Execution Copy

 

 
SECURITY AGREEMENT
 
By
 
INTERNAP NETWORK SERVICES CORPORATION,
as Borrower,
 
and
 
THE GUARANTORS PARTY HERETO,
as Pledgors,
 
and
 
JEFFERIES FINANCE LLC,
as Collateral Agent
 
Dated as of November 26, 2013

 

 

 

 

 

 
TABLE OF CONTENTS

                     
Page(s)
           
ARTICLE I
DEFINITIONS AND INTERPRETATION
 
1
         
Section 1.1
 
Definitions
 
1
             
Section 1.2
 
Interpretation
 
9
             
Section 1.3
 
Resolution of Drafting Ambiguities
 
9
             
Section 1.4
 
Perfection Certificate
 
9
           
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
 
9
         
Section 2.1
 
Grant of Security Interest
 
9
             
Section 2.2
 
Filings
 
11
           
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF COLLATERAL
  12          
Section 3.1
 
Delivery of Certificated Securities Collateral
 
12
             
Section 3.2
 
Perfection of Uncertificated Securities Collateral
 
12
             
Section 3.3
 
Financing Statements and Other Filings; Maintenance of Perfected Security
Interest
 
13
             
Section 3.4
 
Other Actions
 
14
             
Section 3.5
 
Joinder of Additional Pledgors
 
17
             
Section 3.6
 
Supplements; Further Assurances
 
18
           
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
19
         
Section 4.1
 
Title
 
19
             
Section 4.2
 
Validity of Security Interest
 
19
             
Section 4.3
 
Pledgor Defense of Claims; Transferability of Collateral
 
19
             
Section 4.4
 
Other Financing Statements
 
20
             
Section 4.5
 
Chief Executive Office; Change of Name; Jurisdiction of Organization, etc
 
20
             
Section 4.6
 
Location of Inventory and Equipment
 
21
             
Section 4.7
 
Corporate Names; Prior Transactions
 
21
             
Section 4.8
 
Due Authorization and Issuance
 
21
             
Section 4.9
 
Consents, etc
 
21
             
Section 4.10
 
Collateral
 
22
             
Section 4.11
 
Insurance
 
22
             
Section 4.12
 
Intellectual Property
 
22

 

 

 

 

 

 
Section 4.13
 
Payment of Taxes; Compliance with Legal Requirements; Contesting Liens; Charges
 
24
             
Section 4.14
 
Access to Collateral, Books and Records; Other Information
 
24
           
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL   24              
Section 5.1
 
Pledge of Additional Securities Collateral
 
24
             
Section 5.2
 
Voting Rights; Distributions; etc
 
25
             
Section 5.3
 
Default
 
26
             
Section 5.4
 
Certain Agreements of Pledgors as Issuers and Holders of Equity Interests
  26            
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL
  27          
Section 6.1
 
Grant of License
 
27
             
Section 6.2
 
Registration
 
27
             
Section 6.3
 
Protection of Collateral Agent’s Security
 
27
           
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
 
30
         
Section 7.1
 
Special Representation and Warranties
 
30
             
Section 7.2
 
Maintenance of Records
 
31
             
Section 7.3
 
Legend
 
31
             
Section 7.4
 
Modification of Terms, etc
 
31
             
Section 7.5
 
Collection
 
31
           
ARTICLE VIII
TRANSFERS
 
32
             
Section 8.1
 
Transfers of Collateral
 
32
           
ARTICLE IX
REMEDIES
 
32
         
Section 9.1
 
Remedies
 
32
             
Section 9.2
 
Notice of Sale
 
35
             
Section 9.3
 
Waiver of Notice and Claims; Other Waivers; Marshalling
 
35
             
Section 9.4
 
Standards for Exercising Rights and Remedies
 
36
             
Section 9.5
 
No Waiver; Cumulative Remedies
 
37
             
Section 9.6
 
Certain Additional Actions Regarding Intellectual Property
 
38
           
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS; APPLICATION OF PROCEEDS
  38          
Section 10.1
 
Proceeds of Casualty Events and Collateral Dispositions
 
38
             
Section 10.2
 
Application of Proceeds
 
38

 

 

 

 

 
ARTICLE XI
MISCELLANEOUS
 
39
         
Section 11.1
 
Concerning Collateral Agent
 
39
             
Section 11.2
 
Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact
 
40
             
Section 11.3
 
Continuing Security Interest; Assignment
 
40
             
Section 11.4
 
Termination; Release; Reinstatement
 
40
             
Section 11.5
 
Modification in Writing
 
41
             
Section 11.6
 
Notices
 
41
             
Section 11.7
 
Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial
 
41
             
Section 11.8
 
Severability of Provisions
 
43
             
Section 11.9
 
Execution in Counterparts
 
43
             
Section 11.10
 
Business Days
 
43
             
Section 11.11
 
Waiver of Stay
 
43
             
Section 11.12
 
No Credit for Payment of Taxes or Imposition
 
43
             
Section 11.13
 
No Claims Against Collateral Agent
 
44
             
Section 11.14
 
No Release
 
44
             
Section 11.15
 
Overdue Amounts
 
44
             
Section 11.16
 
Obligations Absolute
 
44
           
SCHEDULES
        Schedule 1
Filings, Registrations and Recordings
             
EXHIBITS
                    Exhibit 1
Form of Issuer’s Acknowledgment
    Exhibit 2
Form of Pledge Amendment
    Exhibit 3
Form of Joinder Agreement
    Exhibit 4
Form of Securities Account Control Agreement
    Exhibit 5
Form of Deposit Account Control Agreement
    Exhibit 6
Form of Copyright Security Agreement
    Exhibit 7
Form of Patent Security Agreement
    Exhibit 8
Form of Trademark Security Agreement
   

 

 

 

 

 
SECURITY AGREEMENT
 
This SECURITY AGREEMENT, dated as of November 26, 2013 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this “Agreement”), made by Internap Network Services
Corporation, a Delaware corporation (“Borrower”), and the Subsidiaries of
Borrower from time to time party hereto by execution of this Agreement or
otherwise by execution of a Joinder Agreement (the “Guarantors”) (Borrower,
together with the Guarantors, as pledgors, assignors and debtors and together
with any successors, the “Pledgors,” and each, a “Pledgor”), in favor of
Jefferies Finance LLC, in its capacity as collateral agent pursuant to the
Credit Agreement (as hereinafter defined), as pledgee, assignee and secured
party (in such capacities and together with any successors in such capacities,
the “Collateral Agent”).
 
R E C I T A L S:
 
A.           Borrower, the Guarantors, the Collateral Agent, the other Agents
party thereto and the lending institutions from time to time party thereto as
lenders (the “Lenders”) have entered into that certain Credit Agreement, dated
as of November 26, 2013 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”).
 
B.           The Guarantors have, pursuant to the Credit Agreement,
unconditionally guaranteed the Secured Obligations.
 
C.           Each Pledgor will receive substantial benefits from the execution,
delivery and performance of the Secured Obligations under the Credit Agreement
and the other Loan Documents and is, therefore, willing to enter into this
Agreement.
 
D.           Each Pledgor is, or as to Collateral acquired by such Pledgor after
the date hereof, will be, the legal and/or beneficial owner of the Collateral
pledged by it hereunder.
 
E.           This Agreement is given by each Pledgor in favor of the Collateral
Agent for the benefit of the Secured Parties to secure the payment and
performance of all of the Secured Obligations.
 
F.           It is a condition to the obligations of the Lenders to make the
Loans under the Credit Agreement and the Secured Parties to provide the other
Secured Obligations  that each Pledgor executes and delivers the applicable Loan
Documents, including this Agreement.
 
A G R E E M E N T:
 
NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree as follows:
 
ARTICLE I

 
DEFINITIONS AND INTERPRETATION
 
Section 1.1            Definitions.
 
(a)           Unless otherwise defined herein or in the Credit Agreement,
capitalized terms used herein that are defined in the UCC have the meanings
assigned to them in the UCC.
  

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(b)           Terms used but not otherwise defined herein that are defined in
the Credit Agreement have the meanings given to them in the Credit
Agreement.  In addition, the following terms shall have the following meanings:
 
“Additional Pledged Interests” means, collectively, with respect to each
Pledgor, (a) all options, warrants, rights, agreements, additional membership,
partnership or other Equity Interests of whatever class of any issuer of Initial
Pledged Interests or any interest in any such issuer, together with all rights,
privileges, authority and powers of such Pledgor relating to such interests in
each such issuer or under any Organizational Document of any such issuer, and
the certificates, instruments and agreements representing such membership,
partnership or other Equity Interests and any and all interest of such Pledgor
in the entries on the books of any financial intermediary pertaining to such
membership, partnership or other Equity Interests from time to time acquired by
such Pledgor in any manner and (b) all membership, partnership or other Equity
Interests, as applicable, of each limited liability company, partnership or
other entity (other than a corporation) hereafter acquired or formed by such
Pledgor and all options, warrants, rights, agreements, additional membership,
partnership or other Equity Interests of whatever class of such limited
liability company, partnership or other entity, together with all rights,
privileges, authority and powers of such Pledgor relating to such interests or
under any Organizational Document of any such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other
Equity Interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such membership, partnership
or other Equity Interests, from time to time acquired by such Pledgor in any
manner.
 
“Additional Pledged Shares” means, collectively, with respect to each Pledgor,
(a) all options, warrants, rights, Equity Interests, agreements, additional
shares of capital stock of whatever class of any issuer of the Initial Pledged
Shares or any other Equity Interest in any such issuer, together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests issued by any such issuer under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such interests, from time to time
acquired by such Pledgor in any manner and (b) all the issued and outstanding
shares of capital stock of each corporation hereafter acquired or formed by such
Pledgor and all options, warrants, rights, agreements or additional shares of
capital stock of whatever class of such corporation, together with all rights,
privileges, authority and powers of such Pledgor relating to such shares or
under any Organizational Document of such corporation, and the certificates,
instruments and agreements representing such shares and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such shares, from time to time acquired by such Pledgor in any
manner.
 
“Agreement” has the meaning assigned to such term in the Preamble hereof.
 
“Bailee Letter” has the meaning assigned to such term in Section 3.4(h).
 
“Borrower” has the meaning assigned to such term in the Preamble.
 
“Charges” means any and all property and other taxes, assessments and special
assessments, levies, fees and all other governmental charges imposed upon or
assessed against, and all claims (including any landlords’, carriers’,
mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and
warehousemen’s Liens and other charges arising by operation of law) against, all
or any portion of the Collateral.
 
“Collateral” has the meaning assigned to such term in Section 2.1.
 

2

 

 

 
“Collateral Account” means any collateral account or sub-account established by
the Collateral Agent for the purpose of serving as a collateral account under
this Agreement and all property from time to time on deposit in the Collateral
Account.
 
“Collateral Agent” has the meaning assigned to such term in the Preamble hereof.
 
“Commodity Account Control Agreement” means a commodity account control
agreement in a form that is reasonably satisfactory to the Collateral Agent.
 
“Computer Hardware” means all rights (including rights as licensee and lessee)
with respect to (a) computer and other electronic data processing hardware,
including all integrated computer systems, central processing units, memory
units, display terminals, computer elements, card readers, tape drives, hard and
soft disc drives, cables, electrical supply hardware, generators, power
equalizers, accessories, peripheral devices and other related computer hardware;
and (b) any documentation for hardware, software and firmware described in
clause (a), including flow charts, logic diagrams, manuals, specifications,
training materials, charts and pseudo codes; and all rights with respect
thereto, including any and all licenses, options, warrants, service contracts,
program services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications, and any substitutions,
replacements, additions, new versions or model conversions of any of the
foregoing.
 
“Computer Software” means all rights (including rights as licensee and lessee)
with respect to all computer software, software programs and databases designed
for use on or in connection with Computer Hardware (including source code,
object code and all related applications and data files) and including (a) all
operating system software, utilities and application programs in any form; (b)
any firmware associated with any of the foregoing; (c) any tangible embodiments
of and any documentation for the software, programs, databases and firmware
described in clauses (a), and (b) above, including flow charts, logic diagrams,
manuals, specifications, training materials, charts and pseudo codes; and (d)
all rights with respect any of the foregoing, including any and all licenses,
options, warrants, service contracts, program services, test rights, maintenance
rights, support rights, improvement rights, renewal rights and indemnifications,
and any substitutions, replacements, additions, new versions or model
conversions of any of the foregoing, (e) all income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with respect to any of
the foregoing.
 
“Contracts” means, collectively, with respect to each Pledgor, all contracts,
agreements and grants (in each case, whether written or oral, or third party or
intercompany), to which such Pledgor is a party, and all assignments,
amendments, restatements, supplements, extensions, renewals, replacements or
modifications thereof.
 
“Control” means (a) in the case of each Deposit Account, “control,” as such term
is defined in Section 9-104 of the UCC, and (b) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC and
(c) in the case of any Commodity Contract, “control,” as such term is defined in
Section 9-106 of the UCC.
 
“Control Agreements” means, collectively, the Deposit Account Control
Agreement(s), the Securities Account Control Agreement(s) and the Commodity
Account Control Agreement(s).
 
“Copyright Security Agreement” means an agreement substantially in the form of
Exhibit 6 hereto.
 

3

 

 

 
“Copyrights” means, collectively, all works of authorship (whether or not
protected by statutory or common law copyright, whether established or
registered in the United States or any other country or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications, together with any
and all (a) tangible embodiments of any of the foregoing, (b) rights and
privileges arising under applicable Legal Requirements with respect to the use
of such copyrights, (c) reissues, renewals, continuations, modifications and
extensions thereof and derivative works, (d) income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with respect thereto,
including damages and payments for past, present or future infringements
thereof, (e) rights corresponding thereto throughout the world and (f) rights to
sue for past, present or future infringements thereof.
 
“Credit Agreement” has the meaning assigned to such term in Recital A hereof.
 
“Deposit Account Control Agreement” means an agreement substantially in the form
of Exhibit 5 hereto or such other form that is reasonably satisfactory to the
Collateral Agent.
 
“Deposit Accounts” means, collectively, with respect to each Pledgor, (a) all
“deposit accounts” as such term is defined in the UCC, each Collateral Account
and all accounts and sub-accounts relating to any of the foregoing accounts and
(b) all cash, funds, checks, notes and instruments from time to time on deposit
in any of the accounts or sub-accounts described in clause (a) of this
definition.
 
“Distributions” means, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments, distributions, returns
of capital or principal, income, interest, profits and other property, interests
(debt or equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect of
or in exchange for any or all of the Pledged Securities or Intercompany Notes.
 
