Exhibit
10.6


 


DOMESTIC
PLEDGE AND SECURITY AGREEMENT


 


 


dated
as of March 24, 2005


 


 


among


 


 


PROGRESS
RAIL SERVICES HOLDINGS CORP.,


 


 


the
other Grantors party hereto,


 


and


 


GENERAL
ELECTRIC CAPITAL CORPORATION,

as U.S. Collateral Agent


 












 


TABLE
OF CONTENTS


 


	
  SECTION 1

  	
  DEFINITIONS.

  	
  1

  
	
   

  	
  1.1

  	
  General
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Definitions;
  Interpretation

  	
  9

  
	
  SECTION 2

  	
  GRANT OF SECURITY

  	
  10

  
	
   

  	
  2.1

  	
  Grant
  of Security

  	
  10

  
	
   

  	
  2.2

  	
  Excluded
  Collateral

  	
  10

  
	
  SECTION 3

  	
  SECURITY FOR
  OBLIGATIONS

  	
  11

  
	
   

  	
  3.1

  	
  Security
  for Obligations

  	
  11

  
	
   

  	
  3.2

  	
  Continuing
  Liability under Collateral

  	
  11

  
	
  SECTION 4

  	
  REPRESENTATIONS AND
  WARRANTIES AND COVENANTS

  	
  11

  
	
   

  	
  4.1

  	
  Generally.

  	
  11

  
	
   

  	
  4.2

  	
  Equipment
  and Inventory.

  	
  14

  
	
   

  	
  4.3

  	
  Receivables
  Contracts.

  	
  15

  
	
   

  	
  4.4

  	
  Investment
  Related Property.

  	
  16

  
	
   

  	
  4.5

  	
  Material
  Contracts.

  	
  24

  
	
   

  	
  4.6

  	
  Letter
  of Credit Rights.

  	
  24

  
	
   

  	
  4.7

  	
  Intellectual
  Property.

  	
  25

  
	
   

  	
  4.8

  	
  Commercial
  Tort Claims.

  	
  28

  
	
  SECTION 5

  	
  ACCESS; RIGHT OF
  INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS

  	
  29

  
	
   

  	
  5.1

  	
  Access;
  Right of Inspection

  	
  28

  
	
   

  	
  5.2

  	
  Further
  Assurances.

  	
  29

  
	
   

  	
  5.3

  	
  Additional
  Grantors.

  	
  30

  
	
  SECTION 6

  	
  COLLATERAL AGENT
  APPOINTED ATTORNEY-IN-FACT

  	
  30

  
	
   

  	
  6.1

  	
  Power
  of Attorney

  	
  30

  
	
  SECTION 7

  	
  REMEDIES

  	
  31

  
	
   

  	
  7.1

  	
  Generally.

  	
  31

  
	
   

  	
  7.2

  	
  Application
  of Proceeds

  	
  34

  
	
   

  	
  7.3

  	
  Sales
  on Credit

  	
  34

  
	
   

  	
  7.4

  	
  Investment
  Related Property.

  	
  34

  
	
   

  	
  7.5

  	
  Intellectual
  Property.

  	
  36

  
	
   

  	
  7.6

  	
  Cash
  Proceeds

  	
  38

  
	
  SECTION 8

  	
  COLLATERAL AGENT

  	
  38

  
	
  SECTION 9

  	
  CONTINUING SECURITY
  INTEREST; TRANSFER OF SECURED OBLIGATIONS

  	
  39

  
	
  SECTION 10

  	
  STANDARD OF CARE;
  COLLATERAL AGENT MAY PERFORM

  	
  39

  
	
  SECTION 11

  	
  INDEMNITY AND EXPENSES

  	
  39

  



 


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  SECTION 12

  	
  MISCELLANEOUS

  	
  40

  
	
   

  	
  12.1

  	
  Reinstatement

  	
  40

  
	
   

  	
  12.2

  	
  Notices

  	
  40

  
	
   

  	
  12.3

  	
  Expenses

  	
  40

  
	
   

  	
  12.4

  	
  Amendments
  and Waivers.

  	
  40

  
	
   

  	
  12.5

  	
  Successors
  and Assigns

  	
  41

  
	
   

  	
  12.6

  	
  Independence
  of Covenants

  	
  41

  
	
   

  	
  12.7

  	
  Survival
  of Representations, Warranties and Agreements

  	
  41

  
	
   

  	
  12.8

  	
  Marshaling;
  Payments Set Aside

  	
  41

  
	
   

  	
  12.9

  	
  Severability

  	
  41

  
	
   

  	
  12.10

  	
  Headings

  	
  41

  
	
   

  	
  12.11

  	
  GOVERNING
  LAW

  	
  41

  
	
   

  	
  12.12

  	
  CONSENT
  TO JURISDICTION.

