EXHIBIT 10.3

PLEDGE AND SECURITY AGREEMENT
 
PLEDGE AND SECURITY AGREEMENT (the "Agreement") dated as of March 19, 2012, made
by each of the Grantors referred to below, in favor of U.S. Bank National
Association, a national banking association, in its capacity as agent for the
Secured Parties referred to below (in such capacity, together with its
successors and assigns in such capacity, if any, the "Agent").
 
W I T N E S S E T H:
 
WHEREAS, WMI Holdings Corp., a Washington corporation (the "Borrower"), each
subsidiary of the Borrower listed as a "Guarantor" on the signature pages
thereto (together with each other Person (as defined in the Financing Agreement)
that guarantees all or any portion of the Obligations (as defined in the
Financing Agreement) from time to time, each a "Guarantor" and collectively, the
"Guarantors", and together with the Borrower and each other Person that executes
a supplement hereto and becomes an "Additional Grantor" hereunder, each a
"Grantor" and collectively, the "Grantors"), the lenders from time to time party
thereto (each a "Lender" and collectively, the "Lenders"), and the Agent are
parties to a Financing Agreement, dated as of March 19, 2012 (such agreement, as
amended, restated, supplemented, modified or otherwise changed from time to
time, including any replacement agreement therefor, being hereinafter referred
to as the "Financing Agreement");
 
WHEREAS, pursuant to the Financing Agreement, the Lenders have agreed to make
certain term loans (each a "Loan" and collectively, the "Loans"), to the
Borrower;
 
WHEREAS, it is a condition precedent to the Lenders making any Loan to the
Borrower pursuant to the Financing Agreement that each Grantor shall have
executed and delivered to the Agent a pledge to the Agent, for the benefit of
the Secured Parties, and the grant to the Agent, for the benefit of the Secured
Parties, of (a) a security interest in and Lien on the outstanding shares of
Equity Interests (as defined in the Financing Agreement), subject to the terms
and condition herein, and indebtedness from time to time owned by such Grantor
of each Person now or hereafter existing and in which such Grantor has any
interest at any time, and (b) a security interest in all other assets of such
Grantor; and
 
WHEREAS, each Grantor has determined that the execution, delivery and
performance of this Agreement directly benefit, and are in the best interest of,
such Grantor, and the credit extended under the Financing Agreement will inure
to the benefit of each Grantor;
 
NOW, THEREFORE, in consideration of the premises and the agreements herein and
in order to induce the Lenders to make the Loans and to provide other financial
accommodations to the Borrower  pursuant to the Financing Agreement, and the
Agent to maintain such Loans pursuant to the Financing Agreement, the Grantors
hereby jointly and severally agree with the Agent, for its benefit and the
ratable benefit of the other Secured Parties, as follows:
 

 
   

 
 
 
 

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SECTION 1. Definitions .
 
(a) Reference is hereby made to the Financing Agreement for a statement of the
terms thereof.  All capitalized terms used in this Agreement and the recitals
hereto which are defined in the Financing Agreement or in Article 8 or 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York
(the "Code") and which are not otherwise defined herein shall have the same
meanings herein as set forth therein; provided that terms used herein which are
defined in the Code as in effect in the State of New York on the date hereof
shall continue to have the same meaning notwithstanding any replacement or
amendment of such statute except as the Agent may otherwise determine in its
sole discretion.
 
(b) The following terms shall have the respective meanings provided for in the
Code:  "Accounts", "Account Debtor", "Cash Proceeds", "Chattel Paper",
"Commercial Tort Claim", "Commodity Account", "Commodity Contracts", "Deposit
Account", "Documents", "Electronic Chattel Paper", "Equipment", "Fixtures",
"General Intangibles", "Goods", "Instruments", "Inventory", "Investment
Property", "Letter-of-Credit Rights", "Noncash Proceeds", "Payment Intangibles",
"Proceeds", "Promissory Notes", "Record", "Security Account", "Software",
"Supporting Obligations" and "Tangible Chattel Paper".
 
(c) As used in this Agreement, the following terms shall have the respective
meanings indicated below, such meanings to be applicable equally to both the
singular and plural forms of such terms:
 
"Additional Collateral" has the meaning specified therefor in Section 4(a)(i)
hereof.
 
"Cash Management Account" means each bank account of each Grantor maintained at
one or more Cash Management Banks listed on Schedule IV.
 
"Cash Management Agreement" means a control agreement, in form and substance
reasonably satisfactory to the Required Lenders, by and among a Grantor, the
Agent and a Cash Management Bank with respect to each Cash Management Account,
pursuant to which such Cash Management Bank shall irrevocably agree, among other
things, that (i) it will comply at any time with the instructions originated by
the Agent (or its designee) to such bank or financial institution directing the
disposition of cash, Cash Equivalents, Commodity Contracts, securities,
Investment Property and other items from time to time credited to such Cash
Management Account, without further consent of such Grantor, (ii) all cash, Cash
Equivalents, Commodity Contracts, securities, Investment Property and other
items of such Grantor deposited with such institution shall be subject to a
perfected, first priority security interest in favor of the Agent (or its
designee), (iii) any right of set off, banker's Lien or other similar Lien,
security interest or encumbrance shall be fully waived as against the Agent (or
its designee), and (iv) upon receipt of written notice from the Agent upon the
occurrence of an Event of Default, such Cash Management Bank shall immediately
send to the Agent (or its designee) by wire transfer (to such account as the
Agent (or its designee) shall specify, or in such other manner as the Agent (or
its designee) shall direct) all such cash, Cash Equivalents, the value of any
Commodity Contracts, securities, Investment Property and other items held by it
and shall agree to cease to
 

 
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comply with any directive or instruction by such Grantor.
 
"Cash Management Bank" has the meaning specified therefor in Section 6(h)
hereof.
 
"Certificated Entities" has the meaning specified therefor in Section 5(l)
hereof.
 
"Code" has the meaning specified therefor in Section 1(a) hereof.
 
"Collateral" has the meaning specified therefor in Section 2 hereof.
 
"Collections" means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).
 
"Copyright Licenses" means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to use or sell any works covered by any Copyright
(including, without limitation, all Copyright Licenses set forth in Schedule II
hereto (as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof)).
 
"Copyrights" means all domestic and foreign copyrights, whether registered or
unregistered, including, without limitation, all copyright rights throughout the
universe (whether now or hereafter arising) in any and all media (whether now or
hereafter developed), in and to all original works of authorship fixed in any
tangible medium of expression (including computer software and internet website
content) now or hereafter owned, acquired, developed or used by any Grantor
(including, without limitation, all copyrights described in Schedule II hereto
(as amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof)), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Copyright Office or in any similar office or agency of the
United States or any other country or any political subdivision thereof), and
all reissues, extensions or renewals thereof.
 
"Current Value" has the meaning specified therefor in Section 6(l) hereof.
 
"Existing Issuer" has the meaning specified therefor in the definition of the
term "Pledged Shares".
 
"Foreign Subsidiary" has the meaning specified therefor in Section 2 hereof.
 
"Insurance Assets" means Regulated Insurance Assets of an Insurance Subsidiary
and Insurance Holdings.
 
"Intellectual Property" means all Copyrights, Patents, Trademarks and Other
Intellectual Property.
 
"Licenses" means the Copyright Licenses, the Patent Licenses and the Trademark
Licenses.
 

 
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"Mortgage" means a mortgage (including, without limitation, a leasehold
mortgage), deed of trust or deed to secure debt or similar agreement or
instrument, in form and substance satisfactory to the Required Lenders, made by
a Grantor in favor of the Agent for the benefit of the Agent and the ratable
benefit of the Lenders, securing the Obligations and delivered to the Agent.
 
"New Facility" has the meaning specified therefor in Section 6(l) hereof.
 
"Other Intellectual Property" means all trade secrets, ideas, concepts, methods,
techniques, processes, proprietary information, technology, know-how, formulae,
rights of publicity and privacy and other general intangibles of like nature,
now or hereafter acquired, owned, developed or used by any Grantor (including,
without limitation, all Other Intellectual Property set forth in Schedule II
hereto (as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof)).
 
"Patent Licenses" means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensee or licensor and providing for
the grant of any right to manufacture, use or sell any invention covered by any
Patent (including, without limitation, all Patent Licenses set forth in Schedule
II hereto (as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof)).
 
"Patents" means all domestic and foreign letters patent, design patents, utility
patents, industrial designs and inventions, now existing or hereafter acquired
(including, without limitation, all of those described in Schedule II hereto (as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof)), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office, or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof.
 
"Perfection Requirement" has the meaning specified therefor in Section 5(i)
hereof.
 
"Pledge Amendment" has the meaning specified therefor in Section 4(a)(ii)
hereof.
 
"Pledged Debt" means the indebtedness described in Schedule VII hereto (as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof) of the Grantors and all indebtedness from time to time owned
or acquired by any Grantor, the Promissory Notes and other Instruments
evidencing any or all of such indebtedness, and all interest, cash, Instruments,
Investment Property, financial assets, securities, Equity Interests, stock
options and Commodity Contracts, notes, debentures, bonds, Promissory Notes or
other evidences of indebtedness and all other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such indebtedness.
 
"Pledged Interests" means, collectively, (a) the Pledged Debt, (b) the Pledged
Shares and (c) all security entitlements of any Grantor in any and all of the
foregoing.
 

 
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"Pledged Issuer" has the meaning specified therefor in the definition of the
term "Pledged Shares".
 
"Pledged Shares" means (a) the shares of Equity Interests described in Schedule
VIII hereto (as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof), whether or not evidenced or represented by
any stock certificate, certificated security or other Instrument, owned by the
Grantors and issued by the Persons described in such Schedule VIII (the
"Existing Issuers"), (b) the shares of Equity Interests at any time and from
time to time acquired by a Grantor of any and all Persons now or hereafter
existing (such Persons, together with the Existing Issuers, being hereinafter
referred to collectively as the "Pledged Issuers" and each individually as a
"Pledged Issuer"), whether or not evidenced or represented by any stock
certificate, certificated security or other Instrument, and (c) the certificates
representing such shares of Equity Interests, all options and other rights,
contractual or otherwise, in respect thereof and all dividends, distributions,
cash, Instruments, Investment Property, financial assets, securities, Equity
Interests, stock options and Commodity Contracts, notes, debentures, bonds,
Promissory Notes or other evidences of indebtedness and all other property
(including, without limitation, any stock dividend and any distribution in
connection with a stock split) from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such Equity
Interests.
 
"Runoff Assets Collateral" means "Collateral" under and as defined in the Runoff
Assets Pledge and Security Agreement.
 
"Runoff Assets Pledge and Security Agreement" means that certain Pledge and
Security Agreement, dated as of the date hereof, among the Borrower, as the
Grantor, Wilmington Trust, National Association, as First Lien Trustee, Law
Debenture Trust Company of New York, as Second Lien Trustee, the Agent, as Third
Lien Agent, and Wilmington Trust, National Association, as Collateral Agent
thereunder, as the same may be amended, restated, supplemented, modified or
otherwise changed from time to time, including any replacement agreement
therefor.
 
"Secured Parties" means, collectively, the Agent and the Lenders.
 
"Secured Obligations" has the meaning specified therefor in Section 3 hereof.
 
"Trademark Licenses" means all licenses, contracts or other agreements, whether
written or oral, naming any Grantor as licensor or licensee and providing for
the grant of any right concerning any Trademark, together with any goodwill
connected with and symbolized by any such trademark licenses, contracts or
agreements and the right to prepare for sale or lease and sell or lease any and
all Inventory now or hereafter owned by any Grantor and now or hereafter covered
by such licenses (including, without limitation, all Trademark Licenses
described in Schedule II hereto (as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof)).
 
"Trademarks" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general
 

 
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intangibles of like nature, now or hereafter owned, adopted, acquired or used by
any Grantor (including, without limitation, all domestic and foreign trademarks,
service marks, collective marks, certification marks, trade names, business
names, d/b/a's, Internet domain names, trade styles, designs, logos and other
source or business identifiers described in Schedule II hereto (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof)), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together
with all goodwill of the business symbolized by such marks.
 