“Excluded Accounts” means, as to any Pledgor, all Deposit Accounts that are
maintained in the ordinary course of business and used exclusively (x) as a
payroll account for the employees of such Pledgor (provided that the amount
contained in such account shall at no time exceed the total amount of payroll
payable to the employees of such Pledgor within the immediately succeeding 30
days), or (y) as tax withholding accounts that contain an aggregate amount that
does not exceed the aggregate amount required to be withheld for tax purposes by
Legal Requirements.
 
“Excluded Property” means the following property of any Pledgor, whether now
owned or hereafter acquired or arising:
 
(1)           any governmental licenses or state or local franchises, charters
and authorizations (A) that prohibits or requires the consent of any Person
other than Borrower or any of its Affiliates as a condition to the creation by
any Pledgor of a Lien on any right, title or interest in licenses, franchises,
charters or authorizations or (B) to the extent that any Legal Requirement
applicable thereto prohibits the creation of a Lien thereon, but only, with
respect to the prohibition in (A) and (B), to the extent, and for as long as,
such prohibition is not terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Legal Requirement;
 
(2)           any lease, license or any similar contract or agreement entered
into by any Pledgor or any property owned by any Pledgor that is subject to a
Purchase Money Obligation or a Capital Lease Obligation permitted to be incurred
pursuant to the provisions of the Credit Agreement if and for so long as, but
only for so long as and solely to the extent that, a grant of a security
interest therein would (A) violate or invalidate such lease, license or similar
contract or agreement or Purchase Money Obligation or Capital Lease Obligation
or (B) create a right of termination in favor of any other party thereto (other
than Borrower or a Pledgor), but only, with respect to the prohibition in (A)
and (B), to the extent, and for as long as, such prohibition is not terminated
or rendered unenforceable or otherwise deemed ineffective by the UCC or any
other Legal Requirement); provided that each Pledgor shall, and shall cause each
of its Subsidiaries to, make all commercially reasonable efforts to prevent any
lease, license or other similar contract or agreement from constituting Excluded
Property;
 

4

 

 

 
(3)           intent-to-use trademark applications prior to the filing of a
“statement of use” with respect thereto, to the extent and for so long as
creation by any Pledgor of a security interest therein would result in the
abandonment, invalidation or unenforceability thereof;
 
(4)           Motor Vehicles and other goods subject to certificates of title or
ownership to the extent that a security interest cannot be perfected solely by
filing a UCC-1 financing statement or similar instrument;
 
(5)           the Excluded Accounts;
 
(6)           (x) voting Equity Interests in excess of 65% of all outstanding
voting Equity Interests of any Foreign Subsidiary that is a controlled foreign
corporation (within the meaning of Section 957(a) of the Internal Revenue Code)
and (y) any Equity Interest of a Foreign Subsidiary that is an Immaterial
Subsidiary;
 
(7)            any Excluded Regulatory Collateral; and
 
(8)           those assets as to which the Collateral Agent and the Borrower
reasonably agree in writing that the cost of obtaining a security interest in or
perfection thereof is excessive in relation to the benefit to the Secured
Parties of the security to be afforded thereby;
 
provided that notwithstanding anything to the contrary contained in clauses (1)
through (8) above to the contrary, Excluded Property shall not include any
Proceeds of Property described in clauses (1) through (8) above; provided,
further, that at such time as any of the foregoing Property no longer
constitutes Excluded Property (including, in the case of Excluded Regulatory
Collateral, at such time as the approval of the applicable Governmental
Authority has been obtained), such Property shall immediately and automatically
constitute Collateral and a Lien on and security interest in and to all of the
right, title and interest of the applicable Pledgor in, to and under such
Property shall immediately attach thereto as provided herein.
 
“Excluded Regulatory Collateral” means any rights or interests now held or
hereafter acquired by any Pledgor in any Regulatory License or other franchise,
license, certificate, authorization, registration, permit or operating right
authorizing or relating to such Pledgor’s business, including, without
limitation, those issued by the FCC, or any PUC or Governmental Authority,
solely to the extent the grant by such Pledgor of a security interest in such
assets is prohibited by applicable Legal Requirements as a result of the
inability to obtain the approval of the applicable Governmental Authority.
 

5

 

 

 
“General Intangibles” means, collectively, with respect to each Pledgor, all
“general intangibles,” as such term is defined in the UCC, now owned or
hereafter acquired by such Pledgor and, in any event, shall include (a) all of
such Pledgor’s rights, title and interest in, to and under all insurance
policies and coverages and Contracts, (b) all of such Pledgor’s interest in
know-how and warranties relating to any of the Collateral or any Mortgaged
Property, (c) any and all other rights, claims, choses-in-action and causes of
action of such Pledgor against any other Person and the benefits of any and all
collateral or other security given by any other Person in connection therewith,
(d) all guarantees, endorsements and indemnifications on, or of, any of the
Collateral or any Mortgaged Property, (e) all of Pledgor’s interest in lists,
books, records, correspondence, ledgers, printouts, files (whether in printed
form or stored electronically), tapes and other papers or materials containing
information relating to any of the Collateral or any Mortgaged Property,
including all customer or tenant lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports, manuals,
standards, processing standards, performance standards, catalogs, research data,
computer and automatic machinery software and programs and the like, field
repair data, accounting information pertaining to such Pledgor’s operations or
any of the Collateral or any Mortgaged Property and all media in which or on
which any of the information or knowledge or data or records may be recorded or
stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (f) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any Person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Collateral
or any Mortgaged Property, including building permits, certificates of
occupancy, environmental certificates, industrial permits or licenses and
certificates of operation, and (g) all rights to reserves, payment intangibles,
deferred payments, deposits, refunds, indemnification of claims to the extent
the foregoing relate to any Collateral or any Mortgaged Property and claims for
tax or other refunds against any Governmental Authority relating to any
Collateral or any Mortgaged Property.
 
“Goodwill” means, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including (a) all goodwill connected with
the use of and symbolized by any Intellectual Property Collateral in which such
Pledgor has any interest, (b) all of Pledgor’s interest in know-how, trade
secrets, customer and supplier lists, proprietary information, inventions,
methods, plans, policies, procedures, formulae, descriptions, compositions,
technical data, drawings, specifications, name plates, catalogs, confidential
information and the right to limit the use or disclosure thereof by any Person,
pricing and cost information, business and marketing plans and proposals,
consulting agreements, engineering contracts and such other assets which relate
to such goodwill and (c) all product lines of such Pledgor’s business.
 
“Guarantors” has the meaning assigned to such term in the Preamble hereof.
 
“Initial Pledged Interests” means, with respect to each Pledgor, all membership,
partnership or other Equity Interests (other than in a corporation), as
applicable, in each issuer described on Schedule 11 to the Perfection
Certificate (other than Borrower), together with all rights, privileges,
authority and powers of such Pledgor in and to each such issuer or under any
Organizational Document of each such issuer, and the certificates, instruments
and agreements representing such membership, partnership or other Equity
Interests and any and all interests of such Pledgor in the entries on the books
of any financial intermediary pertaining to such membership, partnership or
other Equity Interests.
 
“Initial Pledged Shares” means, collectively, with respect to each Pledgor, the
issued and outstanding shares of capital stock in each issuer that is a
corporation described on Schedule 11 to the Perfection Certificate (other than
Borrower), together with all rights, privileges, authority and powers of such
Pledgor relating to such shares of capital stock in each such issuer or under
any Organizational Document of each such issuer, and the certificates,
instruments and agreements representing such shares of capital stock and any and
all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to the Initial Pledged Shares.
 
“Instruments” means, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of
the UCC, and shall include all promissory notes, drafts, bills of exchange or
acceptances.
 

6

 

 

 
“Intellectual Property Collateral” means, collectively, all (i) Patents,
Trademarks, Copyrights, Computer Software and Trade Secrets now owned or
hereafter created or acquired by or assigned to such Pledgor, including, without
limitation, the Patents, Trademarks (including Internet domain names) and
Copyrights that are Registered and listed on Schedule 14 to the Perfection
Certificate, (ii) License Agreements to which any Pledgor is now or hereafter
becomes a party or beneficiary, including, without limitation, the License
Agreements listed on Schedule 14 to the Perfection Certificate and (iii)
Goodwill.
 
“Intercompany Notes” means, with respect to each Pledgor, the Intercompany Note,
all other intercompany notes listed on Schedule 12 to the Perfection Certificate
and any intercompany notes hereafter acquired by such Pledgor, and all
certificates, instruments or agreements evidencing any intercompany note and
such other intercompany notes, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
 
“Investment Property” means any Security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, excluding, however, the Securities Collateral.
 
“Joinder Agreement” means an agreement substantially in the form of Exhibit 3
hereto.
 
“Lenders” has the meaning assigned to such term in Recital A hereof.
 
“License Agreements” means, collectively, all agreements, permits, consents,
orders, franchises and covenants not to sue relating to the license,
development, use or disclosure of any Patent, Trademark, Copyright or Trade
Secret, together with any and all (a) renewals, extensions, supplements and
continuations thereof, (b) income, fees, royalties, damages, claims and payments
now and hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements or
violations thereof, (c) rights to sue for past, present or future infringements
or violations thereof and (d) other rights to use, exploit or practice any or
all of the Patents, Trademarks, Copyrights or Trade Secrets.
 
“Motor Vehicles” means motor vehicles, tractors, trailers and other like
property, whether or not the title thereto is governed by a certificate of title
or ownership.
 
“Patent Security Agreement” means an agreement substantially in the form of
Exhibit 7 hereto.
 
“Patents” means, collectively, all patents, patent applications, utility models
and statutory invention registrations (whether established or registered or
recorded in the United States or any other country or any political subdivision
thereof), together with any and all (a) rights and privileges arising under
applicable Legal Requirements with respect to the use of any patents, (b)
inventions and improvements described and charged therein, (c) reissues,
divisions, continuations, renewals, extensions, modifications and
continuations-in-part thereof, (d) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (e) rights corresponding thereto throughout the world and (f) rights to
sue for past, present or future infringements thereof.
 
“Perfection Certificate” means the perfection certificate dated as of the date
hereof, executed and delivered by each Pledgor party thereto in favor of the
Collateral Agent for the benefit of the Secured Parties, and each other
Perfection Certificate and any supplement thereto (which shall be in form and
substance reasonably acceptable to the Collateral Agent) executed and delivered
by the applicable Pledgor in favor of the Collateral Agent for the benefit of
the Secured Parties contemporaneously with the execution and delivery of each
Joinder Agreement executed in accordance with Section 3.5, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time by a Perfection Certificate Supplement or otherwise in
accordance with the Credit Agreement.
 

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“Pledge Amendment” has the meaning assigned to such term in Section 5.1.
 
“Pledged Interests” means, collectively, the Initial Pledged Interests and the
Additional Pledged Interests.
 
“Pledged Securities” means, collectively, the Pledged Interests, the Pledged
Shares and the Successor Interests.
 
“Pledged Shares” means, collectively, the Initial Pledged Shares and the
Additional Pledged Shares.
 
“Pledgor” has the meaning assigned to such term in the preamble hereof.
 
“Registered” means issued by, registered with, renewed by or the subject of a
pending application before any Governmental Authority or Internet domain name
registrar.
 
“Secured Obligations” has the meaning assigned to such term in the Credit
Agreement.
 
“Secured Parties” has the meaning assigned to such term in the Credit Agreement.
 
“Securities Account Control Agreement” means an agreement substantially in the
form of Exhibit 4 hereto or such other form that is reasonably satisfactory to
the Collateral Agent.
 
“Securities Collateral” means, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.
 
“Successor Interests” means, collectively, with respect to each Pledgor, all
shares of each class of the capital stock of the successor corporation or
interests or certificates of the successor limited liability company,
partnership or other entity owned by such Pledgor (unless such successor is such
Pledgor itself) formed by or resulting from any consolidation or merger in which
any Person listed on Schedule 1(a) to the Perfection Certificate is not the
surviving entity.
 
“Trade Secrets” means, collectively, (a) all know-how, trade secrets and
confidential or proprietary information, including customer and supplier lists,
proprietary information, inventions, methods, plans, policies, procedures,
formulae, descriptions, compositions, technical data, drawings, specifications,
name plates, catalogs, pricing and cost information and business and marketing
plans and proposals, (b) all tangible embodiments of any of the foregoing, (c)
the right to limit the use or disclosure of any of the foregoing by any Person,
(d) all rights and privileges arising under applicable Legal Requirements with
respect to the use of any such information, (e) income, fees, royalties, damages
and payments now and hereafter due and/or payable thereunder and with respect
thereto, including damages, claims and payments for past, present or future
infringements or misappropriations thereof, (f) rights corresponding thereto
throughout the world and (g) rights to sue for past, present or future
infringements thereof.
 
“Trademark Security Agreement” means an agreement substantially in the form of
Exhibit 8 hereto.
 

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“Trademarks” means, collectively, all trademarks, service marks, slogans, logos,
certification marks, trade dress, uniform resource locations (URL’s), domain
names, corporate names and trade names, whether registered or unregistered, and
all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States or any
other country or any political subdivision thereof), together with any and all
(a) rights and privileges arising under applicable Legal Requirements with
respect to the use of any trademarks, (b) goodwill associated therewith or
symbolized thereby, (c) reissues, continuations, extensions and renewals
thereof, (d) income, fees, royalties, damages and payments now and hereafter due
and/or payable thereunder and with respect thereto, including damages, claims
and payments for past, present or future infringements thereof, (e) rights
corresponding thereto throughout the world and (f) rights to sue for past,
present or future infringements thereof.
 
“Transferable Record” has the meaning assigned to that term in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction.
 
“UCC” means the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided, however, that if by reason of mandatory provisions
of applicable Legal Requirements, any or all of the attachment, perfection or
priority of the Collateral Agent’s and the other Secured Parties’ security
interest in any item or portion of the Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC” means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions relating to such
provisions.
 
Section 1.2            Interpretation.  The rules of interpretation specified in
the Credit Agreement (including Section 1.03 of the Credit Agreement) shall be
applicable to this Agreement.
 
Section 1.3            Resolution of Drafting Ambiguities.  Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
 
Section 1.4            Perfection Certificate.  Each of the Persons from time to
time party hereto agrees that the Perfection Certificate and all descriptions of
Collateral, schedules, amendments and supplements thereto are and shall at all
times remain a part of this Agreement.
 