  	
  41

  
	
   

  	
  12.13

  	
  WAIVER
  OF JURY TRIAL

  	
  42

  
	
   

  	
  12.14

  	
  Counterparts

  	
  42

  
	
   

  	
  12.15

  	
  Effectiveness

  	
  42

  
	
   

  	
  12.16

  	
  Entire
  Agreement

  	
  42

  



 


	
  SCHEDULE I – GENERAL
  INFORMATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE II –
  COLLATERAL LOCATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE III –
  INVESTMENT RELATED PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE IV – EXCLUDED
  DEPOSITORY ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE V – LETTERS OF
  CREDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE VI –
  INTELLECTUAL PROPERTY

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE VII –
  COMMERCIAL TORT CLAIMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I – Pledge
  Supplement

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex II – New Grantor
  Pledge Supplement

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex III – Securities
  Account Control Agreement for Securities Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex IV – Patent
  Security Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex V – Trademark
  Security Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex VI – Copyright
  Security Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex VII – Collateral
  Access Agreement

  	
   

  



 


ii












 


	
  Annex VIII – Bailee
  Agreement

  	
   

  



 


iii












 


This DOMESTIC PLEDGE AND SECURITY AGREEMENT,
dated as of March 24, 2005 (this “Agreement”),
between each of the undersigned (each, a “Grantor”),
and General Electric Capital
Corporation (“GECC”) acting in the
capacity of U.S. collateral agent for
the benefit of the U.S. Secured Parties (in such capacity, the “Collateral Agent”).


 


RECITALS:


 


WHEREAS reference is made to that certain Credit
Agreement, dated as of the date hereof (as it may be amended, restated, supplemented
or otherwise modified from time to time, the “Credit
Agreement”), by and among Progress Rail Services Holdings Corp. (the
“Parent”),
each of the domestic subsidiaries of Parent party thereto (such subsidiaries,
together with the Parent, the “U.S. Borrowers”), Progress Rail Canada Corporation,
Progress Rail Transcanada Corporation (the “Canadian Borrowers”, and together with the
U.S. Borrowers, the “Borrowers”),
the Issuing Banks, GECC, as U.S. Administrative Agent, GE Canada Finance
Holding Company, as Canadian Administrative Agent, the Lenders and the other
parties thereto;


 


WHEREAS each Grantor will realize substantial
direct and indirect benefits as a result of the transactions contemplated by
the Credit Agreement;


 


WHEREAS subject to the terms and conditions of
the Credit Agreement, certain Grantors may enter into one or more Swap
Agreements with one or more Lenders or Affiliates of Lenders;


 


WHEREAS certain Grantors may from time to time
receive, accept or obtain Banking Services; and


 


WHEREAS in consideration of the extensions of
credit and other accommodations of the Lenders and GECC (and their respective
Affiliates) pursuant to the Credit Agreement, the Swap Agreements and the
Banking Services, respectively, each Grantor
has agreed to grant a security interest in substantially all of its assets to
secure all Secured Obligations (as defined herein) as more specifically set
forth herein.


 


NOW, THEREFORE,
in consideration of the premises and the agreements, provisions and covenants
herein contained, each Grantor and
the Collateral Agent agree as follows:


 


SECTION
1                                                      
DEFINITIONS.


 


1.1                              
General Definitions.  In this Agreement, the following terms shall
have the following meanings:


 


“Account
Debtor” shall
mean each Person who is obligated on a Receivable or any Supporting Obligation
related thereto.


 


“Accounts”
shall mean all
“accounts” as defined in Article 9 of the UCC,
including Health-Care Insurance Receivables Contracts.


 


“Additional
Grantors” shall
mean those additional Persons that may become parties to this Agreement as
additional Grantors, by executing a counterpart agreement in form and substance
satisfactory to the Collateral Agent.


 


“Agreement”
shall have the
meaning set forth in the preamble.


 












 


“Authenticate” shall mean “authenticate” as defined in
Article 9 of the UCC.


 


“Bailee
Agreement” shall
mean a Bailee Agreement substantially in the form of Annex VIII or
otherwise acceptable to the Collateral Agent.


 


“Bankruptcy
Code” shall mean
Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter
in effect, or any successor statute.


 


“Cash
Proceeds” shall
mean all proceeds of any Collateral consisting of cash, checks and other near-cash
items.


