rentech_8k-ex1002.htm


    
      Exhibit
10.2

    

     

    
      
         

        
          

          

        

        


      

       

      GUARANTEE
AND COLLATERAL AGREEMENT

       

       

      dated as
of May 30, 2008,

       

       

      among

       

       

      RENTECH
ENERGY MIDWEST CORPORATION,

       

       

      as the
Borrower,

       

       

      RENTECH,
INC.,

       

       

      as
Holdings,

       

       

      the
Subsidiaries of Holdings from time to time party hereto

       

       

      and

       

       

      CREDIT
SUISSE, CAYMAN ISLANDS BRANCH

       

       

      as
Collateral Agent

       

      
        


         

        


        
          

          

        

      

      [CS&M
Ref. No. ________] 

       


      
        
           


        

        
           


          
          

        

        
           


        

      


      TABLE OF
CONTENTS


      
        	 
      	
                Page

              
	
                ARTICLE
      I

              
	
                Definitions

              
	 
      	 
      
	
                SECTION
      1.01.   Credit Agreement

              	
                2

              
	
                SECTION
      1.02.   Other Defined Terms

              	
                2

              
	 
      	 
      
	
                ARTICLE
      II

              
	
                Guarantee

              
	 
      	 
      
	
                SECTION
      2.01.   Guarantee

              	
                2

              
	
                SECTION
      2.02.   Guarantee of Payment; Continuing
      Guarantee

              	
                2

              
	
                SECTION
      2.03.   No Limitations, Etc

              	
                2

              
	
                SECTION
      2.04.   Reinstatement

              	
                2

              
	
                SECTION
      2.05.   Agreement To Pay; Subrogation

              	
                2

              
	
                SECTION
      2.06.   Information

              	
                2

              
	
                SECTION
      2.07.   Taxes

              	
                2

              
	 
      	 
      
	
                ARTICLE
      III

              
	
                Pledge
      of Securities

              
	 
      	 
      
	
                SECTION
      3.01.   Pledge

              	
                2

              
	
                SECTION
      3.02.   Delivery of the Pledged Collateral

              	
                2

              
	
                SECTION
      3.03.   Representations, Warranties and
      Covenants

              	
                2

              
	
                SECTION
      3.04.   Certification of Limited Liability Company
      Interests and Limited Partnership Interests

              	
                2

              
	
                SECTION
      3.05.   Registration in Nominee Name;
      Denominations

              	
                2

              
	
                SECTION
      3.06.   Voting Rights; Dividends and Interest,
      Etc

              	
                2

              
	 
      	 
      
	
                ARTICLE
      IV

              
	
                Security
      Interests in Personal Property

              
	 
      	 
      
	
                SECTION
      4.01.   Security Interest

              	
                2

              
	
                SECTION
      4.02.   Representations and Warranties

              	
                2

              
	
                SECTION
      4.03.   Covenants

              	
                2

              
	
                SECTION
      4.04.   Other Actions

              	
                2

              
	
                SECTION
      4.05.   Covenants Regarding Patent, Trademark and Copyright
      Collateral

              	
                2

              
	 
      	 
      


      


      
        
           


        

        
          i

          
            

          

        

        
           


        

      


      


      
        	
                ARTICLE
      V

              
	
                Remedies

              
	 
      	 
      
	
                SECTION
      5.01.   Remedies Upon Default

              	
                2

              
	
                SECTION
      5.02.   Application of Proceeds

              	
                2

              
	
                SECTION
      5.03.   Grant of License to Use Intellectual
      Property

              	
                2

              
	
                SECTION
      5.04.   Securities Act, Etc

              	
                2

              
	 
      	 
      
	
                ARTICLE
      VI

              
	
                Indemnity,
      Subrogation and Subordination

              
	 
      	 
      
	
                SECTION
      6.01.   Indemnity and Subrogation

              	
                2

              
	
                SECTION
      6.02.   Contribution and Subrogation

              	
                2

              
	
                SECTION
      6.03.   Subordination

              	
                2

              
	 
      	 
      
	
                ARTICLE
      VII

              
	
                Miscellaneous

              
	 
      	 
      
	
                SECTION
      7.01.   Notices

              	
                2

              
	
                SECTION
      7.02.   Security Interest Absolute

              	
                2

              
	
                SECTION
      7.03.   Survival of Agreement

              	
                2

              
	
                SECTION
      7.04.   Binding Effect; Several Agreement

              	
                2

              
	
                SECTION
      7.05.   Successors and Assigns

              	
                2

              
	
                SECTION
      7.06.   Agent’s Fees and Expenses;
      Indemnification

              	
                2

              
	
                SECTION
      7.07.   Agent Appointed Attorney-in-Fact

              	
                2

              
	
                SECTION
      7.08.   Applicable Law

              	
                2

              
	
                SECTION
      7.09.   Waivers; Amendment

              	
                2

              
	
                SECTION
      7.10.   WAIVER OF JURY TRIAL

              	
                2

              
	
                SECTION
      7.11.   Severability

              	
                2

              
	
                SECTION
      7.12.   Counterparts

              	
                2

              
	
                SECTION
      7.13.   Headings

              	
                2

              
	
                SECTION
      7.14.   Jurisdiction; Consent to Service of
      Process

              	
                2

              
	
                SECTION
      7.15.   Termination or Release

              	
                2

              
	
                SECTION
      7.16.   Additional Subsidiaries

              	
                2

              
	
                SECTION
      7.17.   Right of Setoff

              	
                2

              


      

      



      
        
           


        

        
          ii

          
            

          

        

        
           


        

      

       

      Schedules

       

      
        	
                Schedule
      I

              	
                Subsidiary
      Guarantors

              


      

      
        	
                Schedule
      II

              	
                Pledged
      Equity Interests; Pledged Debt
Securities

              


      

      
        	
                Schedule
      III

              	
                Intellectual
      Property

              


      

       

      Exhibits

       

      
        	
                Exhibit
      A

              	
                Form
      of Supplement

              


      

      
        	
                Exhibit
      B

              	
                Form
      of Perfection Certificate

              


      

       

      



      
        
           


        

        
          iii

          
            

          

        

        
           


        

      


      GUARANTEE
AND COLLATERAL AGREEMENT dated as of May 30, 2008 (this “Agreement”),
among RENTECH ENERGY MIDWEST CORPORATION, a corporation organized under the laws
of the State of Delaware (the “Borrower”),
RENTECH, INC., a corporation organized under the laws of the State of Colorado
(“Holdings”),
the Subsidiaries of Holdings from time to time party hereto and CREDIT SUISSE,
Cayman Islands Branch, as collateral agent for the Secured Parties (in such
capacity, the “Collateral
Agent”).

       

      PRELIMINARY
STATEMENT

       

      Reference
is made to the Credit Agreement dated as of May 30, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, Holdings, the lenders from time to time
party thereto (the “Lenders”)
and Credit Suisse, Cayman Islands Branch, as administrative agent for the
Lenders and collateral agent for the Secured Parties (such term and each other
capitalized term used but not defined in this preliminary statement being
defined as provided in Article I).

       

      The
Lenders have agreed to extend credit to the Borrower pursuant to, and upon the
terms and conditions specified in, the Credit Agreement.  The
obligations of the Lenders to extend credit to the Borrower are conditioned
upon, among other things, the execution and delivery of this Agreement by the
Borrower and each Guarantor.  Each Guarantor is an affiliate of the
Borrower, will derive substantial benefits from the extension of credit to the
Borrower pursuant to the Credit Agreement and is willing to execute and deliver
this Agreement in order to induce the Lenders to extend such
credit.  Accordingly, the parties hereto agree as
follows:

       

      ARTICLE
I


       

      Definitions

       

      SECTION
1.01.   Credit
Agreement.  (a)  Each capitalized term used but not
defined herein shall have the meaning assigned to it in the Credit
Agreement.  Each capitalized term defined in the New York UCC (as such
term is defined herein) and not defined in this Agreement shall have the meaning
assigned to it in the New York UCC.  All references to the Uniform
Commercial Code shall mean the New York UCC.

       

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

       

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

       

      “Accounts
Receivable” shall mean all Accounts and all right, title and interest in
any returned goods, together with all rights, titles, securities and guarantees
with respect thereto, including any rights to stoppage in transit, replevin,
reclamation and resales, and all related security interests, liens and pledges,
whether voluntary or involuntary, in each case whether now existing or owned or
hereafter arising or acquired.

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      “Agent”
shall mean Credit Suisse, in its capacity as collateral agent for the Secured
Parties.  References to “Agent”
shall also include Credit Suisse, acting in its capacity as administrative agent
for the Lenders under the Credit Agreement.

       

      “Agreement”
shall have the meaning assigned to such term in the introductory
paragraph.

       

      “Article 9
Collateral” shall have the meaning assigned to such term in
Section 4.01.