ARTICLE II
 
GRANT OF SECURITY AND SECURED OBLIGATIONS
 
Section 2.1            Grant of Security Interest.  As collateral security for
the prompt and complete payment and performance in full of all the Secured
Obligations, each Pledgor hereby pledges, hypothecates and grants to the
Collateral Agent for the benefit of the Secured Parties, a Lien on and security
interest in and to all of the right, title and interest of such Pledgor in, to
and under the following property, wherever located, whether now existing or
hereafter arising or acquired from time to time (collectively, the
“Collateral”):
 
(a)           all Accounts;
 

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(b)          all cash and Cash Equivalents;
 
(c)           all Chattel Paper;
 
(d)          all Collateral Accounts;
 
(e)          all Commercial Tort Claims, including those described on
Schedule 15 to the Perfection Certificate;
 
(f)           all Computer Hardware;
 
(g)          all Deposit Accounts;
 
(h)          all Documents;
 
(i)           all Equipment (including Motor Vehicles) and Fixtures;
 
(j)           all General Intangibles;
 
(k)          all Goods;
 
(l)           all Instruments;
 
(m)         all Intellectual Property Collateral;
 
(n)          all Inventory;
 
(o)          all Investment Property;
 
(p)          all letters of credit and Letter-of-Credit Rights (whether or not
the letter of credit is evidenced by a writing);
 
(q)          all Securities Collateral;
 
(r)           all Supporting Obligations;
 
(s)           all insurance claims;
 
(t)           all books and records pertaining to the Collateral; and
 
(u)         to the extent not covered by clauses (a) through (t) above, all
choses in action and other personal property, whether tangible or intangible;
 
(v)         all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, and any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time to time with
respect to any of the foregoing.
 

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Notwithstanding anything to the contrary contained in clauses (a) through (v)
above or in any other provision of any Loan Document, (x) the security interest
created by this Agreement shall not extend to, and the term “Collateral” shall
not include, any Excluded Property (but shall include the Proceeds and products
of Excluded Property and each other item set forth in clause (v) above with
respect to Excluded Property, in each case, to the extent that such Proceeds,
products and other items do not themselves constitute Excluded Property)  and
(y) (i) the Pledgors shall from time to time at the request of the Collateral
Agent give written notice to the Collateral Agent identifying in reasonable
detail any Excluded Property and shall provide to the Collateral Agent such
other information regarding the Excluded Property as the Collateral Agent may
reasonably request and (ii) from and after the Closing Date, no Pledgor shall
permit to become effective in any document creating, governing or providing for
any permit, lease or license, a provision that would prohibit the creation of a
Lien on such permit, lease or license in favor of the Collateral Agent.
 
Section 2.2            Filings.
 
(a)           Each Pledgor hereby irrevocably authorizes the Collateral Agent at
any time and from time to time to file or record in any relevant jurisdiction
any initial financing statements (including fixture filings and transmitting
utility filings, as applicable), continuation statements and amendments thereto
that contain the information required by Article 9 of the UCC of each applicable
jurisdiction for the filing of any financing statement, continuation statement
or amendment relating to the Collateral, including (i) whether such Pledgor is
an organization, the type of organization and any organizational identification
number issued to such Pledgor, and (ii) in the case of a financing statement
filed as a fixture filing or a transmitting utility filing or covering
Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Collateral
relates. Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon
request.  Such financing statements may describe the Collateral in the same
manner as described herein or may contain a description of Collateral that
describes such property in any other manner as the Collateral Agent may
determine, in its sole discretion, is necessary, advisable or prudent to ensure
the perfection or priority of the security interest in the collateral granted to
the Collateral Agent in connection herewith, including, describing such property
as “all assets whether now owned or hereafter acquired” or “all personal
property whether now owned or hereafter acquired” (regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the UCC).
 
(b)           Each Pledgor hereby ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any initial financing statements or
amendments thereto relating to the Collateral if filed prior to the date hereof.
 
(c)           Each Pledgor hereby further authorizes the Collateral Agent to
file and/or record with the United States Patent and Trademark Office, the
United States Copyright Office, any applicable successor office and any other
similar office or Governmental Authority in any other country, as applicable,
this Agreement, the Copyright Security Agreement, the Patent Security Agreement,
the Trademark Security Agreement, and any other documents determined by the
Collateral Agent in its sole discretion to be necessary, advisable or prudent
for the purpose of recording, perfecting, confirming, continuing, enforcing or
protecting the pledge and security interest or the priority thereof granted by
such Pledgor hereunder, with or without the signature of such Pledgor, and
naming such Pledgor, as debtor, and the Collateral Agent, as secured party.
 

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ARTICLE III

 
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF COLLATERAL
 
Section 3.1            Delivery of Certificated Securities Collateral.  Each
Pledgor represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof have been delivered to the Collateral Agent in suitable form for transfer
by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a valid and
enforceable  perfected first priority security interest therein and in the
Securities Collateral and, with respect to any certificates or agreements (if
any) delivered to the Collateral Agent representing or evidencing Pledged
Securities or Distributions, such Pledgor shall take, and shall cause the issuer
to take, such action as the Collateral Agent deems to be necessary, advisable or
prudent to ensure that such certificates shall constitute Securities (as defined
in Article 8 of the UCC).  Each Pledgor hereby agrees that all certificates,
agreements or instruments representing or evidencing Securities Collateral
acquired by such Pledgor after the date hereof shall promptly (and in any event
within ten Business Days or such longer period as may be agreed to in writing by
the Collateral Agent in its sole discretion) upon receipt thereof by such
Pledgor be delivered to and held by or on behalf of the Collateral Agent
pursuant hereto and such Pledgor shall promptly (and in any event within ten
Business Days or such longer period as may be agreed to in writing by the
Collateral Agent in its sole discretion) upon receipt thereof take, and shall
cause the issuer to take, such action as the Collateral Agent deems to be
necessary, advisable or prudent to ensure that such certificates representing or
evidencing Pledged Securities or Distributions shall constitute Securities (as
defined in Article 8 of the UCC).  All certificated Securities Collateral shall
be in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank (including, to the
extent reasonably requested by the Collateral Agent, applicable local law
instruments of transfer or assignments in blank), all in form and substance
satisfactory to the Collateral Agent.  The Collateral Agent shall have the
right, at any time upon the occurrence and during the continuance of any Event
of Default, to endorse, assign or otherwise transfer to or to register in the
name of the Collateral Agent or any of its nominees or endorse for negotiation
any or all of the Securities Collateral, without any indication that such
Securities Collateral is subject to the security interest hereunder.  In
addition, the Collateral Agent shall have the right, at any time, to exchange
certificates representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.
 
Section 3.2            Perfection of Uncertificated Securities Collateral.  Each
Pledgor represents and warrants that the Collateral Agent has a valid and
enforceable perfected first priority security interest in all uncertificated
Pledged Securities pledged by it hereunder that are in existence on the date
hereof.  Each Pledgor shall ensure that the issuer of any membership,
partnership or other Equity Interests constituting uncertificated Pledged
Securities does not issue any certificate representing such interest or take any
step to ‘opt in’ or have such uncertificated Pledged Securities treated as
“securities” within the meaning of Section 8-102(a)(15) of the UCC without the
prior written consent of the Collateral Agent.  Each Pledgor hereby agrees that
if any issuer of Pledged Securities is organized in a jurisdiction that does not
permit the use of certificates to evidence equity ownership or any of the
Pledged Securities are at any time not evidenced by certificates of ownership,
then each applicable Pledgor shall, if the Collateral Agent deems it necessary,
advisable or prudent to perfect a first priority security interest in such
Pledged Securities, (i) cause such pledge to be recorded on the equityholder
register or the books of the issuer, (ii) cause the issuer to execute and
deliver to the Collateral Agent an acknowledgment of the pledge of such Pledged
Securities substantially in the form of Exhibit 1 hereto or such other form
reasonably acceptable to the Collateral Agent, execute any customary pledge
forms or other documents that the Collateral Agent deems to be necessary,
advisable or prudent to complete the pledge and give the Collateral Agent the
right to transfer such Pledged Securities under the terms hereof and, upon the
Collateral Agent’s request, provide to the Collateral Agent an opinion of
counsel, in form and substance reasonably satisfactory to the Collateral Agent,
confirming such pledge and perfection thereof and (iii) cause such Pledged
Securities to become certificated and delivered to the Collateral Agent in
accordance with the provisions of Section 3.1.
 

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Section 3.3            Financing Statements and Other Filings; Maintenance of
Perfected Security Interest.  Each Pledgor represents and warrants that the only
filings, registrations and recordings necessary to perfect the security interest
granted by each Pledgor to the Collateral Agent in respect of the Collateral are
listed on Schedule 1 hereto.  All such filings, registrations and recordings
have been delivered to the Collateral Agent in completed and, to the extent
necessary, advisable or prudent, duly executed form for filing in each
applicable governmental, municipal or other office specified on Schedule 1
hereto.  Each Pledgor agrees that at the sole cost and expense of the Pledgors,
(i) such Pledgor will maintain the security interest created by this Agreement
in the Collateral as a valid and enforceable perfected first priority security
interest (subject to Permitted Liens) and shall defend such security interest
against the claims and demands of all Persons, (ii) such Pledgor shall furnish
to the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail and (iii) at any time and from time to time, upon the written
request of the Collateral Agent, such Pledgor shall promptly (and in any event
within three Business Days or such longer period as may be agreed to in writing
by the Collateral Agent in its sole discretion) and duly execute and deliver,
and file and have recorded, such further instruments and documents and take such
further action as the Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the rights and
powers herein granted, including the filing of any financing statements and
amendments thereof, continuation statements and other documents (including this
Agreement) under the UCC (or other similar laws) in effect in any jurisdiction
with respect to the security interest created hereby, the execution of one or
more security documents compatible with applicable local law and the execution
and delivery of Control Agreements, all in form reasonably satisfactory to the
Collateral Agent and in such offices (including the United States Patent and
Trademark Office and the United States Copyright Office) wherever required by or
applicable under applicable Legal Requirements to perfect (to the extent a
security interest in such Collateral may be so perfected under applicable Legal
Requirements), continue and maintain a valid, enforceable, first priority
security interest (subject to Permitted Liens) in the Collateral as provided
herein and to preserve the other rights and interests granted to the Collateral
Agent hereunder, as against third parties, with respect to the Collateral.
 

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Section 3.4            Other Actions.  In order to further ensure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent’s security interest in the Collateral, each
Pledgor represents and warrants and covenants as follows, in each case at such
Pledgor’s own expense, to take the following actions with respect to the
following Collateral:
 
(a)           Instruments and Tangible Chattel Paper.  As of the date hereof,
each Pledgor hereby represents and warrants that (i) no amounts individually or
in the aggregate in excess of $100,000 payable under or in connection with any
of the Collateral are evidenced by any Instrument or Tangible Chattel Paper
other than such Instruments and Tangible Chattel Paper listed on Schedule 12 to
the Perfection Certificate, (ii) the Intercompany Note has been properly
assigned and delivered to the Collateral Agent, accompanied by an endorsement to
the Intercompany Note in the form attached thereto duly executed in blank by
each Pledgor and (iii) each such Instrument and each such item of Tangible
Chattel Paper individually or in the aggregate in excess of $100,000 has been
properly endorsed, assigned and delivered to the Collateral Agent, accompanied
by instruments of transfer or assignment duly executed in blank.  If any amount
individually or in the aggregate in excess of $100,000 then payable under or in
connection with any of the Collateral shall be evidenced by any Instrument or
Tangible Chattel Paper, the Pledgor acquiring such Instrument or Tangible
Chattel Paper shall promptly and in any event within ten Business Days (or such
longer period as may be agreed to in writing by the Collateral Agent in its sole
discretion), endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in blank
as the Collateral Agent may from time to time specify (including, to the extent
reasonably requested by the Collateral Agent, applicable local law instruments
of transfer or assignments in blank).
 
(b)           Deposit Accounts.  Each Pledgor hereby represents and warrants
that (i) as of the date hereof, such Pledgor has neither opened nor maintains
any Deposit Accounts other than the accounts listed on Schedule 16 to the
Perfection Certificate, (ii) such Pledgor and each applicable Bank has executed
and delivered, or, to the extent it has not already done so on the date hereof,
shall execute and deliver in accordance with Section 5.15 of the Credit
Agreement, a Control Agreement substantially in the form set forth in Exhibit 5
hereto or such other form that is reasonably satisfactory to the Collateral
Agent with respect to each Deposit Account of such Pledgor listed on Schedule 16
to the Perfection Certificate other than Excluded Accounts, and (iii) the
Collateral Agent has a valid and enforceable perfected first priority security
interest (subject to Permitted Liens) in each such Deposit Account by
Control.  No Pledgor shall hereafter establish and maintain any Deposit Account
with respect to which such Pledgor is required to enter into a Control Agreement
hereunder or under the Credit Agreement unless (A) the applicable Pledgor shall
have given the Collateral Agent at least 30 days’ (or such shorter period as may
be agreed to in writing by the Collateral Agent in its sole discretion) prior
written notice of its intention to establish such new Deposit Account with a
Bank, (B) such Bank shall be reasonably acceptable to the Collateral Agent and
(C) such Bank and such Pledgor shall have duly executed and delivered to the
Collateral Agent a Deposit Account Control Agreement (or an amendment to an
existing Deposit Account Control Agreement) with respect to such Deposit
Account.  The provisions of this Section 3.4(b) shall not apply to (x) any
Excluded Accounts or (y) any Collateral Account or any other Deposit Accounts
for which the Collateral Agent is the Bank.  No Pledgor has granted or shall
grant Control of any Deposit Account to any Person other than the Collateral
Agent.
 

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(c)           Securities Accounts and Commodity Accounts. Each Pledgor hereby
represents and warrants that (i) as of the date hereof, it has neither opened
nor maintains any Securities Accounts or Commodity Accounts other than those
listed on Schedule 16 to the Perfection Certificate, (ii) such Pledgor and each
applicable Securities Intermediary or Commodity Intermediary has executed and
delivered a Securities Account Control Agreement or Commodity Account Control
Agreement, as applicable, for each Securities Account or Commodity Account of
such Pledgor listed on Schedule 16 to the Perfection Certificate, (iii) the
Collateral Agent has a valid and enforceable perfected first priority security
interest (subject to Permitted Liens) in each such Securities Account and
Commodity Account by Control, and (iv) it does not hold, own or have any
interest in any certificated securities or uncertificated securities other than
those constituting Pledged Securities and those maintained in Securities
Accounts or Commodity Accounts listed on Schedule 16 of the Perfection
Certificate or in respect of which the Collateral Agent has Control.
 
