Exhibit 10.3


PLEDGE AND SECURITY AGREEMENT


          THIS
PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to
time, this “Security Agreement”) is entered into as of April 30, 2009,
by and between [Name of Subsidiary], a __________________ (the “Grantor”),
and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative
Agent”) for the Lenders party to the Credit Agreement referred to below.


PRELIMINARY STATEMENT


          Escalade,
Incorporated (the “Borrower”), the Administrative Agent, the other Loan
Parties and the Lenders are entering into a Credit Agreement dated as of even
date herewith, (as it may be amended or modified from time to time, the “Credit
Agreement”).


          The
Grantor has agreed to guarantee the Secured Obligations pursuant to an
Unlimited Continuing Guaranty, dated as of April 30, 2009, executed by Grantor
in favor of the Administrative Agent for the ratable benefit of the Lenders (as it
may be amended or modified from time to time, the “Guaranty”). 


          The
Grantor is entering into this Security Agreement in order to induce the Lenders
to enter into and extend credit to the Borrower under the Credit Agreement.


          ACCORDINGLY,
the Grantor and the Administrative Agent, on behalf of the Lenders, hereby
agree as follows:


ARTICLE
I

DEFINITIONS


          1.1.
Terms Defined in Credit Agreement. Terms used in this Agreement which are
defined in the Credit agreement and are not otherwise defined in this Security
Agreement shall have the same meanings in this Security Agreement as are
ascribed to such terms in the Credit Agreement.


          1.2.
Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Security Agreement are used herein as defined in the UCC.


          1.3.
Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:


          “Accounts”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Article”
means a numbered article of this Security Agreement, unless another document is
specifically referenced.


          “Assigned
Contracts” means, collectively, all of the Grantor’s rights and remedies
under, and all moneys and claims for money due or to become due to the Grantor
under those contracts set forth on Exhibit I hereto, and any other
material contracts, and any and all amendments, supplements, extensions, and
renewals thereof including all rights and claims of the Grantor now or
hereafter existing: (a) under any insurance, indemnities, warranties, and
guarantees provided for or arising out of or in connection with any of the
foregoing agreements; (b) for any damages arising out of or for breach or
default under or in connection with any of the foregoing contracts; (c) to all
other amounts from time to time paid or payable under or in connection with any
of the foregoing agreements; or (d) to exercise or enforce any and all
covenants, remedies, powers and privileges thereunder.






          “Chattel
Paper” shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Closing
Date” means the date of the Credit Agreement.


          “Collateral”
shall have the meaning set forth in Article II.


          “Collateral
Access Agreement” means any landlord waiver or other agreement, in form and
substance satisfactory to the Administrative Agent, between the Administrative
Agent and any third party (including any bailee, consignee, customs broker, or
other similar Person) in possession of any Collateral or any landlord of any
Loan Party for any real property where any Collateral is located, as such
landlord waiver or other agreement may be amended, restated, or otherwise
modified from time to time.


          “Collateral
Deposit Account” means each Deposit Account maintained by the Grantor into
which all cash, checks or other similar payments relating to or constituting
payments made in respect of Receivables will be deposited, which Collateral Deposit
Accounts are identified as such on Exhibit B.


          “Collection
Account” shall have the meaning set forth in Section 7.1(b).


          “Commercial
Tort Claims” shall have the meaning set forth in Section 9.1-102 of Chapter
9.1 of the UCC.


          “Control”
shall have the meaning set forth in Chapter 8.1 or, if applicable, in
Chapter 9.1 of the UCC.


          “Copyrights”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all copyrights, rights and interests in
copyrights, works protectable by copyright, copyright registrations, and
copyright applications; (b) all renewals of any of the foregoing; (c) all
income, royalties, damages, and payments now or hereafter due and/or payable
under any of the foregoing, including, without limitation, damages or payments
for past or future infringements for any of the foregoing; (d) the right to sue
for past, present, and future infringements of any of the foregoing; and (e)
all rights corresponding to any of the foregoing throughout the world.


          “Default”
means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.


          “Deposit
Account Control Agreement” means an agreement, in form and substance
satisfactory to the Administrative Agent, among any Loan Party, a banking
institution holding such Loan Party’s funds, and the Administrative Agent with
respect to collection and control of all deposits and balances held in a
deposit account maintained by any Loan Party with such banking institution.


          “Deposit
Accounts” shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Documents”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Equipment”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Event
of Default” means an event described in Section 5.1.


          “Exhibit”
refers to a specific exhibit to this Security Agreement, unless another
document is specifically referenced.


          “Excluded
Deposit Account” means (a) a Deposit Account that is not held with a Lender
and that never has a balance in excess of $25,000 at the end of any day, (b) a
Deposit Account that is a trust, fiduciary or payroll account, that is not used
for any other purpose, and with respect to any payroll account, that never has
a balance in excess of the payroll due within five (5) days, and (c) the
Deposit Accounts listed on Exhibit K hereto.


2






          “Excluded
Investments” means (i) all treasury stock of the Grantor, and (ii) 35% of
the issued and outstanding Equity Interests entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) in each foreign Subsidiary
directly owned by the Grantor.


          “Excluded
Location” shall have the meaning set forth in Section 4.13(a).


          “Fixtures”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Guaranteed
Obligations” means all of the Grantor’s obligations, liabilities and
indebtedness to the Lenders arising from, pursuant to or by virtue of the
Guaranty which guaranty is for payment of all of the Secured Obligations.


          “General
Intangibles” shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Goods”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Instruments”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Inventory”
shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Investment
Property” shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Lenders”
means the lenders party to the Credit Agreement and their successors and
assigns.


          “Letter-of-Credit
Rights” shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Licenses”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements
in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties,
damages, claims, and payments now or hereafter due or payable under and with
respect thereto, including, without limitation, damages and payments for past
and future breaches thereof, and (c) all rights to sue for past, present, and
future breaches thereof.


          “Patents”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to: (a) any and all patents and patent applications; (b) all
inventions and improvements described and claimed therein; (c) all reissues,
divisions, continuations, renewals, extensions, and continuations-in-part
thereof; (d) all income, royalties, damages, claims, and payments now or
hereafter due or payable under and with respect thereto, including, without
limitation, damages and payments for past and future infringements thereof; (e)
all rights to sue for past, present, and future infringements thereof; and (f)
all rights corresponding to any of the foregoing throughout the world.


          “Patents
Application Schedule” shall have the meaning set forth in Section 3.10.


          “Permitted
Liens” means Liens permitted by Section 6.02 of the Credit Agreement.


          “Pledged
Collateral” means all Instruments, Securities and other Investment Property
of the Grantor, whether or not physically delivered to the Administrative Agent
pursuant to this Security Agreement.


          “Receivables”
means the Accounts, Chattel Paper, Documents, Investment Property, Instruments
and any other rights or claims to receive money which are General Intangibles
or which are otherwise included as Collateral.


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          “Required
Secured Parties” means (a) prior to an acceleration of the Obligations
under the Credit Agreement, the Required Lenders, (b) after an acceleration of
the Obligations under the Credit Agreement but prior to the date upon which the
Credit Agreement has terminated by its terms and all of the obligations
thereunder have been paid in full, Lenders holding in the aggregate at least
50% of the total of the Credit Exposure of all Lenders, and (c) after the
Credit Agreement has terminated by its terms and all of the Obligations
thereunder have been paid in full (whether or not the Obligations under the
Credit Agreement were ever accelerated), Lenders holding in the aggregate at
least 50% of the aggregate net early termination payments and all other amounts
then due and unpaid from the Grantor to the Lenders under Swap Agreements, as
determined by the Administrative Agent in its reasonable discretion.


          “Section”
means a numbered section of this Security Agreement, unless another document is
specifically referenced.


          “Security”
has the meaning set forth in Chapter 8.1 of the UCC.


          “Stock
Rights” means all dividends, instruments or other distributions and any
other right or property which the Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right
to receive an Equity Interest and any right to receive earnings, in which the
Grantor now has or hereafter acquires any right, issued by an issuer of such
Equity Interest. 


          “Supporting
Obligations” shall have the meaning set forth in Chapter 9.1 of the UCC.


          “Trademarks”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all trademarks (including service marks),
trade names, trade dress, and trade styles and the registrations and
applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income,
royalties, damages, and payments now or hereafter due or payable with respect
thereto, including, without limitation, damages, claims, and payments for past
and future infringements thereof; (e) all rights to sue for past, present, and
future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights
corresponding to any of the foregoing throughout the world.


          “UCC”
means the Uniform Commercial Code, as in effect from time to time, of the State
of Indiana, Ind. Code § 26-1 et. seq.,
or of any other state the laws of which are required as a result thereof
to be applied in connection with the attachment, perfection or priority of, or
remedies with respect to, Administrative Agent’s or any Lender’s Lien on any
Collateral. Excluding
the definitions in Article I of this Security Agreement, if the Uniform
Commercial Code of any state other than Indiana is applicable, then the
references in this Security Agreement to any Chapter or Section of Ind.
Code § 26-1, et seq. shall be deemed to be references to
the equivalent Chapter or Section of such other state’s Uniform Commercial Code
however numbered or denominated.


          The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.