 


“Chattel
Paper” shall mean
all “chattel paper” as defined in Article 9 of the UCC, including, without
limitation, “electronic chattel paper” or “tangible chattel paper”, as each
term is defined in Article 9 of the UCC.


 


“Collateral”
shall have the
meaning set forth in Section 2.1.


 


“Collateral
Access Agreement”
shall mean a Collateral Access Agreement substantially in the form of Annex
VII or otherwise acceptable to the Collateral Agent.


 


“Collateral
Account” shall
mean an account in the name of the U.S. Borrowers and subject to a control
agreement in form and substance acceptable to the Collateral Agent.


 


“Collateral
Agent” shall have
the meaning set forth in the preamble.


 


“Collateral
Deposit Account”
shall have the meaning set forth in Section 4.4.4.


 


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


 


“Collateral
Support” shall
mean all property (real or personal) assigned, hypothecated or otherwise
securing any Collateral and shall include any security agreement or other
agreement granting a lien or security interest in such real or personal
property.


 


“Collection
Account” shall
have the meaning set forth in Section 4.4.4.


 


“Commercial
Tort Claims” shall
mean all “commercial tort claims” as defined in Article 9 of the UCC,
including, without limitation, all commercial tort claims listed and described
with specification on Schedule VII (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder).


 


“Commodities
Accounts” (i)
shall mean all “commodity accounts” as defined in Article 9 of the UCC and (ii)
shall include, without limitation, all of the accounts listed on Schedule
III under the heading “Commodities Accounts” (as such schedule may be
amended or supplemented from time to time in connection with the delivery of a
Pledge Supplement hereunder).


 


“Compliance
Date” shall mean,
as to any Grantor, the date that is the latest of: (i) the Effective Date, (ii)
the last day of the last Fiscal Quarter of the Borrowers, (iii) the date such
Grantor


 


2












 


becomes an Additional Grantor in accordance with Section
5.3 hereof and (iv) with respect to any amendment or supplement to any
Schedule hereto delivered by such Grantor, the date on which such Grantor
amended or supplemented such Schedule.


 


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


 


“Copyright
Licenses” shall
mean any and all agreements granting any right in, to or under any Copyright
(whether such Grantor is licensee or licensor thereunder) including, without
limitation, each such agreement referred to in Schedule VI (as such
schedule may be amended or supplemented from time to time in connection with
the delivery of a Pledge Supplement hereunder).


 


“Copyrights” shall mean all United States, state and
foreign copyrights, including but not limited to copyrights in software and
databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S.
Copyright Act), whether registered or unregistered, now or hereafter in force,
and, with respect to any and all of the foregoing: (i) all registrations and
recordings thereof and all applications in connection therewith, including,
without limitation, such applications referred to in Schedule VI (as
such schedule may be amended or supplemented from time to time in connection
with the delivery of a Pledge Supplement hereunder), (ii) all extensions,
continuations, reversions and renewals thereof, (iii) all rights corresponding
thereto throughout the world, (iv) all rights to sue at law or in equity for
any past, present and future infringement, misappropriation, dilution,
violation or other impairment thereof, including, without limitation, the right
to receive all income, royalties, proceeds and damages therefore, whether now
or hereafter due or payable, and (v) all payments and royalties and rights to
payments and royalties arising out of the sale, lease, license, assignment, or
other disposition thereof.


 


“Copyright
Security Agreement”
shall mean the agreement substantially in the form of Annex VIII.


 


“Credit
Agreement” shall
have the meaning set forth in the preamble.


 


“Deposit
Accounts” (i)
shall mean all “deposit accounts” as defined in Article 9 of the UCC and (ii)
shall include, without limitation, the LC Collateral Account and all of the
accounts listed on Schedule III under the heading “Deposit Accounts” (as
such schedule may be amended or supplemented from time to time in connection
with the delivery of a Pledge Supplement hereunder).


 


“Documents”
shall mean all
“documents” as defined in Article 9 of the UCC.


 


“Documents
Evidencing Goods”
shall mean all Documents evidencing, representing or issued in connection with
Goods.


 


“Equipment”
shall mean: 
(i) all “equipment” as defined in Article 9 of the UCC, (ii) all machinery,
manufacturing equipment, data processing equipment, computers, office equipment,
furnishings, furniture, appliances, and tools (in each case, regardless of
whether characterized as equipment under Article 9 of the UCC), (iii) all
Fixtures and (iv) all accessions or additions thereto, all parts thereof,
whether or not at any time of determination incorporated or installed therein
or attached thereto, and all replacements therefor, wherever located, now or
hereafter existing.