SECTION 2. Grant of Security Interest .  As collateral security for the payment,
performance and observance of all of the Secured Obligations, each Grantor
hereby pledges and assigns to the Agent (and its agents and designees), and
grants to the Agent (and its agents and designees), for the benefit of the
Secured Parties, a continuing security interest in, all personal property and
Fixtures of such Grantor in which such Grantor has rights, wherever located and
whether now or hereafter existing and whether now owned or hereafter acquired,
of every kind and description, tangible or intangible, including, without
limitation, the following (all being collectively referred to herein as the
"Collateral"):
 
(a) all Accounts;
 
(b) all Chattel Paper (whether tangible or electronic);
 
(c) the Commercial Tort Claims specified on Schedule VI (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof);
 
(d) all Deposit Accounts, all cash, and all other property from time to time
deposited therein or otherwise credited thereto and the monies and property in
the possession or under the control of the Agent or any Lender or any affiliate,
representative, agent or correspondent of the Agent or any Lender;
 
(e) all Documents;
 
(f) all General Intangibles (including, without limitation, all Payment
Intangibles, Intellectual Property and Licenses);
 
(g) all Goods, including, without limitation, all Equipment, Fixtures and
Inventory;
 
(h) all Instruments (including, without limitation, Promissory Notes);
 
(i) all Investment Property;
 
(j) all Letter-of-Credit Rights;
 
(k) all Pledged Interests;
 

 
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(l) all Supporting Obligations;
 
(m) all cash and cash equivalents;
 
(n) all other tangible and intangible personal property of such Grantor (whether
or not subject to the Code), including, without limitation, all bank and other
accounts and all cash and all investments therein, all proceeds, products,
offspring, accessions, rents, profits, income, benefits, substitutions and
replacements of and to any of the property of such Grantor described in the
preceding clauses of this Section 2 hereof (including, without limitation, any
proceeds of insurance thereon and all causes of action, claims and warranties
now or hereafter held by such Grantor in respect of any of the items listed
above), and all books, correspondence, files and other Records, including,
without limitation, all tapes, disks, cards, Software, data and computer
programs in the possession or under the control of such Grantor or any other
Person from time to time acting for such Grantor that at any time evidence or
contain information relating to any of the property described in the preceding
clauses of this Section 2 hereof or are otherwise necessary or helpful in the
collection or realization thereof; and
 
(o) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products
of any and all of the foregoing Collateral;
 

 
in each case howsoever such Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
 
Notwithstanding anything herein to the contrary, the term "Collateral" shall not
include (i) any Insurance Assets or Pledged Interests to the extent, but only
for so long as, any insurance-related Governmental Authority does not permit
such Insurance Assets or Pledged Interests to become "Collateral" hereunder, it
being understood that "Collateral" shall include any such Insurance Assets or
Pledged Interests (other than Runoff Assets Collateral to the extent set forth
in clause (ii) of this paragraph) immediately upon any approval of such
insurance-related Governmental Authority in accordance with Section 6.01(b) of
the Financing Agreement, and (ii) Runoff Assets Collateral except as
specifically set forth in the Runoff Assets Pledge and Security Agreement and
the Intercreditor Agreement (as defined in the Runoff Assets Pledge and Security
Agreement).

Notwithstanding anything herein to the contrary, the term "Collateral" shall not
include in the case of a Subsidiary of such Grantor organized under the laws of
a jurisdiction other than the United States, any of the states thereof or the
District of Columbia (a "Foreign Subsidiary"), more than 65% (or such greater
percentage that, due to a change in applicable law after the date hereof, (i)
would not reasonably be expected to cause the undistributed earnings of such
Foreign Subsidiary as determined for United States federal income tax purposes
to be treated as a deemed dividend to such Foreign Subsidiary's United States
parent and (ii) would not reasonably be expected to cause any material adverse
tax consequences) of the issued and outstanding shares of Equity Interests
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) (it
being understood and agreed that the Collateral shall include 100% of the issued
and outstanding shares of Equity Interests not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) or other equity interest of such
Foreign Subsidiary).

 
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The Grantors agree that the pledge of the shares of Equity Interests of any
Pledged Issuer who is a Foreign Subsidiary may be supplemented by one or more
separate pledge agreements, deeds of pledge, share charges, or other similar
agreements or instruments, executed and delivered by the relevant Grantors in
favor of the Agent, which pledge agreements will provide for the pledge of such
shares of Equity Interests in accordance with the laws of the applicable foreign
jurisdiction.  With respect to such shares of Equity Interests, the Required
Lenders may, at any time and from time to time, in their discretion, take, or
request the Agent to take, actions in such foreign jurisdictions that will
result in the perfection of the Lien created in such shares of Equity Interests,
in each case, at the expense of the Grantors.

SECTION 3. Security for Secured Obligations .  The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred (the
"Secured Obligations"):
 
(a) the prompt payment by each Grantor, as and when due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), of
all amounts from time to time owing by it in respect of the Financing Agreement
and/or the other Loan Documents, including, without limitation, (i) all
Obligations, (ii) in the case of a Guarantor, all amounts from time to time
owing by such Guarantor in respect of its guaranty made pursuant to Article IX
of the Financing Agreement or under any other Guaranty to which it is a party,
including, without limitation, all obligations guaranteed by such Guarantor and
(iii) all interest, fees, commissions, charges, expense reimbursements,
indemnifications and all other amounts due or to become due under any Loan
Document (including, without limitation, all interest, fees, commissions,
charges, expense reimbursements, indemnifications and other amounts that accrue
after the commencement of any Insolvency Proceeding of any Grantor, whether or
not the payment of such interest, fees, commissions, charges, expense
reimbursements, indemnifications and other amounts are unenforceable or are not
allowable, in whole or in part, due to the existence of such Insolvency
Proceeding); and
 
(b) the due performance and observance by each Grantor of all of its other
obligations from time to time existing in respect of the Loan Documents.
 
SECTION 4. Delivery of the Pledged Interests.
 
(a) (i)  All Promissory Notes currently evidencing the Pledged Debt and all
certificates currently representing the Pledged Shares shall be delivered to the
Agent on or prior to the execution and delivery of this Agreement.  All other
Promissory Notes, certificates and Instruments constituting Pledged Interests
from time to time required to be pledged to the Agent pursuant to the terms of
this Agreement or the Financing Agreement (the "Additional Collateral") shall be
delivered to the Agent promptly upon, but in any event within ten (10) days of,
receipt thereof by or on behalf of any of the Grantors.  All such Promissory
Notes, certificates and Instruments shall be held by or on behalf of the Agent
pursuant hereto and shall be delivered in suitable form for transfer by delivery
or shall be accompanied by duly executed instruments of transfer or assignment
or undated stock powers executed in blank, all in suitable form and substance
reasonably satisfactory to the Required Lenders to perfect and preserve the
security interests purported to be created hereby.  If any Pledged Interests
consist of uncertificated securities, unless the immediately following sentence
is applicable thereto, such Grantor shall
 

 
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cause the Agent (or its designated custodian or nominee) to become the
registered holder thereof, or cause each issuer of such securities to agree that
it will comply with instructions originated by the Agent  with respect to such
securities without further consent by such Grantor.  If any Pledged Interests
consist of security entitlements, such Grantor shall transfer such security
entitlements to the Agent (or its custodian, nominee or other designee), or
cause the applicable securities intermediary to agree that it will comply with
entitlement orders by the Agent without further consent by such Grantor.
 
(ii) Within five (5) days of the receipt by a Grantor of any Additional
Collateral, a Pledge Amendment, duly executed by such Grantor, in substantially
the form of Exhibit A hereto (a "Pledge Amendment"), shall be delivered to the
Agent, in respect of the Additional Collateral that must be pledged pursuant to
this Agreement and the Financing Agreement.  The Pledge Amendment shall from and
after delivery thereof constitute part of Schedules VII and VIII hereto.  Each
Grantor hereby authorizes the Agent to attach each Pledge Amendment to this
Agreement and agrees that all Promissory Notes, certificates or Instruments
listed on any Pledge Amendment delivered to the Agent shall for all purposes
hereunder constitute Pledged Interests and such Grantor shall be deemed upon
delivery thereof to have made the representations and warranties set forth in
Section 5 hereof with respect to such Additional Collateral.
 
(b) If any Grantor shall receive, by virtue of such Grantor's being or having
been an owner of any Pledged Interests, any (i) stock certificate (including,
without limitation, any certificate representing a stock dividend or
distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of shares,
stock split, spin-off or split-off), Promissory Note or other Instrument, (ii)
option or right, whether as an addition to, substitution for, or in exchange
for, any Pledged Interests, or otherwise, (iii) dividends payable in cash
(except such dividends permitted to be retained by any such Grantor pursuant to
Section 7 hereof) or in securities or other property or (iv) dividends,
distributions, cash, Instruments, Investment Property and other property in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in surplus, such Grantor
shall receive such stock certificate, Promissory Note, Instrument, option,
right, payment or distribution in trust for the benefit of the Agent, shall
segregate it from such Grantor's other property and shall deliver it forthwith
to the Agent, in the exact form received, with any necessary indorsement and/or
appropriate stock powers duly executed in blank, to be held by the Agent as
Pledged Interests and as further collateral security for the Secured
Obligations.
 

 
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SECTION 5. Representations and Warranties .  Each Grantor jointly and severally
represents and warrants as follows:
 
(a) Schedule I hereto (as amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof) sets forth a complete and accurate
list as of the date hereof of (i) the exact legal name of each Grantor, (ii) the
jurisdiction of organization of each Grantor, (iii) the type of organization of
each Grantor, (iv) the organizational identification number of each Grantor or
states that no such organizational identification number exists, and (v) the
federal employer identification number of each Grantor.
 
(b) All Equipment, Fixtures, Inventory and other Goods now existing are, and all
Equipment, Fixtures, Inventory and other Goods hereafter existing will be,
located at the addresses specified therefor in Schedule III hereto (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof).  Each Grantor's places of business and chief executive office,
the place where such Grantor keeps its Records concerning Accounts and all
originals of all Chattel Paper, and each location where any Grantor has any
Collateral are located at the addresses specified therefor in Schedule III
hereto (as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof).  None of the Accounts is evidenced by
Promissory Notes or other Instruments.  Set forth in Schedule IV hereto (as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof) is a complete and accurate list, of each Deposit Account,
Securities Account and Commodities Account of each Grantor, together with the
name and address of each institution at which each such Account is maintained,
the account number for each such Account and a description of the purpose of
each such Account.
 
(c) Each Grantor has delivered to the Agent true, complete and correct copies of
each License described in Schedule II hereto (as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof),
including all schedules and exhibits thereto, which represents all of the
Licenses existing on the date of this Agreement.
 
(d) The Grantors own and control, or otherwise have the right to use, all
Intellectual Property necessary for the operation of its business, without
infringement, to their knowledge, upon or conflict with the rights of any other
Person with respect thereto, except for such infringements and conflicts which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.  Schedule II hereto (as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof) sets
forth a complete and accurate list of all Intellectual Property and Licenses
owned or used by each Grantor as of the date hereof.  All such Intellectual
Property is subsisting and in full force and effect, has not been adjudged
invalid or unenforceable, is valid and enforceable and has not been abandoned in
whole or in part.  Except as set forth in Schedule II hereto (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof), no such Intellectual Property is the subject of any licensing or
franchising agreement.
 
(e) The Existing Issuers set forth in Schedule VIII (as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof)
identified as a Subsidiary of a Grantor are each such Grantor's only
Subsidiaries existing on the date hereof.  The Pledged Shares have been duly
authorized and validly issued and, in the case of
 

 
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Grantors that are corporations, are fully paid and nonassessable and the holders
thereof are not entitled to any preemptive, first refusal or other similar
rights.  Except as noted in Schedule VIII hereto (as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof), the
Pledged Shares constitute 100% (or in the case of a Foreign Subsidiary, 65% of
the voting issued shares) of the issued shares of Equity Interests of the
Pledged Issuers as of the date hereof.  All other shares of Equity Interests
constituting Pledged Interests will be duly authorized and validly issued and,
in the case of entities that are corporations, fully paid and nonassessable.
 