ARTICLE
II

GRANT OF SECURITY INTEREST


          The
Grantor hereby pledges, assigns and grants to the Administrative Agent, on
behalf of and for the ratable benefit of the Lenders, a security interest in
all of its rights, title and interests in, to and under all personal property
and other assets, whether now owned by or owing to, or hereafter acquired by or
arising in favor of the Grantor (including under any trade name or derivations
thereof), and whether owned or consigned by or to, or leased from or to, the
Grantor, and regardless of where located (all of which will be collectively
referred to as the “Collateral”), including:


4






	
 

	
 

	
 


	
 

	
(i)

	
all
  Accounts; 


	
 

	
 

	
 


	
 

	
(ii)

	
all Chattel
  Paper;


	
 

	
 

	
 


	
 

	
(iii)

	
all
  Copyrights, Patents and Trademarks; 


	
 

	
 

	
 


	
 

	
(iv)

	
all
  Documents; 


	
 

	
 

	
 


	
 

	
(v)

	
all
  Equipment; 


	
 

	
 

	
 


	
 

	
(vi)

	
all
  Fixtures; 


	
 

	
 

	
 


	
 

	
(vii)

	
all General
  Intangibles; 


	
 

	
 

	
 


	
 

	
(viii)

	
all Goods;


	
 

	
 

	
 


	
 

	
(ix)

	
all
  Instruments; 


	
 

	
 

	
 


	
 

	
(x)

	
all
  Inventory;


	
 

	
 

	
 


	
 

	
(xi)

	
all
  Investment Property (other than Excluded Investments); 


	
 

	
 

	
 


	
 

	
(xii)

	
all cash or
  cash equivalents; 


	
 

	
 

	
 


	
 

	
(xiii)

	
all letters
  of credit, Letter-of-Credit Rights and Supporting Obligations;


	
 

	
 

	
 


	
 

	
(xiv)

	
all Deposit
  Accounts with any bank or other financial institution;


	
 

	
 

	
 


	
 

	
(xv)

	
all
  Commercial Tort Claims; 


	
 

	
 

	
 


	
 

	
(xvi)

	
all Assigned
  Contracts; and


	
 

	
 

	
 


	
 

	
(xvii)

	
all
  accessions to, substitutions for and replacements, proceeds (including Stock
  Rights), insurance proceeds and products of the foregoing, together with all
  books and records, customer lists, credit files, computer files, programs,
  printouts and other computer materials and records related thereto and any
  General Intangibles at any time evidencing or relating to any of the
  foregoing;





to secure the
prompt and complete payment and performance of the Guaranteed Obligations. 


ARTICLE
III

REPRESENTATIONS AND WARRANTIES


          The
Grantor represents and warrants to the Administrative Agent and the Lenders
that:


          3.1.
Title, Perfection and Priority. The Grantor has good and valid rights in
or the power to transfer the Collateral and title to the Collateral with
respect to which it has purported to grant a security interest hereunder, free
and clear of all Liens except for Liens permitted under Section 4.1(e), and has
full power and authority to grant to the Administrative Agent the security
interest in such Collateral pursuant hereto. When financing statements have
been filed in the appropriate offices against the Grantor in the locations
listed on Exhibit G, the Administrative Agent will have a fully
perfected first priority security interest in that Collateral in which a
security interest may be perfected by filing, subject only to Liens permitted
under Section 4.1(e). 


          3.2.
Type and Jurisdiction of Organization, Organizational and Identification
Numbers. The type of entity of the Grantor, its state of organization, the
organizational number issued to it by its state of organization and its federal
employer identification number are set forth on Exhibit A.


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          3.3.
Principal Location. The Grantor’s mailing address and the location of
its place of business (if it has only one) or its chief executive office (if it
has more than one place of business), is
disclosed in Exhibit A; the Grantor has no other places of
business except those set forth in Exhibit A.


          3.4.
Collateral Locations. All of the Grantor’s locations where Collateral is
located are listed on Exhibit A. All of said locations are owned by the
Grantor except for locations (i) which are leased by the Grantor as lessee and
designated in Part VII(b) of Exhibit A and (ii) at which
Inventory is held in a public warehouse or is otherwise held by a bailee or on
consignment as designated in Part VII(c) of Exhibit A.


          3.5.
Deposit Accounts. All of the Grantor’s Deposit Accounts are listed on Exhibit
B.


          3.6.
Exact Names. The Grantor’s name in which it has executed this Security
Agreement is the exact name as it appears in the Grantor’s organizational
documents, as amended, as filed with the Grantor’s jurisdiction of
organization. The Grantor has not, during the past five years, been known by or
used any other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any acquisition.


          3.7.
Letter-of-Credit Rights and Chattel Paper. Exhibit C lists all
Letter-of-Credit Rights and Chattel Paper of the Grantor. All action by the
Grantor necessary or desirable to protect and perfect the Administrative
Agent’s Lien on each item listed on Exhibit C (including the delivery of
all originals and the placement of a legend on all Chattel Paper as required
hereunder) has been duly taken. The Administrative Agent will have a fully
perfected first priority security interest in the Collateral listed on Exhibit
C, subject only to Liens permitted under Section 4.1(e).


          3.8.
Accounts and Chattel Paper. 


               (a)
The names of the obligors, amounts owing, due dates and other information with
respect to its Accounts and Chattel Paper are and will be correctly stated in
all records of the Grantor relating thereto and in all invoices with respect
thereto furnished to the Administrative Agent by the Grantor from time to time.
As of the time when each Account or each item of Chattel Paper arises, the
Grantor shall be deemed to have represented and warranted that such Account or
Chattel Paper, as the case may be, and all records relating thereto, are
genuine and in all respects what they purport to be. 


               (b)
With respect to its Accounts, (i) all Accounts represent bona fide sales of Inventory
or rendering of services to Account Debtors in the ordinary course of the
Grantor’s business and are not evidenced by a judgment, Instrument or Chattel
Paper; (ii) there are no setoffs, claims or disputes existing or asserted with
respect thereto in a material aggregate amount and the Grantor has not made any
agreement with any Account Debtor for any extension of time for the payment
thereof, any compromise or settlement for less than the full amount thereof,
any release of any Account Debtor from liability therefor, or any deduction
therefrom except such extension, discount or allowance allowed by Grantor in
the ordinary course of its business; (iii) to Grantor’s knowledge, there are no
facts, events or occurrences which in any way materially and adversely impair
the validity or enforceability thereof or could reasonably be expected to
reduce the amount payable thereunder as shown on the Grantor’s books and
records and any invoices and statements with respect thereto; (iv) the Grantor
has not received any notice of proceedings or actions which are threatened or
pending against any Account Debtor which might result in any adverse change in
such Account Debtor’s financial condition; and (v) the Grantor has no knowledge
that any Account Debtor is unable generally to pay its debts as they become
due. 


               (c)
In addition, with respect to all of its Accounts, (i) the amounts shown on all
invoices and statements with respect thereto are actually and absolutely owing
to the Grantor as indicated thereon and are not in any way contingent; (ii) no
payments have been or shall be made thereon except payments immediately
delivered to a Collateral Deposit Account as required pursuant to Section
7.1; and (iii) to the Grantor’s knowledge, all Account Debtors have the
capacity to contract.


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          3.9.
Inventory. With respect to any of its Inventory, (a) such Inventory
(other than Inventory in transit) is located at one of the Grantor’s locations
set forth on Exhibit A, (b) no Inventory (other than Inventory in
transit) is now, or shall at any time or times hereafter be stored at any other
location except as permitted by Section 4.1(g), (c) the Grantor has good,
indefeasible and merchantable title to such Inventory and such Inventory is not
subject to any Lien or security interest or document whatsoever except for the
Lien granted to the Administrative Agent, for the benefit of the Administrative
Agent and Lenders, and except for Permitted Liens, (d) such Inventory is
Inventory of good and merchantable quality, (e) such Inventory is not subject
to any licensing, patent, royalty, trademark, trade name or copyright
agreements with any third parties which would require any consent of any third
party upon sale or disposition of that Inventory or the payment of any monies
to any third party upon such sale or other disposition, (f) such Inventory has
been produced in accordance with the Federal Fair Labor Standards Act of 1938,
as amended, and all rules, regulations and orders thereunder and (g) the
completion of manufacture, sale or other disposition of such Inventory by the
Administrative Agent following an Event of Default shall not require the
consent of any Person and shall not constitute a breach or default under any
contract or agreement to which the Grantor is a party or to which such property
is subject. 


          3.10.
Intellectual Property. The Grantor does not have any interest in, or
title to, any Patent or Trademark except as set forth in Exhibit D
(other than Patent applications which have been separately disclosed to the
Administrative Agent in writing (the “Patent Application Schedule”)).
This Security Agreement is effective to create a valid and continuing Lien and,
upon filing of appropriate financing statements in the offices listed on Exhibit
G and this Security Agreement with the United States Copyright Office and
the United States Patent and Trademark Office, fully perfected first priority
security interests in favor of the Administrative Agent on the Grantor’s
Patents (other than Patent applications not disclosed in this Security
Agreement) and Trademarks, such perfected security interests are enforceable as
such as against any and all creditors of and purchasers from the Grantor; and
all action necessary or desirable to protect and perfect the Administrative
Agent’s Lien on the Grantor’s Patents (other than Patent applications not
disclosed in this Security Agreement) or Trademarks shall have been duly taken.


          3.11.
Filing Requirements. None of the Collateral is of a type for which security
interests or liens may be perfected by filing under any federal statute except
for (a) the vehicles and (b) Patents and Trademarks held by the Grantor. The
legal description, county and street address of each property on which any
Fixtures are located is set forth in Exhibit E together with the name
and address of the record owner of each such property.


          3.12.
No Financing Statements, Security Agreements. No financing statement or
security agreement describing all or any portion of the Collateral which has
not lapsed or been terminated naming the Grantor as debtor has been filed or is
of record in any jurisdiction except (a) for financing statements or security
agreements naming the Administrative Agent on behalf of the Lenders as the
secured party and (b) as permitted by Section 4.1(e). 


          3.13.
Pledged Collateral. 


               (a)
Exhibit F sets forth a complete and accurate list of all of the Pledged
Collateral. The Grantor is the direct, sole beneficial owner and sole holder of
record of the Pledged Collateral listed on Exhibit F as being owned by
it, free and clear of any Liens, except for the security interest granted to
the Administrative Agent for the benefit of the Lenders hereunder. The Grantor
further represents and warrants that (i) all Pledged Collateral constituting an
Equity Interest has been (to the extent such concepts are relevant with respect
to such Pledged Collateral) duly authorized, validly issued, are fully paid and
non-assessable, (ii) with respect to any certificates delivered to the
Administrative Agent representing an Equity Interest, either such certificates
are Securities as defined in Chapter 8.1 of the UCC as a result of actions by
the issuer or otherwise, or, if such certificates are not Securities, the Grantor
has so informed the Administrative Agent so that the Administrative Agent may
take steps to perfect its security interest therein as a General Intangible,
(iii) all Pledged Collateral held by a securities intermediary is covered by a
control agreement among the Grantor, the securities intermediary and the
Administrative Agent pursuant to which the Administrative Agent has Control and
(iv) all Pledged Collateral which represents Indebtedness owed to the Grantor
has been duly authorized, authenticated or issued and delivered by the issuer
of such Indebtedness, is the legal, valid and binding obligation of such issuer
and such issuer is not in default thereunder. 