 


“Fixtures” shall mean all “fixtures” as defined in
Article 9 of the UCC.


 


“General
Intangibles” (i)
shall mean all “general intangibles” as defined in Article 9 of the UCC, including Payment Intangibles and
(ii) shall include, without limitation, all interest rate or


 


3












 


currency protection or hedging arrangements, all tax
refunds and all licenses, permits, concessions and authorizations, (in each
case, regardless of whether characterized as general intangibles under Article
9 of the UCC).


 


“Goods” (i) shall mean all “goods” as defined in
Article 9 of the UCC and (ii) shall include, without limitation, all Inventory,
Equipment, Documents Evidencing Goods, fixtures (as defined in the UCC) and
Software Embedded In Goods.


 


“Guaranteed
Obligations” shall
mean the “Guaranteed Obligations” as defined in the Guaranty.


 


“Health-Care-Insurance
Receivable” shall
have the meaning specified in Article 9 of the UCC.


 


“Indemnitee”
shall mean the
Collateral Agent, and its Affiliates’ officers, partners, directors, trustees,
employees and agents.


 


“Instruments”
shall mean all
“instruments” as defined in Article 9 of the UCC.


 


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


 


“Intellectual
Property” shall
mean all rights, title and interests in or relating to intellectual property
and industrial property arising under any requirement of law and all IP
Ancillary Rights relating thereto, including all Copyrights, Patents,
Trademarks, Internet Domain Names, Trade Secrets, Software and Intellectual
Property Licenses.


 


“Intellectual
Property Licenses” shall
mean all contractual obligations (and all related IP Ancillary Rights), whether
written or oral, granting any right title and interest in or relating to any
Intellectual Property, including but not limited to, the Copyright Licenses,
Patent Licenses, Trademark Licenses, Trade Secret Licenses and Software
Licenses.


 


“Inventory”
shall mean:
 (i) all “inventory” as defined in Article 9 of the UCC and (ii) all goods
held for sale or lease or to be furnished under contracts of service or so
leased or furnished, all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise used
or consumed in any Grantor’s
business; and all goods which are returned to or repossessed by any Grantor,
and all accessions thereto and products thereof (in each case, regardless of
whether characterized as inventory under Article 9 of the UCC).


 


“Investment
Accounts” shall
mean the Collateral Account, Securities Accounts, Commodities Accounts and
Deposit Accounts.


 


“Investment
Related Property” shall
mean:  (a) all “investment property” (as such term is defined in Article 9
of the UCC) and (b) all of the following (regardless of whether classified as
investment property under Article 9 of the UCC): all (i) Pledged Equity
Interests, (ii) Pledged Debt, (iii) the Investment Accounts and (iv)
Certificates of Deposit.


 


“IP
Ancillary Rights”
shall mean, with respect to any other Intellectual Property, as applicable, all
foreign counterparts to, and all divisionals, reversions, continuations,
continuations-in-part,


 


4












 


reissues, reexaminations, renewals and extensions of,
such Intellectual Property and all income, royalties, proceeds and Liabilities
at any time due or payable or asserted under or with respect to any of the
foregoing or otherwise with respect to such Intellectual Property, including
all rights to sue or recover at law or in equity for any past, present or
future infringement, misappropriation, dilution, violation or other impairment
thereof, and, in each case, all rights to obtain any other IP Ancillary Right.


 


“Letter
of Credit Right” shall
mean “letter-of-credit right” as defined in Article 9 of the UCC.


 


“Lock
Box Agreement”
shall have the meaning set forth in Section 4.4.4.


 


“Lock
Boxes” shall have
the meaning set forth in Section 4.4.4.


 


“Material
Contract” shall
mean any contract or other arrangement to which any Grantor is a party for
which breach, nonperformance, cancellation or failure to renew could reasonably
be expected to have a Material Adverse Effect.


 


“Material
Intellectual Property” shall mean Intellectual Property that is owned by or licensed to a
Grantor and material to the conduct of any Grantor’s business.


 


“Money” shall mean “money” as defined in Article
9 of the UCC.


 


“Non-Assignable
Contract” shall
mean any agreement, contract or license to which any Grantor is a party that by
its terms purport to restrict or prevent or penalize the assignment or granting
of a security interest therein (either by its terms or by any federal or state
statutory prohibition or otherwise irrespective of whether such prohibition or
restriction is enforceable under Section 9-406 through 409 of the UCC).