       

      “Borrower”
shall have the meaning assigned to such term in introductory paragraph to this
Agreement.

       

      “Claiming
Party” has the meaning assigned to such term in Section
6.02.

       

      “Collateral”
shall mean the Article 9 Collateral and the Pledged
Collateral.

       

      “Collateral
Agent” shall have the meaning assigned to such term in the introductory
paragraph to this Agreement.

       

      “Contributing
Party” has the meaning assigned to such term in
Section 6.02.

       

      “Controlled
Foreign Corporation” shall mean “controlled foreign corporation” as
defined in the Tax Code.

       

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

       

      “Copyrights”
shall mean all of the following now owned or hereafter acquired by any
Grantor:  (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office
(or any successor office or any similar office in any other country), including
those listed on Schedule III.

       

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

       

      “Federal
Securities Laws” shall have the meaning assigned to such term in Section
5.04.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      “General
Intangibles” shall mean all choses in action and causes of action and all
other intangible personal property of every kind and nature (other than
Accounts) and other general intangibles now owned or hereafter acquired by any
Grantor, including all rights and interests in partnerships, limited
partnerships, limited liability companies and other unincorporated entities,
corporate or other business records, indemnification claims, contract rights
(including rights under other leases, Hedging Agreements, the Management
Agreement and other agreements), Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to secure
payment by an Account Debtor of any of the Accounts.

       

      “Grantors”
shall mean Holdings, the Borrower and the Subsidiary Guarantors.

       

      “Guarantors”
shall mean Holdings and the Subsidiary Guarantors.

       

      “Holdings”
shall have the meaning assigned to such term in the introductory paragraph to
this Agreement.

       

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

       

      “Lenders”
shall have the meaning assigned to such term in the preliminary statements to
this Agreement.

       

      “License”
shall mean any Patent License, Trademark License, Copyright License or other
license or sublicense agreement relating to Intellectual Property to which any
Grantor is a party, including those listed on Schedule III.

       

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

       

      “Obligations”
shall mean (a) the due and punctual payment by the Borrower of (i) the
principal of, premium (if any) and interest (including interest accruing during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of the Borrower to any of the Secured Parties under the Credit
Agreement and each of the other Loan Documents, including obligations to pay
fees, expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Borrower under or pursuant to this Agreement and each of the
other Loan Documents to which it is a party and (c) the due and punctual payment
and performance of all the obligations of each other Loan Party under or
pursuant to the Security Documents and each of the other Loan Documents to which
they are a party.


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


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

       

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

       

      “Perfection
Certificate” shall mean a certificate substantially in the form of Exhibit B, completed
and supplemented with the schedules and attachments contemplated
thereby.

       

      “Pledged
Collateral” shall have the meaning assigned to such term in
Section 3.01.

       

      “Pledged Debt
Securities” shall have the meaning assigned to such term in Section
3.01.

       

      “Pledged Equity
Interests” shall have the meaning assigned to such term in Section
3.01.

       

      “Pledged
Securities” shall mean any promissory notes, unit certificates, stock
certificates or other securities (as defined in Article 8 of the New York UCC)
now or hereafter included in the Pledged Collateral, including all certificates,
instruments or other documents representing or evidencing any Pledged
Collateral.

       

      “Secured Parties”
shall mean the Lenders.

       

      “Security
Interest” shall have the meaning assigned to such term in
Section 4.01.

       

      “Subsidiary
Guarantors” shall mean (a) the Subsidiaries identified on Schedule I hereto as
Subsidiary Guarantors and (b) each other Subsidiary that becomes a party to this
Agreement as a Subsidiary Guarantors after the Closing Date.

       

      “Tax Code”
shall mean the United States Internal Revenue Code of 1986, as amended from time
to time.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


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

       

      “Trademarks”
shall mean all of the following now owned or hereafter acquired by any
Grantor:  (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office
(or any successor office) or any similar offices in any State of the United
States or any other country or any political subdivision thereof, and all
extensions or renewals thereof, including those listed on Schedule III,
(b) all goodwill associated therewith or symbolized thereby and (c) all other
assets, rights and interests that uniquely reflect or embody such
goodwill.

       

      ARTICLE
II

       

      Guarantee

       

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

       

      SECTION
2.02.    Guarantee of
Payment; Continuing Guarantee.  Each Guarantor further agrees
that its guarantee hereunder constitutes a guarantee of payment when due
(whether or not any bankruptcy or similar proceeding shall have stayed the
accrual or collection of any of the Obligations or operated as a discharge
thereof) and not of collection, and waives any right to require that any resort
be had by the Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any Deposit Account or credit on
the books of the Agent or any other Secured Party in favor of the Borrower, any
other Loan Party or any other person.  Each Guarantor agrees that its
guarantee hereunder is continuing in nature and applies to all Obligations,
whether currently existing or hereafter incurred.

       

      SECTION
2.03.    No Limitations,
Etc.  (b)  Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 7.15, the
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations, any
impossibility in the performance of the Obligations or
otherwise.


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      Without
limiting the generality of the foregoing, the obligations of each Guarantor
hereunder shall not be discharged, impaired or otherwise affected by
(i) the failure of the Agent or any other Secured Party to assert any claim
or demand or to enforce or exercise any right or remedy under the provisions of
any Loan Document or otherwise, (ii) any extension or renewal of any of the
Obligations, (iii) any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any Loan Document or any
other agreement, including with respect to any other Guarantor under this
Agreement, (iv) the release of, or any impairment of or failure to perfect
any Lien on or security interest in, any security held by the Agent or any other
Secured Party for the Obligations or any of them, (v) any default, failure
or delay, willful or otherwise, in the performance of the Obligations or
(vi) any other act, omission or delay to do any other act that may or might
in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations (other than
contingent indemnification obligations)) or which would impair or eliminate the
right of any Guarantor to subrogation.  Each Guarantor expressly
authorizes the Agent and the other Secured Parties to take and hold security for
the payment and performance of the Obligations, to exchange, waive or release
any or all such security (with or without consideration), to enforce or apply
such security and direct the order and manner of any sale thereof in their sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.  Each Guarantor acknowledges
that it will receive substantial direct and indirect benefits from the financing
arrangements contemplated by the Loan Documents.

       

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

       

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

       


      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      SECTION
2.05.   Agreement To Pay;
Subrogation.  In furtherance of the foregoing and not in
limitation of any other right that the Agent or any other Secured Party has at
law or in equity against any Guarantor by virtue hereof, upon the failure of the
Borrower or any other Loan Party to pay any Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor, upon notice from Agent, hereby promises
to and will forthwith pay, or cause to be paid, to the Agent for distribution to
the applicable Secured Parties in cash the amount of such unpaid
Obligation.  Upon payment by any Guarantor of any sums to the Agent as
provided above, all rights of such Guarantor against the Borrower or any other
Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.  If any amount shall erroneously be paid
to any Guarantor on account of any such Indebtedness of the Borrower or any
other Loan Party, such amount shall be held in trust for the benefit of the
Secured Parties and shall forthwith be paid to the Agent to be credited against
the payment of the Obligations, whether matured or unmatured, in accordance with
the terms of the Credit Agreement and any other Loan Document.

       

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

       

      SECTION
2.07.  Taxes.  Each
Guarantor agrees that the provisions of Section 2.15 of the Credit Agreement
shall apply equally to such Guarantor with respect to payments made by it
hereunder.

       

      ARTICLE
III


       

      Pledge
of Securities

       

      SECTION
3.01.   Pledge.  As
security for the payment or performance, as the case may be, in full of the
Obligations, each Grantor hereby assigns and pledges to the Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, and
hereby grants to the Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, a security interest in, all of such Grantor’s right,
title and interest in, to and under (a)(i) the Equity Interests in any
Subsidiary owned by such Grantor on the date hereof (including all such Equity
Interests listed on Schedule II),
(ii) any other Equity Interests in any Subsidiary obtained in the future by
such Grantor and (iii) all certificates, if any, representing any such Equity
Interests (all the foregoing collectively referred to herein as the “Pledged Equity
Interests”), (b)(i) the debt securities owing by any Subsidiary held
by such Grantor on the date hereof (including all such debt securities listed
opposite the name of such Grantor on Schedule II),
(ii) any debt securities owing by any Subsidiary obtained in the future by
such Grantor and (iii) all promissory notes and other instruments
evidencing any such debt securities (all the foregoing collectively referred to
herein as the “Pledged Debt
Securities”), (c) all other property that may be delivered to and
held by the Agent pursuant to the terms of this Section 3.01,
(d) subject to Section 3.06, all payments of principal or interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of, in exchange for or upon the
conversion of, and all other Proceeds received in respect of, the securities
referred to in clauses (a) and (b) above, (e) subject to
Section 3.06, all rights and privileges of such Grantor with respect to the
securities and other property referred to in clauses (a), (b), (c) and (d)
above, and (f) all Proceeds of any of the foregoing (the items referred to
in clauses (a) through (f) above being collectively referred to as the “Pledged
Collateral”).