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               (b)
In addition, (i) none of the Pledged Collateral has been issued or transferred
in violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject,
(ii) there are existing no options, warrants, calls or commitments of any
character whatsoever relating to the Pledged Collateral or which obligate the
issuer of any Equity Interest included in the Pledged Collateral to issue
additional Equity Interests, and (iii) no consent, approval, authorization, or
other action by, and no giving of notice, filing with, any governmental
authority or any other Person is required for the pledge by the Grantor of the
Pledged Collateral pursuant to this Security Agreement or for the execution,
delivery and performance of this Security Agreement by the Grantor, or for the
exercise by the Administrative Agent of the voting or other rights provided for
in this Security Agreement or for the remedies in respect of the Pledged
Collateral pursuant to this Security Agreement, except as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally. 


               (c)
Except as set forth in Exhibit F, the Grantor owns 100% of the issued
and outstanding Equity Interests which constitute Pledged Collateral and none
of the Pledged Collateral which represents Indebtedness owed to the Grantor is
subordinated in right of payment to other Indebtedness or subject to the terms
of an indenture. 


ARTICLE
IV

COVENANTS


          From
the date of this Security Agreement, and thereafter until this Security
Agreement is terminated, the Grantor agrees that:


          4.1.
General.


               (a)
Collateral Records. The Grantor will maintain complete and accurate
books and records with respect to the Collateral, and furnish to the Administrative
Agent, such reports relating to the Collateral as the Administrative Agent
shall from time to time request. 


               (b)
Authorization to File Financing Statements; Ratification. The Grantor
hereby authorizes the Administrative Agent to file, and if requested will
deliver to the Administrative Agent, all financing statements and other
documents and take such other actions as may from time to time be requested by
the Administrative Agent in order to maintain a first perfected security interest
in and, if applicable, Control of, the Collateral. Any financing statement
filed by the Administrative Agent may be filed in any filing office in any UCC
jurisdiction and may (i) indicate the Collateral (1) as all assets of the
Grantor or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Chapter 9.1 of the
UCC or such jurisdiction, or (2) by any other description which reasonably
approximates the description contained in this Security Agreement, and (ii)
contain any other information required by part 5 of Chapter 9.1 of the UCC
for the sufficiency or filing office acceptance of any financing statement or
amendment, including (A) whether the Grantor is an organization, the type of
organization and any organization identification number issued to the Grantor,
and (B) in the case of a financing statement filed as a fixture filing or
indicating the Grantor’s Collateral as as-extracted collateral or timber to be
cut, a sufficient description of real property to which the Collateral relates.
The Grantor also agrees to furnish any such information to the Administrative
Agent promptly upon request. The Grantor also ratifies its authorization for
the Administrative Agent to have filed in any UCC jurisdiction any initial
financing statements or amendments thereto if filed prior to the date hereof. 


               (c)
Further Assurances. The Grantor will, if so requested by the
Administrative Agent, furnish to the Administrative Agent, as often as the
Administrative Agent reasonably requests, statements and schedules further
identifying and describing the Collateral and such other reports and
information in connection with the Collateral as the Administrative Agent may
reasonably request, all in such detail as the Administrative Agent may specify.
The Grantor also agrees to take any and all actions necessary to defend title
to the Collateral against all persons and to defend the security interest of
the Administrative Agent in the Collateral and the priority thereof against any
Lien not expressly permitted hereunder.


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               (d)
Disposition of Collateral. The Grantor will not sell, lease or otherwise
dispose of the Collateral except for dispositions specifically permitted
pursuant to Section 6.05 of the Credit Agreement.


               (e)
Liens. The Grantor will not create, incur, or suffer to exist any Lien
on the Collateral except (i) the security interest created by this Security
Agreement, and (ii) other Permitted Liens. 


               (f)
Other Financing Statements. The Grantor will not authorize the filing of
any financing statement naming it as debtor covering all or any portion of the
Collateral, except as permitted by Section 4.1(e). The Grantor
acknowledges that it is not authorized to file any financing statement or
amendment or termination statement with respect to any financing statement
without the prior written consent of the Administrative Agent, subject to the
Grantor’s rights under Section 9.1-509(d)(2) of the UCC.


               (g)
Locations. The Grantor will not (i) maintain any Collateral at any
location other than those locations listed on Exhibit A, (ii) otherwise
change, or add to, such locations without the Administrative Agent’s prior
written consent (such consent not to be unreasonably withheld or delayed) as
required by the Credit Agreement (and if the Administrative Agent gives such
consent, the Grantor will concurrently therewith obtain a Collateral Access
Agreement for each such location to the extent required by the Credit
Agreement), or (iii) change its principal place of business or chief executive
office from the location identified on Exhibit A, other than as
permitted by the Credit Agreement.


               (h)
Compliance with Terms. The Grantor will perform and comply with all
obligations in respect of the Collateral and all agreements to which it is a
party or by which it is bound relating to the Collateral.


          4.2.
Receivables.


               (a)
Certain Agreements on Receivables. The Grantor will not make or agree to
make any discount, credit, rebate or other reduction in the original amount
owing on a Receivable or accept in satisfaction of a Receivable less than the
original amount thereof, except that, prior to the occurrence of an Event of Default,
the Grantor may discount, credit, rebate or otherwise reduce the amount of
Accounts arising from the sale of Inventory in accordance with its present
policies and in the ordinary course of business.


               (b)
Collection of Receivables. Except as otherwise provided in this Security
Agreement, the Grantor will collect and enforce, at the Grantor’s sole expense,
all amounts due or hereafter due to the Grantor under the Receivables, except
that, prior to the occurrence of an Event of Default, the Grantor may choose
not to enforces Receivables that have been written off in accordance with its
present policies and in the ordinary course of business.


               (c)
Delivery of Invoices. The Grantor shall deliver to the Administrative
Agent as soon as practical upon the Administrative Agent’s written request
duplicate invoices with respect to each Account owned by it bearing such
language of assignment as the Administrative Agent shall specify.


               (d)
Disclosure of Counterclaims on Receivables. If (i) any discount, credit
or agreement to make a rebate or to otherwise reduce the amount owing on a
Receivable exists or (ii) if, to the knowledge of the Grantor, any dispute,
setoff, claim, counterclaim or defense exists or has been asserted or
threatened with respect to a Receivable, the Grantor shall disclose such fact
to the Administrative Agent in writing at least as often as once in each three
Fiscal Months. At least as often as once in each three Fiscal Months, the
Grantor shall send the Administrative Agent a copy of each credit memorandum in
excess of $50,000 and the Grantor shall simultaneously report each others
credit memo and each of the facts required to be disclosed to the
Administrative Agent in accordance with this Section 4.2(d).


9






               (e)
Electronic Chattel Paper. The Grantor shall take all steps necessary to
grant the Administrative Agent Control of all electronic chattel paper in
accordance with the UCC and all “transferable records” as defined in each of
the Uniform Electronic Transactions Act and the Electronic Signatures in Global
and National Commerce Act.


          4.3.
Inventory and Equipment.


               (a)
Maintenance of Goods. The Grantor will do all things necessary to
maintain, preserve, protect and keep the Inventory and the Equipment in good
repair and working and saleable condition, except for damaged or defective or
obsolete goods arising in the ordinary course of the Grantor’s business and
except for ordinary wear and tear in respect of the Equipment.


               (b)
Returned Inventory. If an Account Debtor returns any Inventory to the
Grantor when no Event of Default exists, then the Grantor shall promptly
determine the reason for such return and shall issue a credit memorandum to the
Account Debtor in the appropriate amount. The Grantor shall promptly report to
the Administrative Agent any return involving an amount in excess of $200,000.
Each such report shall indicate the reasons for the returns and the locations
and condition of the returned Inventory. In the event any Account Debtor
returns Inventory to the Grantor when an Event of Default exists, the Grantor,
upon the written request of the Administrative Agent, shall: (i) hold the
returned Inventory in trust for the Administrative Agent; (ii) segregate all
returned Inventory from all of its other property; (iii) dispose of the
returned Inventory solely according to the Administrative Agent’s written
instructions; and (iv) not issue any credits or allowances with respect thereto
without the Administrative Agent’s prior written consent. All returned
Inventory shall be subject to the Administrative Agent’s Liens thereon. 


               (c)
Inventory Count. The Grantor will conduct a physical count of its
Inventory at least once per Fiscal Year (at one time or by cycle counting in
each case in accordance with GAAP), and after and during the continuation of an
Event of Default, at such other times as the Administrative Agent requests.
Upon the request of the Administrative Agent, the Grantor, at Grantor’s own
expense, shall deliver to the Administrative Agent the results of each physical
verification, which the Grantor has made, or has caused any other Person to
make on its behalf, of all or any portion of its Inventory. 


               (d)
Equipment. Upon the written request of the Administrative Agent, the
Grantor shall inform the Administrative Agent of any additions to or deletions
from the Equipment which individually exceed $100,000 book value on
depreciation schedules, or if an Event of Default has occurred and is
continuing the Grantor shall inform the Administrative Agent promptly upon each
such addition or deletion. The Grantor shall not permit any Equipment to become
a fixture with respect to real property or to become an accession with respect
to other personal property with respect to which real or personal property the
Administrative Agent does not have a Lien. The Grantor will not, without the
Administrative Agent’s prior written consent, alter or remove any identifying
symbol or number on any of the Grantor’s Equipment constituting Collateral.


               (e)
Titled Vehicles. Upon the Administrative Agent’s request after an Event
of Default, promptly deliver to the Administrative Agent the original of any
vehicle title certificate and provide and/or file all other documents or
instruments necessary to have the Lien of the Administrative Agent noted on any
such certificate or with the appropriate state office. The Grantor will give
the Administrative Agent notice of its acquisition of any vehicle covered by a
certificate of title; provided that, no such notice shall be required so long
as the net book value of all vehicles owned by the Loan Parties is less than
$100,000.