(f) To the knowledge of the Grantors, the Promissory Notes currently evidencing
the Pledged Debt have been, and all other Promissory Notes from time to time
evidencing Pledged Debt, when executed and delivered, will have been, duly
authorized, executed and delivered by the respective makers thereof, and, to the
knowledge of the Grantors, all such Promissory Notes are or will be, as the case
may be, legal, valid and binding obligations of such makers, enforceable against
such makers in accordance with their respective terms, except as enforceability
may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally.
 
(g) The policies currently evidencing the Insurance Assets or any other
Insurance Assets listed on Schedule IX hereto (as amended, supplemented or
otherwise modified from time to time) have been, and all other policies from
time to time evidencing Insurance Assets, when executed and delivered, will have
been, duly authorized, executed and delivered by the parties thereto and all
such policies or other Insurance Assets as may be relevant are or will be, as
the case may be, legal, valid and binding obligations of each party thereto,
enforceable against such makers in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally.
 
(h) The Grantors are and will be at all times the sole and exclusive owners of,
or otherwise have and will have adequate rights in, the Collateral free and
clear of any Lien except for the Permitted Liens.  No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording or filing office except such as may have
been filed to perfect or protect any Permitted Lien.
 
(i) No authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority (other than an insurance-related Governmental
Authority) or any other Person, is required for (i) the grant by any Grantor of
the security interest purported to be created hereby in the Collateral or
(ii) the exercise by the Agent of any of its rights and remedies hereunder,
except, in the case of this clause (ii), as may be required in connection with
any sale of any Pledged Interests by laws affecting the offering and sale of
securities generally.  No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or any other Person, is
required for the perfection of the security interest purported to be created
hereby in the Collateral, except (A) for the filing under the Uniform Commercial
Code as in effect in the applicable jurisdiction of the financing statements
described in Schedule V hereto (as amended, supplemented or otherwise modified
from time to time), all of which financing statements have been duly filed and
are in full force and effect, (B) with respect to the perfection of the security
interest created hereby in the United
 

 
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States Intellectual Property and Licenses, for the recording of the appropriate
Assignment for Security, substantially in the form of Exhibit B hereto in the
United States Patent and Trademark Office or the United States Copyright Office,
as applicable, (C) with respect to the perfection of the security interest
created hereby in foreign Intellectual Property and Licenses, for registrations
and filings in jurisdictions located outside of the United States and covering
rights in such jurisdictions relating to such foreign Intellectual Property and
Licenses, (D) with respect to any action that may be necessary to obtain control
of Collateral constituting Deposit Accounts, Electronic Chattel Paper,
Investment Property or Letter-of-Credit Rights, the taking of such actions, and
(E) the Agent's having possession of all Documents, Chattel Paper, Instruments
and cash constituting Collateral (subclauses (A), (B), (C), (D) and (E), each a
"Perfection Requirement" and collectively, the "Perfection Requirements").
 
(j) This Agreement creates a legal, valid and enforceable security interest in
favor of the Agent, for the benefit of the Secured Parties, in the Collateral
secured thereby, as security for the Secured Obligations.  On the date hereof,
the Perfection Requirements result in the perfection of such security
interests.  Such security interests are, or in the case of Collateral in which
any Grantor obtains rights after the date hereof, will be, perfected, first
priority security interests, subject in priority only to the Permitted Liens
that, pursuant to the definition of the term "Permitted Liens", are not
prohibited from being prior to the Liens in favor of the Agent, for the benefit
of the Secured Parties, and the recording of such instruments of assignment
described above.  Such Perfection Requirements and all other action necessary or
desirable to perfect and protect such security interest have been duly made or
taken.
 
(k) As of the date hereof, no Grantor holds any Commercial Tort Claims in
respect of which a claim has been filed in a court of law or a written notice by
an attorney has been given to a potential defendant, except for such claims
described in Schedule VI (as amended, supplemented or otherwise modified from
time to time in accordance with the terms hereof).
 
(l) With respect to each Grantor and its Subsidiaries that is a partnership or a
limited liability company, each such Person has irrevocably opted into (and has
caused each of its Subsidiaries that is a partnership or a limited liability
company, and a Pledged Issuer to opt into) Article 8 of the Uniform Commercial
Code (collectively, the "Certificated Entities").  Such interests are securities
for purposes of Article 8 of any relevant Uniform Commercial Code.
 
(m) Each Grantor has good and marketable title to, valid leasehold interests in,
or valid licenses to use, all property and assets material to its business, free
and clear of all Liens, except Permitted Liens.  All such properties and assets
are in good working order and condition, ordinary wear and tear excepted.
 
SECTION 6. Covenants as to the Collateral .  So long as any of the Secured
Obligations (whether or not due) shall remain unpaid or any Lender shall have
any Commitment under the Financing Agreement, unless the Agent shall otherwise
consent in writing upon direction of the Required Lenders:
 

 
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(a) Further Assurances.   Each Grantor will (x) execute and deliver, and cause
each of its Subsidiaries to execute and deliver, to the Agent for the benefit of
the Agent and the Lenders, at the time of the delivery of the financial
statements of the Borrower and its Subsidiaries required by Section 6.01(a)(i)
and (ii) of the Financing Agreement (in addition to any requirements hereunder
to deliver a Pledge Amendment in respect of Additional Collateral), schedules
identifying and describing any changes to the Collateral since the date of the
last such schedules delivered to the Agent for the benefit of the Agent and the
Lenders (and modify this Agreement by amending the Schedules hereto to include
any Additional Collateral), and (y) take such action and execute, acknowledge
and deliver such agreements, instruments or other documents as may be necessary
from time to time or as the Required Lenders may reasonably request with respect
to any Collateral or any Additional Collateral (including with respect to any
Insurance Holdings and any Insurance Assets when otherwise required pursuant to
the terms hereof) in order (i) to perfect and protect, or maintain the
perfection of, the security interest and Lien purported to be created hereby in
the relevant jurisdiction as necessary or advisable under applicable law; (ii)
to enable the Agent to exercise and enforce its rights and remedies hereunder in
respect of the Collateral; or (iii) otherwise to effect the purposes of this
Agreement, including, without limitation:  (A) marking conspicuously all Chattel
Paper, Instruments and Licenses beneficially owned by such Grantor and not held
for sale or disposition in the ordinary course of such Grantor's business, and,
at the request of the Agent, all of its Records pertaining to the Collateral
with a conspicuous legend sufficient to indicate that such Chattel Paper,
Instrument, License or Collateral is subject to the security interest created
hereby, (B) if any Account shall be evidenced by a Promissory Note or other
Instrument or Chattel Paper, delivering and pledging to the Agent such
Promissory Note, other Instrument or Chattel Paper, duly endorsed and
accompanied by executed instruments of transfer or assignment, all in form and
substance necessary to perfect and preserve the security interest purported to
be created hereby or as the Required Lenders may reasonably request,
(C) executing and filing (to the extent, if any, that such Grantor's signature
is required thereon) or authenticating the filing of, such financing or
continuation statements, or amendments thereto, (D) with respect to Intellectual
Property hereafter existing and not covered by an appropriate security interest
grant, the executing and recording in the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, delivery of all
appropriate instruments granting a security interest, as may be necessary or
desirable or that the Agent may request at the direction of the Required Lenders
in order to perfect and preserve the security interest purported to be created
hereby, (E) delivering to the Agent irrevocable proxies in respect of the
Pledged Interests, (F) furnishing to the 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 Agent  may reasonably request,
all in reasonable detail, (G) if any Collateral with a book value in excess of
$250,000 shall be in the possession of a third party (including, without
limitation, any landlord by virtue of Collateral being located on such
landlord's premises leased to a Grantor), notifying such Person of the Agent's
security interest created hereby and using commercially reasonable efforts to
obtain a written agreement, in form and substance satisfactory to the Required
Lenders, waiving or subordinating any Liens of such Person in such Collateral,
providing access to such Collateral in order to remove such Collateral from such
premises during an Event of Default and acknowledging that such Person holds
possession of the Collateral for the benefit of the Agent, (H) if at any time
after the date hereof, any Grantor acquires or holds any Commercial Tort Claim,
promptly notifying the Agent in a writing signed by such Grantor setting forth a
brief
 

 
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description of such Commercial Tort Claim and granting to the Agent a security
interest therein and in the proceeds thereof, which writing shall incorporate
the provisions hereof and shall be in form and substance reasonably satisfactory
to the Required Lenders sufficient to perfect and preserve the security interest
purported to be created hereby, and (I) taking all actions required by law in
any relevant Uniform Commercial Code jurisdiction, or by other law as applicable
in any foreign jurisdiction.  No Grantor shall take or fail to take any action
which would in any manner impair the validity or enforceability of the Agent's
security interest in and Lien on any Collateral.
 
(b) Location of Equipment and Inventory.  Each Grantor will keep the Equipment
and Inventory (other than Equipment and Inventory sold in the ordinary course of
business at the locations specified in Schedule III hereto (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof) or, upon not less than thirty (30) days' prior written notice to
the Agent accompanied by a new Schedule III hereto indicating each new location
of the Equipment and Inventory, at such other locations in the United States as
the Grantors may elect, provided that all action has been taken to (i) grant to
the Agent a perfected, first priority security interest in such Equipment and
Inventory (subject in priority only to Permitted Liens that, pursuant to the
definition of the term "Permitted Liens", are not prohibited from being prior to
the Liens in favor of the Agent, for the benefit of the Secured Parties) and
(ii) comply with 6(a)(G), if applicable
 
(c) Condition of Equipment.  Each Grantor will maintain or cause the Equipment
which is reasonably necessary or useful in the proper conduct of its business to
be maintained and preserved in good condition, repair and working order as when
acquired, ordinary wear and tear and casualty excepted, and will forthwith, or
in the case of any loss or damage to any material Equipment promptly after the
occurrence thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith which are necessary or desirable,
consistent with sound business practice.
 
(d) Insurance.  Each Grantor will, at its own expense, maintain insurance with
respect to the Collateral in accordance with the terms of the Financing
Agreement.  Each Grantor will deliver to the Agent (for delivery to the Lenders)
original or duplicate insurance policies to the extent not previously delivered
to the Agent.  Each Grantor will also, execute and deliver to the extent not
previously delivered, loss payee endorsements or evidence of additional insured
status naming the Agent on behalf of the Lenders in form and substance
reasonably satisfactory to the Required Lenders (to the extent not previously
delivered).
 
(e) Provisions Concerning the Accounts and the Licenses.
 
(i) The Grantors shall, at its own expense, take all reasonable steps to
enforce, collect and receive all amounts owing or to become due on the Accounts
Receivable of the Grantors or any of their Subsidiaries and may settle, adjust
or compromise the amount due in the ordinary course of business consistent with
past practices.  After the occurrence and during the continuance of an Event of
Default, the Agent (at the written direction of the Required Lenders) may send a
notice of assignment and/or notice of the Lenders' security interest to any and
all Account Debtors or third parties holding or otherwise concerned with any
 

 
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of the Collateral, and thereafter the Agent or its designee shall have the sole
right to collect the Accounts Receivable and/or take possession of the
Collateral and the books and records relating thereto and/or to enforce
collection of any such Accounts Receivable, and/or to settle, adjust or
compromise the amount or payment thereof.  After receipt by any Grantor of a
notice from the Agent that the Agent has notified, intends to notify, or has
enforced or intends to enforce a Grantor's rights against the Account Debtors or
obligors under any Accounts Receivable as referred to in the immediately
preceding sentence after the occurrence and during the continuance of an Event
of Default, (A) all amounts and proceeds (including Instruments) received by
such Grantor in respect of the Accounts Receivable shall be received in trust
for the benefit of the Agent hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over to the Agent or its designated
agent in the same form as so received (with any necessary endorsement) to be
applied as specified in Section 9(d) hereof, and (B) such Grantor will not
adjust, settle or compromise the amount or payment of any Account Receivable or
extend the time of payment thereof, or release wholly or partly any Account
Debtor or obligor thereof, or allow any allowance, credit or discount thereon.
 