(d)           Investment Property.  If any Pledgor shall at any time acquire any
certificated securities constituting Investment Property, such Pledgor shall
promptly, and in any event within ten Business Days of acquiring such security
(or such later date as may be agreed to in writing by the Collateral Agent in
its sole discretion), (i) endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank, all in form and substance reasonably satisfactory to the Collateral
Agent or (ii) deliver such securities into a Securities Account with respect to
which a Securities Account Control Agreement is in effect in favor of the
Collateral Agent.  If any securities now or hereafter acquired by any Pledgor
constituting Investment Property are uncertificated and are issued to such
Pledgor or its nominee directly by the issuer thereof, such Pledgor shall
promptly, and in any event within ten Business Days of acquiring such security
(or such later date as may be agreed to in writing by the Collateral Agent in
its sole discretion), notify the Collateral Agent thereof and pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral Agent,
either (i) cause the issuer to agree to comply with Entitlement Orders or other
instructions from the Collateral Agent as to such securities, without further
consent of any Pledgor or such nominee, (ii) cause a Security Entitlement with
respect to such uncertificated security to be held in a Securities Account with
respect to which the Collateral Agent has Control or (iii) arrange for the
Collateral Agent to become the registered owner of the securities.  The Pledgors
shall not hereafter establish and maintain any Securities Account or Commodity
Account with any Securities Intermediary or Commodity Intermediary unless (1)
the applicable Pledgor shall have given the Collateral Agent at least 30 days’
(or such shorter period as may be agreed to in writing by the Collateral Agent
in its sole discretion) prior written notice of its intention to establish such
new Securities Account or Commodity Account with such Securities Intermediary or
Commodity Intermediary, (2) such Securities Intermediary or Commodity
Intermediary shall be reasonably acceptable to the Collateral Agent and (3) such
Securities Intermediary or Commodity Intermediary, as the case may be, and such
Pledgor shall have duly executed and delivered a Control Agreement with respect
to such Securities Account or Commodity Account, as the case may be.  The
Collateral Agent shall not give any Entitlement Orders or instructions or
directions to any issuer of uncertificated securities, Securities Intermediary
or Commodity Intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by such Pledgor, unless an Event of Default has
occurred and is continuing or, after giving effect to any such withdrawal or
dealing rights, would occur.  The provisions of this Section 3.4(d) shall not
apply to any Financial Assets credited to a Securities Account for which the
Collateral Agent is the Securities Intermediary.  No Pledgor shall grant Control
over any Investment Property to any Person other than the Collateral Agent, and
each Pledgor shall promptly (and in any event within ten Business Days) notify
the Collateral Agent if any issuer of Pledged Interests takes any action to have
any Pledged Interests issued by it treated as Securities under Article 8 of the
UCC and such Pledgor shall take all steps deemed necessary, advisable or prudent
by the Collateral Agent in order to grant Control of such Pledged Interests in
favor of the Collateral Agent.  As between the Collateral Agent and the
Pledgors, the Pledgors shall bear the investment risk with respect to the
Investment Property and Pledged Securities, and the risk of loss of, damage to,
or the destruction of the Investment Property and Pledged Securities, whether in
the possession of, or maintained as a security entitlement or deposit by, or
subject to the control of, the Collateral Agent, a Securities Intermediary,
Commodity Intermediary, any Pledgor or any other Person; provided, however, that
nothing contained in this Section 3.4(d) shall release or relieve any Securities
Intermediary or Commodity Intermediary of its duties and obligations to the
Pledgors or any other Person under any Control Agreement or under applicable
Legal Requirements.  Each Pledgor shall promptly pay all Charges and fees of
whatever kind or nature with respect to the Investment Property and Pledged
Securities pledged by it under this Agreement.  In the event any Pledgor shall
fail to make such payment contemplated in the immediately preceding sentence,
the Collateral Agent may do so for the account of such Pledgor and the Pledgors
shall promptly reimburse and indemnify the Collateral Agent in accordance with
Section 10.03 of Credit Agreement from all costs and expenses incurred by the
Collateral Agent under this Section 3.4(d).
 

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(e)           Electronic Chattel Paper and Transferable Records.  If any amount,
individually or in the aggregate, in excess of $100,000 or payable under or in
connection with any of the Collateral is evidenced by any Electronic Chattel
Paper or any Transferable Record, the Pledgor acquiring such Electronic Chattel
Paper or Transferable Record shall promptly and in any event within ten Business
Days of the acquisition thereof (or such later date as may be agreed to in
writing by the Collateral Agent in its sole discretion) notify the Collateral
Agent thereof and shall take such action as the Collateral Agent may reasonably
request to vest in the Collateral Agent control under Section 9-105 of the UCC
of such Electronic Chattel Paper or control under Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or, as the case may
be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in
such jurisdiction, of such Transferable Record.  The Collateral Agent agrees
with such Pledgor that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for the Pledgor to
make alterations to the Electronic Chattel Paper or Transferable Record
permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in control to
allow without loss of control, unless an Event of Default has occurred and is
continuing or would occur after giving effect to any such alterations.
 
(f)           Letter-of-Credit Rights.  If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of such
Pledgor, other than (i) a Letter of Credit issued pursuant to the Credit
Agreement or (ii) a Letter of Credit that is a “supporting obligation” (as
defined in Section 9-102 of the UCC) with respect to other Collateral in which
the Collateral Agent has a valid, enforceable, perfected first priority security
interest (subject to Permitted Collateral Liens), in an amount individually in
excess of $100,000 or in the aggregate in excess of $250,000, such Pledgor shall
promptly (and in any event within ten Business Days of becoming a beneficiary
thereunder (or such later date as may be agreed to in writing by the Collateral
Agent in its sole discretion)) notify the Collateral Agent thereof and such
Pledgor shall, at the request of the Collateral Agent, pursuant to an agreement
in form and substance reasonably satisfactory to the Collateral Agent, either
(i) arrange for the issuer and any confirmer or other nominated Person of such
Letter of Credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under the Letter of Credit or (ii) arrange for the
Collateral Agent to become the transferee beneficiary of such Letter of Credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the Letter of Credit are to be applied as provided in the Credit
Agreement.
 

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(g)           Commercial Tort Claims.  As of the date hereof, each Pledgor
hereby represents and warrants that it holds no Commercial Tort Claims having a
book value or Fair Market Value, individually, in excess of $100,000, or in the
aggregate in excess of $250,000, other than those listed on Schedule 15 to the
Perfection Certificate.  If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim having a book value or Fair Market Value, individually, in
excess of $100,000, or in the aggregate in excess of $250,000, such Pledgor
shall promptly (and in any event within ten Business Days of acquiring such
Commercial Tort Claim (or such later date as may be agreed to in writing by the
Collateral Agent in its sole discretion)) notify the Collateral Agent in writing
signed by such Pledgor of the brief details thereof and grant to the Collateral
Agent in such writing a security interest therein and in the Proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Collateral Agent.
 
(h)           Collateral in the Possession of a Third Party.  If any Equipment
or Inventory  is in possession or control of any third party, including any
warehouseman, landlord, lessor, bailee or agent, the Pledgors shall notify the
Collateral Agent thereof and notify the third party of the Collateral Agent’s
security interest therein and use commercially reasonable efforts to obtain an
acknowledgment (a “Bailee Letter”) from such third party that (i) it is holding
the Equipment and Inventory for the benefit of the Collateral Agent, (ii)
waiving all right, title and interest in such Equipment and/or Inventory and
(ii) such party will comply with instructions from the Collateral Agent with
respect to such Collateral, without further consent of any Pledgors.
 
(i)             Landlord’s Access Agreements.  Upon the reasonable request of
the Collateral Agent, each Pledgor shall use its commercially reasonable efforts
to obtain as soon as practicable with respect to any location set forth in
Section 5.11(d) of the Credit Agreement a Landlord Access Agreement.
 
Section 3.5            Joinder of Additional Pledgors.  The Pledgors shall cause
each Subsidiary of Borrower which, from time to time, after the date hereof
shall be required to pledge any assets to the Collateral Agent for the benefit
of the Secured Parties pursuant to the Credit Agreement,  to execute and deliver
to the Collateral Agent (i) a Joinder Agreement substantially in the form of
Exhibit 3 hereto, (ii) a Perfection Certificate, in each case, within ten
Business Days after the date on which it was acquired or created (or such later
date as may be agreed by the Collateral Agent in its sole discretion) and (iii)
such other documentation as the Collateral Agent shall reasonably requested, and
upon such execution and delivery, such Subsidiary shall constitute a “Pledgor”
for all purposes hereunder with the same force and effect as if originally named
as a Pledgor herein.  The execution and delivery of such Joinder Agreement shall
not require the consent of any Pledgor hereunder.  The rights and obligations of
each Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of, or failure to add, any new Pledgor as a party to this Agreement or
any other Loan Document.
 

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Section 3.6            Supplements; Further Assurances.  Each Pledgor shall take
such further actions, and execute and deliver to the Collateral Agent such
additional assignments, agreements, supplements, powers and instruments, as the
Collateral Agent may deem necessary, advisable or prudent, wherever required by
applicable Legal Requirements, in order to perfect, preserve and protect the
security interest and the priority thereof in the Collateral as provided herein
and the rights and interests granted to the Collateral Agent hereunder, to carry
into effect the purposes hereof or better to assure and confirm unto the
Collateral Agent the Collateral or permit the Collateral Agent to exercise and
enforce its rights, powers and remedies hereunder with respect to any
Collateral.  Without limiting the generality of the foregoing, (a) each Pledgor
shall make, execute, endorse, acknowledge, file or refile and/or deliver to the
Collateral Agent from time to time upon reasonable request such lists,
descriptions and designations of the Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements (including local law security agreements),
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments as the Collateral
Agent shall reasonably request and (b) each Pledgor that owns or acquires
material Excluded Regulatory Collateral after the date hereof shall use
commercially reasonable efforts to obtain approval of the applicable
Governmental Authority with respect to the grant by such Pledgor of a security
interest in such Excluded Regulatory Collateral unless such Pledgor determines
in good faith that such approval is unobtainable.  If an Event of Default has
occurred and is continuing, the Collateral Agent may institute and maintain, in
its own name or in the name of any Pledgor, such suits and proceedings as the
Collateral Agent may be advised by counsel shall be necessary, advisable or
prudent to prevent any impairment of the security interest in the Collateral or
the perfection or priority thereof.  If (x) an Event of Default has occurred and
is continuing or (y) a landlord of any Pledgor shall provide notice of default
under or termination of any lease to which a Pledgor is a party such Pledgor
shall use commercially reasonable efforts to cause such landlord to agree (in a
writing addressed to the Collateral Agent) to extend the time period provided by
such landlord for the removal of Collateral from the leased premises for a
period, and otherwise on terms and conditions, reasonably satisfactory to the
Collateral Agent; provided that, in connection therewith, no Pledgor shall
agree, directly or indirectly, with any landlord to abandon any Collateral or
waive or limit such Pledgor’s rights in any Collateral.  All of the foregoing
shall be at the sole cost and expense of the Pledgors and shall be paid in
accordance with Section 10.03 of the Credit Agreement.
 

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ARTICLE IV

 
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
Each Pledgor represents, warrants and covenants as follows (it being
acknowledged and agreed that each reference in the representations and
warranties of this Article IV to a Schedule of the Perfection Certificate, shall
be taken as a reference to such Schedule as contained in the most recently
updated or supplemented Perfection Certificate in effect at the time such
representation and warranty is made):
 
Section 4.1            Title.  Except for the security interest granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns (or either owns or has a
license to, in the case of Intellectual Property Collateral) and, as to
Collateral acquired by it from time to time after the date hereof, will own (or
either own or have a License to, in the case of Intellectual Property
Collateral) the rights in each item of Collateral pledged by it hereunder free
and clear of any and all Liens or claims of others.  Such Pledgor has not filed,
nor authorized any third party to file a financing statement or other public
notice with respect to all or any part of the Collateral on file or of record in
any public office, except such as have been filed in favor of the Collateral
Agent pursuant to this Agreement, filed in favor of the holder of a Permitted
Lien, permitted by the Credit Agreement or financing statements or public
notices relating to the termination statements listed on Schedule 9(a) to the
Perfection Certificate.  No Person other than the Collateral Agent has, or will
have, control or possession of all or any part of the Collateral, except to the
extent not prohibited by the Loan Documents.
 
Section 4.2            Validity of Security Interest.  The security interest in
and Lien on the Collateral granted to the Collateral Agent for the benefit of
the Secured Parties hereunder constitutes (a) a legal and valid security
interest in all the Collateral securing the payment and performance of the
Secured Obligations, and (b) (i) in the case of all Collateral in which a
security interest may be perfected by filing a financing statement under the
UCC, subject to the filings and other actions described on Schedule 1 hereto, a
valid and enforceable perfected first priority security interest (subject to
Permitted Liens) in all such Collateral to the extent required by this Agreement
and (ii) with respect to certificated Securities Collateral, Instruments,
Tangible Chattel Paper, Deposit Accounts, Securities Accounts, Commodities
Accounts, certificated Investment Property, Electronic Chattel Paper,
Transferable Records and Letter-of-Credit Rights, subject to the deliveries
contemplated pursuant to Section 3.1 and Section 3.4 and the filings
contemplated pursuant to Section 3.3, a valid and enforceable perfected first
priority security interest (with respect to the perfected first priority
security interest contemplated by Section 3.3, subject to Permitted Liens) in
all such Collateral to the extent required by this Agreement.  The security
interest and Lien granted to the Collateral Agent for the benefit of the Secured
Parties pursuant to this Agreement in and on the Collateral will at all times
constitute a valid and enforceable perfected, continuing first priority security
interest therein to the extent required by this Agreement, subject only to
clause (b) of the preceding sentence and Permitted Liens.
 
Section 4.3            Pledgor Defense of Claims;  Transferability of
Collateral.  Each Pledgor shall, at its own cost and expense, defend title to
the Collateral pledged by it hereunder and the security interest therein granted
to the Collateral Agent and the priority thereof required hereunder against all
claims and demands of all Persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party.  There is no agreement that restricts the transferability of any
material portion of the Collateral or impairs or conflicts with such Pledgor’s
obligations or the rights of the Collateral Agent hereunder, and no Pledgor
shall enter into any such agreement or take any other action that would have any
such effect.
 

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Section 4.4            Other Financing Statements.  No Pledgor has filed, nor
authorized any third party to file (nor will there be) any valid or effective
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral other than financing statements and other statements and
instruments filed in favor of the Collateral Agent, or relating to Permitted
Liens, or as otherwise permitted by the Credit Agreement or financing statements
or public notices relating to the termination statements listed on Schedule 9(a)
to the Perfection Certificate.  Prior to the payment in full of the Secured
Obligations, no Pledgor shall execute, authorize or permit to be filed in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) relating to any Collateral,
except financing statements and other statements and instruments filed or to be
filed in respect of and covering the security interests granted by such Pledgor
in favor of the Collateral Agent, or any holder of Permitted Liens, or as
otherwise permitted by the Credit Agreement.
 
Section 4.5            Chief Executive Office; Change of Name; Jurisdiction of
Organization, etc.
 