       


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      Notwithstanding
anything herein to the contrary, in no event shall the Security Interest attach
to the outstanding capital stock of a Controlled Foreign Corporation in excess
of 65% of the voting power of all classes of capital stock of such Controlled
Foreign Corporation entitled to vote, to the extent, and for so long as, such
pledge would result in adverse tax consequences to the Secured Parties as a
result of such pledge; provided, that
immediately upon the amendment of the Tax Code to allow the pledge of a greater
percentage of the voting power of capital stock in a Controlled Foreign
Corporation without adverse tax consequences, the Collateral shall include, and
the security interest granted by such Grantor shall attach to, such greater
percentage of capital stock of each Controlled Foreign Corporation.

       

      TO HAVE
AND TO HOLD the Pledged Collateral, together with all right, title, interest,
powers, privileges and preferences pertaining or incidental thereto, unto the
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.

       

      SECTION
3.02.   Delivery of the
Pledged Collateral.  (c)  To the extent required for
the validity and first priority of the security interests created or intended to
be created by the Security Documents, each Grantor agrees promptly to deliver or
cause to be delivered to the Agent any and all certificates, instruments or
other documents representing or evidencing Pledged Securities.

       

      (b)           Upon
delivery to the Agent, (i) any certificate, instrument or document representing
or evidencing Pledged Securities constituting a “security” shall be accompanied
by undated stock or unit powers duly executed in blank or other undated
instruments of transfer satisfactory to the Agent and duly executed in blank and
by such other instruments and documents as the Agent may request and
(ii) all other property composing part of the Pledged Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable
Grantor and such other instruments or documents as the Agent may
request.  Each delivery of Pledged Securities shall be accompanied by
a schedule describing the applicable securities, which schedule shall be
attached hereto as Schedule II and
made a part hereof; provided that failure to
attach any such schedule hereto shall not affect the validity of the pledge of
such Pledged Securities.  Each schedule so delivered shall supplement
any prior schedules so delivered.

       

      SECTION
3.03.    Representations,
Warranties and Covenants.  Each Grantor, jointly with the other
Grantors and severally, represents and warrants, as of the Effective Date, that,
and covenants to and with the Agent, for the benefit of the Secured Parties,
that:


      
        
           


        

        
          8

          
            

          

        

        
           


        

      


      (a)           Schedule II correctly
sets forth the percentage of the issued and outstanding units of each class of
the Equity Interests of the issuer thereof represented by such Pledged Equity
Interests and includes all Equity Interests, debt securities and promissory
notes required to be pledged hereunder to the extent required for the validity
and first priority of the security interests created or intended to be created
by the Security Documents;

       

      (b)           the
Pledged Equity Interests and Pledged Debt Securities have been duly and validly
authorized and issued by the issuers thereof and (i) in the case of Pledged
Equity Interests, are fully paid and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers
thereof;

       

      (c)           except
for the security interests granted hereunder (or otherwise permitted under the
Credit Agreement), each Grantor (i) is and, subject to any transfers made
in compliance with the Credit Agreement, will continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on Schedule II as owned
by such Grantor, (ii) holds the same free and clear of all Liens and
(iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than transfers made in compliance with the Credit
Agreement;

       

      (d)           except
for restrictions and limitations imposed by the Loan Documents or securities
laws generally, the Pledged Collateral is and will continue to be freely
transferable and assignable, and none of the Pledged Collateral is or will be
subject to any option, right of first refusal, shareholders agreement, charter
or by-law provisions or contractual restriction of any nature that might
prohibit, impair, delay or otherwise affect the pledge of such Pledged
Collateral hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Agent of rights and remedies hereunder;

       

      (e)           each
Grantor (i) has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated and (ii) will
defend its title or interest thereto or therein against any and all Liens (other
than any Lien created or permitted by the Loan Documents), however arising, of
all persons whomsoever;

       

      (f)           no
consent or approval of any Governmental Authority, any securities exchange or
any other person was or is necessary to the validity of the pledge effected
hereby (other than such as have been obtained and are in full force and
effect);

       

      (g)           by
virtue of the execution and delivery by each Grantor of this Agreement, when any
Pledged Securities are delivered to the Agent in accordance with this Agreement,
the Agent will obtain a legal, valid and perfected first priority lien upon and
security interest in such Pledged Securities as security for the payment and
performance of the Obligations; and

       

      (h)           the
pledge effected hereby is effective to vest in the Agent, for the ratable
benefit of the Secured Parties, the rights of the Agent in the Pledged
Collateral as set forth herein and all action by any Grantor necessary or
desirable to protect and perfect the Lien on the Pledged Collateral has been
duly taken.

       


      
        
           


        

        
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      SECTION
3.04.  Certification of
Limited Liability Company Interests and Limited Partnership
Interests.  As of the Closing Date, except as may be set forth
on Schedule II, no
interest in any limited liability company or limited partnership which is a
Subsidiary is represented by a certificate or is a “security” within the meaning
of Article 8 of the New York UCC or governed by Article 8 of the New York
UCC.  If after the Closing Date any interest in any limited liability
company or limited partnership which is a Subsidiary becomes represented by a
certificate or becomes a “security” within the meaning of Article 8 of the
New York UCC, the applicable Grantor agrees to deliver such certificate to
the extent required for the validity and first priority of the security
interests created or intended to be created by the Security
Documents.

       

      SECTION
3.05.  Registration in
Nominee Name; Denominations.  The Agent, on behalf of the
Secured Parties, shall have the right (in its sole and absolute discretion), if
an Event of Default shall have occurred and be continuing, to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as pledgee or as
sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank
or in favor of the Agent.  Each Grantor will promptly give to the
Agent copies of any notices or other communications received by it with respect
to Pledged Securities in its capacity as the registered owner
thereof.  The Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this
Agreement.

       

      SECTION
3.06.  Voting Rights;
Dividends and Interest, Etc.  (d)  Unless and until
an Event of Default shall have occurred and be continuing and, subject to
applicable law, the Agent shall have given the Grantors notice of its intent to
exercise its rights under this Agreement (which notice shall be deemed to have
been given immediately upon the occurrence of an Event of Default under
paragraph (g) or (h) of Article VII of the Credit Agreement):

       

      (i)           Each
Grantor shall be entitled to exercise any and all voting and/or other consensual
rights and powers inuring to an owner of Pledged Securities or any part thereof
for any purpose consistent with the terms of this Agreement, the Credit
Agreement and the other Loan Documents; provided, however, that such rights and
powers shall not be exercised in any manner that could materially and adversely
affect the rights inuring to a holder of any Pledged Securities or the rights
and remedies of the Agent or the other Secured Parties under this Agreement or
the Credit Agreement or any other Loan Document or the ability of the Secured
Parties to exercise the same.

       

      (ii)           The
Agent shall execute and deliver to each Grantor, or cause to be executed and
delivered to each Grantor, all such proxies, powers of attorney and other
instruments as such Grantor may reasonably request for the purpose of enabling
such Grantor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above.

       


      
        
           


        

        
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      (iii)           Each
Grantor shall be entitled to receive and retain, free and clear of the Lien of
this Agreement, any and all dividends, interest, principal and other
distributions paid on or distributed in respect of the Pledged Securities to the
extent and only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in accordance
with, the terms and conditions of the Credit Agreement, the other Loan Documents
and applicable law; provided, however, that any noncash
dividends, interest, principal or other distributions that would constitute
Pledged Equity Interests or Pledged Debt Securities, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity Interests
in the issuer of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall not be commingled by such
Grantor with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the ratable benefit of the Secured
Parties and shall be forthwith delivered to the Agent in the same form as so
received (with any necessary endorsement or instrument of
assignment).

       

      (b)           Upon
the occurrence and during the continuance of an Event of Default, after the
Agent shall have notified (or shall be deemed to have notified pursuant to
Section 3.06(a)) the Grantors of the suspension of their rights under paragraph
(a)(iii) of this Section 3.06, then all rights of any Grantor to dividends,
interest, principal or other distributions that such Grantor is authorized to
receive pursuant to paragraph (a)(iii) of this Section 3.06 shall
cease, and all such rights shall thereupon become vested in the Agent, for the
ratable benefit of the Secured Parties.  The Agent shall have the sole
and exclusive right and authority to receive and retain such dividends,
interest, principal or other distributions.  All dividends, interest,
principal or other distributions received by any Grantor contrary to the
provisions of this Section 3.06 shall be held in trust for the benefit of
the Agent, for the ratable benefit of the Secured Parties, and shall be
segregated from other property or funds of such Grantor and shall be forthwith
delivered to the Agent upon demand in the same form as so received (with any
necessary endorsement or instrument of assignment).  Any and all money
and other property paid over to or received by the Agent pursuant to the
provisions of this paragraph (b) shall be retained by the Agent in an
account to be established by the Agent upon receipt of such money or other
property and shall be applied in accordance with the provisions of
Section 5.02.  After all Obligations (other than contingent
indemnification obligations) are indefeasibly paid in full in cash, the Agent
shall, promptly after all such Events of Default have been cured or waived,
repay to each applicable Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and
that remain in such account.