(ii) Each Grantor hereby appoints the Agent or its designee on behalf of the
Agent as the Grantors' attorney-in-fact with power exercisable during the
continuance of an Event of Default to endorse any Grantor's name upon any notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Accounts Receivable, to sign any Grantor's name on any invoice or bill of
lading relating to any of the Accounts Receivable, drafts against Account
Debtors with respect to Accounts Receivable, assignments and verifications of
Accounts Receivable and notices to Account Debtors with respect to Accounts
Receivable, to send verification of Accounts Receivable, and to notify the
Postal Service authorities to change the address for delivery of mail addressed
to any Grantor to such address as the Agent or its designee may designate and to
do all other acts and things necessary to carry out this Agreement.  All acts of
said attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission (other than
acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction), or for any error of judgment or mistake of fact or law; this
power being coupled with an interest is irrevocable until all of the Loans and
other Obligations under the Loan Documents are paid in full, all Commitments are
terminated and all of the Loan Documents are terminated.
 
(iii) Nothing herein contained shall be construed to constitute the Agent as
agent of any Grantor for any purpose whatsoever, and the Agent and Secured
Parties shall not be responsible or liable for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever the same may
be located and regardless of the cause thereof (other than from acts of omission
or commission constituting gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction).  The Agent and
Secured Parties shall not, under any circumstance or in any event whatsoever,
have any liability for any error or omission or delay of any kind occurring in
the settlement, collection or payment of any of the Accounts Receivable or any
instrument received in payment thereof or for any damage resulting therefrom
(other than acts of omission or commission constituting gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction).  The Agent, by anything herein or in any assignment or otherwise,
does not assume any of the obligations under any contract or agreement assigned
to the Agent and
 

 
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shall not be responsible in any way for the performance by any Grantor of any of
the terms and conditions thereof.
 
(iv) Upon the occurrence and during the continuance of any material breach or
default under any material License by any party thereto other than a Grantor,
(A) the relevant Grantor will, promptly after obtaining knowledge thereof, give
the Agent written notice of the nature and duration thereof, specifying what
action, if any, it has taken and proposes to take with respect thereto, and (B)
after the occurrence and during the continuance of an Event of Default, each
Grantor will, upon written instructions from the Agent (at the written direction
of the Required Lenders and at such Grantor's expense, take such action as the
Agent may deem necessary or advisable in respect thereof.
 
(f) Provisions Concerning the Pledged Interests.  Each Grantor will:
 
(i) not make or consent to any amendment or other modification or waiver with
respect to any Pledged Interests or enter into any agreement or permit to exist
any restriction with respect to any Pledged Interests other than pursuant to the
Loan Documents; and
 
(ii) not permit the issuance of (A) any additional shares of any class of Equity
Interests of any Pledged Issuer unless pledged to the Agent hereunder, (B) any
securities convertible voluntarily by the holder thereof or automatically upon
the occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such shares of Equity Interests or (C) any warrants, options, contracts
or other commitments entitling any Person to purchase or otherwise acquire any
such shares of Equity Interests.
 
(g) Intellectual Property.
 
(i) If applicable, each Grantor has duly executed and delivered the applicable
Assignment for Security in the form attached hereto as Exhibit B.  Each Grantor
(either itself or through licensees) will, and will cause each licensee thereof
to, take all reasonable action necessary to maintain all of the Intellectual
Property that is necessary for the conduct of such Grantor's business in full
force and effect, including, without limitation, using the proper statutory
notices and markings and using the Trademarks on each applicable trademark class
of goods in order to so maintain the Trademarks in full force, free from any
claim of abandonment for non-use, and no Grantor will (nor permit any licensee
thereof to) do any act or knowingly omit to do any act whereby any Intellectual
Property may become invalidated.
 
(ii) Notwithstanding the foregoing, so long as no Event of Default has occurred
and is continuing, no Grantor shall have an obligation to use or to maintain any
Intellectual Property (A) that relates solely to any product or work, that has
been, or is in the process of being, discontinued, abandoned or terminated, (B)
that is being replaced with Intellectual Property substantially similar to the
Intellectual Property that may be abandoned or otherwise become invalid, so long
as the failure to use or maintain such Intellectual Property does not materially
adversely affect the validity of such replacement Intellectual Property and so
long as such replacement Intellectual Property is subject to the Lien created by
this Agreement or (C) that is substantially the same as any other Intellectual
Property that is in full force, so long as the failure
 

 
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to use or maintain such Intellectual Property does not materially adversely
affect the validity of such replacement Intellectual Property and so long as
such other Intellectual Property is subject to the Lien and security interest
created by this Agreement.
 
(iii) Each Grantor will cause to be taken all reasonably necessary steps in any
proceeding before the United States Patent and Trademark Office and the United
States Copyright Office or any similar office or agency in any other country or
political subdivision thereof to maintain each registration of the Intellectual
Property (other than Intellectual Property not necessary for the conduct of such
Grantor's business described in clause (ii) above), including, without
limitation, filing of renewals, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings and
payment of maintenance fees, filing fees, taxes or other governmental fees.  If
any Intellectual Property (other than the Intellectual Property not necessary
for the conduct of such Grantor's business as described in (ii) above) is
infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, the Grantors shall (x) upon obtaining knowledge of
such infringement, misappropriation, dilution or other violation, promptly
notify the Agent and (y) to the extent the Grantors shall deem appropriate under
the circumstances, promptly sue for infringement, misappropriation, dilution or
other violation, seek injunctive relief where appropriate and recover any and
all damages for such infringement, misappropriation, dilution or other
violation, or take such other actions as the Grantors shall deem appropriate
under the circumstances to protect such Intellectual Property.
 
(iv) Upon the acquisition of any Intellectual Property or License by any
Grantor, such Grantor shall promptly, but in any event not later than 30 days
after the acquisition thereof, furnish to the Agent notice of the acquisition of
such Intellectual Property or License and shall within 30 days thereafter take
such actions as are required or advisable to perfect the Agent's lien in such
property.  Notwithstanding anything herein to the contrary, no failure on the
part of a prior owner of any Intellectual Property or License acquired by any
Grantor to comply with the covenants imposed on the Grantors under Section 6(g)
of this Agreement will be attributed to or otherwise deemed a breach of those
covenants by any Grantor acquiring such Intellectual Property or License.
 
(v) Notwithstanding anything herein to the contrary, upon the occurrence and
during the continuance of an Event of Default, no Grantor may abandon or
otherwise permit any material Intellectual Property to become invalid without
the prior written consent of the Agent, and if any material Intellectual
Property is infringed, misappropriated, diluted or otherwise violated in any
material respect by a third party, the Grantors will take such action as the
Agent (at the direction of the Required Lenders) shall reasonably deem
appropriate under the circumstances to protect such Intellectual Property.  Upon
the occurrence and during the continuance of any Event of Default, the Agent
shall have the right but shall in no way be obligated to file applications for
protection of the Intellectual Property and/or bring suit in the name of any
Grantor, the Agent or the Secured Parties to enforce the Intellectual Property
and any License thereunder.  In the event of such suit, each Grantor shall, at
the reasonable request of the Agent (at the direction of the Required Lenders),
do any and all lawful acts and execute any and all documents requested by the
Agent (at the direction of the Required Lenders) in aid of such enforcement and
the Grantors shall promptly reimburse and indemnify the Agent for all costs and
expenses incurred by the Agent in the exercise of its rights under this Section
6(g)(vi) in accordance with Section 10.04 of the Financing Agreement.
 

 
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(vi) In the event that any Grantor shall (A) obtain rights to any new Trademarks
necessary for the operation of its business, or any reissue, renewal or
extension of any existing Trademark necessary for the operation of its business,
(B) obtain rights to or develop any new patentable inventions, or become
entitled to the benefit of any Patent, or any reissue, division, continuation,
renewal, extension or continuation-in-part of any existing Patent or any
improvement thereof (whether pursuant to any license or otherwise), (C) obtain
rights to or develop any new works protectable by Copyright, or become entitled
to the benefit of any rights with respect to any Copyright or any registration
or application therefor, or any renewal or extension of any existing Copyright
or any registration or application therefor, or (D) obtain rights to or develop
new Other Intellectual Property, the provisions of Section 2 hereof shall
automatically apply thereto and such Grantor shall give to the Agent prompt
notice thereof in accordance with the terms of this Agreement and the Financing
Agreement.  Except as otherwise provided herein or in the Financing Agreement
each Grantor, either itself or through any agent, employee, licensee or
designee, shall give the Agent written notice of each application submitted by
it for the registration of any Trademark or Copyright or the issuance of any
Patent with the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, or in any similar office or agency of the
United States or any country or any political subdivision thereof.
 
(vii) Each Grantor shall execute, authenticate and deliver any and all
assignments, agreements, instruments, documents and papers as the Agent (at the
direction of the Required Lenders) may reasonably request to evidence the
Agent's security interest hereunder in such Intellectual Property and the
General Intangibles of such Grantor relating thereto or represented thereby, and
each Grantor hereby appoints the Agent its attorney-in-fact to execute and/or
authenticate and file all such writings for the foregoing purposes, all acts of
such attorney being hereby ratified and confirmed, and such power (being coupled
with an interest) shall be irrevocable until the date on which all of the
Secured Obligations have been paid in full in cash after the termination of each
Lender's Commitment and each of the Loan Documents.
 
(h) Deposit, Commodities and Securities Accounts.  (i)  Each Grantor shall (x)
establish and maintain cash management services of a type and on terms
reasonably satisfactory to the Required Lenders at one or more of the banks
reasonably acceptable to the Required Lenders set forth on Schedule IV (each a
"Cash Management Bank") and (y) deposit or cause to be deposited promptly, and
in any event no later than the next Business Day after the date of receipt
thereof, all proceeds in respect of any Collateral, all Collections (of a nature
susceptible to a deposit in a bank account) and all other amounts received by
any Grantor (including payments made by Account Debtors directly to any Grantor)
into a Cash Management Account; (ii) On or prior to the Effective Date, the
Grantors shall, with respect to each Cash Management Account, deliver to the
Agent a Cash Management Agreement with respect to such Cash Management
Account.  From and after the Effective Date, the Grantors shall not maintain,
and shall not permit any of their Subsidiaries to maintain, cash, Cash
Equivalents or other amounts in any Deposit Account or Securities Account,
unless the Agent shall have received a Cash Management Agreement in respect of
each such Deposit Account or Securities Account; (iii) Upon the terms and
subject to the conditions set forth in a Cash Management Agreement with respect
to a Cash Management Account, upon the direction of the Agent upon an Event of
Default having occurred and continuing, all amounts received in such Cash
Management Account shall be wired each Business Day into the Agent's Account;
(iv) Any such securities,
 

 
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cash, investments and other items so received by the Agent shall be held as
additional Collateral for the Secured Obligations or applied in accordance with
Section 9 hereof; (v) So long as no Default or Event of Default has occurred and
is continuing, the Borrower may amend Schedule IV to add or replace a Cash
Management Bank or Cash Management Account; provided, however, that prior to the
time of the opening of such Cash Management Account, each Grantor and such
prospective Cash Management Bank shall have executed and delivered to the Agent
a Cash Management Agreement; (vi) Each Grantor shall close any of its Cash
Management Accounts (and establish replacement cash management accounts in
accordance with the foregoing sentence) promptly and in any event within 30 days
of notice from the Agent that the creditworthiness of any Cash Management Bank
is no longer acceptable to the Required Lenders, or that the operating
performance, funds transfer, or availability procedures or performance of such
Cash Management Bank with respect to Cash Management Accounts or the Agent's
liability under any Cash Management Agreement with such Cash Management Bank is
no longer acceptable in the respective Lender's and Agent's reasonable judgment;
(vii) The Cash Management Accounts shall be cash collateral accounts, with all
cash, checks and similar items of payment in such accounts securing payment of
the Obligations, and in which the Grantors are hereby deemed to have granted a
Lien to the Agent for the benefit of the Agent and the Lenders; and (viii) All
checks, drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness received directly by any Grantor from any of its Account Debtors,
as proceeds from Accounts of such Grantor or as proceeds of any other Collateral
shall be held by such Grantor in trust for the Agent and the Lenders and if of a
nature susceptible to a deposit in a bank account, upon receipt be deposited by
such Grantor in original form and no later than the next Business Day after
receipt thereof into a Cash Management Account or other bank account referenced
in the definition of Cash Management Accounts as excluded from the scope
thereof.  Each Grantor shall not commingle such collections with the proceeds of
any assets, if any, not included in the Collateral.  No checks, drafts or other
instrument received by the Agent shall constitute final payment to the  Agent
unless and until such instruments have actually been collected.
 