(a)           The exact legal name, jurisdiction of organization, organizational
identification number and tax identification number, if any, of each Pledgor is
set forth on Schedule 1(a) to the Perfection Certificate, and the chief
executive office of each Pledgor is set forth on Schedule 2(a) to the Perfection
Certificate.
 
(b)           No Pledgor shall effect any change (i) in any Pledgor’s legal
name, (ii) in the location of any Pledgor’s chief executive office, (iii) in any
Pledgor’s organizational structure, (iv) in any Pledgor’s Federal Taxpayer
Identification Number or organizational identification number, if any (except as
may be required by applicable Legal Requirements, in which case, Borrower shall
promptly notify the Collateral Agent of such change), or (v) in any Pledgor’s
jurisdiction of organization (in each case, including by merging with or into
any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), until (A) it shall have given the
Collateral Agent not less than ten Business Days’ prior written notice (in the
form of an Officers’ Certificate), of its intention so to do, clearly describing
such change and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (B) it shall have taken all action
necessary or advisable to maintain the validity, enforceability, perfection and
priority of the security interest of the Collateral Agent for the benefit of the
Secured Parties in the Collateral, if applicable.  Each Pledgor shall promptly
provide the Collateral Agent with certified Organizational Documents reflecting
any of the changes described in the preceding sentence.  Each Pledgor shall
promptly notify the Collateral Agent in writing of any change in the location of
any office in which it maintains books or records relating to Collateral owned
by it or any office or facility at which Collateral is located (including the
establishment of any such new office or any such facility), other than changes
in location to a Mortgaged Property or a leased Property subject to a Landlord
Access Agreement in favor of the Collateral Agent.
 
(c)           If such Pledgor does not have an organizational identification
number or tax identification number and later obtains one, such Pledgor shall
within ten Business Days notify the Collateral Agent in writing of such
organizational identification number or tax identification number, as the case
may be.  If any Pledgor fails to provide information to the Collateral Agent
about such changes on a timely basis, the Collateral Agent shall not be liable
or responsible to any party for any failure to maintain a valid, enforceable,
and perfected security interest with the priority required hereunder in such
Pledgor’s property constituting Collateral, for which the Collateral Agent
needed to have information relating to such changes. The Collateral Agent shall
have no duty to inquire about such changes if any Pledgor does not inform the
Collateral Agent of such changes, the parties acknowledging and agreeing that it
would not be feasible or practical for the Collateral Agent to search for
information on such changes if such information is not provided by any Pledgor.
 

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(d)           Each Pledgor shall comply with the provisions of Section 5.13 of
the Credit Agreement.
 
Section 4.6            Location of Inventory and Equipment.  As of the date
hereof, all Equipment and Inventory of such Pledgor with a fair market value in
excess of $250,000, for each individual location, and $1,000,000, in the
aggregate for all locations with less than $250,000 of such Collateral, is
located at the chief executive office or such other location listed on
Schedule 2(d) to the Perfection Certificate.  Such Pledgor will (a) provide the
Collateral Agent with not less than 30 days’ prior written notice of its
intention to move any Equipment or Inventory (other than Equipment and Inventory
of such Pledgor with a fair market value of less than $250,000, for each
individual location, and $1,000,000, in the aggregate) from such location to
another location, and will provide the Collateral Agent with such other
information in connection with such location as the Collateral Agent may
reasonably request for purposes of maintaining the perfection and priority of
the security interest of the Collateral Agent in such Equipment and Inventory
and (b) take all other actions reasonably requested by the Collateral Agent to
maintain the perfection and priority of the security interest of the Collateral
Agent in such Equipment and Inventory for the benefit of the Secured Parties.
 
Section 4.7            Corporate Names; Prior Transactions.  Such Pledgor has
not, during the past five years, been known by or used any other corporate or
fictitious name or been party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, in each case other than as set
forth on Schedules 1(b) and 1(c) to the Perfection Certificate.
 
Section 4.8            Due Authorization and Issuance.  All of the Initial
Pledged Shares have been, and to the extent any Pledged Shares are hereafter
issued, such Pledged Shares will be, upon such issuance, duly authorized,
validly issued and fully paid and non-assessable.  All of the Initial Pledged
Interests have been fully paid for, and there is no amount or other obligation
owing by any Pledgor to any issuer of the Initial Pledged Interests in exchange
for or in connection with the issuance of the Initial Pledged Interests or any
Pledgor’s status as a partner or a member of any issuer of the Initial Pledged
Interests.
 
Section 4.9            Consents, etc.  No consent of any party (including,
without limitation, equity holders or creditors of such Pledgor) and no consent,
authorization, approval, license or other action by, and no notice to or filing
with, any Governmental Authority or regulatory body or other Person is required
(a) for the exercise by the Collateral Agent of the voting or other rights
provided for in this Agreement or (b) for the exercise by the Collateral Agent
of the remedies in respect of the Collateral pursuant to this Agreement.  If the
Collateral Agent desires to exercise any remedies, voting or consensual rights
or attorney-in-fact powers set forth in this Agreement and determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other Person therefor, then, upon the request of the Collateral Agent, each
Pledgor agrees to use its commercially reasonable efforts to assist and aid the
Collateral Agent to obtain as soon as practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers.
 

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Section 4.10          Collateral.  All information set forth herein, including
the schedules annexed hereto, and all information contained in any documents,
schedules and lists heretofore delivered to any Secured Party, including the
Perfection Certificate and the schedules thereto, in connection with this
Agreement, in each case, relating to the Collateral, is accurate and complete in
all material respects.
 
Section 4.11          Insurance.
 
(a)           The Pledgors shall take all actions necessary to obtain and
maintain such insurance as is required pursuant to the Credit Agreement.  In the
event that the proceeds of any insurance claim are paid after the Collateral
Agent has exercised its right to foreclose after an Event of Default, such Net
Cash Proceeds shall be paid to the Collateral Agent to satisfy any deficiency
remaining after such foreclosure.  The Collateral Agent shall retain its
interest in the insurance policies and coverages required to be maintained
pursuant to the Credit Agreement during any redemption period.
 
(b)           Pledgor shall provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until at least
30 days after receipt by the Collateral Agent of written notice thereof.
 
(c)           All such insurance shall (i) name the Collateral Agent as
mortgagee (in the case of property insurance) or additional insured on behalf of
the Secured Parties (in the case of liability insurance) or lender’s loss payee
(in the case of property insurance), as applicable, (ii) if reasonably requested
by the Collateral Agent, include a breach of warranty clause and (iii) be
reasonably satisfactory in all other material respects to the Collateral Agent.
 
Section 4.12          Intellectual Property.
 
(a)           The operation of such Pledgor’s business as currently conducted or
as contemplated to be conducted and the use of the Intellectual Property
Collateral in connection therewith does not conflict with, infringe,
misappropriate, dilute, misuse or otherwise violate the intellectual property
rights of any third party.
 
(b)           Such Pledgor is licensed to use or is the exclusive owner of all
right, title and interest in and to the Intellectual Property Collateral that is
material to its business, and is entitled to use such Intellectual Property
Collateral subject only to the terms of the License Agreements.
 
(c)           The Intellectual Property Collateral set forth on Schedule 14 to
the Perfection Certificate includes all of the following that are owned by such
Pledgor (or in the case of License Agreements, to which such Pledgor is a party)
as of the date hereof:  Patents that are Registered, Trademarks that are
Registered, Copyrights that are Registered and License Agreements.
 
(d)           The Registered Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable in whole or part, and to the
knowledge of such Pledgor, is valid and enforceable.  Such Pledgor is not aware
of any uses of any item of Intellectual Property Collateral that could be
expected to lead to such item becoming invalid or unenforceable.
 

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(e)           Such Pledgor has made or performed all filings, recordings and
other acts and has paid all required fees and taxes to maintain and protect its
interest in each and every item of material Registered Intellectual Property
Collateral in full force and effect throughout the world, and to protect and
maintain its interest therein including, without limitation, recordations of any
of its interests in the Patents and Trademarks that are Registered with the
United States Patent and Trademark Office and in corresponding national and
international patent and trademark offices, and recordation of any of its
interests in the Copyrights that are Registered with the United States Copyright
Office and in corresponding national and international copyright offices.  Such
Pledgor has used proper statutory notice in connection with its use of each
Patent, Trademark and Copyright in the Intellectual Property Collateral.
 
(f)           No claim, action, suit, investigation, litigation or proceeding
has been asserted or is pending or, to the knowledge of such Pledgor, threatened
against such Pledgor (i) based upon or challenging or seeking to deny or
restrict the Pledgor’s rights in or use of any of the Intellectual Property
Collateral, (ii) alleging that the Pledgor’s rights in or use of the
Intellectual Property Collateral or that any services provided by, processes
used by, or products manufactured or sold by, such Pledgor infringe,
misappropriate, dilute, misuse or otherwise violate any patent, trademark,
copyright or any other proprietary right of any third party, or (iii) alleging
that the Intellectual Property Collateral is being licensed or sublicensed in
violation or contravention of the terms of any license or other agreement.  No
Person is engaging in any activity that infringes, misappropriates, dilutes,
misuses or otherwise violates the Intellectual Property Collateral or the
Pledgor’s rights in or use thereof.  Except as set forth on Schedule 14 to the
Perfection Certificate, such Pledgor 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 Intellectual Property Collateral.  The consummation
of the transactions contemplated by the Loan Documents will not result in the
termination or impairment of any of the Intellectual Property Collateral.
 
(g)           With respect to each License Agreement: (i) such License Agreement
is valid and binding and in full force and effect and represents the entire
agreement between the respective parties thereto with respect to the subject
matter thereof; (ii) such License Agreement 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 interest granted herein, nor will the grant
of such rights and interest constitute a breach or default under such License
Agreement or otherwise give any party thereto a right to terminate such License
Agreement; (iii) such Pledgor has not received any notice of termination or
cancellation under such License Agreement; (iv) such Pledgor has not received
any notice of a breach or default under such License Agreement, which breach or
default has not been cured; (v) such Pledgor has not granted to any other third
party any rights, adverse or otherwise, under such License Agreement; and (vi)
neither such Pledgor nor any other party to such License Agreement is in breach
or default thereof in any material respect, and no event has occurred that, with
notice or lapse of time or both, would constitute such a breach or default or
permit termination, modification or acceleration under such License Agreement.
 

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(h)           To the knowledge of such Pledgor, (i) none of the Trade Secrets of
such Pledgor has been used, divulged, disclosed or appropriated to the detriment
of such Pledgor for the benefit of any other Person other than such Pledgor;
(ii) no employee, independent contractor or agent of such Pledgor 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 Pledgor; and (iii) no employee, independent contractor or agent of such
Pledgor 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 Pledgor’s Intellectual Property Collateral.
 
(i)           No Pledgor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, agreement, decree, order, injunction, judgment
or ruling restricting the use of any Intellectual Property Collateral or that
would impair the validity or enforceability of such Intellectual Property
Collateral.
 
Section 4.13          Payment of Taxes; Compliance with Legal Requirements;
Contesting Liens; Charges.  Each Pledgor may at its own expense contest the
validity, amount or applicability of any Charges so long as the contest thereof
shall be conducted in accordance with, and not prohibited pursuant to the
provisions of, the Credit Agreement.  Notwithstanding the foregoing sentence,
(a) no contest of any such obligation may be pursued by such Pledgor if such
contest could reasonably be expected to expose the Collateral Agent or any other
Secured Party to (i) any possible criminal liability or (ii) any additional
civil liability for failure to comply with such obligations unless such Pledgor
shall have furnished a bond or other security therefor satisfactory to the
Collateral Agent, or such Secured Party, as the case may be, and (b) if at any
time payment or performance of any obligation contested by such Pledgor pursuant
to this Section 4.13 shall become reasonably necessary to prevent the imposition
of remedies because of non-payment, such Pledgor shall pay or perform the same
in sufficient time to prevent the imposition of remedies in respect of such
default or prospective default.
 
Section 4.14          Access to Collateral, Books and Records; Other
Information.  Each Pledgor shall permit representatives of the Collateral Agent
or any Secured Party upon reasonable notice to visit and inspect any of its
properties, including to conduct any environmental assessments, sampling,
testing or monitoring of the Mortgaged Property, or assets and examine and make
abstracts from any of its books and records (including insurance policies) at
any reasonable time and upon reasonable notice.  Such Pledgor shall, at any and
all times, within a reasonable time after written request by the Collateral
Agent, furnish or cause to be furnished to the Collateral Agent, in such manner
and in such detail as may be reasonably requested by the Collateral Agent,
additional information with respect to the Collateral.  If a Default occurs and
is continuing, the Collateral Agent shall have the right, but not the
obligation, to access any Mortgaged Property to undertake any Response that the
Collateral Agent in its sole discretion deems appropriate at the sole cost and
expense of the Pledgors.
 
ARTICLE V

 
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
 
Section 5.1            Pledge of Additional Securities Collateral.  Each Pledgor
shall, upon obtaining any Pledged Securities or Intercompany Notes of any
Person, accept the same in trust for the benefit of the Collateral Agent and
promptly, and in any event within ten Business Days thereafter (or such later
date as may be agreed to in writing by the Collateral Agent in its sole
discretion), deliver to the Collateral Agent a pledge amendment, duly executed
by such Pledgor, in substantially the form of Exhibit 2 hereto (each, a “Pledge
Amendment”), and the certificates and other documents required under Section 3.1
and Section 3.2 in respect of such additional Pledged Securities or Intercompany
Notes that are to be pledged pursuant to this Agreement, and confirming the
grant of the Lien created hereby in respect of such additional Pledged
Securities or Intercompany Notes.  Each Pledgor hereby authorizes the Collateral
Agent to attach each Pledge Amendment to this Agreement and agrees that all
Pledged Securities or Intercompany Notes listed on any Pledge Amendment
delivered to the Collateral Agent shall for all purposes hereunder be considered
Collateral.
 

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Section 5.2            Voting Rights; Distributions; etc.
 
(a)           So long as no Event of Default shall have occurred and be
continuing:
 
(i)           Each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Securities Collateral or any part
thereof for any purpose not inconsistent with the terms or purposes hereof, the
other Loan Documents or any other document evidencing the Secured Obligations;
provided, however, that no Pledgor shall in any event exercise such rights in
any manner that could reasonably be expected to (x) have a material adverse
effect on the value thereof or (y) be disadvantageous to any Secured Party in
any material respect.
 