10






          4.4.
Delivery of Instruments, Securities, Chattel Paper and Documents. The
Grantor will (a) deliver to the Administrative Agent promptly upon execution of
this Security Agreement the originals of all Chattel Paper, Securities and
Instruments constituting Collateral (if any then exist), (b) hold in trust for
the Administrative Agent upon receipt and immediately thereafter deliver to the
Administrative Agent any Chattel Paper, Securities and Instruments constituting
Collateral, (c) upon the Administrative Agent’s request, deliver to the
Administrative Agent (and thereafter hold in trust for the Administrative Agent
upon receipt and immediately deliver to the Administrative Agent) any Document
evidencing or constituting Collateral and (d) upon the Administrative Agent’s
request, deliver to the Administrative Agent a duly executed amendment to this
Security Agreement, in the form of Exhibit H hereto (the “Amendment”),
pursuant to which the Grantor will pledge such additional Collateral. The
Grantor hereby authorizes the Administrative Agent to attach each Amendment to
this Security Agreement and agrees that all additional Collateral set forth in
such Amendments shall be considered to be part of the Collateral.


          4.5.
Uncertificated Pledged Collateral. The Grantor will permit the
Administrative Agent from time to time to cause the appropriate issuers (and,
if held with a securities intermediary, such securities intermediary) of
uncertificated securities or other types of Pledged Collateral not represented
by certificates to mark their books and records with the numbers and face
amounts of all such uncertificated securities or other types of Pledged
Collateral not represented by certificates and all rollovers and replacements
therefor to reflect the Lien of the Administrative Agent granted pursuant to
this Security Agreement. The Grantor will take any actions necessary to cause
(a) the issuers of uncertificated securities which are Pledged Collateral and
(b) any securities intermediary which is the holder of any Pledged Collateral,
to cause the Administrative Agent to have and retain Control over such Pledged
Collateral. Without limiting the foregoing, the Grantor will, with respect to
Pledged Collateral held with a securities intermediary, cause such securities
intermediary to enter into a control agreement with the Administrative Agent,
in form and substance satisfactory to the Administrative Agent, giving the
Administrative Agent Control. 


          4.6.
Pledged Collateral.


               (a)
Changes in Capital Structure of Issuers. Except as otherwise provided in
the Credit Agreement, the Grantor will not (i) permit or suffer any issuer of
an Equity Interest constituting Pledged Collateral to dissolve, merge,
liquidate, retire any of its Equity Interests or other Instruments or
Securities evidencing ownership, reduce its capital, sell or encumber all or
substantially all of its assets (except for Permitted Liens and sales of assets
permitted pursuant to Section 4.1(d)) or merge or consolidate with any
other entity, or (ii) vote any Pledged Collateral in favor of any of the
foregoing.


               (b)
Issuance of Additional Securities. The Grantor will not permit or suffer
the issuer of an Equity Interest constituting Pledged Collateral owned by it to
issue additional Equity Interests, any right to receive the same or any right
to receive earnings, except to the Grantor.


               (c)
Registration of Pledged Collateral. The Grantor will permit any
registerable Pledged Collateral to be registered in the name of the
Administrative Agent or its nominee at any time at the option of the Required
Secured Parties.


               (d)
Exercise of Rights in Pledged Collateral. 


	
 

	
 


	
 

	
          (i)
  Without in any way limiting the foregoing and subject to clause (ii) below,
  the Grantor shall have the right to exercise all voting rights or other
  rights relating to the Pledged Collateral for all purposes not inconsistent
  with this Security Agreement, the Credit Agreement or any other Loan
  Document; provided
  however, that no vote or other right shall be
  exercised or action taken which would have the effect of impairing the rights
  of the Administrative Agent in respect of the Pledged Collateral.


	
 

	
 


	
 

	
          (ii)
  The Grantor will permit the Administrative Agent or its nominee at any time
  after the occurrence and during the continuance of an Event of Default,
  without notice, to exercise all voting rights or other rights relating to
  Pledged Collateral, including, without limitation, exchange, subscription or
  any other rights, privileges, or options pertaining to any Equity Interest or
  Investment Property constituting Pledged Collateral as if it were the
  absolute owner thereof.





11






	
 

	
 


	
 

	
          (iii)
  The Grantor shall be entitled to collect and receive for its own use all cash
  dividends and interest paid in respect of the Pledged Collateral to the
  extent not in violation of the Credit Agreement other than any of the
  following distributions and payments (collectively referred to as the “Excluded
  Payments”): (A) dividends and interest paid or payable other than in cash
  in respect of any Pledged Collateral, and instruments and other property
  received, receivable or otherwise distributed in respect of, or in exchange
  for, any Pledged Collateral; (B) dividends and other distributions paid or
  payable in cash in respect of any Pledged Collateral in connection with a
  partial or total liquidation or dissolution or in connection with a reduction
  of capital, capital surplus or paid-in capital of an issuer; and (C) cash
  paid, payable or otherwise distributed, in respect of principal of, or in
  redemption of, or in exchange for, any Pledged Collateral; provided
  however, that until actually paid, all rights to such
  distributions shall remain subject to the Lien created by this Security
  Agreement; and


	
 

	
 


	
 

	
          (iv)
  All Excluded Payments and all other distributions in respect of any of the
  Pledged Collateral, whenever paid or made, shall be delivered to the
  Administrative Agent to hold as Pledged Collateral and shall, if received by
  the Grantor, be received in trust for the benefit of the Administrative
  Agent, be segregated from the other property or funds of the Grantor, and be
  forthwith delivered to the Administrative Agent as Pledged Collateral in the
  same form as so received (with any necessary endorsement).





          4.7.
Intellectual Property. 


               (a)
The Grantor will use its best efforts to secure all consents and approvals
necessary or appropriate for the assignment to or benefit of the Administrative
Agent of any License held by the Grantor and to enforce the security interests
granted hereunder.


               (b)
The Grantor shall notify the Administrative Agent immediately if it knows or
has reason to know that any application or registration relating to any Patent
or Trademark (now or hereafter existing) may become abandoned or dedicated, or
of any 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 or any court) regarding the Grantor’s ownership of
any Patent or Trademark, its right to register the same, or to keep and
maintain the same if such abandonment, dedication, adverse determination or
development could reasonably be expected to result in a Material Adverse
Effect.


               (c)
The Grantor shall notify the Administrative Agent within 45 days of the end of
each Fiscal Quarter of any Patent or Trademark issued to it by the United
States Patent and Trademark Office or any similar office or agency during such
Fiscal Quarter. Upon request by the Administrative Agent, the Grantor shall
execute and deliver any and all security agreements as the Administrative Agent
may request to evidence the Administrative Agent’s first priority security
interest on such Patent or Trademark, and the General Intangibles of the
Grantor relating thereto or represented thereby. The Grantor shall promptly
upon request by the Administrative Agent provide the Administrative Agent with
an update to the Patent Application Schedule. The Administrative Agent may,
after the occurrence and during the continuance of an Event of Default, attach
the Patent Application Schedule to this Security Agreement and file this
Security Agreement with the United States Patent and Trademark Office.


               (d)
The Grantor shall take all actions necessary or requested by the Administrative
Agent to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of each of its Patents and
Trademarks (now or hereafter existing), including the filing of applications
for renewal, affidavits of use, affidavits of noncontestability and opposition
and interference and cancellation proceedings, unless the Grantor shall
determine that the failure to take such action could not reasonably be expected
to result in a Material Adverse Effect.


12






               (e)
The Grantor shall, unless Grantor shall determine that the failure to take such
action could not reasonably be expected to result in a Material Adverse Effect,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and shall
take such other actions as the Administrative Agent shall deem reasonably
appropriate under the circumstances to protect such Patent or Trademark. In the
event that the Grantor institutes suit because any of its Patents or Trademarks
constituting Collateral is infringed upon, or misappropriated or diluted by a
third party, the Grantor shall comply with Section 4.8.


          4.8.
Commercial Tort Claims. To Grantor’s knowledge, all of the Grantor’s
Commercial Tort Claims are listed in Exhibit J hereto. The Grantor shall
promptly, and in any event within thirty Business Days after the same is
acquired by it, notify the Administrative Agent of any Commercial Tort Claim
acquired by it and, unless the Administrative Agent otherwise consents, the
Grantor shall enter into an amendment to this Security Agreement, in the form
of Exhibit H hereto, granting to Administrative Agent a first priority security
interest in such Commercial Tort Claim.


          4.9.
Letter-of-Credit Rights. If the Grantor is or becomes the beneficiary of
a letter of credit in the amount in excess of $200,000, the Grantor shall
promptly, and in any event within thirty Business Days after becoming a
beneficiary, notify the Administrative Agent thereof and use Grantor’s best
efforts to cause the issuer and/or confirmation bank to (i) consent to the
assignment of any Letter-of-Credit Rights to the Administrative Agent and (ii)
agree to direct all payments thereunder to a Deposit Account at the
Administrative Agent or subject to a Deposit Account Control Agreement for
application to the Secured Obligations, in accordance with Section 2.18 of the
Credit Agreement, all in form and substance reasonably satisfactory to the
Administrative Agent. 


          4.10.
Federal, State or Municipal Claims. Upon the request of the
Administrative Agent, the Grantor shall promptly notify the Administrative
Agent of any Collateral which constitutes a claim against the United States
government or any state or local government or any instrumentality or agency
thereof, the assignment of which claim is restricted by federal, state or
municipal law.


          4.11.
Reserved.


          4.12.
Insurance. 


               (a)
In the event any Collateral is located in any area that has been designated by
the Federal Emergency Management Agency as a “Special Flood Hazard Area”, the
Grantor shall purchase and maintain flood insurance on such Collateral
(including any personal property which is located on any real property leased
by such Loan Party within a “Special Flood Hazard Area”). The amount of flood
insurance required by this Section shall be in an amount equal to the lesser of
the total commitment or the total replacement cost value of the improvements.


               (b)
All insurance policies required hereunder and under Section 5.09 of the Credit
Agreement shall name the Administrative Agent (for the benefit of the
Administrative Agent and the Lenders) as an additional insured or as loss
payee, as applicable, and shall contain loss payable clauses or mortgagee
clauses, through endorsements in form and substance reasonably satisfactory to
the Administrative Agent, which provide that: (i) all proceeds thereunder with
respect to any Collateral shall be payable to the Administrative Agent; (ii) no
such insurance shall be affected by any act or neglect of the insured or owner
of the property described in such policy; and (iii) such policy and loss
payable or mortgagee clauses may be canceled, amended, or terminated only upon
at least thirty days prior written notice given to the Administrative Agent.