(i) Control.  Each Grantor hereby agrees to take any or all action that may be
necessary or desirable or that the Agent may request in order for the Agent to
obtain control in accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the
Code with respect to the following Collateral:  (i) Deposit Accounts, (ii)
Electronic Chattel Paper, (iii) Investment Property and (iv) Letter-of-Credit
Rights.  Each Grantor hereby acknowledges and agrees that any agent or designee
of the Agent shall be deemed to be a "secured party" with respect to the
Collateral under the control of such agent or designee for all purposes.
 
(j) Records; Inspection and Reporting.
 
(i) Each Grantor shall keep adequate records concerning the Accounts, Chattel
Paper and Pledged Interests.  Each Grantor shall permit the Agent, or any agents
or representatives thereof or such professionals or other Persons as the Agent
may designate, upon reasonable advance notice, at the expense of the Grantors
(provided that so long as no Event of Default shall have occurred and be
continuing, the Grantors shall pay for only (I) one examination described in the
following clause (A) per year, (II) one visit and inspection described in the
following clause (B) per year, (III) one verification described in the following
clause (C) per year, (IV) one audit, physical count, appraisal, valuation or
examination described
 

 
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in the following clause (D) per year, and (V) one discussion described in the
following clause (E) per year): (A) to examine and make copies of and abstracts
from such Grantor's books and records, (B) to visit and inspect its properties,
(C) to verify materials, leases, notes, Accounts, Inventory and other assets of
such Grantor from time to time, (D) to conduct audits, physical counts,
appraisals and/or valuations, or examinations at the locations of such Grantor
and (E) to discuss such Grantor's affairs, finances and accounts with any of its
directors, officers, managerial employees, independent accountants or any of its
other representatives. In furtherance of the foregoing, each Grantor hereby
authorizes its independent accountants, and the independent accountants of each
of its Subsidiaries, to discuss the affairs, finances and accounts of such
Person (independently or together with representatives of such Person) with the
agents and representatives of the Agent in accordance with this Section 6(j).
 
(ii) Except as otherwise expressly permitted by Section 6.02(j) of the Financing
Agreement, no Grantor shall, without prior written notice to the Agent and the
Lenders, amend, modify or otherwise change (A) its name, organizational
identification number or FEIN (B) its jurisdiction of organization as set forth
in Schedule I hereto or (C) its chief executive office as set forth in Schedule
III hereto.  Each Grantor shall promptly notify the Agent upon obtaining an
organizational identification number, if on the date hereof such Grantor did not
have such identification number.
 
(iii) The Borrowers acknowledge that pursuant to this Section 6(j),
representatives of the Lenders and the Agent may visit any or all of the
Grantors and/or conduct an inspection, including audits, valuations,
assessments, appraisals, and/or examinations of any or all of the Grantors at
any time and from time to time provided, however, that so long as no Event of
Default shall have occurred and be continuing, the Borrower shall pay for only
one such inspection per year.  The Borrower agrees to pay (i) out-of-pocket
costs and reasonable expenses incurred in connection with all such visits,
inspections, audits, physical counts, valuations, assessments,
appraisals,  and/or examinations and (ii) the cost of all visits, inspections,
audits, physical counts, valuations, assessments, appraisals, and/or
examinations conducted by a third party on behalf of the Agent and/or the
Lenders.
 
(k) Partnership and Limited Liability Company Interest.  Except with respect to
partnership interests and membership interests evidenced by a certificate, which
certificate has been pledged and delivered to the Agent pursuant to Section 4
hereof, no Grantor that is a partnership or a limited liability company shall,
nor shall any Grantor with any Subsidiary that is a partnership or a limited
liability company, permit such partnership interests or membership interests to
(i) be dealt in or traded on securities exchanges or in securities markets, (ii)
become a security for purposes of Article 8 of any relevant Uniform Commercial
Code, (iii) become an investment company security within the meaning of Section
8-103 of any relevant Uniform Commercial Code or (iv) be evidenced by a
certificate.  Each Grantor agrees that such partnership interests or membership
interests shall constitute General Intangibles.
 
(l) After-Acquired Real Property.  Upon the acquisition by any Grantor after the
date hereof of any fee interest in any real property (wherever located) (each
such interest being a "New Facility"), or leasehold interest in any real
property, such Grantor shall promptly  notify the Agent and the Lenders thereof,
setting forth with specificity a description of the interest acquired, the
location of the real property, any structures or
 

 
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improvements thereon and either an appraisal or such Grantor's good-faith
estimate of the current value of such real property (for purposes of this
Section, the "Current Value"). Upon the acquisition by any Grantor after the
date hereof of any interest in any (i) New Facility with a Current Value in
excess of $250,000 individually, or $1,000,000 in the aggregate, such Grantor
shall deliver a Mortgage (and, with respect to any New Facility with a Current
Value of $2,500,000  or more (or, with respect to the delivery of title
insurance, $1,000,000 or more)) at the time of such acquisition,  any other real
property deliverables (including, without limitation, appraisals, title
insurance and a Phase 1 report) in favor of the Agent for the benefit of the
Secured Parties, in each case in form  reasonably acceptable to the Required
Lenders with respect to such New Facility and (ii) any leasehold interest in a
property at which Collateral with a value of $50,000 or more is located, such
Grantor shall use its commercially reasonable efforts to provide a landlord’s
waiver, in form reasonably acceptable to the Required Lenders, with respect to
such leasehold interest.  The Borrower shall pay all fees and expenses,
including reasonable attorneys' fees and expenses, and all customary title
insurance charges and premiums, in connection with each Grantor's obligations
under this Section 6(l).  It is understood by the parties hereto that no
leasehold mortgages shall be requested with respect to any interest in real
property  consisting of office space so long as a landlord waiver in a form
reasonably acceptable to the Required Lenders has been obtained with respect to
such real property.
 
(m) Validity of Security Documents.  Each Security Agreement, each Mortgage or
each other security document, after delivery thereof pursuant hereto, shall at
all times continue to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien in favor of the
Agent for the benefit of the Agent and the Lenders on any Collateral purported
to be covered thereby.
 
SECTION 7. Voting Rights, Dividends, Etc. in Respect of the Pledged Interests.
 
(a) So long as no Event of Default shall have occurred and be continuing:
 
(i) each Grantor may exercise any and all voting and other consensual rights
pertaining to any Pledged Interests for any purpose not inconsistent with the
terms of this Agreement or the Financing Agreement; provided, however, that (A)
none of the Grantors will exercise or refrain from exercising any such right, as
the case may be, that could reasonably be expected to have a Material Adverse
Effect and (B) each Grantor will give the Agent at least five (5) Business Days'
notice of the manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right which could reasonably be expected to
have a Material Adverse Effect;
 
(ii) each of the Grantors may receive and retain any and all dividends, interest
or other distributions paid in respect of the Pledged Interests to the extent
permitted by the Financing Agreement and subject to Section 4(b) hereof; and
 
(iii) the Agent will (at the direction of the Required Lenders) execute and
deliver (or cause to be executed and delivered) to a Grantor all such proxies
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights which it is
entitled to exercise pursuant to Section
 

 
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7(a)(i) hereof and to receive the dividends, interest and/or other distributions
which it is authorized to receive and retain pursuant to Section 7(a)(ii)
hereof.
 
(b) Upon the occurrence and during the continuance of an Event of Default:
 
(i) all rights of each Grantor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section
7(a)(i) hereof, and to receive the dividends, distributions, interest and other
payments that it would otherwise be authorized to receive and retain pursuant to
Section 7(a)(ii) hereof, shall cease, and all such rights shall thereupon become
vested in the Agent, which shall thereupon have the sole right to exercise such
voting and other consensual rights and to receive and hold as Pledged Interests
such dividends, distributions and interest payments;
 
(ii) the Agent is authorized to notify each debtor with respect to the Pledged
Debt to make payment directly to the Agent (or its designee) and may collect any
and all moneys due or to become due to any Grantor in respect of the Pledged
Debt, and each of the Grantors hereby authorizes each such debtor to make such
payment directly to the Agent (or its designee) without any duty of inquiry;
 
(iii) without limiting the generality of the foregoing, the Agent may at its
option exercise any and all rights of conversion, exchange, subscription or any
other rights, privileges or options pertaining to any of the Pledged Interests
as if it were the absolute owner thereof, including, without limitation, the
right to exchange, in its discretion, any and all of the Pledged Interests upon
the merger, consolidation, reorganization, recapitalization or other adjustment
of any Pledged Issuer, or upon the exercise by any Pledged Issuer of any right,
privilege or option pertaining to any Pledged Interests, and, in connection
therewith, to deposit and deliver any and all of the Pledged Interests with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and
 
(iv) all dividends, distributions, interest and other payments that are received
by any of the Grantors contrary to the provisions of Section 7(b)(i) hereof
shall be received in trust for the benefit of the Agent, shall be segregated
from other funds of the Grantors, and shall be forthwith paid over to the Agent
as Pledged Interests in the exact form received with any necessary indorsement
and/or appropriate stock powers duly executed in blank, to be held by the Agent
as Pledged Interests and as further collateral security for the Secured
Obligations.
 
SECTION 8. Additional Provisions Concerning the Collateral .
 
(a) To the maximum extent permitted by applicable law, and for the purpose of
taking any action that the Agent and/or the Required Lenders may deem reasonably
necessary or advisable to accomplish the purposes of this Agreement, each
Grantor hereby (i) authorizes the Agent to execute any such agreements,
instruments or other documents in such Grantor's name and to file such
agreements, instruments or other documents in such Grantor's name and in any
appropriate filing office, (ii) authorizes the Agent at any time and from time
to time to file, one or more financing or continuation statements and amendments
thereto, relating
 

 
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to the Collateral (including, without limitation, any such financing statements
that (A) describe the Collateral as "all assets" or "all personal property" (or
words of similar effect) or that describe or identify the Collateral by type or
in any other manner as the Agent may determine, regardless of whether any
particular asset of such Grantor falls within the scope of Article 9 of the
Uniform Commercial Code, and (B) contain any other information required by Part
5 of Article 9 of the Code for the sufficiency or filing office acceptance of
any financing statement, continuation statement or amendment, including, without
limitation, whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor) and
(iii) ratifies such authorization to the extent that the Agent has filed any
such financing statements, continuation statements, or amendments thereto, prior
to the date hereof.  A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
 
(b) Each Grantor hereby irrevocably appoints the Agent as its attorney-in-fact
and proxy, with full authority in the place and stead of such Grantor and in the
name of such Grantor or otherwise, effective upon the occurrence and during the
continuance of an Event of Default (other than as to clause (vi) below which
appointment is effective whether or not an Event of Default has occurred or is
continuing), to take any action and to execute any instrument that the Required
Lenders may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of a Grantor under Section 6 hereof and Section
7(a) hereof), (i) to ask, demand, collect, sue for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (ii) to receive, endorse, and collect any drafts or
other Instruments, Documents and Chattel Paper in connection with clause (i) or
(ii) above, (iii) to receive, indorse and collect all Instruments made payable
to such Grantor representing any dividend, interest payment or other
distribution in respect of any Pledged Interests and to give full discharge for
the same, (iv) to file any claims or take any action or institute any
proceedings which the Required Lenders may  deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the Agent and
the Lenders with respect to any Collateral, (v) to execute assignments, licenses
and other documents to enforce the rights of the Agent and the Lenders with
respect to any Collateral, (vi) to pay or discharge taxes or Liens levied or
placed upon or threatened against the Collateral, the legality or validity
thereof and the amounts necessary to discharge the same to be determined by the
Required Lenders in their discretion, and such payments made by the Agent to
become Obligations of such Grantor to the Agent, due and payable immediately
without demand, and (vii) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, assignments,
verifications and notices in connection with Accounts, Chattel Paper and other
documents relating to the Collateral.  This power is coupled with an interest
and is irrevocable until the date on which all of the Secured Obligations have
been paid in full in cash after the termination of each Lender's Commitment and
each of the Loan Documents.
 