 


“Non-payment
Contract” means
any contract or agreement to which any Grantor is a party other than any
contract where the account debtor’s principal obligation is a monetary
obligation; provided that Non-payment Contracts shall not include any
Receivables Contracts.


 


“Patent
Licenses” shall
mean all agreements granting any right in, to, or under any Patent (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each such agreement referred to in Schedule VI (as such schedule may be
amended or supplemented from time to time in connection with the delivery of a
Pledge Supplement hereunder).


 


“Patents” shall mean all United States and foreign
patents and certificates of invention, or similar industrial property rights,
now or hereafter in force, including, but not limited to each such patent
referred to in Schedule VI (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder), and with respect to any and all of the foregoing, (i)
all applications therefore including, without limitations, such patent
applications referred to in Schedule VI (as such schedule may be amended
or supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder), (ii) all reissues, divisionals, continuations,
continuations-in-part, extensions, renewals, and reexaminations of the
foregoing, (iii) all rights corresponding thereto throughout the world, (iv)
all inventions and improvements described therein, (v) all rights to sue at law
or in equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof, including, without limitation,
the right to receive all income, royalties, proceeds and damages therefore,
whether now or hereafter due or payable, and (vi) all payments and royalties
and rights to payments and royalties arising out of the sale, lease, license,
assignment, or other disposition thereof.


 


5












 


“Patent
Security Agreement”
shall mean the agreement substantially in the form of Annex VI.


 


“Payment
Intangible” shall
have the meaning specified in Article 9 of the UCC.


 


“Permitted
Sale” shall mean
those sales, transfers or assignments permitted by Section 6.03 of the Credit
Agreement, but only so long as the proceeds of such sales, transfers or
assignments are applied in accordance with clauses (b) and (c) of Section 2.12
of the Credit Agreement.


 


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


 


“Pledged
Debt” shall mean
all indebtedness for borrowed money owed to such Grantor, whether or not
evidenced by any instrument or promissory note, including, without limitation,
all indebtedness described on Schedule III under the heading
“Pledged Debt” (as such schedule may be amended or supplemented from time to
time in connection with the delivery of a Pledge Supplement hereunder), all
monetary obligations owing to any Grantor from any other Grantor, the
instruments evidencing any of the foregoing, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing.


 


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


 


“Pledged
LLC Interests” shall
mean all interests in any limited liability company including, without
limitation, all limited liability company interests listed on Schedule III
under the heading “Pledged LLC Interests” (as such schedule may be amended or supplemented
from time to time in connection with the delivery of a Pledge Supplement
hereunder) and the certificates, if any, representing such limited liability
company interests and any interest of such Grantor on the books and records of
such limited liability company or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests and any other warrant, right or option to acquire any of the
foregoing.


 


“Pledged
NSULC Stock”
means all Pledged Stock of a Person that is a Nova Scotia unlimited liability
company, now owned or hereafter acquired by a Grantor.


 


“Pledged
Partnership Interests” shall mean all interests in any general partnership, limited
partnership, limited liability partnership or other partnership including,
without limitation, all partnership interests listed on Schedule III
under the heading “Pledged Partnership Interests” (as such schedule may be
amended or supplemented from time to time in connection with the delivery of a
Pledge Supplement hereunder) and the certificates, if any, representing such
partnership interests and any interest of such Grantor on the books and records
of such partnership or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or


 


6












 


otherwise distributed in respect of or in exchange for
any or all of such partnership interests and any other warrant, right or option
to acquire any of the foregoing.


 


“Pledged
Stock” shall mean
all shares of capital stock owned by such Grantor, including, without
limitation, all shares of capital stock described on Schedule III
under the heading “Pledged Stock” (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder), and the certificates, if any, representing such shares
and any interest of such Grantor in the entries on the books of the issuer of
such shares or on the books of any securities intermediary pertaining to such
shares, and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such shares and any other warrant, right or option to acquire any of the
foregoing.


 


“Pledged
Trust Interests” shall
mean all interests in a Delaware business trust or other trust including,
without limitation, all trust interests listed on Schedule III under the
heading “Pledged Trust Interests” (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder) and the certificates, if any, representing such trust
interests and any interest of such Grantor on the books and records of such
trust or on the books and records of any securities intermediary pertaining to
such interest and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such trust interests and any other warrant, right or option
to acquire any of the foregoing.


 


“Proceeds”
shall mean: 
(i) all “proceeds” as defined in Article 9 of the UCC, (ii) payments or
distributions made with respect to any Investment Related Property and (iii)
whatever is receivable or received when Collateral or proceeds are sold,
leased, licensed, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.