               (c)
All premiums on such insurance shall be paid when due by the Grantor, and
copies of the policies delivered to the Administrative Agent. If the Grantor
fails to obtain any insurance as required by this Section, the Administrative
Agent at the direction of the Required Lenders may obtain such insurance at the
Grantor’s expense. By purchasing such insurance, the Administrative Agent shall
not be deemed to have waived any Default arising from the Grantor’s failure to
maintain such insurance or pay any premiums therefor.


13






          4.13.
Collateral Access Agreements.


               (a)
The Grantor shall use commercially reasonable efforts to obtain a Collateral
Access Agreement, from the lessor of each leased property, mortgagee of owned
property or bailee or consignee with respect to any warehouse, processor or
converter facility or other location where Collateral is stored or located,
which agreement or letter shall provide access rights, contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee, bailee or
consignee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the
Administrative Agent; provided however, (i) with respect to any location
leased by the Grantor, so long as the aggregate amount of tangible Collateral
located at such leased location has a book value of less than $50,000 at all
times, then the Grantor shall have no obligation to deliver a Collateral Access
Agreement for such leased location, and (ii) with respect to any processor
facility at which Collateral is held, so long as the aggregate amount of
tangible Collateral held by at such processor facility has a book value of less
than $125,000 at all times, then the Grantor shall have no obligation to
deliver a Collateral Access Agreement for such processor facility (each such
location, an “Excluded Location”).


               (b)
After the Closing Date, no real property or warehouse space shall be leased by
the Grantor and no Inventory shall be shipped to a processor or converter under
arrangements established after the Closing Date, unless and until a
satisfactory Collateral Access Agreement shall first have been obtained with
respect to such location (unless such location would constitute an Excluded
Location). The Grantor shall timely and fully pay and perform its obligations
under all leases and other agreements with respect to each leased location or
third party warehouse where any Collateral is or may be located. 


          4.14.
Deposit Account Control Agreements. The Grantor will provide to
the Administrative Agent a Deposit Account Control Agreement duly executed on
behalf of each financial institution holding a deposit account of the Grantor
for each Deposit Account of Grantor other than the Excluded Deposit Accounts; provided
that, the Administrative Agent may, in its discretion, defer
delivery of any such Deposit Account Control Agreement, establish a reserve
with respect to any deposit account for which the Administrative Agent has not
received such Deposit Account Control Agreement, and require the Grantor to
open and maintain a new deposit account with a financial institution subject to
a Deposit Account Control Agreement.


          4.15. Change
of Name or Location; Change of Fiscal Year. The Grantor shall not (a)
change its name as it appears in official filings in the state of its
incorporation or organization, (b) change its chief executive office, principal
place of business, mailing address, corporate offices or warehouses or
locations at which Collateral is held or stored (other than Excluded
Locations), or the location of its records concerning the Collateral as set
forth in the Security Agreement, (c) change the type of entity that it is, (d)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (e) change its state of incorporation
or organization, in each case, unless the Administrative Agent shall have
received at least thirty days prior written notice of such change and the
Administrative Agent shall have acknowledged in writing that either (1) such
change will not adversely affect the validity, perfection or priority of the
Administrative Agent’s security interest in the Collateral, or (2) any
reasonable action requested by the Administrative Agent in connection therewith
has been completed or taken (including any action to continue the perfection of
any Liens in favor of the Administrative Agent, on behalf of Lenders, in any
Collateral), provided that, any new location shall be in the continental
U.S. The Grantor shall not change its fiscal year which currently ends on the
last Saturday of December.


14






          4.16. Assigned
Contracts. The Grantor will use its best efforts to secure all consents and
approvals necessary or appropriate for the assignment to or for the benefit of
the Administrative Agent of any Assigned Contract held by the Grantor and to
enforce the security interests granted hereunder. The Grantor shall fully
perform all of its obligations under each of the Assigned Contracts, and shall
enforce all of its rights and remedies thereunder, in each case, as it deems
appropriate in its business judgment; provided however, that the Grantor shall not
take any action or fail to take any action with respect to its Assigned
Contracts which would cause the termination of an Assigned Contract. Without limiting
the generality of the foregoing, the Grantor shall take all action necessary or
appropriate to permit, and shall not take any action which would have any
materially adverse effect upon, the full enforcement of all indemnification
rights under its Assigned Contracts. The Grantor shall notify the
Administrative Agent and the Lenders in writing, promptly after the Grantor
becomes aware thereof, of any event or fact which could give rise to a material
claim by it for indemnification under any of its Assigned Contracts, and shall
diligently pursue such right and report to the Administrative Agent on all
further developments with respect thereto. The Grantor shall deposit into a
Deposit Account at the Administrative Agent or subject to a Deposit Account Control
Agreement for application to the Secured Obligations, in accordance with
Section 2.18 of the Credit Agreement, all amounts received by the Grantor as
indemnification or otherwise pursuant to its Assigned Contracts. If the Grantor
shall fail after the Administrative Agent’s demand to pursue diligently any
right under its Assigned Contracts, or if an Event of Default then exists, the
Administrative Agent may, and at the direction of the Required Secured Parties
shall, directly enforce such right in its own or the Grantor’s name and may
enter into such settlements or other agreements with respect thereto as the
Administrative Agent or the Required Secured Parties, as applicable, shall
determine. In any suit, proceeding or action brought by the Administrative
Agent for the benefit of the Lenders under any Assigned Contract for any sum
owing thereunder or to enforce any provision thereof, the Grantor shall
indemnify and hold the Administrative Agent and Lenders harmless from and
against all expense, loss or damage suffered by reason of any defense, setoff,
counterclaims, recoupment, or reduction of liability whatsoever of the obligor
thereunder arising out of a breach by the Grantor of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing from the Grantor to or in favor of such obligor or its successors. All
such obligations of the Grantor shall be and remain enforceable only against
the Grantor and shall not be enforceable against the Administrative Agent or
the Lenders. Notwithstanding any provision hereof to the contrary, the Grantor
shall at all times remain liable to observe and perform all of its duties and
obligations under its Assigned Contracts, and the Administrative Agent’s or any
Lender’s exercise of any of their respective rights with respect to the
Collateral shall not release the Grantor from any of such duties and
obligations. Neither the Administrative Agent nor any Lender shall be obligated
to perform or fulfill any of the Grantor’s duties or obligations under its
Assigned Contracts or to make any payment thereunder, or to make any inquiry as
to the nature or sufficiency of any payment or property received by it
thereunder or the sufficiency of performance by any party thereunder, or to present
or file any claim, or to take any action to collect or enforce any performance,
any payment of any amounts, or any delivery of any property.


ARTICLE
V

EVENTS OF DEFAULT AND REMEDIES


          5.1.
Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:


               (a)
Any representation or warranty made by or on behalf of the Grantor under or in
connection with this Security Agreement shall be materially false as of the
date on which made.


               (b)
The breach by the Grantor of any of the terms or provisions of Article VII.


               (c)
The breach by the Grantor of any of the terms or provisions of Article IV
which is not remedied within ten days after such breach.


               (d)
The breach by the Grantor (other than a breach which constitutes an Event of
Default under any other Section of this Article V) of any of the terms or
provisions of this Security Agreement which is not remedied within fifteen days
after such breach.


15






               (e)
The occurrence of any “Event of Default” under, and as defined in, the Credit
Agreement.


               (f)
The occurrence of
any “default” or “event of default”, as defined in any other Loan Document or
the breach of any of the terms or provisions of any other Loan Document, which
default or breach continues beyond any period of grace therein provided.


               (g)
Any Equity Interest which is included within the Collateral shall at any time
constitute a Security or the issuer of any such Equity Interest shall take any
action to have such interests treated as a Security unless (i) all certificates
or other documents constituting such Security have been delivered to the
Administrative Agent and such Security is properly defined as such under
Article 8 of the UCC of the applicable jurisdiction, whether as a result of
actions by the issuer thereof or otherwise, or (ii) the Administrative Agent
has entered into a control agreement with the issuer of such Security or with a
securities intermediary relating to such Security and such Security is defined
as such under Article 8 of the UCC of the applicable jurisdiction, whether as a
result of actions by the issuer thereof or otherwise.


          5.2.
Remedies. 


               (a)
Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent may exercise any or all of the following rights and
remedies:


	
 

	
 


	
 

	
          (i)
  those rights and remedies provided in this Security Agreement, the Credit Agreement,
  or any other Loan Document; provided that, this Section 5.2(a) shall
  not be understood to limit any rights or remedies available to the
  Administrative Agent and the Lenders prior to an Event of Default;


	
 

	
 


	
 

	
          (ii)
  those rights and remedies available to a secured party under the UCC (whether
  or not the UCC applies to the affected Collateral) or under any other
  applicable law (including, without limitation, any law governing the exercise
  of a bank’s right of setoff or bankers’ lien) when a debtor is in default
  under a security agreement;


	
 

	
 


	
 

	
          (iii)
  give notice of sole control or any other instruction under any Deposit
  Account Control Agreement or and other control agreement with any securities
  intermediary and take any action therein with respect to such Collateral;


	
 

	
 


	
 

	
          (iv)
  without notice (except as specifically provided in Section 8.1 or elsewhere
  herein), demand or advertisement of any kind to the Grantor or any other
  Person, enter the premises of the Grantor where any Collateral is located
  (through self-help and without judicial process) to collect, receive,
  assemble, process, appropriate, sell, lease, assign, grant an option or
  options to purchase or otherwise dispose of, deliver, or realize upon, the
  Collateral or any part thereof in one or more parcels at public or private
  sale or sales (which sales may be adjourned or continued from time to time
  with or without notice and may take place at the Grantor’s premises or
  elsewhere), for cash, on credit or for future delivery without assumption of
  any credit risk, and upon such other terms as the Administrative Agent may
  deem commercially reasonable; and


	
 

	
 


	
 

	
          (v)
  concurrently with written notice to the Grantor, transfer and register in its
  name or in the name of its nominee the whole or any part of the Pledged
  Collateral, to exchange certificates or instruments representing or
  evidencing Pledged Collateral for certificates or instruments of smaller or
  larger denominations, to exercise the voting and all other rights as a holder
  with respect thereto, to collect and receive all cash dividends, interest,
  principal and other distributions made thereon and to otherwise act with
  respect to the Pledged Collateral as though the Administrative Agent was the
  outright owner thereof. 