       


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      (c)           Upon
the occurrence and during the continuance of an Event of Default, after the
Agent shall have notified (or shall be deemed to have notified pursuant to
Section 3.06(a)) the Grantors of the suspension of their rights under paragraph
(a)(i) of this Section 3.06, then all rights of any Grantor to exercise the
voting and consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of the
Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and
all such rights shall thereupon become vested in the Agent, for the ratable
benefit of the Secured Parties.  The Agent shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers; provided that,
unless otherwise directed by the Required Lenders, the Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Grantors to exercise such rights.

       

      (d)           Any
notice given by the Agent to the Grantors exercising its rights under
paragraph (a) of this Section 3.06 (i) may be given by telephone if
promptly confirmed in writing, (ii) may be given to one or more of the Grantors
at the same or different times and (iii) may suspend the rights of the Grantors
under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Agent in its sole and absolute discretion) and
without waiving or otherwise affecting the Agent’s rights to give additional
notices from time to time suspending other rights so long as an Event of Default
has occurred and is continuing.

       

      ARTICLE
IV


       

      Security
Interests in Personal Property

       

      SECTION
4.01.   Security
Interest.  (e)  As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
grants to the Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest (the “Security
Interest”), in all right, title or interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Article 9
Collateral”):

       

      (i)           all
Accounts;

       

      (ii)           all
As-Extracted Collateral;

       

      (iii)           all
Chattel Paper;

       

      (iv)           all
cash and Deposit Accounts;

       

      (v)           all
Documents;

       

      (vi)           all
Equipment;

       

      (vii)           all
Fixtures;

       

      (viii)          all
General Intangibles;

       


      
        
           


        

        
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      (ix)           all
Instruments;

       

      (x)           all
Inventory;

       

      (xi)           all
Investment Property;

       

      (xii)           all
Letter-of-Credit Rights;

       

      (xiii)          all
Commercial Tort Claims;

       

      (xiv)         
all Securities Accounts;

       

      (xv)           all
books and records pertaining to the Article 9 Collateral; and

       

      (xvi)          
to the extent not otherwise included, all Proceeds and products of any and all
of the foregoing and all collateral security and guarantees given by any person
with respect to any of the foregoing.

       

      (b)           Each
Grantor hereby irrevocably authorizes the Agent at any time and from time to
time to file in any relevant jurisdiction any initial financing statements
(including fixture filings) with respect to the Article 9 Collateral or any part
thereof and amendments thereto that (i) indicate the Article 9 Collateral as
“all assets” of such Grantor or words of similar effect and (ii) contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment,
including whether such Grantor is an organization, the type of organization and
any organizational identification number issued to such Grantor.  Each
Grantor agrees to provide such information to the Agent promptly upon
request.

       

      Each
Grantor also ratifies its authorization for the Agent to file in any relevant
jurisdiction any initial financing statements or amendments thereto if filed
prior to the Closing Date.

       

      The Agent
is further authorized to file with the United States Patent and Trademark Office
or United States Copyright Office (or any successor office or any similar office
in any other country) such documents as may be necessary or advisable for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Grantor, without the signature of such
Grantor, and naming such Grantor or the Grantors as debtors and the Agent as
secured party.

       

      (c)           The
Security Interest is granted as security only and shall not subject the Agent or
any other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Article 9
Collateral.

       


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      (d)           Notwithstanding
anything herein to the contrary, (i) in no event shall the Security Interest
attach to (A) any contract or agreement to which any Grantor is a party or any
of its rights or interests thereunder to the extent and for so long as the grant
of the Security Interest shall constitute or result in (I) the unenforceability
of any right of such Grantor therein or (II) a breach or termination pursuant to
the terms of, or a default under, any such contract or agreement (other than to
the extent that any such term would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or
principles of equity), (B)  any fixtures, improvements or equipment
acquired by any Grantor after the Closing Date if (I) at least 80% of the
purchase price of such fixtures, improvements or equipment was financed through
the incurrence of Indebtedness, (II) such Indebtedness is secured by a Lien on
such fixtures, improvements or equipment and (III) the terms of the instrument
or instruments governing such Indebtedness (but not of any refinancings or
replacements thereof) would be violated by the attachment of the Security
Interest to such fixtures, improvements or equipment, (C) the Equity Interests
in any person that is not the Borrower or a Subsidiary to the extent and for so
long as the grant of the Security Interest shall constitute or result in a
breach of, or default under, the terms of such person’s joint venture agreement,
limited liability company agreement, joint operating agreement or similar
document (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York
UCC or any other applicable law or principles of equity); provided, however, that, in the case of
clauses (A), (B) and (C) above, the Security Interest shall attach immediately
at such time as the condition causing such unenforceability shall be remedied or
removed, such Indebtedness shall be repaid, refinanced or replaced or such term
shall be removed and, to the extent severable, shall attach immediately to any
portion of such contract, agreement, document, real property, improvement or
equipment (including any proceeds of the foregoing) that does not result in any
of the consequences specified in clauses (A), (B)(III) or (C) above, as the case
may be and (ii) the Grantors will not be required to make filings with the
United States Patent and Trademark Office or the United States Copyright Office
in order to perfect the Security Interest in Article 9 Collateral
consisting of United States Patents, United States Trademarks and United States
Copyrights that have, in the Agent’s reasonable judgment, an aggregate fair
market value not in excess of $1,000,000, or (D) Excluded Assets, which shall be
defined as the securities account with Lehman and the securities securing the
Lehman loan for so long as the Lehman loan is outstanding.

       

      SECTION
4.02.   Representations
and Warranties.  Each Grantor, jointly with the other Grantors
and severally, represents and warrants, as of the Closing Date, to the Agent and
the other Secured Parties that:

       

      (a)           Each
Grantor has good and valid rights in and title to the Article 9 Collateral
with respect to which it has purported to grant a Security Interest hereunder
and has full power and authority to grant to the Agent, for the ratable benefit
of the Secured Parties, the Security Interest in such Article 9 Collateral
pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of
any other person other than any consent or approval that has been obtained and
is in full force and effect.


      
        
           


        

        
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      (b)           The
Perfection Certificate, when delivered in accordance with the Credit Agreement,
will be duly prepared, completed and executed and the information set forth
therein (including (x) the exact legal name of each Grantor and (y) the
jurisdiction of organization of each Grantor) will be correct and complete in
all material respects when delivered.  Uniform Commercial Code
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Article 9 Collateral have been prepared by the Agent, or will be based upon
the information provided to the Agent and the other Secured Parties in the
Perfection Certificate for filing in each governmental, municipal or other
office specified in Section 2 of the
Perfection Certificate (or specified by notice from the Borrower to the Agent
after the Closing Date in the case of filings, recordings or registrations
required by Sections 5.06 or 5.12 of the Credit Agreement), which are all
the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in the Article 9
Collateral consisting of United States Patents, United States registered
Trademarks and United States registered Copyrights) that are necessary to
publish notice of and protect the validity of and to establish a legal, valid
and perfected security interest in favor of the Agent (for the ratable benefit
of the Secured Parties) in respect of all Article 9 Collateral in which the
Security Interest may be perfected by filing, recording or registration in the
United States of America, its territories or possessions, any constituent State
of the United States of America or the District of Columbia, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation
statements.  Each Grantor represents and warrants that a fully
executed agreement in the form hereof (or a fully executed short form agreement
in form and substance satisfactory to the Agent), and containing a description
of all Article 9 Collateral consisting of Intellectual Property with
respect to United States Patents (and Patents for which the United States patent
applications are pending), United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and United States
registered Copyrights (and Copyrights for which United States registration
applications are pending) has been delivered to the Agent for recording by the
United States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. §261, 15 U.S.C. §1060 or
17 U.S.C. §205 and the regulations thereunder, as applicable, and otherwise
as may be required pursuant to the laws of any other necessary jurisdiction, to
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Agent (for the ratable benefit of the Secured Parties)
in respect of all Article 9 Collateral consisting of Patents, Trademarks
and Copyrights in which a security interest may be perfected by filing,
recording or registration in the United States of America, its territories or
possessions, any constituent State of the United States of America or the
District of Columbia, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Article 9 Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).