 


“Receivables” or “Receivables
Contracts” shall mean all (i) Accounts, (ii) Chattel Paper, (iii)
Payment Intangibles, (iv) Instruments and (v) to the extent not otherwise
covered above, all other rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, regardless of
how classified under Article 9 of the UCC together with all of Grantors’
rights, if any, in any goods or other property giving rise to such right to
payment and all Collateral Support and Supporting Obligations related thereto
and all Receivables Records; provided that Receivables Contracts shall
not include any Investment Related Property.


 


“Receivables
Records” shall
mean (i) all original copies of all documents, instruments or other writings or
electronic records or other Records evidencing the Receivables Contracts, (ii)
all books, correspondence, credit or other files, Records, ledger sheets or
cards, invoices, and other papers relating to Receivables Contracts, including,
without limitation, all tapes, cards, computer tapes, computer discs, computer
runs, record keeping systems and other papers and documents relating to the
Receivables Contracts, whether in the possession or under the control of
Grantor or any computer bureau or agent from time to time acting for Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
agents thereof, and certificates, acknowledgments, or other writings,
including, without limitation, lien search reports, from filing or other
registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or non-written forms of information
related in any way to the foregoing or any Receivable.


 


“Record” shall have the meaning specified in
Article 9 of the UCC.


 


7












 


“Representation
Date” shall mean
each of (i) the date hereof, (ii) each date on which a Borrowing is made and
(iii) each date on which any Letter of Credit is issued, amended, renewed or
extended.


 


“Secured
Obligations” shall
mean all Obligations and all Guaranteed Obligations.


 


“Securities” shall mean any stock, shares,
partnership interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of
the foregoing.


 


“Securities
Accounts” (i)
shall mean all “securities accounts” as defined in Article 8 of the UCC and
(ii) shall include, without limitation, all of the accounts listed on Schedule
III under the heading “Securities Accounts” (as such schedule may be amended
or supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder).


 


“Software”
shall mean any
and all computer programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or object code;
databases and compilations, including any and all data, databases and
collections of data, whether machine readable or otherwise; descriptions,
flow-charts and other work product used to design, plan, organize and develop any
of the foregoing, screens, user interfaces, report formats, firmware,
development tools, templates, menus, buttons and icons; and all configurations
and documentation including user manuals and other training materials related
to any of the foregoing, including, without limitation, any such programs
referred to in Schedule VI (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder).


 


“Software
Embedded in Goods”
means, with respect to any Goods, any computer program embedded in Goods and
any supporting information or documentation provided in connection with the
program if (i) the program is associated with the Goods in such a manner that
it customarily is considered part of the Goods or (ii) by becoming the owner of
the Goods a person acquires a right to use the program in connection with the
Goods.


 


“Software
Licenses” shall
mean any and all agreements granting any right in or to any Software (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each such agreement referred to in Schedule VI (as such schedule may be
amended or supplemented from time to time in connection with the delivery of a
Pledge Supplement hereunder).


 


“State” shall mean a State of the United States,
the District of Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the United
States.


 


“Supporting
Obligation” shall
mean all “supporting obligations” as defined in Article 9 of the UCC.


 


“Trade
Secret Licenses” shall
mean any and all agreements granting any right in or to any Trade Secret
(whether such Grantor is licensee or licensor thereunder) including, without
limitation, each such agreement referred to in Schedule VI (as such
schedule may be amended or supplemented from time to time in connection with
the delivery of a Pledge Supplement hereunder).


 


8












 


“Trade
Secrets” shall
mean all trade secrets and all other confidential or proprietary information
and know-how, whether or not reduced to a writing or other tangible form, now
or hereafter in force, owned or used in, or contemplated at any time for use
in, the business of any Grantor (all of the foregoing being collectively called
a “Trade Secret”), including with respect to any and all of the
foregoing:  (i) all documents and things embodying, incorporating, or
referring in any way thereto, (ii) all rights to sue at law or in equity for
any past, present and future infringement, misappropriation, dilution,
violation or other impairment thereof, including, without limitation, the right
to receive all income, royalties, proceeds and damages therefore, whether now
or hereafter due or payable, and (iii) all payments and royalties and rights to
payments and royalties arising out of the sale, lease, license, assignment, or
other dispositions thereof.


 


“Trademark
Licenses” shall
mean any and all agreements granting any right in or to any Trademark (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each such agreement referred to in Schedule VI (as such schedule may be
amended or supplemented from time to time in connection with the delivery of a
Pledge Supplement hereunder).