(ii)           Each Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien hereof, any and all Distributions, but only
if and to the extent made in accordance with the provisions of the Credit
Agreement; provided, however, that any and all such Distributions consisting of
rights or interests in the form of Pledged Securities or Intercompany Notes
shall promptly, and in any event within ten Business Days after receipt thereof
(or such later date as may be agreed to in writing by the Collateral Agent in
its sole discretion), be delivered to the Collateral Agent to hold as Collateral
and shall, if received by any Pledgor, be received in trust for the benefit of
the Collateral Agent, be segregated from the other property or funds of such
Pledgor and be forthwith delivered to the Collateral Agent as Collateral in the
same form as so received (with any necessary, advisable or reasonably requested
endorsement).
 
(b)           Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may implement either or both of the following
remedies:
 
(i)           All rights of each Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to Section
5.2(a)(i) shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which, shall thereupon have the sole right to exercise such
voting and other consensual rights.
 
(ii)           All rights of each Pledgor to receive Distributions that it would
otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii)
without further action shall cease and all such rights shall thereupon become
vested in the Collateral Agent, which, shall thereupon have the sole right to
receive and hold as Collateral such Distributions.
 

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(c)           Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may request in order to permit the Collateral Agent to exercise
the voting and other rights which it may be entitled to exercise pursuant to
Section 5.2(b)(i) and to receive all Distributions which it may be entitled to
receive under Section 5.2(b)(ii).  If the Collateral Agent duly exercises its
right to vote any of such Pledged Securities, each Pledgor appoints the
Collateral Agent, such Pledgor’s true and lawful attorney-in-fact and grants the
Collateral Agent an irrevocable proxy to vote such Pledged Securities in any
manner the Collateral Agent deems advisable for or against all matters submitted
or which may be submitted to a vote of shareholders, partners or members, as the
case may be.  The power-of-attorney and proxy granted hereby is coupled with an
interest and shall be irrevocable.
 
(d)           All Distributions that are received by any Pledgor contrary to the
provisions of Section 5.2(b)(ii) shall be received in trust for the benefit of
the Collateral Agent, shall be segregated from the other funds of such Pledgor
and shall immediately be paid over to the Collateral Agent as Collateral in the
same form as so received (with any necessary, advisable or reasonably requested
endorsement).
 
Section 5.3            Default.  Such Pledgor is not in default or violation
under any agreement to which such Pledgor is a party relating to the Pledged
Securities pledged by it (including with respect to the payment of any portion
of any mandatory capital contribution, if any, required to be made
thereunder).  No Securities Collateral pledged by such Pledgor is subject to any
defense, offset or counterclaim, nor, to the knowledge of such Pledgor, have any
of the foregoing been asserted or alleged against such Pledgor by any Person
with respect thereto, and as of the date hereof, there are no certificates,
instruments, documents or other writings (other than the Organizational
Documents of such Pledgor and certificates, if any, delivered to the Collateral
Agent) which evidence any Pledged Securities of such Pledgor.
 
Section 5.4            Certain Agreements of Pledgors as Issuers and Holders of
Equity Interests.
 
(a)           In the case of each Pledgor that is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.
 
(b)           In the case of each Pledgor that is a partner, member or holder of
any Equity Interests in a partnership, limited liability company or other
entity, such Pledgor hereby consents to the extent required by the applicable
Organizational Documents of such Pledgor to the pledge by each other Pledgor,
pursuant to the terms hereof, of the Pledged Interests in such partnership,
limited liability company or other entity and, upon the occurrence and during
the continuance of an Event of Default, to the transfer of such Pledged
Interests to the Collateral Agent or its nominee and to the substitution of the
Collateral Agent or its nominee as a substituted partner, member or holder of
Equity Interests in such partnership, limited liability company or other entity
with all the rights, powers and duties of a general partner, limited partner,
member or holder of Equity Interests, as the case may be.
 

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ARTICLE VI

 
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
 
Section 6.1            Grant of License.  For the purpose of enabling the
Collateral Agent, during the continuance of an Event of Default, to exercise
rights and remedies under Article IX at such time as the Collateral Agent shall
be lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Pledgor hereby grants to the Collateral Agent, to the extent
licensable, an irrevocable, non-exclusive worldwide license (exercisable without
payment of royalty or other compensation to such Pledgor) to use, assign,
license sublicense or otherwise dispose of the Intellectual Property Collateral
now owned or hereafter acquired by such Pledgor, wherever the same may be
located.  Such license shall include access to all media in which any of the
Intellectual Property Collateral may be recorded or stored and to all computer
programs used for the compilation or printout hereof.
 
Section 6.2            Registration.  Except pursuant to licenses and other
agreements entered into by any Pledgor in the ordinary course of business, on
and as of the date hereof (i) each Pledgor owns and/or possesses the right to
use, and has done nothing to authorize or enable any other Person to use, any
Copyright, Patent or Trademark listed on Schedule 14 to the Perfection
Certificate, and (ii) to the knowledge of Pledgor, all registrations listed on
Schedule 14 of the Perfection Certificate are valid and in full force and
effect.
 
Section 6.3            Protection of Collateral Agent’s Security.
 
(a)           With respect to each item of its Intellectual Property Collateral,
each Pledgor agrees, on a continuing basis, to take, at its sole cost and
expense, all necessary steps, including, without limitation, in the United
States Patent and Trademark Office, the United States Copyright Office and any
other Governmental Authority, to (i) maintain the validity and enforceability of
such Intellectual Property Collateral and maintain such Intellectual Property
Collateral in full force and effect, and (ii) pursue the registration and
maintenance of each Patent, Trademark, or Copyright registration or application,
now or hereafter included in such Intellectual Property Collateral of such
Pledgor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the United States Patent and
Trademark Office, the United States Copyright Office or other Governmental
Authorities, the filing of applications for renewal or extension, the filing of
affidavits under Sections 8 and 15 of the U.S. Trademark Act, 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.  No Pledgor shall, without the written consent of
the Collateral Agent, discontinue use of or otherwise abandon any Intellectual
Property Collateral, or abandon any right to file an application for any Patent,
Trademark, or Copyright, unless such Pledgor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual Property
Collateral is no longer desirable in the conduct of such Pledgor’s business and
that the loss thereof would not be reasonably likely to materially adversely
affect the operation of such Pledgor’s business, in which case, such Pledgor
will give prompt notice of any such abandonment to the Collateral Agent.
 

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(b)           Each Pledgor agrees, on a continuing basis, promptly (and in any
event within ten Business Days) to notify the Collateral Agent if such Pledgor
becomes aware (i) that any item of the Intellectual Property Collateral may have
become abandoned, placed in the public domain, invalid or unenforceable, or of
any adverse determination or development regarding such Pledgor’s ownership of
any of the Intellectual Property Collateral or its right to register the same or
to keep and maintain and enforce the same, or (ii) of any adverse determination
or the institution of any proceeding (including, without limitation, the
institution of any proceeding in the United States Patent and Trademark Office
or any court) regarding any item of the Intellectual Property Collateral.
 
(c)           In the event that any Pledgor becomes aware that any item of the
Intellectual Property Collateral is being infringed or misappropriated by a
third party, such Pledgor shall promptly (and in any event within ten Business
Days)  notify the Collateral Agent and shall take such actions, at its expense,
as such Pledgor or the Collateral Agent deems reasonable and appropriate under
the circumstances to protect or enforce such Intellectual Property Collateral,
including, without limitation, suing for infringement or misappropriation and
for an injunction against such infringement or misappropriation.  Without
limiting the foregoing, upon such Pledgor obtaining knowledge thereof, Pledgor
shall promptly (and in any event within ten Business Days) notify the Collateral
Agent in writing of any event that may be reasonably expected to materially and
adversely affect the value or utility any item of Intellectual Property
Collateral, the ability of such Pledgor or the Collateral Agent to dispose of
such Intellectual Property Collateral or any portion thereof or the rights and
remedies of the Collateral Agent in relation thereto, including a levy or
written threat of levy or any legal process against such Intellectual Property
Collateral or any portion thereof.
 
(d)           Each Pledgor agrees, on a continuing basis, to use proper
statutory notice in connection with its use of each item of its Intellectual
Property Collateral.  No Pledgor shall do or permit any act or knowingly omit to
do any act whereby any of its Intellectual Property Collateral may lapse or
become invalid or unenforceable or placed in the public domain.  No Pledgor will
settle or compromise any pending or future litigation or administrative
proceeding with respect to any Intellectual Property Collateral without the
prior written consent of the Collateral Agent.
 
(e)           Except as otherwise permitted by this Article VI, each Pledgor
agrees, on a continuing basis, to take all steps which it or the Collateral
Agent deems reasonable and appropriate under the circumstances to preserve and
protect each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.
 
(f)           No Pledgor shall (i) license any  Intellectual Property Collateral
other than pursuant to License Agreements entered into by such Pledgor in, or
incidental to, the ordinary course of its business, or (ii) amend or permit the
amendment of any License Agreement in a manner that materially and adversely
affects the right to receive payments thereunder, or in any manner that would
materially impair the value of any Intellectual Property Collateral or the Lien
on and security interest in the Intellectual Property Collateral intended to be
granted to the Collateral Agent for the benefit of the Secured Parties, in each
case (i) and (ii), without the consent of the Collateral Agent.
 

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(g)           Each Pledgor agrees, on a continuing basis, diligently keep
adequate records respecting the Intellectual Property Collateral and  furnish to
the Collateral Agent from time to time upon the Collateral Agent’s reasonable
request therefor reasonably detailed statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Collateral Agent may from time to time request.
 
(h)           During the continuance of an Event of Default, within three
Business Days after written notice from the Collateral Agent, make available to
the Collateral Agent, to the extent within such Pledgor’s power and authority,
such personnel in such Pledgor’s employ on the date of such Event of Default as
the Collateral Agent may reasonably designate, by name, title or job
responsibility, to permit such Pledgor to continue, directly or indirectly, to
produce, advertise and sell the products and services sold or delivered by such
Pledgor under or in connection with the Intellectual Property Collateral, and
each Pledgor shall use commercially reasonable efforts to ensure that such
Persons shall be available to perform their prior functions on the Collateral
Agent’s behalf if compensated at Pledgor’s expense on a per diem, pro rata basis
consistent with the salary and benefits structure applicable to each as of the
date of such Event of Default.
 
(i)           With respect to its Intellectual Property Collateral, each Pledgor
agrees to execute or otherwise authenticate agreements, as applicable, the
Copyright Security Agreement,  Patent Security Agreement and Trademark Security
Agreement in substantially the forms set forth in Exhibits 6, 7 and 8 hereto or
otherwise in form and substance satisfactory to the Collateral Agent for
recording the security interest granted hereunder to the Collateral Agent in
such Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office and any other Governmental
Authorities necessary to perfect the security interest hereunder in such
Intellectual Property Collateral.
 
If any Pledgor shall, at any time before the payment in full of the Secured
Obligations, (a) obtain any rights to any additional Intellectual Property
Collateral or (b) become entitled to the benefit of any additional Intellectual
Property Collateral or any renewal or extension thereof, including any reissue,
division, continuation, or continuation-in-part of any Intellectual Property
Collateral, or any improvement on any Intellectual Property Collateral, the
provisions of this Agreement shall automatically apply thereto and any such item
enumerated in clause (a) or (b) of this Section 6.3 with respect to such Pledgor
shall automatically constitute Intellectual Property Collateral if such item
would have constituted Intellectual Property Collateral at the time of execution
hereof and be subject to the Lien and security interest created by this
Agreement without further action by any party (excluding any Intellectual
Property Collateral that constitutes Excluded Property).  Each Pledgor shall
promptly (i) provide to the Collateral Agent written notice of any of the
foregoing and (ii) confirm the attachment of the Lien and security interest
created by this Agreement to any rights described in clauses (a) and (b) of the
immediately preceding sentence of this Section 6.3 by execution of an instrument
in form reasonably acceptable to the Collateral Agent and the filing of any
instruments or statements as shall be deemed necessary, advisable or prudent by
the Collateral Agent to preserve, protect or perfect the Collateral Agent’s
security interest or the priority thereof in such Intellectual Property
Collateral to the extent such security interest in such Intellectual Property
Collateral may be perfected under applicable Legal Requirements.  Further, each
Pledgor authorizes the Collateral Agent to modify this Agreement by amending
Schedules 14(a) (b) and (c) to the Perfection Certificate to include any
Intellectual Property Collateral acquired or arising after the date hereof of
such Pledgor.
 

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Unless there shall occur and be continuing any Event of Default, each Pledgor
shall have the right to commence and prosecute in its own name, as the party in
interest, for its own benefit and at the sole cost and expense of the Pledgors,
such applications for protection of the Intellectual Property Collateral and
suits, proceedings or other actions to prevent the infringement, counterfeiting,
unfair competition, dilution, diminution in value or other damage as are
necessary, advisable or prudent to protect the Intellectual Property
Collateral.  Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent or
the Secured Parties to enforce the Intellectual Property Collateral and any
license thereunder.  In the event of such suit, each Pledgor shall, at the
reasonable request of the Collateral Agent, do any and all lawful acts and
execute any and all documents requested by the Collateral Agent in aid of such
enforcement and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent in accordance with Section 10.03 of the Credit Agreement for
all costs and expenses incurred by the Collateral Agent in the exercise of its
rights under this Section 6.3.  In the event that the Collateral Agent shall
elect not to bring such suit to enforce the Intellectual Property Collateral,
each Pledgor agrees, at the reasonable request of the Collateral Agent, to take
all actions necessary, advisable or prudent, whether by suit, proceeding or
other action, to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual
Property Collateral by others and for that purpose agrees to diligently maintain
any suit, proceeding or other action against any Person so infringing necessary
to prevent such infringement.
 
ARTICLE VII
 
CERTAIN PROVISIONS CONCERNING ACCOUNTS
 
Section 7.1            Special Representation and Warranties.  As of the time
when each of its Accounts arises, each Pledgor shall be deemed to have
represented and warranted that such Account and all records, papers and
documents relating thereto (i) are genuine and correct and in all material
respects what they purport to be, (ii) to the Pledgor’s knowledge, represent the
legal, valid and binding obligation of the account debtor, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally or by equitable
principles relating to enforceability, evidencing indebtedness unpaid and owed
by such account debtor, arising out of the performance of labor or services or
the sale, lease, license, assignment or other disposition and delivery of the
goods or other property listed therein or out of an advance or a loan,
(iii) will, in the case of an Account, except for the original or duplicate
original invoice sent to purchase evidencing such purchaser’s account, be the
only original writing evidencing and embodying such obligation of the account
debtor named therein and (iv) are in all material respects in compliance and
conform with all applicable Legal Requirements.
 

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Section 7.2            Maintenance of Records.  Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practices, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto.  Each Pledgor shall, at such Pledgor’s
sole cost and expense, upon the Collateral Agent’s demand made at any time after
the occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including all documents evidencing Accounts and
any books and records relating thereto to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Pledgor).  Upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent may transfer a full and complete copy of any
Pledgor’s books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any Person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Collateral Agent’s security interest therein without the consent of any Pledgor.
 