      
        
           


        

        
          15

          
            

          

        

        
           


        

      


      (c)           The
Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b),
a perfected security interest in all Article 9 Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the in the United States of
America, its territories or possessions, any constituent State of the United
States of America or the District of Columbia pursuant to the Uniform Commercial
Code or other applicable law in such jurisdictions and (iii) a security
interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement (or a fully executed short form agreement in form and substance
satisfactory to the Agent) with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable.  The Security
Interest is and shall be prior to any other Lien on any of the Article 9
Collateral, other than Liens expressly permitted pursuant to Section 6.02
of the Credit Agreement.

       

      (d)           The
Article 9 Collateral is owned by the Grantors free and clear of any Lien,
except for Liens expressly permitted pursuant to Section 6.02 of the Credit
Agreement.  No Grantor has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Article 9
Collateral, (ii) any assignment in which any Grantor assigns any Collateral
or any security agreement or similar instrument covering any Article 9
Collateral with the United States Patent and Trademark Office or the United
States Copyright Office, (iii) any notice under the Assignment of Claims Act or
(iv) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any
Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Liens expressly permitted pursuant to Section 6.02 of the Credit
Agreement.  As of the date hereof, no Grantor holds any Commercial
Tort Claims except as indicated on the Perfection Certificate.

       

      SECTION
4.03.   Covenants.  (f)  Each
Grantor agrees promptly to notify the Agent in writing of any change (i) in
such Grantor’s legal name, as reflected in its organizational documents,
(ii) in the jurisdiction of organization or formation of such Grantor,
(iii) if it is not a registered organization (as defined in the New York
UCC), in the location of its chief executive office or its principal place of
business, (iv) in such Grantor’s organizational form or (v) in such
Grantor’s Federal Taxpayer Identification Number or organizational
identification number assigned by the jurisdiction of
organization.  Each Grantor agrees to promptly provide the Agent with
certified organizational documents reflecting any of the changes described in
the first sentence of this paragraph.  Each Grantor agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Agent to continue at all times following such change
to have a valid, legal and perfected security interest in all the
Collateral.  Each Grantor also agrees promptly to notify the Agent in
writing if any material portion of the Collateral is damaged or
destroyed.


      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      (b)           Each
Grantor agrees to maintain, at its own cost and expense, such complete and
accurate records with respect to the Article 9 Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received with respect to
any part of the Article 9 Collateral, and, at such time or times as the
Agent may request, promptly to prepare and deliver to the Agent a duly certified
schedule or schedules in form and detail satisfactory to the Agent showing the
identity, amount and location of any and all Article 9
Collateral.

       

      (c)           Upon
request of the Agent, at the time of delivery of annual financial statements
pursuant to Section 5.04(a) of the Credit Agreement, the Borrower shall
deliver to the Agent a certificate executed by a Responsible Officer of the
Borrower certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings
recordings or registrations, including all refilings, recordings and
registrations, containing a description of the Article 9 Collateral have been
filed of record in each governmental, municipal or other appropriate office in
each jurisdiction identified pursuant to paragraph (a) of this Section to
the extent necessary to protect and perfect the Security Interest for a period
of not less than 12 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within
such period).  Each certificate delivered pursuant to this paragraph
shall identify in the format of Schedule III all
Intellectual Property of any Grantor in existence on the date thereof and not
then listed on such Schedules or previously so identified to the
Agent.

       

      (d)           Each
Grantor shall, at its own expense, take any and all actions necessary to defend
title to the Article 9 Collateral against all persons and to defend the
Security Interest and the priority thereof against any Lien not expressly
permitted pursuant to Section 6.02 of the Credit Agreement.

       

      (e)           Each
Grantor agrees, at its own expense, promptly to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Agent may from time to time request to better assure,
obtain, preserve, protect and perfect the Security Interest and the rights and
remedies created hereby, including the payment of any fees and Taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing or continuation statements
(including fixture filings) or other documents in connection herewith or
therewith.  If any amount payable to any Grantor under or in
connection with any of the Article 9 Collateral shall be or become
evidenced by any promissory note or other instrument, such note or instrument
shall be promptly pledged and delivered to the Agent, duly endorsed in a manner
satisfactory to the Agent.


      
        
           


        

        
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      Without
limiting the generality of the foregoing, each Grantor hereby authorizes the
Agent, with prompt notice thereof to the Grantors, to supplement this Agreement
by supplementing Schedule III or
adding additional schedules hereto to identify specifically any asset or item of
a Grantor (i) that constitutes Copyrights, Licenses, Patents or Trademarks and
(ii) that, together with all United States Copyrights, United States Patents and
United States Trademarks with respect to which a filing with the United States
Patent and Trademark Office or the United States Copyright Office has not been
made, has, in the Agent’s reasonable judgment, an aggregate fair market value in
excess of $1,000,000; provided that any Grantor
shall have the right, exercisable within 10 days after it has been notified
by the Agent of the specific identification of such Collateral, to advise the
Agent in writing of any inaccuracy of the representations and warranties made by
such Grantor hereunder with respect to such Collateral.  Each Grantor
agrees that it will use its reasonable best efforts to take such action as shall
be necessary in order that all representations and warranties hereunder shall be
true and correct with respect to such Collateral within 30 days after the
date it has been notified by the Agent of the specific identification of such
Collateral.

       

      (f)           The
Agent and such persons as the Agent may designate shall have the right, at the
applicable Grantor’s own cost and expense, upon reasonable notice and during
normal business hours, to inspect the Article 9 Collateral, all records
related thereto (and to make extracts and copies from such records) and the
premises upon which any of the Article 9 Collateral is located, to discuss
the applicable Grantor’s affairs with the officers of such Grantor and its
independent accountants and to verify under reasonable procedures, the
existence, validity, amount, quality, quantity, value, condition and status of,
or any other matter relating to, the Article 9 Collateral, including, in the
case of Accounts or other Article 9 Collateral in the possession of any
third person, by contacting Account Debtors or the third person possessing such
Article 9 Collateral for the purpose of making such a
verification.  The Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.

       

      (g)           At
its option, the Agent may discharge past due Taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Article 9 Collateral and not expressly permitted pursuant to
Section 5.03 or Section 6.02 of the Credit Agreement, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this Agreement,
and each Grantor jointly and severally agrees to reimburse the Agent on demand
for any payment made or any expense incurred by the Agent pursuant to the
foregoing authorization; provided, however, that nothing in this
paragraph shall be interpreted as excusing any Grantor from the performance of,
or imposing any obligation on the Agent or any Secured Party to cure or perform,
any covenants or other promises of any Grantor with respect to Taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.

       

      (h)           Each
Grantor shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral, all in accordance with the
terms and conditions thereof, and each Grantor jointly and severally agrees to
indemnify and hold harmless the Agent and the other Secured Parties from and
against any and all liability for such performance.

       

      
        
          
          

        

        
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      (i)           No
Grantor shall make or permit to be made an assignment, pledge or hypothecation
of the Article 9 Collateral or shall grant any other Lien in respect of the
Article 9 Collateral or permit any notice to be filed under the Assignment of
Claims Act, except, in each case, as expressly permitted by Section 6.02 of
the Credit Agreement.  No Grantor shall make or permit to be made any
transfer of the Article 9 Collateral and each Grantor shall remain at all times
in possession or otherwise in control of the Article 9 Collateral owned by
it, except as permitted by the Credit Agreement.

       

      (j)           No
Grantor will, without the Agent’s prior written consent, grant any extension of
the time of payment of any Accounts included in the Article 9 Collateral,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, compromises,
compoundings, settlements, releases, credits or discounts granted or made in the
ordinary course of business and consistent with its current practices and in
accordance with such prudent and standard practice used in industries that are
the same as or similar to those in which such Grantor is engaged.

       

      SECTION
4.04.  Other
Actions.  In order to further insure the attachment, perfection
and priority of, and the ability of the Agent to enforce, the Security Interest
in the Article 9 Collateral, each Grantor agrees, in each case at such
Grantor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:

       

      (a)           Instruments.
If any Grantor shall at any time hold or acquire any Instruments, such Grantor
shall forthwith endorse, assign and deliver the same to the Agent, accompanied
by such undated instruments of endorsement, transfer or assignment duly executed
in blank as the Agent may from time to time specify.

       

      (b)           [Deposit
Accounts. At all times after the [60th] day following the Closing Date
and thereafter, for each Deposit Account that any Grantor at any time opens or
maintains, such Grantor shall either (i) cause the depositary bank to agree
to comply at any time with instructions from the Agent to such depositary bank
directing the disposition of funds from time to time credited to such Deposit
Account, without further consent of such Grantor or any other person, pursuant
to an agreement in form and substance reasonably satisfactory to the Agent or
(ii) arrange for the Agent to become the customer of the depositary bank
with respect to the Deposit Account, with the Grantor being permitted, only with
the consent of the Agent, to exercise rights to withdraw funds from such Deposit
Account.  The Agent agrees with each Grantor that the Agent shall not
give any such instructions or withhold any withdrawal rights from any Grantor,
unless an Event of Default has occurred and is continuing, or, after giving
effect to any withdrawal, would occur.  The provisions of this
paragraph shall not apply to any Deposit Account for which any Grantor, the
depositary bank and the Agent have entered into a cash collateral agreement
specially negotiated among such Grantor, the depositary bank and the Agent for
the specific purpose set forth therein.]