(c) For the purpose of enabling the Agent to exercise rights and remedies
hereunder upon the occurrence and during the continuance of an Event of Default,
at such time as the Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Grantor hereby (i) grants to the Agent
an irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, assign, license or sublicense any
Intellectual Property now or hereafter owned by any Grantor, wherever the same
may be located, including in such license reasonable access to all media in
which any
 

 
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of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof; and (ii) assigns to the Agent, to
the extent assignable, all of its rights to any Intellectual Property now or
hereafter licensed or used by any Grantor.  Notwithstanding anything contained
herein to the contrary, but subject to any provisions of the Financing Agreement
that limit or condition the right of a Grantor to dispose of its property and
Section 6(g) hereof, so long as no Event of Default shall have occurred and be
continuing, each Grantor may exploit, use, enjoy, protect, license, sublicense,
assign, sell, dispose of or take other actions with respect to the Intellectual
Property in the ordinary course of its business.  In furtherance of the
foregoing, unless an Event of Default shall have occurred and be continuing, the
Agent shall from time to time, upon the request of a Grantor, execute and
deliver any instruments, certificates or other documents, in the form so
requested, which such Grantor shall have certified are appropriate (in such
Grantor's judgment) to allow it to take any action permitted above (including
relinquishment of the license provided pursuant to this clause (c) as to any
Intellectual Property).  Further, upon the date on which all of the Secured
Obligations have been paid in full in cash after the termination of each
Lender's Commitment and each of the Loan Documents, the Agent (subject to
Section 13(e) hereof) shall release and reassign to the Grantors all of the
Agent's right, title and interest in and to the Intellectual Property, and the
Licenses, all without recourse, representation or warranty whatsoever and at the
Grantors' sole expense.  The exercise of rights and remedies hereunder by the
Agent shall not terminate the rights of the holders of any licenses or
sublicenses theretofore granted by any Grantor in accordance with the second
sentence of this clause (c).  Each Grantor hereby releases the Agent from any
claims, causes of action and demands at any time arising out of or with respect
to any actions taken or omitted to be taken by the Agent under the powers of
attorney granted herein other than actions taken or omitted to be taken through
the Agent's gross negligence or willful misconduct, as determined by a final
determination of a court of competent jurisdiction.
 
(d) Upon the occurrence and during the continuance of a Default if any Grantor
fails to perform any agreement or obligation contained herein the Agent may
itself perform, or cause performance of, such agreement or obligation, in the
name of such Grantor or the Agent, and the expenses of the Agent incurred in
connection with such performance shall be jointly and severally payable by the
Grantors pursuant to Section 10.04 of the Financing Agreement and shall be
secured by the Collateral.
 
(e) The powers conferred on the Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers.  Other than the exercise of reasonable care to assure the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the 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 and shall be
relieved of all responsibility for any Collateral in its possession upon
surrendering it or tendering surrender of it to any of the Grantors (or
whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct).  The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which the Agent accords its own property, it being understood that the
Agent shall not have responsibility for ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters.  The
 

 
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Agent shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Agent in good faith.
 
(f) Anything herein to the contrary notwithstanding (i) each Grantor shall
remain liable under the Licenses and otherwise in respect of the Collateral to
the extent set forth therein to perform all of its obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Agent of any of its rights hereunder shall not release any Grantor from any of
its obligations under the Licenses or otherwise in respect of the Collateral,
and (iii) the Agent shall not have any obligation or liability by reason of this
Agreement under the Licenses or otherwise in respect of the Collateral, nor
shall the Agent be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
 
(g) Upon the occurrence and during the continuance of a Default or an Event of
Default, the Agent may at any time in its discretion (i) without notice to any
Grantor, transfer or register in the name of the Agent or any of its nominees
any or all of the Pledged Interests, subject only to the revocable rights of
such Grantor under Section 7(a) hereof, and (ii) exchange certificates or
Instruments constituting Pledged Interests for certificates or Instruments of
smaller or larger denominations.
 
SECTION 9. Remedies Upon Default .  If any Event of Default shall have occurred
and be continuing:
 
(a) The Agent may exercise in respect of the Collateral, in addition to any
other rights and remedies provided for herein or otherwise available to it, all
of the rights and remedies of a secured party upon default under the Code
(whether or not the Code applies to the affected Collateral), and also may
(i) take absolute control of the Collateral, including, without limitation,
transfer into the Agent's name or into the name of its nominee or nominees (to
the extent the Agent has not theretofore done so) and thereafter receive, for
the benefit of the Agent and the Lenders, all payments made thereon, give all
consents, waivers and ratifications in respect thereof and otherwise act with
respect thereto as though it were the outright owner thereof, (ii) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and upon
request of the Agent forthwith, assemble all or part of the Collateral as
directed by the Agent and make it available to the Agent at a place or places to
be designated by the Agent that is reasonably convenient to both parties, and
the Agent may enter into and occupy any premises owned or leased by any Grantor
where the Collateral or any part thereof is located or assembled for a
reasonable period in order to effectuate the Agent's rights and remedies
hereunder or under law, without obligation to any Grantor in respect of such
occupation, and (iii) without notice except as specified below and without any
obligation to prepare or process the Collateral for sale, (A) sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Agent's offices, at any exchange or broker's board or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and upon
such other terms as the Agent may  deem commercially reasonable and/or
(B) lease, license or otherwise dispose of the Collateral or any part thereof
upon such terms as the Agent may  deem commercially reasonable.  The Agent or
any other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of the Collateral or any part thereof
at any such sale and shall be entitled,
 

 
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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 the Collateral or any part
thereof payable by such person at such sale.  Each Grantor agrees that, to the
extent notice of sale or any other disposition of the Collateral shall be
required by law, at least five (5) days' prior notice to the applicable Grantor
of the time and place of any public sale or the time after which any private
sale or other disposition of the Collateral is to be made shall constitute
reasonable notification.  The Agent shall not be obligated to make any sale or
other disposition of Collateral regardless of notice of sale having been
given.  The 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 Grantor hereby waives any claims against the Agent and the
Lenders arising by reason of the fact that the price at which the Collateral may
have been sold at a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the Secured
Obligations, even if the Agent accepts the first offer received and does not
offer the Collateral to more than one offeree, and waives all rights that such
Grantor may have to require that all or any part of the Collateral be marshaled
upon any sale (public or private) thereof.  Each Grantor hereby acknowledges
that (i) any such sale of the Collateral by the Agent shall be made without
warranty, (ii) the Agent may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like, (iii) the Agent may bid (which bid may
be, in whole or in part, in the form of cancellation of indebtedness), if
permitted by law, for the purchase, lease, license or other disposition of the
Collateral or any portion thereof for the account of the Agent (on behalf of
itself and the Lenders) and (iv) such actions set forth in clauses (i), (ii) and
(iii) above shall not adversely affect the commercial reasonableness of any such
sale of the Collateral.  In addition to the foregoing, (i) upon written notice
to any Grantor from the Agent, each Grantor shall cease any use of the
Intellectual Property or any trademark, patent or copyright similar thereto for
any purpose described in such notice; (ii) the Agent may, at any time and from
time to time, upon ten (10) days' prior notice to any Grantor, license, whether
general, special or otherwise, and whether on an exclusive or non-exclusive
basis, any of the Intellectual Property, throughout the universe for such term
or terms, on such conditions, and in such manner, as the Agent shall in its sole
discretion determine; and (iii) the Agent may, at any time, pursuant to the
authority granted in Section 8 hereof (such authority being effective upon the
occurrence and during the continuance of an Event of Default), execute and
deliver on behalf of a Grantor, one or more instruments of assignment of the
Intellectual Property (or any application or registration thereof), in form
suitable for filing, recording or registration in any country.
 
(b) In the event that the Agent determines to exercise its right to sell all or
any part of the Pledged Interests pursuant to Section 9(a) hereof, each Grantor
will, at such Grantor's expense and upon request by the Agent:  (i) to the
extent an exemption from applicable registration requirements is unavailable,
execute and deliver, and cause each issuer of such Pledged Interests and the
directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Agent, advisable to register such Pledged
Interests under the provisions of the Securities Act, and to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related prospectus
 

 
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which, in the opinion of the Agent , are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the SEC applicable thereto, (ii) to the extent an exemption from
applicable registration requirements is unavailable, cause each issuer of such
Pledged Interests to qualify such Pledged Interests under the state securities
or "Blue Sky" laws of each jurisdiction, and to obtain all necessary
governmental approvals for the sale of the Pledged Interests, as requested by
the Agent, (iii) cause each Pledged Issuer to make available to its
securityholders, as soon as practicable, an earnings statement which will
satisfy the provisions of Section 11(a) of the Securities Act, and (iv) do or
cause to be done all such other acts and things as may be necessary to make such
sale of such Pledged Interests valid and binding and in compliance with
applicable law.  Each Grantor acknowledges the impossibility of ascertaining the
amount of damages which would be suffered by the Agent by reason of the failure
by any Grantor to perform any of the covenants contained in this Section 9(b)
and, consequently, agrees that, if any Grantor fails to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Pledged Interests on the date the Agent demands
compliance with this Section 9(b); provided, however, that the payment of such
amount shall not release any Grantor from any of its obligations under any of
the other Loan Documents.
 
(c) Notwithstanding the provisions of Section 9(b) hereof, each Grantor
recognizes that the Agent may  deem it impracticable to effect a public sale of
all or any part of the Pledged Shares or any other securities constituting
Pledged Interests and that the Agent may , therefore, determine to make one or
more private sales of any such securities to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such securities
for their own account, for investment and not with a view to the distribution or
resale thereof.  Each Grantor acknowledges that any such private sale may be at
prices and on terms less favorable to the seller than the prices and other terms
which might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sales shall be deemed to have been made in a
commercially reasonable manner and that the Agent shall have no obligation to
delay the sale of any such securities for the period of time necessary to permit
the issuer of such securities to register such securities for public sale under
the Securities Act.  Each Grantor further acknowledges and agrees that any offer
to sell such securities which has been (i) publicly advertised on a bona fide
basis in a newspaper or other publication of general circulation in the
financial community of New York, New York (to the extent that such an offer may
be so advertised without prior registration under the Securities Act) or (ii)
made privately in the manner described above to not less than fifteen bona fide
offerees shall be deemed to involve a "public disposition" for the purposes of
Section 9-610(c) of the Code (or any successor or similar, applicable statutory
provision) as then in effect in the State of New York, notwithstanding that such
sale may not constitute a "public offering" under the Securities Act, and that
the Agent may, in such event, bid for the purchase of such securities.
 