 


“Trademarks”
shall mean all
United States, state and foreign trademarks, service marks, certification
marks, collective marks, trade names, corporate names, company names, business
names, fictitious business names, Internet domain names, trade styles, logos,
other source or business identifiers, designs and general intangibles of a like
nature, rights of publicity and privacy pertaining to the names, likeness,
signature and biographical data of natural persons, now or hereafter in force,
and, with respect to any and all of the foregoing:  (i) all registrations
and recordation thereof and all applications in connection therewith including,
but not limited to, such registrations and applications referred to in Schedule
VI (as such schedule may be amended or supplemented from time to time in
connection with the delivery of a Pledge Supplement hereunder), (ii) all
renewals and extensions thereof (iii) the goodwill of the business associated
therewith and symbolized thereby, (iv) all rights corresponding thereto
throughout the world, (v) all rights to sue at law or in equity for any past,
present and future infringement, misappropriation, dilution, violation or other
impairment thereof, including, without limitation, the right to receive all
income, royalties, proceeds and damages therefore, whether now or hereafter due
or payable, and (vi) all payments and royalties and rights to payments and
royalties arising out of the sale, lease, license assignment or other
disposition thereof.


 


“Trademark
Security Agreement”
shall mean the agreement substantially in the form of Annex VII.


 


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


 


“USPTO” shall have the meaning set forth in Section
2.2 hereof.


 


1.2                              
Definitions; Interpretation.  All capitalized terms used herein (including
the preamble and recitals hereto) and not otherwise defined herein shall have
the meanings ascribed thereto in the Credit Agreement or, if not defined
therein, in the UCC.  References to “Sections,” “Annexes” and “Schedules”
shall be to Sections, Annexes and Schedules, as the case may be, of this
Agreement unless otherwise specifically provided.  Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose or be given any
substantive effect.  Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference.  The use herein of the word “include” or “including”, when
following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not


 


9












 


limited to” or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter.  If any conflict or inconsistency exists between this
Agreement and the Credit Agreement, the Credit Agreement shall govern. 
All references herein to provisions of the UCC shall include all successor provisions
under any subsequent version or amendment to any Article of the UCC.


 


SECTION
2                                                      
GRANT OF SECURITY


 


2.1                              
Grant of Security.  Each Grantor hereby
grants to the Collateral Agent a security interest and continuing lien on all
of such Grantor’s right, title and interest in, to and under all personal
property of such Grantor including, but not limited to the following, in each
case whether now owned or existing or hereafter acquired or arising and
wherever located (all of which being hereinafter collectively referred to as
the “Collateral”):


 


(i)                                    
Documents;


 


(ii)                                 
Goods;


 


(iii)                              
Insurance;


 


(iv)                             
Intellectual
Property;


 


(v)                                
Investment Related
Property;


 


(vi)                             
Letter of Credit
Rights;


 


(vii)                          
Money;


 


(viii)                       
Non-payment
Contracts;


 


(ix)                               
Receivables Contracts
and Receivable Records;


 


(x)                                  
Commercial Tort
Claims;


 


(xi)                               
to the extent not
otherwise included above, all General Intangibles, Material Contracts, motor
vehicles and other personal property of any kind and all Collateral Records,
Collateral Support and Supporting Obligations relating to any of the foregoing;


 


(xii)                            
all Property of such
Grantor held by any Secured Party, including all property of every description,
in the custody of or in the transit to such Secured Party for any purpose;
including safekeeping, collection of Pledge, for the Account of such Grantor as
to which such Grantor may have any right or power; and


 


(xiii)                         
to the extent not
otherwise included above, all Proceeds, products, accessions, rents and profits
of or in respect of any of the foregoing.


 


2.2                              
Excluded Collateral.  The security interest granted under Section
2.1 shall not attach to (the following property collectively referred to as
the “Excluded Property”) (a) any
Lease, license, contract, property rights or agreement to which each Grantor is
a party or any of its rights or interests thereunder if the grant of such
security interest shall constitute or result in (i) the abandonment,
invalidation or unenforceability of any right, title or interest of any Grantor therein or (ii) in a breach or


 


10












 


termination pursuant to the terms of, or a default
under, any such Lease license, contract property rights or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity), (b) applications filed in the
U.S. Patent and Trademark Office (the “USPTO”)
to register trademarks or service marks on the basis of any Grantor’s “intent
to use” such trademarks or service marks unless and until the filing of a
“Statement of Use” or “Amendment to Allege Use” has been filed and accepted,
whereupon such applications shall be automatically subject to the lien granted
herein and deemed included in the Collateral or (c) any of the Equity Interests
of a Controlled Foreign Corporation in excess of sixty-five percent (65%) of
the issued and outstanding Equity Interests of such Controlled Foreign
Corporation entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)).