       


      
        
           


        

        
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      (c)           Investment
Property. Except to the extent otherwise provided in Article III, if
any Grantor shall at any time hold or acquire any certificated securities, such
Grantor shall forthwith endorse, assign and deliver the same to the Agent,
accompanied by such undated instruments of transfer or assignment duly executed
in blank as the Agent may from time to time specify. If any securities now or
hereafter acquired by any Grantor are uncertificated and are issued to such
Grantor or its nominee directly by the issuer thereof, such Grantor shall
promptly notify the Agent thereof and, at the Agent’s request and option,
pursuant to an agreement in form and substance satisfactory to the Agent, either
(i) cause the issuer to agree to comply with instructions from the Agent as
to such securities, without further consent of any Grantor or such nominee or
(ii) arrange for the Agent to become the registered owner of the
securities.  If any securities, whether certificated or
uncertificated, or other Investment Property now or hereafter acquired by any
Grantor are held by such Grantor or its nominee through a Securities
Intermediary or Commodity Intermediary, such Grantor shall promptly notify the
Agent thereof and, at the Agent’s request and option, pursuant to an agreement
in form and substance satisfactory to the Agent, either (i) cause such
Securities Intermediary or Commodity Intermediary, as the case may be, to agree
to comply with Entitlement Orders from the Agent to such Securities Intermediary
as to such securities or other Investment Property, or (as the case may be) to
apply any value distributed on account of any commodity contract as directed by
the Agent to such Commodity Intermediary, in each case without further consent
of any Grantor or such nominee or (ii) in the case of Financial Assets (as
governed by Article 8 of the New York UCC) or other Investment Property
held through a Securities Intermediary, arrange for the Agent to become the
Entitlement Holder with respect to such Investment Property, with the Grantor
being permitted, only with the consent of the Agent, to exercise rights to
withdraw or otherwise deal with such Investment Property.  The Agent
agrees with each Grantor that the Agent shall not give any such Entitlement
Orders or instructions or directions to any such issuer, Securities Intermediary
or Commodity Intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by any Grantor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and
withdrawal rights would occur.

       

      (d)           Electronic
Chattel Paper and Transferable Records. If any Grantor at any time holds
or acquires an interest in any Electronic Chattel Paper or any “transferable
record” with a principal amount in excess $250,000, as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or in Section 16 of the Uniform Electronic Transactions Act as
in effect in any relevant jurisdiction, such Grantor shall promptly notify the
Agent thereof and, at the request of the Agent, shall take such action as the
Agent may request to vest in the Agent control under New York UCC
Section 9-105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable
record.  The Agent agrees with such Grantor that the Agent will
arrange, pursuant to procedures satisfactory to the Agent and so long as such
procedures will not result in the Agent’s loss of control, for the Grantor to
make alterations to the Electronic Chattel Paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Grantor with respect to such Electronic Chattel Paper or transferable
record.


      
        
           


        

        
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      (e)           Letter-of-Credit
Rights. If any Grantor is at any time a beneficiary under a letter of
credit with a face value in excess of $500,000 now or hereafter issued in favor
of such Grantor, such Grantor shall promptly notify the Agent thereof and, at
the request and option of the Agent, such Grantor shall, pursuant to an
agreement in form and substance satisfactory to the Agent, either
(i) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to the Agent of the proceeds of any drawing under the
letter of credit or (ii) arrange for the Agent to become the transferee
beneficiary of the letter of credit, with the Agent agreeing, in each case, that
the proceeds of any drawing under the letter of credit are to be paid to the
applicable Grantor unless an Event of Default has occurred or is continuing, in
which case they will be applied to the repayment of the Loans.

       

      (f)           Commercial Tort
Claims. If any Grantor shall at any time hold or acquire a Commercial
Tort Claim in an amount reasonably estimated to exceed $1,500,000, such Grantor
shall promptly notify the Agent thereof in a writing signed by such Grantor
including a summary description of such claim and grant to the Agent, for the
ratable benefit of the Secured Parties, in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance satisfactory to the Agent.

       

      SECTION
4.05.   Covenants
Regarding Patent, Trademark and Copyright
Collateral.  (g)  Each Grantor agrees that it will
not, and will not permit any of its licensees to, do any act, or omit to do any
act, whereby any Patent that is material to the conduct of any Grantor’s
business may become invalidated or dedicated to the public, and agrees that it
shall continue to mark any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.

       

      (b)           Each
Grantor (either itself or through its licensees or its sublicensees) will, for
each Trademark material to the conduct of any Grantor’s business,
(i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such
Trademark with notice of Federal or foreign registration to the extent necessary
and sufficient to establish and preserve its maximum rights under applicable law
and (iv) not knowingly use or knowingly permit the use of such Trademark in
violation of any third party rights.

       

      (c)           Each
Grantor (either itself or through its licensees or sublicensees) will, for each
work covered by a Copyright material to the conduct of any Grantor’s business,
continue to publish, reproduce, display, adopt and distribute the work with
appropriate copyright notice as necessary and sufficient to establish and
preserve its maximum rights under applicable copyright laws.

       

      (d)           Each
Grantor shall notify the Agent promptly if it knows or has reason to know that
any Patent, Trademark or Copyright material to the conduct of its business may
become abandoned, lost or dedicated to the public, or of any material and
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor’s ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain the
same.


      
        
           


        

        
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      (e)           In
no event shall any Grantor, either itself or through any agent, employee,
licensee or designee, file an application for any Patent, Trademark or Copyright
(or for the registration of any Trademark or Copyright) with the United States
Patent and Trademark Office, United States Copyright Office or any office or
agency in any political subdivision of the United States or in any other country
or any political subdivision thereof, unless it promptly notifies the Agent,
and, upon request of the Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Agent may request to evidence the
Security Interest in such Patent, Trademark or Copyright, and each Grantor
hereby appoints the Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.

       

      (f)           Each
Grantor will take all necessary steps that are consistent with the practice in
any proceeding before the United States Patent and Trademark Office, United
States Copyright Office or any office or agency in any political subdivision of
the United States or in any other country or any political subdivision thereof,
to maintain and pursue each material application relating to the Patents,
Trademarks and/or Copyrights (and to obtain the relevant grant or registration)
and to maintain each issued Patent and each registration of the Trademarks and
Copyrights that is material to the conduct of any Grantor’s business, including
timely filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with good
business judgment, to initiate opposition, interference and cancelation
proceedings against third parties.

       

      (g)           If
any Grantor knows or has reason to believe that any Article 9 Collateral
consisting of a Patent, Trademark or Copyright material to the conduct of any
Grantor’s business has been or is about to be infringed, misappropriated or
diluted by a third person, such Grantor promptly shall notify the Agent and
shall, if consistent with good business judgment, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Article 9
Collateral.

       

      (h)           Upon
the occurrence and during the continuance of an Event of Default, each Grantor
shall use its reasonable efforts to obtain all requisite consents or approvals
by the licensor of each Copyright License, Patent License, Trademark License and
each other material License to effect the assignment of all such Grantor’s
right, title and interest thereunder to the Agent, for the ratable benefit of
the Secured Parties, or its designee.

       

      ARTICLE
V


       

      Remedies

       

      SECTION
5.01.   Remedies Upon
Default.  Upon the occurrence and during the continuance of an
Event of Default, each Grantor agrees to deliver each item of Collateral to the
Agent on demand, and it is agreed that the Agent shall have the right to take
any of or all the following actions at the same or different times to the extent
permitted by applicable law:  (a) with respect to any
Article 9 Collateral consisting of Intellectual Property, on demand, to
cause the Security Interest to become an assignment, transfer and conveyance of
any of or all such Article 9 Collateral by the applicable Grantor to the Agent,
or to license or sublicense, whether general, special or otherwise, and whether
on an exclusive or nonexclusive basis, any such Article 9 Collateral throughout
the world on such terms and conditions and in such manner as the Agent shall
determine (other than in violation of any then-existing licensing arrangements
to the extent that waivers cannot be obtained) and


      
        
           


        

        
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      (b) with
or without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable
law.  Without limiting the generality of the foregoing, each Grantor
agrees that the Agent shall have the right to sell or otherwise dispose of all
or any part of the Collateral at a public or private sale or at any broker’s
board or on any securities exchange, for cash, upon credit or for future
delivery as the Agent shall deem appropriate.  The Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold.  Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.