16






               (b)
The Administrative Agent, on behalf of the Lenders, may comply with any
applicable state or federal law requirements in connection with a disposition
of the Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.


               (c)
The Administrative Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Administrative Agent and the Lenders, the
whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption the Grantor hereby expressly releases.


               (d)
Until the Administrative Agent is able to effect a sale, lease, or other
disposition of Collateral, the Administrative Agent shall have the right to
hold or use Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value or for any
other purpose deemed appropriate by the Administrative Agent. The
Administrative Agent may, if it so elects, seek the appointment of a receiver
or keeper to take possession of Collateral and to enforce any of the
Administrative Agent’s remedies (for the benefit of the Administrative Agent
and Lenders), with respect to such appointment without prior notice or hearing
as to such appointment and the Grantor hereby consents to such appointment.


               (e)
If, after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain Swap Obligations outstanding,
the Required Secured Parties may exercise the remedies provided in this Section
5.2 upon the occurrence of any event which would allow or require the
termination or acceleration of any Swap Obligations pursuant to the terms of
the Swap Agreement.


               (f)
Notwithstanding the foregoing, neither the Administrative Agent nor the Lenders
shall be required to (i) make any demand upon, or pursue or exhaust any of
their rights or remedies against, the Grantor, any other obligor, guarantor,
pledgor or any other Person with respect to the payment of the Secured
Obligations or to pursue or exhaust any of their rights or remedies with
respect to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, or
(iii) effect a public sale of any Collateral.


               (g)
The Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to resort
to one or more private sales thereof in accordance with clause (a)
above. The Grantor also acknowledges that any private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of such sale being private. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Collateral for the
period of time necessary to permit the Grantor or the issuer of the Pledged
Collateral to register such securities for public sale under the Securities Act
of 1933, as amended, or under applicable state securities laws, even if the
Grantor and the issuer would agree to do so.


          5.3.
Grantor’s Obligations Upon Default. Upon the request of the
Administrative Agent after the occurrence of a Default, the Grantor shall:


               (a)
assemble and make available to the Administrative Agent the Collateral and all
books and records relating thereto at any place or places specified by the
Administrative Agent, whether at the Grantor’s premises or elsewhere;


               (b)
permit the Administrative Agent, by the Administrative Agent’s representatives
and agents, to enter, occupy and use any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral or the books and records
relating thereto, or both, to remove all or any part of the Collateral or the
books and records relating thereto, or both, and to conduct sales of the
Collateral, without any obligation to pay the Grantor for such use and
occupancy; 


17






               (c)
prepare and file, or cause an issuer of Pledged Collateral to prepare and file,
with the Securities and Exchange Commission or any other applicable government
agency, registration statements, a prospectus and such other documentation in
connection with the Pledged Collateral as the Administrative Agent may request,
all in form and substance satisfactory to the Administrative Agent, and furnish
to the Administrative Agent, or cause an issuer of Pledged Collateral to
furnish to the Administrative Agent, any information regarding the Pledged
Collateral in such detail as the Administrative Agent may specify; 


               (d)
take, or cause an issuer of Pledged Collateral to take, any and all actions
necessary to register or qualify the Pledged Collateral to enable the
Administrative Agent to consummate a public sale or other disposition of the
Pledged Collateral; and 


               (e)
at its own expense, cause the independent certified public accountants then
engaged by the Grantor to prepare and deliver to the Administrative Agent and
each Lender, at any time, and from time to time, promptly upon the
Administrative Agent’s request, the following reports with respect to the
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts. 


          5.4.
Grant of Intellectual property License. For the purpose of enabling the
Administrative Agent to exercise the rights and remedies under this Article
V at such time as the Administrative Agent shall be lawfully entitled to
exercise such rights and remedies, the Grantor hereby (a) grants to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantor) to use, license or sublicense any
Intellectual property Rights now owned or hereafter acquired by the Grantor,
and wherever the same may be located, and including in such license 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
and (b) irrevocably agrees that the Administrative Agent may sell any of the
Grantor’s Inventory directly to any person, including without limitation
persons who have previously purchased the Grantor’s Inventory from the Grantor
and in connection with any such sale or other enforcement of the Administrative
Agent’s rights under this Security Agreement, may sell Inventory which bears
any Trademark owned by or licensed to the Grantor and any Inventory that is
covered by any Copyright owned by or licensed to the Grantor and the
Administrative Agent may finish any work in process and affix any Trademark
owned by or licensed to the Grantor and sell such Inventory as provided herein.


ARTICLE
VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY


          6.1.
Account Verification. After the occurrence and during the continuance of
an Event of Default, the Administrative Agent may at any time, in the
Administrative Agent’s own name, in the name of a nominee of the Administrative
Agent, or in the name of the Grantor communicate (by mail, telephone, facsimile
or otherwise) with the Account Debtors of the Grantor, parties to contracts
with the Grantor and obligors in respect of Instruments of the Grantor to
verify with such Persons, to the Administrative Agent’s satisfaction, the
existence, amount, terms of, and any other matter relating to, Accounts,
Instruments, Chattel Paper, payment intangibles and/or other Receivables. 


          6.2.
Authorization for Secured Party to Take Certain Action. 


               (a)
The Grantor irrevocably authorizes the Administrative Agent at any time and
from time to time in the sole discretion of the Administrative Agent and
appoints the Administrative Agent as its attorney in fact (i) to execute on
behalf of the Grantor as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s sole discretion to perfect and to
maintain the perfection and priority of the Administrative Agent’s security
interest in the Collateral, (ii) to endorse and collect any cash proceeds of
the Collateral, (iii) to file a carbon, photographic or other reproduction of
this Security Agreement or any financing 


18






statement with
respect to the Collateral as a financing statement and to file any other
financing statement or amendment of a financing statement (which does not add
new collateral or add a debtor) in such offices as the Administrative Agent in
its sole discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the Administrative Agent’s security interest in the
Collateral, (iv) to contact and enter into one or more agreements with the
issuers of uncertificated securities which are Pledged Collateral or with
securities intermediaries holding Pledged Collateral as may be necessary or
advisable to give the Administrative Agent Control over such Pledged
Collateral, (v) to apply the proceeds of any Collateral received by the
Administrative Agent to the Secured Obligations as provided in Section 7.3,
(vi) to discharge past due taxes, assessments, charges, fees or Liens on the
Collateral (except for such Liens as are specifically permitted hereunder),
(vii) to contact Account Debtors for any reason, (viii) to demand payment or
enforce payment of the Receivables in the name of the Administrative Agent or
the Grantor and to endorse any and all checks, drafts, and other instruments
for the payment of money relating to the Receivables, (ix) to sign the
Grantor’s name on any invoice or bill of lading relating to the Receivables,
drafts against any Account Debtor of the Grantor, assignments and verifications
of Receivables, (x) to exercise all of the Grantor’s rights and remedies with
respect to the collection of the Receivables and any other Collateral, (xi) to
settle, adjust, compromise, extend or renew the Receivables, (xii) to settle,
adjust or compromise any legal proceedings brought to collect Receivables,
(xiii) to prepare, file and sign the Grantor’s name on a proof of claim in
bankruptcy or similar document against any Account Debtor of the Grantor, (xiv)
to prepare, file and sign the Grantor’s name on any notice of Lien, assignment
or satisfaction of Lien or similar document in connection with the Receivables,
(xv) to change the address for delivery of mail addressed to the Grantor to
such address as the Administrative Agent may designate and to receive, open and
dispose of all mail addressed to the Grantor, and (xvi) to do all other acts
and things necessary to carry out this Security Agreement; and the Grantor
agrees to reimburse the Administrative Agent on demand for any payment made or
any expense incurred by the Administrative Agent in connection with any of the
foregoing; provided
that, this authorization shall not relieve the Grantor of any of its
obligations under this Security Agreement or under the Credit Agreement. 


               (b)
All acts of said attorney or designee are hereby ratified and approved. The
powers conferred on the Administrative Agent, for the benefit of the
Administrative Agent and Lenders, under this Section 6.2 are solely to protect
the Administrative Agent’s interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any such powers. 


          6.3.
Proxy. THE GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE
ADMINISTRATIVE AGENT AS THE PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION
6.2 ABOVE) OF THE GRANTOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE
RIGHT TO VOTE SUCH PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO
SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE
APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL
INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES
TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING
GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL
MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE
EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY
TRANSFER OF ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY
OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT. 


          6.4.
Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE
ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS
COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS
SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT,
NOR ANY LENDER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT
OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT
BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN
RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED
THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.


19






ARTICLE
VII
COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS


          7.1.
Collection of Receivables. Upon the occurrence and during the
continuance of a Default, the Administrative Agent, upon written notice to the
Borrower, may require that all funds deposited into Collateral Deposit Account
be swept on a daily basis into a collection account maintained by the Grantor with the Administrative Agent
(the “Collection Account”). The Administrative Agent shall hold and
apply funds received into the Collection Account as provided by the terms of Section
7.3. 


          7.2.
Covenant Regarding New Deposit Accounts. Before opening or
replacing any Collateral Deposit Account or other Deposit Account that will not
constitute an Excluded Deposit Account, the Grantor shall (a) obtain the
Administrative Agent’s consent in writing to the opening of such Deposit
Account, and (b) cause each bank or financial institution in which it seeks to
open a Deposit Account, to enter into a Deposit Account Control Agreement with
the Administrative Agent in order to give the Administrative Agent Control of
such Deposit Account. In the case of Deposit Accounts maintained with Lenders,
the terms of such agreement shall be subject to the provisions of the Credit
Agreement regarding setoffs.