Section 7.3            Legend.  At the request of the Collateral Agent and in
form and manner satisfactory to the Collateral Agent, each Pledgor shall legend
the Accounts and the other books, records and documents of such Pledgor
evidencing or pertaining to the Accounts with an appropriate reference to the
fact that the Accounts have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.
 
Section 7.4            Modification of Terms, etc.  No Pledgor shall rescind or
cancel any obligations evidenced by any Account or modify any term thereof or
make any adjustment with respect thereto except in the ordinary course of
business in a manner consistent with prudent business practices, or extend or
renew any such obligations except in the ordinary course of business consistent
with prudent business practices or compromise or settle any dispute, claim, suit
or legal proceeding relating thereto or sell any Account or interest therein
except in the ordinary course of business in a manner consistent with prudent
business practices without the prior written consent of the Collateral
Agent.  Each Pledgor shall timely fulfill all obligations on its part to be
fulfilled under or in connection with the Accounts.
 
Section 7.5            Collection.  Each Pledgor shall cause to be collected
from the account debtor of each of the Accounts, as and when due in the ordinary
course of business and consistent with prudent business practices (including
Accounts that are delinquent, such Accounts to be collected in accordance with
generally accepted commercial collection procedures), any and all amounts owing
under or on account of such Account, and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balance of such Account,
except that any Pledgor may, with respect to an Account, allow in the ordinary
course of business (i) a refund or credit due as a result of returned or damaged
or defective merchandise and (ii) such extensions of time to pay amounts due in
respect of Accounts and such other modifications of payment terms or settlements
in respect of Accounts as shall be commercially reasonable in the circumstances,
all in accordance with such Pledgor’s ordinary course of business consistent
with its collection practices as in effect from time to time.  The costs and
expenses (including attorneys’ fees) of collection, in any case, whether
incurred by any Pledgor, the Collateral Agent or any Secured Party, shall be
paid by the Pledgors in accordance with Section 10.03 of the Credit Agreement.
 

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ARTICLE VIII

 
TRANSFERS
 
Section 8.1            Transfers of Collateral.  No Pledgor shall (a) sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Collateral pledged by it hereunder except to the extent not prohibited by
and otherwise subject to the requirements of the Credit Agreement or (b) create
or permit to exist any Lien upon or with respect to any of the Collateral
pledged by it hereunder other than Permitted Liens.
 
ARTICLE IX

 
REMEDIES
 
Section 9.1            Remedies.  Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may from time to time exercise in
respect of the Collateral, in addition to the other rights and remedies provided
for herein or otherwise available to it, the following remedies:
 
(a)           Personally, or by agents or attorneys, immediately take possession
of the Collateral or any part thereof, from any Pledgor or any other Person who
then has possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon any Pledgor’s premises where any of the
Collateral is located, remove such Collateral, remain present at such premises
to receive copies of all communications and remittances relating to the
Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;
 
(b)           Demand, sue for, collect or receive any money or property at any
time payable or receivable in respect of the Collateral including instructing
the obligor or obligors on any agreement, instrument or other obligation
constituting part of the Collateral to make any payment required by the terms of
such agreement, instrument or other obligation directly to the Collateral Agent,
and in connection with any of the foregoing, compromise, settle, extend the time
for payment and make other modifications with respect thereto; provided,
however, that in the event that any such payments are made directly to any
Pledgor, prior to receipt by any such obligor of such instruction, such Pledgor
shall segregate all amounts received pursuant thereto in trust for the benefit
of the Collateral Agent and shall promptly but in no event later than three
Business Days after receipt thereof (or such later date as may be agreed to in
writing by the Collateral Agent in its sole discretion) pay such amounts to the
Collateral Agent;
 
(c)           Sell, assign, grant a license to use or otherwise liquidate, or
direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the Collateral
or any part thereof, and take possession of the proceeds of any such sale,
assignment, license or liquidation;
 
(d)           Take possession of the Collateral or any part thereof, by
directing any Pledgor in writing to deliver the same to the Collateral Agent at
any place or places so designated by the Collateral Agent, in which event such
Pledgor shall at its own expense:  (i) forthwith cause the same to be moved to
the place or places designated by the Collateral Agent and therewith delivered
to the Collateral Agent, (ii) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by the
Collateral Agent and (iii) while the Collateral shall be so stored and kept,
provide such security and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition.  Each Pledgor’s
obligation to deliver the Collateral as contemplated in this Section 9.1(d) is
of the essence hereof.  Upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree requiring
specific performance by any Pledgor of such obligation;
 

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(e)           Withdraw all moneys, instruments, securities and other property in
any bank, financial securities, deposit or other account of any Pledgor
constituting Collateral for application to the Secured Obligations as provided
in Article X;
 
(f)           Retain and apply the Distributions to the Secured Obligations as
provided in Article X;
 
(g)           Exercise any and all rights as beneficial and legal owner of the
Collateral, including perfecting assignment of and exercising any and all
voting, consensual and other rights and powers with respect to any Collateral;
and
 
(h)           All the rights and remedies of a secured party on default under
the UCC (whether or not the UCC applies to the affected Collateral), and the
Collateral Agent may also in its sole discretion, without notice except as
specified in Section 9.2, sell, assign, transfer or grant a license to use the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker’s board or at any of the Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Collateral Agent may deem commercially
reasonable.  The Collateral Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser, licensee, assignee or recipient of
any or all of the Collateral at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold, assigned or licensed at such sale, to
use and apply any of the Secured Obligations owed to such Person as a credit on
account of the purchase price of any Collateral payable by such Person at such
sale.  Each purchaser, assignee, licensee or recipient at any such sale shall
acquire the property sold, assigned or licensed absolutely free from any claim
or right on the part of any Pledgor, and each Pledgor hereby waives, to the
fullest extent permitted by applicable Legal Requirements, all rights of
redemption, stay and/or appraisal that it now has or may at any time in the
future have under any Legal Requirement now existing or hereafter enacted.  The
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given.  The Collateral 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.  Each Pledgor hereby waives, to
the fullest extent permitted by applicable Legal Requirements, any claims
against the Collateral Agent arising by reason of the fact that the price at
which any Collateral may have been sold, assigned or licensed at such a private
sale was less than the price which might have been obtained at a public sale,
even if the Collateral Agent accepts the first offer received and does not offer
such Collateral to more than one offeree.
 

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Notwithstanding anything to the contrary contained in this Agreement, the Credit
Agreement, or any other Loan Document or in any other agreement, instrument or
document executed by any Pledgor and delivered to the Collateral Agent or any
Lender, and without waiving or limiting any obligations of the Pledgors
hereunder, neither the Collateral Agent nor any Lender or other Secured Party,
nor any receiver appointed by the exercise of remedies hereunder, (i) will take
any action pursuant to this Agreement, the Credit Agreement, or any other Loan
Document or any other document referred to above which would constitute or
result in any assignment or change of control of any Regulatory License issued
by the FCC, any PUC, or any other Governmental Authority if any such assignment
or change of control would require, under any Legal Requirements, the prior
approval of the FCC, any PUC, or any other Governmental Authority without first
obtaining such prior approval of the FCC, such PUC, or such other Governmental
Authority.
 
In connection with the enforcement by the Collateral Agent of any remedies
pursuant to this Section 9.1 that would require the approval of the FCC, a PUC
or any Governmental Authority, and subject to the terms and conditions set forth
herein, each Pledgor agrees that it shall join and cooperate fully with, at the
request of the Collateral Agent, any receiver referred to below and/or the
successful bidder or bidders at any foreclosure sale in a filing of an
application (and furnishing any additional information that may be required in
connection with such application or which the Collateral Agent may believe
relevant to such application) with the FCC, any PUC and all other applicable
Governmental Authorities, requesting their prior approval of the transfer of
control of any Pledgor or assignment of all licenses, certificates, Governmental
Approvals, approvals and permits, issued to any Pledgor by the FCC, any PUC or
any such Governmental Authorities with respect to the Collateral and the
operation thereof, to the Collateral Agent, the receiver or to the successful
bidder or bidders. In connection with the foregoing, each Pledgor shall take
such further actions, and execute all such instruments, as the Collateral Agent
reasonably deems necessary or advisable.
 
If the Pledgors fail to reasonably cooperate with the Collateral Agent in its
enforcement of any remedies permitted hereunder that would require the approval
of the FCC, a PUC, or any Governmental Authority, and subject to the terms and
conditions set forth herein, (i) each Pledgor agrees that the Collateral Agent
may enforce any obligation of any such Pledgor as set forth in this section by
an action for specific performance; and (ii) each Pledgor, subject to the rules
and regulations of the FCC, a PUC, or any Governmental Authority, hereby
irrevocably constitutes and appoints the Collateral Agent and any agent or
officer thereof (which appointment is coupled with an interest) as its true and
lawful attorney-in-fact with full irrevocable power and authority and in the
place and stead of such Pledgor and in the name of such Pledgor or in its own
name, after the occurrence and during the continuance of an Event of Default and
in connection with the foregoing, for the purpose of executing on behalf and in
the name of such Pledgor any and all of the above-referenced instruments and to
take any and all appropriate action in furtherance of the foregoing. The
exercise of any rights or remedies hereunder or under any other Loan Document by
the Collateral Agent or any other Person acting on its behalf that may require
FCC, any PUC or any other Governmental Authority approval, shall be subject to
obtaining such approval and shall at all times be consistent in all material
respects with the rules and regulations of the FCC, any PUC, or any Governmental
Authority. Pending the receipt of any FCC, any PUC or any  Governmental
Authority approval, no Pledgor shall do anything to delay, hinder, interfere or
obstruct the exercise of the Collateral Agent’s rights or remedies hereunder in
obtaining such approvals. Notwithstanding anything to the contrary in this
Agreement, neither the Collateral Agent nor any other Person acting on its
behalf shall take any action which would reasonably be expected to cause the
revocation, suspension or material adverse modification of any of the regulatory
licenses, permits, or franchises of any Pledgor.
 

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In connection with the exercise of its remedies under this Agreement that
require the approval of the FCC, a PUC, or any Governmental Authority, the
Collateral Agent may, upon the occurrence and during the continuation of an
Event of Default, obtain the appointment of a receiver or trustee to assume upon
receipt of all necessary judicial, FCC, any PUC or other Governmental Authority
consents or approvals, control of or ownership of any of the Governmental
Approvals. Such receiver or trustee shall have all rights and powers provided to
it by law or by court order or provided to the Collateral Agent under this
Agreement. Upon the appointment of such trustee or receiver, each Pledgor agrees
to cooperate, to the extent necessary or advisable, in the expeditious
preparation, execution and filing of an application to the FCC, any PUC or any
other Governmental Authority or for consent to the transfer or control or
assignment of any Pledgor’s Governmental Approvals to the receiver or trustee.
 
Section 9.2            Notice of Sale.  Each Pledgor acknowledges and agrees
that, to the extent notice of sale or other disposition of Collateral shall be
required by any Legal Requirement, 10 days’ prior notice to such Pledgor of the
time and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters, unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market (in which case no such prior notice shall be required).  No notification
need be given to any Pledgor if it has signed, after the occurrence of an Event
of Default, a statement renouncing or modifying any right to notification of
sale or other intended disposition.
 
Section 9.3            Waiver of Notice and Claims; Other Waivers; Marshalling.
 
(a)           Each Pledgor hereby waives, to the fullest extent permitted by
applicable Legal Requirements, notice of judicial hearing in connection with the
Collateral Agent’s taking possession or the Collateral Agent’s disposition of
any of the Collateral, including any and all prior notice and hearing for any
prejudgment remedy or remedies and any such right which such Pledgor would
otherwise have under any Legal Requirement, and each Pledgor hereby further
waives, to the fullest extent permitted by applicable Legal Requirements (i) all
damages occasioned by such taking of possession, (ii) all other requirements as
to the time, place and terms of sale or other requirements with respect to the
enforcement of the Collateral Agent’s rights hereunder and (iii) all rights of
redemption, appraisal, valuation, stay, extension or moratorium now or hereafter
in force under any applicable Legal Requirements.  The Collateral Agent shall
not be liable for any incorrect or improper payment made pursuant to this
Article IX except to the extent resulting solely from the Collateral Agent’s
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.  Any sale of, or the grant of options to purchase, or
any other realization upon, any Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the applicable
Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity or otherwise against such Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through or under such Pledgor.
 

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(b)           Each Pledgor hereby waives demand, notice, protest, notice of
acceptance of this Agreement, notice of Credit Extensions, Collateral received
or delivered or any other action taken in reliance hereon and all other demands
and notices of any description.
 
(c)           The Collateral Agent shall not be required to marshal any present
or future collateral security (including the Collateral) for, or other
assurances of payment of, the Secured Obligations or any of them or to resort to
such collateral security or other assurances of payment in any particular
order.  To the maximum extent permitted by applicable Legal Requirements, each
Pledgor hereby agrees that it will not invoke any Legal Requirement relating to
the marshalling of collateral and hereby irrevocably waives the benefits of all
such Legal Requirements.
 
Section 9.4            Standards for Exercising Rights and Remedies.  (a)  To
the extent that applicable Legal Requirements impose duties on the Collateral
Agent to exercise remedies in a commercially reasonable manner, each Pledgor
acknowledges and agrees that it is not commercially unreasonable for the
Collateral Agent (i) to fail to incur expenses reasonably deemed significant by
the Collateral Agent to prepare Collateral for disposition or otherwise to fail
to complete raw material or work in process into finished goods or other
finished products for disposition, (ii) to fail to obtain third party consents
for access to Collateral to be disposed of, or to obtain or to fail to obtain
consents for Governmental Authorities or third parties for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against account debtors or other Persons obligated
on Collateral or to fail to remove liens or encumbrances on or any adverse
claims against Collateral, (iv) to exercise collection remedies against account
debtors and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
Persons, whether or not in the same business as any Pledgor, for expressions of
interest in acquiring all or any portion of the Collateral, (vii) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing 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, (ix) to dispose of assets
in wholesale rather than retail markets, (x) to disclaim or modify disposition
warranties, (xi) to purchase insurance or credit enhancements to insure the
Collateral Agent against risks of loss, collection or disposition of Collateral
or to provide to the Collateral Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the
Collateral Agent, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist the Collateral Agent in the
collection or disposition of any of the Collateral.  The Pledgors acknowledge
that the purpose of this Section 9.4 is to provide non-exhaustive indications of
what actions or omissions by the Collateral Agent would fulfill the Collateral
Agent’s duties under the UCC or other Legal Requirement of the State or any
other relevant jurisdiction in the Collateral Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Collateral
Agent shall not be deemed to fail to fulfill such duties solely on account of
not being indicated in this Section 9.4.  Without limiting the foregoing,
nothing contained in this Section 9.4 shall be construed to grant any rights to
any Pledgor or to impose any duties on the Collateral Agent that would not have
been granted or imposed by this Agreement or by applicable Legal Requirements in
the absence of this Section 9.4.
 