       

      The Agent
shall give each applicable Grantor 10 days’ written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of
the New York UCC or its equivalent in other jurisdictions) of the Agent’s
intention to make any sale of Collateral.  Such notice, in the case of
a public sale, shall state the time and place for such sale and, in the case of
a sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or
exchange.  Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Agent may fix
and state in the notice (if any) of such sale.  At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Agent may (in its sole and absolute discretion)
determine.  The Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given.  The Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned.  In case any sale of all
or any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Agent shall not incur any liability
in case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be sold
again upon like notice.  At any public (or private) sale made pursuant
to this Agreement, any Secured Party may bid for or purchase, free from any
right of redemption, stay, valuation or appraisal on the part of any Grantor
(all said rights being also hereby waived and released), the Collateral or any
part thereof offered for sale and may make payment on account thereof by using
any claim then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor.  For purposes hereof,
a written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full.  As an
alternative to exercising the power of sale herein conferred upon it, the Agent
may proceed by a suit or suits at law or in equity to foreclose under this
Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.  Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform
to the commercially reasonable standards as provided in Section 9-610(b) of
the New York UCC or its equivalent in other jurisdictions.


      
        
           


        

        
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      SECTION
5.02.   Application of
Proceeds.  The Agent shall apply the proceeds of any
collection, sale, foreclosure or other realization upon any Collateral,
including any Collateral consisting of cash, as follows:

       

      FIRST, to
the payment of all costs and expenses incurred by the Agent (in its capacity as
administrative agent or collateral agent under the Loan Documents) in connection
with such collection, sale, foreclosure or realization or otherwise in
connection with this Agreement, any other Loan Document or any of the
Obligations, including all court costs and the fees and expenses of its agents
and legal counsel, the repayment of all advances made by the Agent hereunder or
under any other Loan Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other Loan Document;

       

      SECOND,
to the payment in full of all other Obligations (the amounts so applied to be
distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such
distribution);

       

      THIRD, to
the Grantors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

       

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

       

      SECTION
5.03.   Grant of License
to Use Intellectual Property.  For the purpose of enabling the
Agent to exercise rights and remedies under this Agreement at such time as the
Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Agent an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to the Grantors),
to use, license or sublicense any of the Article 9 Collateral consisting of
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof.  The use of such license by the Agent may be exercised, at
the option of the Agent, only upon the occurrence and during the continuation of
an Event of Default; provided, however, that any license,
sublicense or other transaction entered into by the Agent in accordance herewith
shall be binding upon each Grantor notwithstanding any subsequent cure of an
Event of Default.


      
        
           


        

        
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      SECTION
5.04.   Securities Act,
Etc.  In view of the position of the Grantors in relation to
the Pledged Collateral, or because of other current or future circumstances, a
question may arise under the U.S. Securities Act of 1933, as now or hereafter in
effect, or any similar statute hereafter enacted analogous in purpose or effect
(such Act and any such similar statute as from time to time in effect being
called the “Federal
Securities Laws”) with respect to any disposition of the Pledged
Collateral permitted hereunder.  Each Grantor understands that
compliance with the Federal Securities Laws might very strictly limit the course
of conduct of the Agent if the Agent were to attempt to dispose of all or any
part of the Pledged Collateral, and might also limit the extent to which or the
manner in which any subsequent transferee of any Pledged Collateral could
dispose of the same.  Similarly, there may be other legal restrictions
or limitations affecting the Agent in any attempt to dispose of all or part of
the Pledged Collateral under applicable “blue sky” or other state securities
laws or similar laws analogous in purpose or effect.  Each Grantor
recognizes that in light of such restrictions and limitations the Agent may,
with respect to any sale of the Pledged Collateral, limit the purchasers to
those who will agree, among other things, to acquire such Pledged Collateral for
their own account, for investment, and not with a view to the distribution or
resale thereof.  Each Grantor acknowledges and agrees that in light of
such restrictions and limitations, the Agent, in its sole and absolute
discretion (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Collateral or
part thereof shall have been filed under the Federal Securities Laws and
(b) may approach and negotiate with a limited number of potential
purchasers (including a single potential purchaser) to effect such
sale.  Each Grantor acknowledges and agrees that any such sale might
result in prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions. In the event of any such sale, the
Agent shall incur no responsibility or liability for selling all or any part of
the Pledged Collateral at a price that the Agent, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a limited number of purchasers (or a single purchaser) were
approached.  The provisions of this Section 5.04 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the Agent
sells.

       

      ARTICLE
VI

      Indemnity,
Subrogation and Subordination

       

      SECTION
6.01.   Indemnity and
Subrogation.  In addition to all such rights of indemnity and
subrogation as the Guarantors may have under applicable law (but subject to
Section 6.03), the Borrower agrees that (a) in the event a payment shall be
made by any Guarantor (other than Holdings) under this Agreement, the Borrower
shall indemnify such Guarantor for the full amount of such payment and such
Guarantor shall be subrogated to the rights of the person to whom such payment
shall have been made to the extent of such payment and (b) in the event any
assets of any Guarantor (other than Holdings) shall be sold pursuant to this
Agreement or any other Security Document to satisfy in whole or in part a claim
of any Secured Party, the Borrower shall indemnify such Guarantor in an amount
equal to the greater of the book value or the fair market value of the assets so
sold.


      
        
           


        

        
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      SECTION
6.02.  Contribution and
Subrogation.  Each Guarantor (other than Holdings) (a “Contributing
Party”) agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor (other than Holdings) hereunder in
respect of any Obligation or assets of any other Guarantor (other than Holdings)
shall be sold pursuant to any Security Document to satisfy any Obligation owed
to any Secured Party, and such other Guarantor (the “Claiming
Party”) shall not have been fully indemnified by the Borrower as provided
in Section 6.01, the Contributing Party shall indemnify the Claiming Party
in an amount equal to (i) the amount of such payment or (ii) the
greater of the book value or the fair market value of such assets, as the case
may be, in each case multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Party on the date hereof and the denominator
shall be the aggregate net worth of all the Guarantors (other than Holdings) on
the date hereof (or, in the case of any Guarantor becoming a party hereto
pursuant to Section 7.16, the date of the supplement hereto executed and
delivered by such Guarantor).  Any Contributing Party making any
payment to a Claiming Party pursuant to this Section 6.02 shall be
subrogated to the rights of such Claiming Party under Section 6.01 to the
extent of such payment.

       

      SECTION 6.03. 
Subordination.  (h)  Notwithstanding
any provision of this Agreement to the contrary, all rights of the Guarantors
under Sections 6.01 and 6.02 and all other rights of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the
Obligations.  No failure on the part of the Borrower or any Guarantor
to make the payments required by Sections 6.01 and 6.02 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of its
obligations hereunder.

       

      (b)           The
Borrower and each Guarantor hereby agree that all Indebtedness and other
monetary obligations owed by it to any other Guarantor or the Borrower shall be
fully subordinated to the indefeasible payment in full in cash of the
Obligations.

       

      ARTICLE
VII


       

      Miscellaneous

       

      SECTION
7.01.   Notices.  All
communications and notices hereunder (a) to any party other than the Subsidiary
Guarantors, shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 9.01 of the Credit Agreement or (b) to any
Subsidiary Guarantor, shall (except as otherwise expressly permitted herein) be
in writing and given to it in care of the Borrower as provided in Section 9.01
of the Credit Agreement.

       

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


      
        
           


        

        
          26

          
            

          

        

        
           


        

      


      SECTION
7.03.    Survival of
Agreement.  All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any Lender or on its behalf and notwithstanding that the
Agent or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under any Loan Document is outstanding and unpaid.

       

      SECTION
7.04.   Binding Effect;
Several Agreement.  This Agreement shall become effective as to
any Loan Party when a counterpart hereof executed on behalf of such Loan Party
shall have been delivered to the Agent and a counterpart hereof shall have been
executed on behalf of the Agent, and thereafter shall be binding upon such Loan
Party and the Agent and their permitted successors and assigns, and shall inure
to the benefit of such Loan Party, the Agent and the other Secured Parties and
their successors and assigns, except that no Loan Party shall have the right to
assign or transfer its rights or obligations hereunder or any interest herein or
in the Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated or permitted by this Agreement or the Credit
Agreement.  This Agreement shall be construed as a separate agreement
with respect to each Loan Party and may be amended, modified, supplemented,
waived or released with respect to any Loan Party without the approval of any
other Loan Party and without affecting the obligations of any other Loan Party
hereunder.

       

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

       

      SECTION
7.06.  Agent’s Fees and
Expenses; Indemnification.  (i)  Each Grantor shall
pay all out-of-pocket expenses incurred by the Agent and its Affiliates,
including the fees, charges and disbursements of counsel, in connection with (i)
the administration of the Loan Documents and any amendments, modifications or
waivers of the provisions thereto, (ii) the custody, inspection, supervision and
preservation of, the sale of, the collection from, or any other realization
upon, the Collateral, (iii) the enforcement or protection of the Agent’s rights
under the Loan Documents, including its rights under this Section and during any
workout, restructuring or negotiations in respect of the Loans and (iv) the
failure of any Grantor to perform or observe any of the provisions
thereof.