          7.3.
Application of Proceeds; Deficiency. All amounts deposited in the
Collection Account shall be deemed received by the Administrative Agent in
accordance with Section 2.18 of the Credit Agreement and shall, after having
been credited to the Collection Account, be applied (and allocated) by
Administrative Agent in accordance with Section 2.10(b) of the Credit
Agreement; provided
that, so long as no Default has occurred and is continuing,
collections which are received into the Collection Account shall be deposited
into the Borrower’s Funding Account rather than being used to reduce amounts
owing under the Credit Agreement. After maturity of the Obligations, whether by
acceleration or otherwise, the Administrative Agent may require all other cash
proceeds of the Collateral, which are not required to be applied to the
Obligations pursuant to Section 2.11 of the Credit Agreement, to be deposited
in a special non-interest bearing cash collateral account with the
Administrative Agent and held there as security for the Guaranteed Obligations.
The Grantor shall have no control whatsoever over said cash collateral account.
Any such proceeds of the Collateral shall be applied in the order set forth in
Section 2.18 of the Credit Agreement unless a court of competent jurisdiction
shall otherwise direct. The balance, if any, after all of the Guaranteed
Obligations have been satisfied, shall be deposited by the Administrative Agent
into the Grantor’s general operating account with the Administrative Agent. The
Grantor shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all Guaranteed
Obligations, including any attorneys’ fees and other expenses incurred by
Administrative Agent or any Lender to collect such deficiency. 


ARTICLE
VIII

GENERAL PROVISIONS


          8.1.
Waivers. The Grantor hereby waives notice of the time and place
of any public sale or the time after which any private sale or other
disposition of all or any part of the Collateral may be made. To the extent
such notice may not be waived under applicable law, any notice made shall be
deemed reasonable if sent to the Grantor, addressed as set forth in Article IX,
at least ten days prior to (i) the date of any such public sale or (ii) the
time after which any such private sale or other disposition may be made. To the
maximum extent permitted by applicable law, the Grantor waives all claims,
damages, and demands against the Administrative Agent or any Lender arising out
of the repossession, retention or sale of the Collateral, except such as arise
solely out of the gross negligence or willful misconduct of the Administrative
Agent or such Lender as finally determined by 


20






a court of
competent jurisdiction. To the extent it may lawfully do so, the Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage
of, and covenants not to assert against the Administrative Agent or any Lender,
any valuation, stay, appraisal, extension, moratorium, redemption or similar
laws and any and all rights or defenses it may have as a surety now or
hereafter existing which, but for this provision, might be applicable to the
sale of any Collateral made under the judgment, order or decree of any court,
or privately under the power of sale conferred by this Security Agreement, or
otherwise. Except as otherwise specifically provided herein, the Grantor hereby
waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this Security
Agreement or any Collateral.


          8.2.
Limitation on Administrative Agent’s and Lenders’ Duty with Respect
to the Collateral. The Administrative Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Administrative Agent
and each Lender shall use reasonable care with respect to the Collateral in its
possession or under its control. Neither the Administrative Agent nor any
Lender shall have any other duty as to any Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Administrative Agent or such Lender, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. To the extent that applicable law imposes duties on the Administrative
Agent to exercise remedies in a commercially reasonable manner, the Grantor
acknowledges and agrees that it is commercially reasonable for the
Administrative Agent (i) to fail to incur expenses deemed significant by the
Administrative Agent to prepare Collateral for disposition or otherwise to
transform raw material or work in process into finished goods or other finished
products for disposition, (ii) to fail to obtain third party consents for
access to Collateral to be disposed of, or to obtain or, if not required by
other law, to fail to obtain governmental or third party consents for the
collection or disposition of Collateral to be collected or disposed of, (iii)
to fail to exercise collection remedies against Account Debtors or other
Persons obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (iv) to exercise collection remedies against Account
Debtors and other Persons obligated on Collateral directly or through the use
of collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as the Grantor, for
expressions of interest in acquiring all or any portion of such Collateral,
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature, (viii)
to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Administrative
Agent against risks of loss, collection or disposition of Collateral or to
provide to the Administrative Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the
Administrative Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent
in the collection or disposition of any of the Collateral. The Grantor
acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive
indications of what actions or omissions by the Administrative Agent would be
commercially reasonable in the Administrative Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the
Administrative Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this Section 8.2. Without limitation upon the
foregoing, nothing contained in this Section 8.2 shall be construed to grant
any rights to the Grantor or to impose any duties on the Administrative Agent
that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 8.2.


          8.3.
Compromises and Collection of Collateral. The Grantor and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other claims
may be asserted by obligors with respect to certain of the Receivables, that
certain of the Receivables may be or become uncollectible in whole or in part
and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be
recovered with respect to a Receivable. In view of the foregoing, the Grantor
agrees that the Administrative Agent may at any time and from time to time, if
an Event of Default has occurred and is continuing, compromise with the obligor
on any Receivable, accept in full payment of any Receivable such amount as the
Administrative Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Administrative Agent shall be commercially
reasonable so long as the Administrative Agent acts in good faith based on
information known to it at the time it takes any such action.


21






          8.4.
Secured Party Performance of Grantor’s Obligations. Without
having any obligation to do so, the Administrative Agent may perform or pay any
obligation which the Grantor has agreed to perform or pay in this Security
Agreement and the Grantor shall reimburse the Administrative Agent for any
amounts paid by the Administrative Agent pursuant to this Section 8.4. The
Grantor’s obligation to reimburse the Administrative Agent pursuant to the
preceding sentence shall be a Secured Obligation payable on demand.


          8.5.
Specific Performance of Certain Covenants. The Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14,
4.15, 4.16, 5.3, or 8.7 or in Article VII will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and Lenders
have no adequate remedy at law in respect of such breaches and therefore
agrees, without limiting the right of the Administrative Agent or the Lenders
to seek and obtain specific performance of other obligations of the Grantor
contained in this Security Agreement, that the covenants of the Grantor
contained in the Sections referred to in this Section 8.5 shall be specifically
enforceable against the Grantor.


          8.6.
Dispositions Not Authorized. The Grantor is not authorized to
sell or otherwise dispose of the Collateral except as set forth in Section
4.1(d) and notwithstanding any course of dealing between the Grantor and the
Administrative Agent or other conduct of the Administrative Agent, no
authorization to sell or otherwise dispose of the Collateral (except as set
forth in Section 4.1(d)) shall be binding upon the Administrative Agent or the
Lenders unless such authorization is in writing signed by the Administrative
Agent with the consent or at the direction of the Required Secured Parties.


          8.7.
No Waiver; Amendments; Cumulative Remedies. No delay or omission
of the Administrative Agent or any Lender to exercise any right or remedy
granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver of any Default or an acquiescence therein, and any
single or partial exercise of any such right or remedy shall not preclude any
other or further exercise thereof or the exercise of any other right or remedy.
No waiver, amendment or other variation of the terms, conditions or provisions
of this Security Agreement whatsoever shall be valid unless in writing signed
by the Administrative Agent with the concurrence or at the direction of the
Lenders required under Section 9.02 of the Credit Agreement and then only to
the extent in such writing specifically set forth. All rights and remedies
contained in this Security Agreement or by law afforded shall be cumulative and
all shall be available to the Administrative Agent and the Lenders until the
Guaranteed Obligations have been paid in full. 


          8.8.
Limitation by Law; Severability of Provisions. All rights,
remedies and powers provided in this Security Agreement may be exercised only
to the extent that the exercise thereof does not violate any applicable
provision of law, and all the provisions of this Security Agreement are
intended to be subject to all applicable mandatory provisions of law that may
be controlling and to be limited to the extent necessary so that they shall not
render this Security Agreement invalid, unenforceable or not entitled to be
recorded or registered, in whole or in part. Any provision in any this Security
Agreement that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Security Agreement are
declared to be severable.


          8.9.
Reinstatement. This Security Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against the Grantor for liquidation or reorganization, should the Grantor
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of the Grantor’s assets, and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of
the Guaranteed Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Guaranteed Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Guaranteed
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.


22






          8.10.
Benefit of Agreement. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Grantor, the
Administrative Agent and the Lenders and their respective successors and
assigns (including all persons who become bound as a debtor to this Security
Agreement), except that the Grantor shall not have the right to assign its
rights or delegate its obligations under this Security Agreement or any
interest herein, without the prior written consent of the Administrative Agent.
No sales of participations, assignments, transfers, or other dispositions of
any agreement governing the Secured Obligations or any portion thereof or
interest therein shall in any manner impair the Lien granted to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, hereunder.


          8.11.
Survival of Representations. All representations and warranties
of the Grantor contained in this Security Agreement shall survive the execution
and delivery of this Security Agreement.


          8.12.
Taxes and Expenses. Any taxes (including income taxes) payable or
ruled payable by Federal or State authority in respect of this Security
Agreement shall be paid by the Grantor, together with interest and penalties,
if any. The Grantor shall reimburse the Administrative Agent for any and all
out-of-pocket expenses and internal charges (including reasonable attorneys’,
auditors’ and accountants’ fees and reasonable time charges of attorneys,
paralegals, auditors and accountants who may be employees of the Administrative
Agent) paid or incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, collection and enforcement of
this Security Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the expenses and charges associated
with any periodic or special audit of the Collateral). Any and all costs and
expenses incurred by the Grantor in the performance of actions required
pursuant to the terms hereof shall be borne solely by the Grantor.


          8.13.
Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.


          8.14.
Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Guaranteed
Obligations outstanding) until (i) the Credit Agreement has terminated pursuant
to its express terms and (ii) all of the Guaranteed Obligations have been
indefeasibly paid and performed in full (or with respect to any outstanding
Letters of Credit, a cash deposit or Supporting Letter of Credit has been
delivered to the Administrative Agent as required by the Credit Agreement) and
no commitments of the Administrative Agent or the Lenders which would give rise
to any Guaranteed Obligations are outstanding.


          8.15.
Entire Agreement. This Security Agreement embodies the entire
agreement and understanding between the Grantor and the Administrative Agent
relating to the Collateral and supersedes all prior agreements and
understandings between the Grantor and the Administrative Agent relating to the
Collateral.


          8.16.
CHOICE
OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE
STATE OF INDIANA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.


23






          8.17.
CONSENT
TO JURISDICTION. THE GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR INDIANA STATE COURT SITTING
IN INDIANAPOLIS, INDIANA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND THE GRANTOR HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER
TO BRING PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE GRANTOR AGAINST THE ADMINISTRATIVE
AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT IN INDIANA.