(d) Any cash held by or for the benefit of the Agent (or its agent or designee)
as Collateral and all Cash Proceeds received by the Agent (or its agent or
designee) in respect of any sale of or collection from, or other realization
upon, all or any part of the Collateral may, in the discretion of the Agent, be
held by the Agent (or its agent or designee) as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 10.04 of the Financing Agreement) in whole or in part
by the Agent against, all or any part of the Secured Obligations in such order
as the Agent  shall
 

 
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elect, consistent with the provisions of the Financing Agreement.  Any surplus
of such cash or Cash Proceeds held by the Agent (or its agent or designee) and
remaining after the date on which all of the Secured Obligations have been
indefeasibly paid in full in cash after the termination of each Lender's
Commitment, and each of the Loan Documents, shall be paid over to whomsoever
shall be lawfully entitled to receive the same or as a court of competent
jurisdiction shall direct.
 
(e) In the event that the proceeds of any such sale, collection or realization
are insufficient to pay all amounts to which the Agent and the Lenders are
legally entitled, the Grantors shall be jointly and severally liable for the
deficiency, together with interest thereon at the highest rate specified in any
applicable Loan Document for interest on overdue principal thereof or such other
rate as shall be fixed by applicable law, together with the costs of collection
and the reasonable fees, costs, expenses and other client charges of any
attorneys employed by the Agent to collect such deficiency.
 
(f) Each Grantor hereby acknowledges that if the Agent complies with any
applicable requirements of law in connection with a disposition of the
Collateral, such compliance will not adversely affect the commercial
reasonableness of any sale or other disposition of the Collateral.
 
(g) The Agent shall not be required to marshal any present or future collateral
security (including, but not limited to, this Agreement and 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, and all of the Agent's rights hereunder and in respect of such
collateral security and other assurances of payment shall be cumulative and in
addition to all other rights, however existing or arising.  To the extent that
any Grantor lawfully may, such Grantor hereby agrees that it will not invoke any
law relating to the marshalling of collateral which might cause delay in or
impede the enforcement of the Agent's rights under this Agreement or under any
other instrument creating or evidencing any of the Secured Obligations or under
which any of the Secured Obligations is outstanding or by which any of the
Secured Obligations is secured or payment thereof is otherwise assured, and, to
the extent that it lawfully may, each Grantor hereby irrevocably waives the
benefits of all such laws.
 
(h) Upon the occurrence and during the continuance of any Default or Event of
Default, the Agent or its designee may at any time and from time to time employ
and maintain on the premises of any Grantor a custodian selected by the Agent or
its designee who shall have full authority to do all acts necessary to protect
the Agent's and the Lenders' interests.  Each Grantor hereby agrees to, and to
cause its Subsidiaries to, cooperate with any such custodian and to do whatever
the Agent or its designee may reasonably request to preserve the
Collateral.  All costs and expenses incurred by the Agent or its designee by
reason of the employment of the custodian shall be the responsibility of the
Borrower and shall be payable on demand and shall be subject to and encompassed
by Section 10.04 of the Financing Agreement.
 
(i) Grant of Intellectual Property License.  For the purpose of enabling the
Agent, during the continuance of an Event of Default, to exercise rights and
remedies under Section 9 hereof at such time as the Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Grantor hereby grants to the Agent, to the extent assignable, an irrevocable,
non-exclusive license to use, assign, license or sublicense any of the
 

 
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Intellectual Property owned or hereafter acquired by such Grantor, wherever the
same may be located, and all customer lists, formulae and other Records of any
Grantor relating to the distribution of products and services in connection with
which any of such Intellectual Property is used.  Such license shall include
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout hereof.
 
SECTION 10. Notices, Etc.   All notices and other communications provided for
hereunder shall be given in accordance with the notice provision of the
Financing Agreement.
 
SECTION 11. Security Interest Absolute; Joint and Several Obligations .
 
(a) All rights of the Secured Parties, all Liens and all obligations of each of
the Grantors hereunder shall be absolute and unconditional irrespective of (i)
any lack of validity or enforceability of the Financing Agreement or any other
Loan Document, (ii) any change in the time, manner or place of payment of, or in
any other term in respect of, all or any of the Secured Obligations, or any
other amendment or waiver of or consent to any departure from the Financing
Agreement or any other Loan Document, (iii) any exchange or release of, or
non-perfection of any Lien on any Collateral, or any release or amendment or
waiver of or consent to departure from any guaranty, for all or any of the
Secured Obligations, or (iv) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any of the Grantors in
respect of the Secured Obligations.  All authorizations and agencies contained
herein with respect to any of the Collateral are irrevocable and powers coupled
with an interest.
 
(b) Each Grantor hereby waives (i) promptness and diligence, (ii) notice of
acceptance and notice of the incurrence of any Obligation by any Borrower, (iii)
notice of any actions taken by the Agent, any Lender, any Guarantor or any other
Person under any Loan Document or any other agreement, document or instrument
relating thereto, (iv) all other notices, demands and protests, and all other
formalities of every kind in connection with the enforcement of the Obligations,
the omission of or delay in which, but for the provisions of this subsection
(b), might constitute grounds for relieving such Grantor of any such Grantor's
obligations hereunder and (v) any requirement that the Agent or any Lender
protect, secure, perfect or insure any security interest or other lien on any
property subject thereto or exhaust any right or take any action against any
Grantor or any other Person or any collateral.
 
(c) All of the obligations of the Grantors hereunder are joint and several.  The
Agent may, in its sole and absolute discretion, enforce the provisions hereof
against any of the Grantors and shall not be required to proceed against all
Grantors jointly or seek payment from the Grantors ratably.  In addition, the
Agent may , in its sole and absolute discretion, select the Collateral of any
one or more of the Grantors for sale or application to the Secured Obligations,
without regard to the ownership of such Collateral, and shall not be required to
make such selection ratably from the Collateral owned by all of the
Grantors.  The release or discharge of any Grantor by the Agent shall not
release or discharge any other Grantor from the obligations of such Person
hereunder.
 
SECTION 12. Agent .  In case of the pendency of any proceeding under the
Bankruptcy Code or any other judicial proceeding relative to any Grantor, the
Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein
 

 
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expressed or by declaration or otherwise and irrespective of whether any Agent
shall have made any demand on the Borrower) shall be entitled and empowered (but
not obligated) by intervention in such proceeding or otherwise:
 
(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Agent and the Lenders (including
any claim for the compensation, expenses, disbursements and advances of the
Agent and the Lenders and their respective agents and counsel and all other
amounts due the Agent and the Lenders hereunder and under the other Loan
Documents) allowed in such judicial proceeding; and
 
(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Agent and each Lender to make such payments to the Agent and, in the event
that the Agent shall consent to the making of such payments directly to the
Agents and the Lenders, to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent hereunder and under the other
Loan Documents.
 
SECTION 13. Miscellaneous .
 
(a) No amendment of any provision of this Agreement (including any Schedule
attached hereto) shall be effective unless it is in writing and signed by each
Grantor effected thereby and the Agent, and no waiver of any provision of this
Agreement, and no consent to any departure by any Grantor therefrom, shall be
effective unless it is in writing and signed by the Agent, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
 
(b) No failure on the part of the Secured Parties to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.  The rights and remedies of the Secured Parties provided herein and in
the other Loan Documents are cumulative and are in addition to, and not
exclusive of, any rights or remedies provided by law.  The rights of the Secured
Parties under any Loan Document against any party thereto are not conditional or
contingent on any attempt by such Person to exercise any of its rights under any
other Loan Document against such party or against any other Person, including
but not limited to, any Grantor.
 
(c) This Agreement shall create a continuing security interest in the Collateral
and shall (i) remain in full force and effect, subject to paragraph (e) below,
until the date on which all of the Secured Obligations have been indefeasibly
paid in full in cash after the termination of each Lender's Commitment, and each
of the Loan Documents and (ii) be binding on each Grantor all other Persons who
become bound as debtor to this Agreement in accordance
 

 
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with Section 9-203(d) of the Code, and shall inure, together with all rights and
remedies of the Secured Parties hereunder, to the benefit of the Secured Parties
and their respective successors, transferees and assigns.  Without limiting the
generality of clause (ii) of the immediately preceding sentence, the Secured
Parties may assign or otherwise transfer their respective rights and obligations
under this Agreement and any other Loan Document to any other Person pursuant to
the terms of the Financing Agreement, and such other Person shall thereupon
become vested with all of the benefits in respect thereof granted to the Secured
herein or otherwise.  Upon any such assignment or transfer, all references in
this Agreement to any Secured Party shall mean the assignee of any such Secured
Party.  None of the rights or obligations of any Grantor hereunder may be
assigned or otherwise transferred without the prior written consent of the Agent
, and any such assignment or transfer shall be null and void.
 
(d) Upon the date on which all of the Secured Obligations have been indefeasibly
paid in full in cash after the termination of each Lender's Commitment and each
of the Loan Documents, (i) subject to paragraph (e) below, this Agreement and
the security interests and licenses created hereby shall terminate and all
rights to the Collateral shall revert to the Grantors and (ii) the Agent will,
upon the Grantors' request and at the Grantors' expense, without any
representation, warranty or recourse whatsoever, (A) return to the Grantors (or
whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct) such of the Collateral as shall not have
been sold or otherwise disposed of or applied pursuant to the terms hereof and
(B) execute and deliver to the Grantors such documents as the Grantors shall
reasonably request to evidence such termination.
 
(e) This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Grantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment or performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
"voidable preference," "fraudulent conveyance," or otherwise, all as though such
payment or performance had not been made.  In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
 
(f) Upon the execution and delivery, or authentication, by any Person of a
security agreement supplement in substantially the form of Exhibit C hereto
(each a "Security Agreement Supplement"), (i) such Person shall be referred to
as an "Additional Grantor" and shall be and become a Grantor, and each reference
in this Agreement to "Grantor" shall also mean and be a reference to such
Additional Grantor, and each reference in this Agreement and the other Loan
Documents to "Collateral" shall also mean and be a reference to the Collateral
of such Additional Grantor, and (ii) the supplemental Schedules I-IX attached to
each Security Agreement Supplement shall be incorporated into and become a part
of and supplement Schedules I-IX, respectively, hereto, and the Agent may attach
such Schedules as supplements to such Schedules, and each reference to such
Schedules shall mean and be a reference to such Schedules, as supplemented
pursuant hereto.
 

 
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(g) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY
PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR
THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY
INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
 
(h) In addition to and without limitation of any of the foregoing, this
Agreement shall be deemed to be a Loan Document and shall otherwise be subject
to all of terms and conditions contained in Sections 10.10 and 10.11 of the
Financing Agreement, mutatis mutandis.
 
(i) Each Grantor irrevocably and unconditionally waives any right it may have to
claim or recover in any legal action, suit or proceeding with respect to this
Agreement any special, exemplary, punitive or consequential damages.
 
(j) Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
 
(k) Section headings herein are included for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
 
(l) This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which shall be deemed
an original, but all of such counterparts taken together shall constitute one
and the same agreement.  Delivery of an executed counterpart of this Agreement
by facsimile or electronic mail shall be equally effective as delivery of an
original executed counterpart.
 

 
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(m) For purposes of this Agreement, all references to Schedule I-IX attached
hereto shall be deemed to refer to each such Schedule as updated from time to
time in accordance with the terms of this Agreement.
 
SECTION 14.  Authority of the Agent .  Each Grantor acknowledges that the rights
and powers of the Agent under this Agreement with respect to any action taken by
the Agent or the exercise or non-exercise by the Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement or any amendment, supplement or other
modification of this Agreement shall, as between the Agent and the Secured
Parties, be governed by the Financing Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as between
the Agent and each of the Grantors, the Agent shall be conclusively presumed to
be acting as agent for the Secured Parties with full and valid authority so to
act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
 
Section 15.  Authority Subject to Financing Agreement .  U.S. Bank  National
Association has been appointed the Agent hereunder pursuant to Article VIII of
the Financing  Agreement.  Notwithstanding anything to the contrary herein, it
is expressly understood and agreed by the parties to this Agreement that any
authority conferred upon the Agent hereunder is subject to the terms of the
delegation of authority made by the Lenders to the Agent pursuant to the
Financing Agreement and that the Agent has agreed to act (and any successor
Agent shall act) as such hereunder only on the express conditions and
protections contained in the Financing Agreement (including, without limitation,
Section 8.03 thereof).  Any successor Agent appointed in accordance with Section
8.07 of the Financing Agreement shall be entitled to all the rights, interests
and benefits of the Agent hereunder.
 