      
        
           


        

        
          27

          
            

          

        

        
           


        

      


      (b)           Without
limitation of its indemnification obligations under the other Loan Documents,
each Grantor agrees to, jointly and severally, indemnify the Agent and the other
Indemnitees against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution,
delivery or performance of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties thereto of their obligations thereunder or the consummation of the
Transactions and the other transactions contemplated hereby or thereby, (ii) the
use of the proceeds of the Loans, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing or to the Collateral, whether or not
any Indemnitee is a party thereto (and regardless of whether such matter is
initiated by a third party, a Loan Party or any of Affiliate thereof) or (iv)
any actual or alleged presence or Release of Hazardous Materials on any property
currently or formerly owned or operated by the Borrower or the Subsidiaries, or
any Environmental Liability related in any way to the Borrower or the
Subsidiaries; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted primarily from the gross negligence or willful
misconduct of such Indemnitee.  No Grantor shall assert, and each
Grantor hereby waives any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, the other Loan Documents, any agreement or instrument
contemplated hereby, the Transactions, any Loan or the use of proceeds
thereof.

       

      (c)           Any
such amounts payable as provided hereunder shall be additional Obligations
secured hereby and by the other Security Documents. The provisions of this
Section 7.06 shall remain operative and in full force and effect regardless
of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Agent or any other Secured Party.  All amounts due under
this Section 7.06 shall be payable on written demand therefor and shall
bear interest, on and from the date of demand, at the rate specified in
Section 2.06 of the Credit Agreement.

       

      SECTION
7.07.  Agent Appointed
Attorney-in-Fact.  Each Grantor hereby appoints the Agent as
the attorney-in-fact of such Grantor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument
that the Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, the Agent shall have the right, upon
the occurrence and during the continuance of an Event of Default, with full
power of substitution either in the Agent’s name or in the name of such Grantor
(a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof, (b) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of
the Collateral, (c) to sign the name of any Grantor on any invoice or bill
of lading relating to any of the Collateral, (d) to send verifications of
Accounts Receivable to any Account Debtor, (e) to commence and prosecute
any and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any
Collateral,


      
        
           


        

        
          28

          
            

          

        

        
           


        

      


      (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral, (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Agent, and
(h) to use, sell, assign, transfer, pledge, make any agreement with respect
to or otherwise deal with all or any of the Collateral, and to do all other acts
and things necessary to carry out the purposes of this Agreement in accordance
with its terms, as fully and completely as though the Agent were the absolute
owner of the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The Agent and
the other Secured Parties shall be accountable only for amounts actually
received as a result of the exercise of the powers granted to them herein, and
neither they nor their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence, willful misconduct or bad faith.

       

      SECTION
7.08.   Applicable
Law.  THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.

       

      SECTION
7.09.  Waivers;
Amendment.  (j)  No failure or delay by the Agent or
any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver hereof or thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agent and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section 7.09, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without
limiting the generality of the foregoing, the making of a Loan shall not be
construed as a waiver of any Default, regardless of whether the Agent or any
Lender may have had notice or knowledge of such Default at the time. No notice
or demand on any Loan Party in any case shall entitle any Loan Party to any
other or further notice or demand in similar or other
circumstances.

       

      (b)           Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Agent and the Loan Party or Loan Parties with respect to which such waiver,
amendment or modification is to apply, subject to any consent required in
accordance with Section 9.08 of the Credit Agreement.

       


      
        
           


        

        
          29

          
            

          

        

        
           


        

      


      SECTION
7.10.    WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

       

      SECTION
7.11.    Severability.  In
the event any one or more of the provisions contained in this Agreement or in
any other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

       

      SECTION
7.12.    Counterparts.  This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original but all of
which when taken together shall constitute a single contract, and shall become
effective as provided in Section 7.04.  Delivery of an executed
signature page to this Agreement by facsimile transmission or other electronic
imaging means shall be as effective as delivery of a manually signed counterpart
of this Agreement.

       

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

       

      SECTION
7.14.   Jurisdiction;
Consent to Service of Process.  (k)  Each of the
Grantors hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America, sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the Loan Parties hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or in such
Federal court.  Each of the Loan Parties agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or any other Loan Document shall
affect any right that the Agent or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document
against any Grantor or its properties in the courts of any
jurisdiction.


      
        
           


        

        
          30

          
            

          

        

        
           


        

      


      (b)           Each
of the Loan Parties hereby irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (a) of this Section (it being
understood that such waiver shall not require any suit, action or proceeding
initiated in any court to be remanded or removed to any court referred to in
paragraph (a) of this Section).  Each of the Loan Parties hereby
irrevocably waives the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

       

      (c)           Each
of the Loan Parties hereby irrevocably consents to service of process in the
manner provided for notices in Section 7.01.  Nothing in this
Agreement or any other Loan Document will affect the right of the Agent to serve
process in any other manner permitted by law.

       

      SECTION
7.15.   Termination or
Release.  This Agreement, the guarantees made herein, the
Security Interest and all other security interests granted hereby shall
terminate, and the Loan Parties shall automatically be released from their
obligations hereunder, upon payment in full in cash of all Obligations (other
than contingent indemnification obligations).  Upon request made to
Collateral Agent by Borrower, Collateral Agent shall promptly prepare for filing
by Borrower, at the expense of Borrower, any and all such requested
releases.

       

      SECTION
7.16.   Additional
Subsidiaries.  Any Subsidiary that is required to become a
party hereto pursuant to Section 5.12 of the Credit Agreement shall enter into
this Agreement as a Guarantor and a Grantor upon becoming such a
Subsidiary.  Upon execution and delivery by the Agent and such
Subsidiary of a supplement in the form of Exhibit A
hereto, such Subsidiary shall become a Guarantor and a Grantor hereunder with
the same force and effect as if originally named as a Guarantor and a Grantor
herein.  The execution and delivery of any such instrument shall not
require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this
Agreement.

       

      SECTION
7.17.  Right of
Setoff.  If an Event of Default shall have occurred and is
continuing, each Secured Party is hereby authorized at any time and from time to
time to set off and apply any and all Collateral (including any deposits
(general or special, time or demand, provisional or final)) at any time held and
other obligations at any time owing by such Secured Party to or for the credit
or the account of any Grantor against any and all of the obligations of such
Grantor now or hereafter existing under this Agreement and the other Loan
Documents held by such Secured Party, irrespective of whether or not such
Secured Party shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured.  The rights
of each Secured Party under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Secured Party may
have.



      
        
           


        

        
          31

          
            

          

        

        
           


        

      


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

      
         

        
          	 	
                  RENTECH
      ENERGY MIDWEST CORPORATION

                   

                  
                    By:
      /s/ Merrick
      Kerr                                                       
      

                  

                  Name:
      Merrick Kerr

                  Title:

                   

                   

                  RENTECH,
      INC.

                   

                  
                    By:
      /s/ Merrick
      Kerr                                                         
      

                  

                  Name:
      Merrick Kerr

                  Title:
      CFO

                   

                   

                  RENTECH
      DEVELOPMENT CORPORATION

                   

                  
                    By:
      /s/ Merrick
      Kerr                                                          
      

                  

                  Name:
      Merrick Kerr

                  Title:

                   

                   

                  RENTECH
      SERVICES CORPORATION

                   

                  
                    By:
      /s/ Merrick
      Kerr                                                          
      

                  

                  Name:
      Merrick Kerr

                  Title:

                   

                   

                  
                    RENTECH
      ENERGY TECHNOLOGY CENTER, LLC

                     

                    By: /s/ Merrick
      Kerr                                                          
      

                    Name: Merrick
      Kerr

                    Title:

                  

                   

                


        

      


      
        
           


        

        
          32

          
            

          

        

        
           


        

      


      
      

       

      
        	 	

                CREDIT
      SUISSE, Cayman Islands Branch,

                as
      Collateral Agent

                 

                 

                By:   /s/ Vanessa
      Gomez                                                 
      

                Name: Vanessa
      Gomez

                Title: Director

                 

                 

                by    /s/ James
      Moran                                                     

                Name: James
      Moran

                Title: Managing
      Director 

              


      

       


      
        
           


        

        
          33

          
            

          

        

        
           


        

      


      Schedule
I

      


      SUBSIDIARY
GUARANTORS

      


      
        	
                 
      

              	
                1.

              	
                Rentech
      Development Corporation, a Colorado
corporation

              


      

      
        	
                 
      

              	
                2.

              	
                Rentech
      Services Corporation, a Colorado
corporation

              


      

      
        	
                 
      

              	
                3.

              	
                Rentech
      Energy Technology Center, LLC, a Colorado limited liability
      company