          8.18.
WAIVER
OF JURY TRIAL. THE GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.


          8.19.
Indemnity. The Grantor hereby agrees to indemnify the
Administrative Agent and the Lenders, and their respective successors, assigns,
agents and employees, from and against any and all liabilities, damages,
penalties, suits, costs, and expenses of any kind and nature (including,
without limitation, all expenses of litigation or preparation therefor whether
or not the Administrative Agent or any Lender is a party thereto) imposed on,
incurred by or asserted against the Administrative Agent or the Lenders, or
their respective successors, assigns, agents and employees, in any way relating
to or arising out of this Security Agreement, or the manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including,
without limitation, latent and other defects, whether or not discoverable by
the Administrative Agent or the Lenders or the Grantor, and any claim for
Patent, Trademark or Copyright infringement) other than liabilities, damages,
penalties, suits, costs, and expenses arising due to the gross negligence or
willful misconduct of the Administrative Agent or the Lenders.


          8.20.
Counterparts. This Security Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart. 


ARTICLE
IX

NOTICES


          9.1.
Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent by United States mail, telecopier, personal
delivery or nationally established overnight courier service, and shall be
deemed received (a) when received, if sent by hand or overnight courier
service, or mailed by certified or registered mail notices or (b) when sent, if
sent by telecopier (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient), in each case addressed to the Grantor
at the address set forth on Exhibit A as its principal place of
business, and to the Administrative Agent and the Lenders at the addresses set
forth in accordance with Section 9.01 of the Credit Agreement.


          9.2.
Change in Address for Notices. Each of the Grantor, the Administrative
Agent and the Lenders may change the address for service of notice upon it by a
notice in writing to the other parties.


24






ARTICLE
X

THE ADMINISTRATIVE AGENT


          JPMorgan
Chase Bank, N.A. has been appointed Administrative Agent for the Lenders
hereunder pursuant to Article VIII of the Credit Agreement. It is expressly
understood and agreed by the parties to this Security Agreement that any
authority conferred upon the Administrative Agent hereunder is subject to the
terms of the delegation of authority made by the Lenders to the Administrative
Agent pursuant to the Credit Agreement, and that the Administrative Agent has
agreed to act (and any successor Administrative Agent shall act) as such
hereunder only on the express conditions contained in such Article VIII. Any successor
Administrative Agent appointed pursuant to Article VIII of the Credit Agreement
shall be entitled to all the rights, interests and benefits of the
Administrative Agent hereunder.


[Signature
Page Follows]


25






[Signature Page to Pledge and Security Agreement]


          IN
WITNESS WHEREOF, the Grantor and the Administrative Agent have executed this
Security Agreement as of the date first above written.


	
 

	
 

	
 


	
 

	
[Name of Subsidiary],
  a ______________  corporation


	
 

	
 


	
 

	
By:

	
 


	
 

	
 

	 


	
 

	
 

	
 



	
 

	
 

	
 


	
 

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


	
 

	
 


	
 

	
By:

	
 


	
 

	
 

	 


	
 

	
 

	
H. Robert
  Hill, Vice President










	
 

	
 


	
STATE OF
  INDIANA

	
)


	
 

	
) SS:


	
COUNTY OF
  _________________

	
)





          Before
me, a Notary Public in and for the State of ________________, personally appeared
_________________, the ____________ of [Name of Subsidiary], a ________________,
who acknowledged the execution of the foregoing Pledge and Security Agreement
for and on behalf of such corporation.


          Witness my hand and Notarial Seal this _____
day of _______, ____.


	
 

	
 


	
 

	
_________________________________________
____________________________, Notary Public




	
My County of
  Residence: _____________________

	
 


	
 

	
 


	
My
  Commission Expires: _____________________

	
 










EXHIBIT
A
(See Sections 3.2, 3.3, 3.4, 3.9 and 9.1 of Security
Agreement)


GRANTOR’S INFORMATION AND COLLATERAL
LOCATIONS


	
 

	
 

	
 


	
I.

	
Name of Grantor:



	
 

	
 


	
II.

	
State of Incorporation or Organization:



	
 

	
 


	
III.

	
Type of Entity:
 


	
 

	
 


	
IV.

	
Organizational Number assigned by State of
  Incorporation or Organization:


	
 

	
 


	
V.

	
Federal Identification Number:
  ________________________________


	
 

	
 


	
VI.

	
Place of Business
  (if it has only one) or Chief Executive Office (if more than
  one place of business) and Mailing Address:


	
 

	
 


	
 

	
________________________________________


	
 

	
________________________________________


	
 

	
________________________________________


	
 

	
________________________________________


	
 

	
 


	
 

	
Attention:
  _______________________________


	
 

	
 


	
VII.

	
Locations of Collateral:


	
 

	
 


	
 

	
(a)

	
Properties
  Owned by the Grantor:


	
 

	
 

	
 


	
 

	
(b)

	
Properties
  Leased by the Grantor (Include Landlord’s Name):


	
 

	
 

	
 


	
 

	
(c)

	
Public
  Warehouses or other Locations pursuant to Bailment or Consignment
  Arrangements (include name of Warehouse Operator or
  other Bailee or Consignee):










EXHIBIT
B
(See Section 3.5 of Security Agreement)


DEPOSIT ACCOUNTS


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Name of
  Institution

	
 

	
Account
  Number

	
 

	
Check here
  if Deposit
Account is a Collateral
Deposit Account

	
 

	
Description
  of Deposit
Account if not
a Collateral
Deposit Account


	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 










EXHIBIT
C
(See Section 3.7 of Security Agreement)


LETTER OF CREDIT RIGHTS


 


CHATTEL PAPER


 






EXHIBIT
D
(See Section 3.10 and 3.11 of Security Agreement)


INTELLECTUAL PROPERTY RIGHTS


PATENTS


	
 

	
 

	
 

	
 

	
 


	
Patent
  Description

	
 

	
Patent
  Number

	
 

	
Issue Date


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 





PATENT APPLICATIONS


	
 

	
 

	
 

	
 

	
 


	
Patent
  Application

	
 

	
Application
  Filing Date

	
 

	
Application
  Serial Number


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 





TRADEMARKS


	
 

	
 

	
 

	
 

	
 


	
Trademark

	
 

	
Registration
  Date

	
 

	
Registration
  Number


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 





TRADEMARK APPLICATIONS


	
 

	
 

	
 

	
 

	
 


	
Trademark
  Application

	
 

	
Application
  Filing Date

	
 

	
Application
  Serial Number


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 





INTELLECTUAL PROPERTY LICENSES


	
 

	
 

	
 

	
 

	
 


	
Name of
  Agreement

	
 

	
Date of
  Agreement

	
 

	
Parties to
  Agreement


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 










EXHIBIT
E
(See Section 3.11 of Security Agreement)


FIXTURES


I. Legal
description, county and street address of property on which Fixtures are
located:


II. Name and
Address of Record Owner:


____________________________________

____________________________________

____________________________________

____________________________________ 






EXHIBIT
F
(See Section 3.13 of Security Agreement and Definition
of “Pledged Collateral”)


LIST OF PLEDGED COLLATERAL, SECURITIES AND
OTHER INVESTMENT PROPERTY


STOCKS


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Issuer

	
 

	
Certificate
  Number(s)

	
 

	
Number of
  Shares

	
 

	
Class of
  Stock

	
 

	
Percentage
  of Outstanding Shares


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 





BONDS


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Issuer

	
 

	
Number

	
 

	
Face Amount

	
 

	
Coupon Rate

	
 

	
Maturity


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 





GOVERNMENT SECURITIES


	
 

	
 

	
 

	
 

	
 

	
 


	
Issuer

	
Number

	
Type

	
Face Amount

	
Coupon Rate

	
Maturity


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 





OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)


	
 

	
 

	
 


	
Issuer

	
Description
  of Collateral

	
Percentage
  Ownership Interest


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 





[Add
description of custody accounts or arrangements with securities intermediary,
if applicable]






EXHIBIT
G
(See Section 3.1 of Security Agreement)


OFFICES IN WHICH FINANCING STATEMENTS HAVE
BEEN FILED






EXHIBIT
H
(See Section 4.4 and 4.8 of Security Agreement)


AMENDMENT 


This
Amendment, dated ________________, ___ is delivered pursuant to Section 4.4 of
the Security Agreement referred to below. All defined terms herein shall have
the meanings ascribed thereto or incorporated by reference in the Security
Agreement. The undersigned hereby certifies that the representations and
warranties in Article III of the Security Agreement are and continue to be true
and correct. The undersigned further agrees that this Amendment may be attached
to that certain Pledge and Security Agreement, dated April 30, 2009, between
the undersigned, as the Grantor, and JPMorgan Chase Bank, N.A., as the
Administrative Agent, (the “Security Agreement”) and that the Collateral
listed on Schedule I to this Amendment shall be and become a part of the
Collateral referred to in said Security Agreement and shall secure all
Guaranteed Obligations referred to in said Security Agreement. 


	
 

	
 

	
 


	
 

	 

	 


	
 

	
 

	
 


	
 

	
By:

	
 


	
 

	
Name:

	
 


	
 

	
 

	 


	
 

	
Title:

	
 


	
 

	
 

	 










SCHEDULE I TO AMENDMENT




STOCKS









	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Issuer

	
 

	
Certificate
  Number(s)

	
 

	
Number of
  Shares

	
 

	
Class of
  Stock

	
 

	
Percentage
  of Outstanding Shares


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 





BONDS


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
Issuer

	
 

	
Number

	
 

	
Face Amount

	
 

	
Coupon Rate

	
 

	
Maturity


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 

	 

	 

	 





GOVERNMENT SECURITIES


	
 

	
 

	
 

	
 

	
 

	
 


	
Issuer

	
Number

	
Type

	
Face Amount

	
Coupon Rate

	
Maturity


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 


	
 

	
 

	
 

	
 

	
 

	
 


	 

	 

	 

	 

	 

	 





OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)


	
 

	
 

	
 


	
Issuer

	
Description
  of Collateral

	
Percentage
  Ownership Interest


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 





[Add
description of custody accounts or arrangements with securities intermediary,
if applicable]


COMMERCIAL TORT CLAIMS


	
 

	
 

	
 


	
Description
  of Claim

	
Parties

	
Case Number;
  Name of Court where Case was Filed


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 


	
 

	
 

	
 


	 

	 

	 










EXHIBIT
I
(See “Assigned Contracts” Definition)


ASSIGNED CONTRACTS






EXHIBIT J


COMMERCIAL TORT CLAIMS


 






EXHIBIT K


EXCLUDED DEPOSIT ACCOUNTS