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
 

 
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IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.
 

  GRANTORS:    
 
WMI HOLDINGS CORP.
         
 
By:
/s/        Name:       Title:          

 

 
WMI INVESTMENT CORP.
         
 
By:
/s/        Name:       Title:          

     

 
 
 
 

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SCHEDULE I
 

 
LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; JURISDICTIONS OF
ORGANIZATION; FEDERAL EMPLOYER IDENTIFICATION NUMBER
 

 
Sched. I-1
 

 
 
 
 

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SCHEDULE II
 

 
INTELLECTUAL PROPERTY AND LICENSES; TRADE NAMES
 
 
A.
COPYRIGHTS

 
1.           Registered Copyrights
 
2.           Copyright Applications
 
3.           Copyright Licenses
 

 
 
B.
PATENTS

1.           Registered Patents
 
2.           Patents Applications
 
3.           Patents Licenses
 

 
 
C.
TRADEMARKS

1.           Registered Trademarks
 
2.           Trademark Applications
 
3.           Trademark Licenses
 

D.
OTHER INTELLECTUAL PROPERTY AND LICENSES
   
E.
TRADENAMES
   
F.
NAME OF, AND EACH TRADENAME USED BY, EACH PERSON FROM WHICH A GRANTOR HAS
ACQUIRED ANY SUBSTANTIAL PART OF THE COLLATERAL WITHIN THE PRECEDING FIVE YEARS

 
Sched. II-1
 

 
 

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SCHEDULE III
 
LOCATIONS OF GRANTORS

LOCATION
Description of Location (state if Location

 
(i) contains Equipment, Fixtures, Inventory or other Goods

 
(ii) is chief place of business and

 
chief executive office, or

 
(iii) contains Records concerning Accounts

 
and originals of Chattel Paper)

 
Sched. III-1
 

 
 
 
 

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SCHEDULE IV
 

 
DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS
 
Name and Address
of Institution
Maintaining Account                                                      Account
Number                                           Type of Account

 

 
Sched. IV-1
 

 
 
 
 

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SCHEDULE V
 

 
UCC FINANCING STATEMENTS
 
 
UCC Financing Statements have been filed in the jurisdictions below against the
Grantors:
Name of Grantor
Secretary of State
                   

 
Sched. V-1
 

 
 
 
 

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SCHEDULE VI
 

 
COMMERCIAL TORT CLAIMS
 

 
Sched. VI-1
 

 
 
 
 

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SCHEDULE VII
 
 
PLEDGED DEBT
 
 

Grantor
Name of Maker
Description
Principal Amount
Outstanding as of
       

 
 
 
Sched. VII-1
 

 
 
 
 

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SCHEDULE VIII
 
 
PLEDGED SHARES
 
 
 
Grantor
 
Name of Pledged Issuer
 
Number of Shares
Percentage of Outstanding Shares
 
 
Class
 
Certificate Number
                                                                               
                                       

 
Sched. VIII-1
 

 
 
 
 

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SCHEDULE IX
 
INSURANCE ASSETS

 
Sched. IX-1
 

 
 
 
 

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EXHIBIT A
 
PLEDGE AMENDMENT
 
This Pledge Amendment, dated _________ __, ___, is delivered pursuant to Section
4 of the Pledge and Security Agreement referred to below.  The undersigned
hereby agrees that this Pledge Amendment may be attached to the Pledge and
Security Agreement, dated March 19, 2012, as it may heretofore have been or
hereafter may be amended, restated, supplemented, modified or otherwise changed
from time to time (the "Security Agreement") and that the Promissory Notes or
shares listed on this Pledge Amendment shall be hereby pledged and assigned to
the Agent and become part of the Pledged Interests referred to in such Pledge
Agreement and shall secure all of the Secured Obligations referred to in such
Security Agreement.
 
Pledged Debt
Grantor
Name of Maker
Description
Principal Amount
Outstanding as of
               

Pledged Shares
 
Grantor
Name of
Pledged Issuer
Number of Shares
Percentage of Outstanding Shares
Class
Certificate Number
                       

 
 

  [GRANTOR]            
By:
/s/        Name        Title           

 
U.S. BANK NATIONAL
ASSOCIATION,
as the Agent:
       
By:
/s/      Name      Title         

 
Exh. A-1
 

 
 

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EXHIBIT B
 
ASSIGNMENT FOR SECURITY - - [TRADEMARKS] [PATENTS] [COPYRIGHTS]
 
WHEREAS, ________________ (the "Assignor") [has adopted, used and is using, and
holds all right, title and interest in and to, the trademarks and service marks
listed on the attached Schedule A, which trademarks and service marks are
registered or applied for in the United States Patent and Trademark Office (the
"Trademarks")] [holds all right, title and interest in the letter patents,
design patents and utility patents listed on the attached Schedule A, which
patents are issued or applied for in the United States Patent and Trademark
Office (the "Patents")] [holds all right, title and interest in the copyrights
listed on the attached Schedule A, which copyrights are registered in the United
States Copyright Office (the "Copyrights")];
 
WHEREAS, the Assignor has entered into a Pledge and Security Agreement, dated
March 19, 2012 (as amended, restated, supplemented, modified or otherwise
changed from time to time, the "Security Agreement"), in favor of U.S. Bank
National Association, as the Agent for itself and certain lenders (in such
capacity, together with its successors and assigns, if any, the "Assignee"); and
 
WHEREAS, pursuant to the Security Agreement, the Assignor has assigned to the
Assignee and granted to the Assignee for the benefit of the Secured Parties (as
defined in the Security Agreement) a continuing security interest in all right,
title and interest of the Assignor in, to and under the [Trademarks, together
with, among other things, the good-will of the business symbolized by the
Trademarks] [Patents] [Copyrights] and the applications and registrations
thereof, and all proceeds thereof, including, without limitation, any and all
causes of action which may exist by reason of infringement thereof and any and
all damages arising from past, present and future violations thereof (the
"Collateral"), to secure the payment, performance and observance of the Secured
Obligations (as defined in the Security Agreement);
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Assignor does hereby pledge, convey, sell,
assign, transfer and set over unto the Assignee and grants to the Assignee for
the benefit of the Assignee and the Lenders a continuing security interest in
the Collateral to secure the prompt payment, performance and observance of the
Secured Obligations.
 
The Assignor does hereby further acknowledge and affirm that the rights and
remedies of the Assignee with respect to the Collateral are more fully set forth
in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein.
 

 
Exh. B-1
 

 
 
 
 

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

 

IN WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed
by its officer thereunto duly authorized as of _____________ __, 201_.
 

  [GRANTOR]          
 
By:
/s/        Name        Title           

 
STATE OF ____________
ss.:
COUNTY OF __________
 
On this ____ day of _______________, 201_, before me personally came
________________, to me known to be the person who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that s/he is the
________________ of _______________________________________, a
____________________, and that s/he executed the foregoing instrument in the
firm name of _______________________________________, and that s/he had
authority to sign the same, and s/he acknowledged to me that he executed the
same as the act and deed of said firm for the uses and purposes therein
mentioned.
 
 

 
Exh. B-2
 

 
 
 
 

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SCHEDULE A TO ASSIGNMENT FOR SECURITY
 

 

[Trademarks and Trademark Applications]
[Patent and Patent Applications]
[Copyright and Copyright Applications]
Owned by ______________________________

 
Exh. B-3
 

 
 

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EXHIBIT C
 

 
FORM OF SECURITY AGREEMENT SUPPLEMENT
 
[Date of Security Agreement Supplement]
 
U.S. Bank National Association, as Agent
214 North Tryon Street, 26th Floor
Charlotte, NC 28202
 
Ladies and Gentlemen:
 
Reference hereby is made to (i) the Financing Agreement, dated as of March 19,
2012 (such agreement, as amended, restated, supplemented, modified or otherwise
changed from time to time, including any replacement agreement therefor, being
hereinafter referred to as the "Financing Agreement") by and among WMI Holdings
Corp., a Washington corporation (the "Borrower", sometimes referred to herein as
the "Borrower"), each subsidiary of the Borrower listed as a "Guarantor" on the
signature pages thereto (together with each other Person (as defined in the
Financing Agreement) that guarantees all or any portion of the Obligations (as
defined in the Financing Agreement) from time to time, each a "Guarantor" and
collectively, the "Guarantors", and together with the Borrowers, each a
"Grantor" and collectively, the "Grantors"), the lenders from time to time party
thereto (each a "Lender" and collectively, the "Lenders"), and U.S. Bank
National Association, a national banking association, in its capacity as Agent
for the Lenders (in such capacity, together with its successors and assigns in
such capacity, if any, the "Agent") and (ii) the Pledge and Security Agreement,
dated as of March 19, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the "Security Agreement"), made by the Grantors from
time to time party thereto in favor of the Agent.  Capitalized terms defined in
the Financing Agreement or the Security Agreement and not otherwise defined
herein are used herein as defined in the Financing Agreement or the Security
Agreement.
 
SECTION 1.                      Grant of Security.  The undersigned hereby
grants to the Agent, for the ratable benefit of the Secured Parties, a security
interest in, all of its right, title and interest in and to all of the
Collateral (as defined in the Security Agreement) of the undersigned, whether
now owned or hereafter acquired by the undersigned, wherever located and whether
now or hereafter existing or arising, including, without limitation, the
property and assets of the undersigned set forth on the attached supplemental
schedules to the Schedules to the Security Agreement.
 
SECTION 2.                      Security for Obligations.  The grant of a
security interest in the Collateral by the undersigned under this Security
Agreement Supplement and the Security Agreement secures the payment of all
Secured Obligations of the undersigned now or hereafter existing under or in
respect of the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.  Without limiting the generality of the foregoing, each
of this Security Agreement Supplement and the Security
 

 
Exh. C-1
 

 
 
 
 

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

 

Agreement secures the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to the Agent or any
Secured Party under the Loan Documents but for the fact that such Secured
Obligations are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Grantor.
 
SECTION 3.                      Supplements to Security Agreement
Schedules.  The undersigned has attached hereto supplemental Schedules I through
VIII to Schedules I through VIII, respectively, to the Security Agreement, and
the undersigned hereby certifies, as of the date first above written, that such
supplemental Schedules have been prepared by the undersigned in substantially
the form of the equivalent Schedules to the Security Agreement, and such
supplemental Schedules include all of the information required to be scheduled
to the Security Agreement and do not omit to state any information material
thereto.
 
SECTION 4.                      Representations and Warranties.  The undersigned
hereby makes each representation and warranty set forth in Section 5 of the
Security Agreement (as supplemented by the attached supplemental Schedules) to
the same extent as each other Grantor.
 
SECTION 5.                      Obligations Under the Security Agreement.  The
undersigned hereby agrees, as of the date first above written, to be bound as a
Grantor by all of the terms and provisions of the Security Agreement to the same
extent as each of the other Grantors.  The undersigned further agrees, as of the
date first above written, that each reference in the Security Agreement to an
"Additional Grantor" or a "Grantor" shall also mean and be a reference to the
undersigned.
 
SECTION 6.                      Governing Law.  This Security Agreement
Supplement shall be governed by, and construed in accordance with, the laws of
the State of New York.
 

 
   

 
 

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

 

 
SECTION 7.                      Loan Document.  In addition to and without
limitation of any of the foregoing, this Security Agreement Supplement shall be
deemed to be a Loan Document and shall otherwise be subject to all of terms and
conditions contained in Sections 10.10 and 10.11 of the Financing Agreement,
mutatis mutandis.
 

 
Very truly yours,
 
    [NAME OF ADDITIONAL GRANTOR]          
 
By:
/s/        Name        Title           

 

Acknowledged and Agreed:  
 
U.S. BANK NATIONAL
ASSOCIATION
As Agent
       
By:
/s/      Name      Title