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(a)           Each Pledgor recognizes that, by reason of certain prohibitions
contained in Legal Requirements, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Collateral, to limit purchasers to
those who meet the requirements of a Governmental Authority.  Each Pledgor
acknowledges that any such sales may be at prices and on terms less favorable to
the Collateral Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agrees that any such
restricted sale shall be deemed to have been made in a commercially reasonable
manner and that, except as may be required by applicable Legal Requirements, the
Collateral Agent shall have no obligation to engage in public sales.
 
(b)           Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended (the “Securities Act”), and
applicable state or foreign securities laws, the Collateral Agent may be
compelled, with respect to any sale or disposition of all or any part of the
Securities Collateral and Investment Property, to limit purchasers to Persons
who will agree, among other things, to acquire such Securities Collateral or
Investment Property for their own account, for investment and not with a view to
the distribution or resale thereof.  Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Collateral Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Securities Collateral or
Investment Property for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state or foreign securities laws, even if
such issuer would agree to do so.
 
(c)           If the Collateral Agent determines to exercise its right to sell
any or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall, and shall cause each issuer of Securities
Collateral and Investment Property to be sold hereunder to, from time to time
furnish to the Collateral Agent all such information as the Collateral Agent may
reasonably request in order to determine the number and nature or interest, of
securities or other instruments included in the Securities Collateral or
Investment Property which may be sold by the Collateral Agent as exempt
transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.
 
(d)           Each Pledgor further agrees that a breach of any of the covenants
contained in this Section 9.5 will cause irreparable injury to the Collateral
Agent and other Secured Parties, that the Collateral Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 9.5 shall be
specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants.
 
Section 9.5            No Waiver; Cumulative Remedies.
 

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(i)           No failure on the part of the Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of the Collateral
Agent in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy; nor shall the Collateral Agent be
required to look first to, enforce or exhaust any other security, collateral or
guaranties.  The remedies herein provided are cumulative and are not exclusive
of any remedies provided by applicable Legal Requirements, in equity or
otherwise.
 
(ii)           In the event that the Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Agent, then and in every such case, the Pledgors, the
Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Collateral,
and all rights, remedies and powers of the Collateral Agent and the other
Secured Parties shall continue as if no such proceeding had been instituted.
 
Section 9.6            Certain Additional Actions Regarding Intellectual
Property.  If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or assignments of the Intellectual
Property Collateral that is Registered or such other documents as are necessary,
advisable or prudent to carry out the intent and purposes hereof.
 
ARTICLE X
 
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
 
Section 10.1          Proceeds of Casualty Events and Collateral
Dispositions.  The Pledgors shall take all actions required by the Credit
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Collateral.
 
Section 10.2          Application of Proceeds.  The proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums
then held by the Collateral Agent pursuant to this Agreement, in accordance with
the Credit Agreement.
 

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ARTICLE XI

 
MISCELLANEOUS
 
Section 11.1           Concerning Collateral Agent.
 
(i)            The Collateral Agent has been appointed as collateral agent
pursuant to the  Credit Agreement.  The actions of the Collateral Agent
hereunder are subject to the provisions of the Credit Agreement.  The Collateral
Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking action (including the release or substitution of the Collateral), in
accordance with this Agreement and the Credit Agreement.  Each Secured Party, by
its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by the Collateral Agent for the benefit of the
Secured Parties in accordance with the terms of this Agreement.  The Collateral
Agent may employ agents and attorneys-in-fact in connection herewith and shall
not be liable for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.  The Collateral Agent may resign
and a successor Collateral Agent may be appointed in the manner provided in the
Credit Agreement.  Upon the acceptance of any appointment as the Collateral
Agent by a successor Collateral Agent, that successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent under this Agreement, and the
retiring Collateral Agent shall thereupon be discharged from its duties and
obligations under this Agreement.  After any retiring Collateral Agent’s
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the
Collateral Agent.
 
(ii)           Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.  The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession from time to time if such Collateral is accorded
treatment substantially equivalent to that which the Collateral Agent, in its
individual capacity, accords its own property consisting of similar instruments
or interests; provided that neither the Collateral Agent nor any of the other
Secured Parties nor any of their respective directors, officers, employees or
agents shall have responsibility for (x) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Securities Collateral, whether or not the Collateral Agent or
any other Secured Party has or is deemed to have knowledge of such matters
(y) failing to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or (z) failing to take any necessary steps to
preserve rights against any Person with respect to any Collateral.
 
(iii)           The Collateral Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.
 
(iv)           If any item of Collateral also constitutes collateral granted to
the Collateral Agent under any other deed of trust, mortgage, security
agreement, pledge or instrument of any type, in the event of any conflict
between the provisions hereof and the provisions of such other deed of trust,
mortgage, security agreement, pledge or instrument of any type in respect of
such collateral, the Collateral Agent, in its sole discretion, shall determine
which provisions shall control.
 

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Section 11.2          Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact.  If any Pledgor shall fail to perform any covenants contained
in this Agreement (including such Pledgor’s covenants to (i) pay the premiums in
respect of all required insurance policies hereunder, (ii) pay Charges,
(iii) make repairs, (iv) discharge Liens or (v) pay or perform any obligations
of such Pledgor under any Collateral) or if any representation or warranty on
the part of any Pledgor contained herein shall be breached, the Collateral Agent
may (but shall not be obligated to) do the same or cause it to be done or remedy
any such breach, and may expend funds for such purpose; provided, however, that
the Collateral Agent shall in no event be bound to inquire into the validity of
any Charges, Lien, imposition or other obligation which such Pledgor fails to
pay or perform as and when required hereby and which such Pledgor does not
contest in accordance with the provisions of Section 4.14.  Any and all amounts
so expended by the Collateral Agent shall be paid by the Pledgors in accordance
with the provisions of Section 10.03 of the Credit Agreement.  Neither the
provisions of this Section 11.2 nor any action taken by the Collateral Agent
pursuant to the provisions of this Section 11.2 shall prevent any such failure
to observe any covenant contained in this Agreement nor any breach of
representation or warranty from constituting an Event of Default.  Each Pledgor
hereby appoints the Collateral Agent its attorney-in-fact, with full authority
in the place and stead of such Pledgor and in the name of such Pledgor, or
otherwise, from time to time in the Collateral Agent’s discretion to take any
action and to execute any instrument consistent with the terms of the Credit
Agreement, this Agreement and the other Loan Documents which the Collateral
Agent may deem necessary, advisable or prudent to accomplish the purposes
hereof.  The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof.  Each
Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof.
 
Section 11.3          Continuing Security Interest; Assignment.  This Agreement
shall create a continuing security interest in the Collateral and shall (i) be
binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent and the other Secured Parties
and each of their respective successors, transferees and assignees (including
permitted assignees pursuant to Section 10.04 of the Credit Agreement).  No
other Persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto.  Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any obligations held by it secured by this Agreement to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement.
 
Section 11.4          Termination; Release; Reinstatement.  Collateral shall be
released if and to the extent so provided in Section 9.14(c) of the Credit
Agreement.  Each Pledgor agrees that, if any payment made by any Loan Party or
other Person and applied to the Secured Obligations is at any time annulled,
avoided, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
any Collateral are required to be returned by any Secured Party to such Loan
Party, its estate, trustee, receiver or any other party, including any Pledgor,
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully
as if such payment had never been made.  If, prior to any of the foregoing, any
Lien or other Collateral securing such Pledgor’s liability hereunder shall have
been released or terminated by virtue of the foregoing, such Lien, other
Collateral or provision shall be reinstated in full force and effect and such
prior release, termination, cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of any such
Pledgor in respect of any Lien or other Collateral securing such obligation or
the amount of such payment.
 

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Section 11.5          Modification in Writing.  No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement and unless in
writing and signed by the Collateral Agent.  Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given.  Except where notice is specifically required
by this Agreement, no notice to or demand on any Pledgor in any case shall
entitle any Pledgor to any other or further notice or demand in similar or other
circumstances.
 
Section 11.6          Notices.  Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of
Borrower set forth in the Credit Agreement and as to the Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.6.
 
Section 11.7          Governing Law, Consent to Jurisdiction and Service of
Process; Waiver of Jury Trial.
 
(a)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK, IN WHICH CASE THE LAWS OF SUCH JURISDICTION SHALL GOVERN WITH RESPECT
TO THE PERFECTION OF THE SECURITY INTEREST IN, OR THE REMEDIES WITH RESPECT TO,
SUCH PARTICULAR COLLATERAL.
 

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(b)           EACH PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE SUPREME COURT OF
THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT, 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 COURT OR, TO THE EXTENT PERMITTED BY APPLICABLE LEGAL
REQUIREMENTS, 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 APPLICABLE LEGAL REQUIREMENTS.  NOTHING IN THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR OTHERWISE SHALL AFFECT ANY RIGHT THAT THE COLLATERAL
AGENT, ANY OTHER AGENT, ANY LENDER OR OTHER SECURED PARTY MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY PLEDGOR OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
 
(c)           EACH PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LEGAL REQUIREMENTS, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN SECTION 11.7(b).  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LEGAL REQUIREMENTS, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
 
(d)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENT, IN THE MANNER PROVIDED FOR NOTICES (OTHER THAN FACSIMILE TRANSMISSION
OR ELECTRONIC MEANS AND DISREGARDING ANY PERSON TO WHOM SUCH NOTICE SI REQUIRED
TO BE COPIED) IN SECTION 11.6.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY APPLICABLE LEGAL REQUIREMENTS.
 
(e)           EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LEGAL REQUIREMENTS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, THE TRANSACTIONS OR THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 11.7.
 

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Section 11.8          Severability of Provisions.  Any provision hereof 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
 
Section 11.9          Execution in Counterparts.  This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same
agreement.  Delivery of an executed counterpart of a signature page of this
Agreement by facsimile transmission or other electronic means shall be effective
as delivery of a manually executed counterpart of this Agreement.
 
Section 11.10        Business Days.  In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.
 
Section 11.11        Waiver of Stay.  Each Pledgor covenants that in the event
that such Pledgor or any property or assets of such Pledgor shall hereafter
become the subject of a voluntary or involuntary proceeding under the Bankruptcy
Code or such Pledgor shall otherwise be a party to any federal, state or foreign
bankruptcy, insolvency, moratorium or similar proceeding to which the provisions
relating to the automatic stay under Section 362 of the Bankruptcy Code or any
similar provision in any such Legal Requirement is applicable, then, in any such
case, whether or not the Collateral Agent has commenced foreclosure proceedings
under this Agreement, such Pledgor shall not, and each Pledgor hereby expressly
waives its right to (to the extent it may lawfully do so) at any time insist
upon, plead or in any whatsoever, claim or take the benefit or advantage of any
such automatic stay or such similar provision as it relates to the exercise of
any of the rights and remedies (including any foreclosure proceedings) available
to the Collateral Agent as provided in this Agreement, in any other Security
Document or any other document evidencing the Secured Obligations.  Each Pledgor
further covenants that it will not hinder, delay or impede the execution of any
power granted herein to the Collateral Agent, but will suffer and permit the
execution of every such power as though no law relating to any stay or similar
provision had been enacted.
 
Section 11.12        No Credit for Payment of Taxes or Imposition.  No Pledgor
shall be entitled to any credit against the principal, premium, if any, or
interest payable under the Credit Agreement, and such Pledgor shall not be
entitled to any credit against any other sums which may become payable under the
terms thereof or hereof, by reason of the payment of any Tax on the Collateral
or any part thereof.
 

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Section 11.13        No Claims Against Collateral Agent.  Nothing contained in
this Agreement shall constitute any consent or request by the Collateral Agent,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Collateral or
any part thereof, nor as giving any Pledgor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Collateral Agent in respect thereof or any
claim that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.
 
Section 11.14        No Release.  Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor’s part to be performed or observed under or in respect
of any of the Collateral or from any liability to any Person under or in respect
of any of the Collateral or shall impose any obligation on the Collateral Agent
or any other Secured Party to perform or observe any such term, covenant,
condition or agreement on such Pledgor’s part to be so performed or observed or
shall impose any liability on the Collateral Agent or any other Secured Party
for any act or omission on the part of such Pledgor relating thereto or for any
breach of any representation or warranty on the part of such Pledgor contained
in this Agreement, the Credit Agreement or the other Loan Documents, or under or
in respect of the Collateral or made in connection herewith or therewith.  The
obligations of each Pledgor contained in this Section 11.14 shall survive the
termination and release of the Liens hereunder and the discharge of such
Pledgor’s other obligations under this Agreement, the Credit Agreement and the
other Loan Documents.
 
Section 11.15        Overdue Amounts.  Until paid, all amounts due and payable
under this Agreement shall constitute Secured Obligations and shall bear
interest, whether before or after judgment, at the Default Rate.
 
Section 11.16        Obligations Absolute.  All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
 
(i)           any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor;
 
(ii)          any lack of validity or enforceability of any Loan Document, or
any other agreement or instrument relating thereto against any Pledgor;
 
(iii)         any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any Loan Document or any other
agreement or instrument relating thereto;
 
(iv)         any pledge, exchange, release or non-perfection or loss of priority
of any other collateral, or any release or amendment or waiver of or consent to
any departure from any guarantee, for all or any of the Secured Obligations;
 
(v)          any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, or any Loan Document; or
 
(vi)         any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
 

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IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have caused this
Security Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.

      INTERNAP NETWORK SERVICES
CORPORATION , as Pledgor      
 
By 
          /s/ J. Eric Cooney   Name: J. Eric Cooney   Title: Chief Executive
Officer        
VOXEL HOLDINGS, INC., as Pledgor
        By           /s/ John D. Maggard   Name: John D. Maggard   Title:
President and Treasurer        
VOXEL DOT NET, INC., as Pledgor
        By            /s/ John D. Maggard   Name: John D. Maggard   Title:
President and Treasurer         UBERSMITH, INC., as Pledgor         By 
          /s/ John D. Maggard   Name: John D. Maggard   Title: President and
Treasurer        
INTERNAP CONNECTIVITY LLC, as Pledgor
        By            /s/ John D. Maggard   Name: John D. Maggard   Title:
President and Treasurer

           
[Signature Page to Security Agreement]
 

 

 

 

 

 
JEFFERIES FINANCE LLC, as Collateral Agent
     
 
By
          /s/ Brian Buoye   Name:  Brian Buoye   Title:  Managing Director

 
[Signature Page to Security Agreement]