 


SECTION
3                                                      
SECURITY FOR OBLIGATIONS


 


3.1                              
Security for Obligations.  This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) (and any
successor provision thereof)), of all Secured Obligations.


 


3.2                              
Continuing Liability under Collateral.  Notwithstanding anything herein to the
contrary, (i) each Grantor shall
remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Collateral Agent
or any Secured Party and (ii) each Grantor shall remain liable under each of
the agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests,
to perform all of the obligations undertaken by it thereunder all in accordance
with and pursuant to the terms and provisions thereof and neither the
Collateral Agent nor any Secured Party shall have any obligation or liability
under any of such agreements by reason of or arising out of this Agreement or
any other document related thereto nor shall the Collateral Agent nor any
Secured Party have any obligation to make any inquiry as to the nature or
sufficiency of any payment received by it or have any obligation to take any
action to collect or enforce any rights under any agreement included in the
Collateral, including, without limitation, any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, (iii) the exercise by the
Collateral Agent of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral.


 


SECTION
4                                                      
REPRESENTATIONS AND WARRANTIES AND COVENANTS


 


4.1                              
Generally.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on each Representation Date, that:


 


(i)                                    
it owns or leases the
Collateral purported to be owned or leased by it or otherwise has the rights it
purports to have in each item of Collateral and, as to all Collateral whether
now existing or hereafter acquired, and in each case holds such rights free and
clear of any and all Liens other than Liens permitted by Section 6.02 of the
Credit Agreement, including,
without limitation, liens arising as a result of such Grantor becoming bound
(as a result of merger or otherwise) as debtor under a security agreement
entered into by another Person;


 


11












 


(ii)                                 
such Grantor has been
duly organized as a corporation, limited liability company or limited
partnership, as applicable, under the laws of its jurisdiction of organization
or formation and remains duly existing as such;


 


(iii)                              
such Grantor has not
filed any certificates of domestication, transfer or continuance in any other
jurisdiction;


 


(iv)                             
the execution and
delivery of this Agreement by such Grantor and the performance by it of its
obligations under this Agreement are within its corporate, limited liability
company or other powers and have been duly authorized by all necessary
corporate or other action;


 


(v)                                
upon the filing of
all UCC financing statements naming each Grantor
as “grantor” and the Collateral Agent as “Collateral Agent” and describing the
Collateral in the filing offices set forth opposite such Grantor’s name on Schedule
I(E) (as such schedule may be amended or supplemented from time to time in
connection with the delivery of a Pledge Supplement hereunder), the execution
of a deposit account control agreement in substantially the form of Annex IV,
the recording of the Trademark Security Agreement and the Patent Security
Agreement in the USPTO within three (3) months of the date hereof, and the
recording of the Copyright Security Agreement in the U.S. Copyright Office
within thirty (30) days of the date hereof, and the filing of this Agreement
(or the Railcar Security Agreement) with the Surface Transportation Board, the
security interests granted to the Collateral Agent hereunder constitute valid
and perfected first priority Liens (subject only to Liens permitted by Section
6.02 of the Credit Agreement); provided that recording of the Trademark
Security Agreement and the Patent Security Agreement in the USPTO and the
Copyright Security Agreement with the U.S. Copyright Office may be necessary to
perfect the security interest of the Collateral Agent in issued Patents, and
registrations and applications for other U.S. Intellectual Property that are
acquired by Grantor after the date hereof; and the taking of actions outside
the United States may be required in order to perfect the Collateral Agent’s
Lien in foreign registered or applied-for Intellectual Property owned by each
Grantor;


 


(vi)                             
other than the
financing statements filed in favor of the Collateral Agent and the Railcar
Security Agreement filings with the Surface Transportation Board in favor of
the Collateral Agent, no effective UCC financing statement, fixture filing or
other instrument similar in effect under any applicable law covering all or any
part of the Collateral is on file in any filing or recording office, including
the filing office of the Surface Transportation Board, except for (x) financing
statements for which proper termination statements have been delivered to the
Collateral Agent for filing and (y) financing statements filed in connection
with Liens permitted by Section 6.02 of the Credit Agreement;


 


(vii)                          
no authorization,
approval or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body is required for either (x) the pledge or grant by
any Grantor of the Liens purported to be created in favor of the Collateral
Agent hereunder or (y) the exercise by Collateral Agent of any rights or
remedies in respect of any Collateral (whether specifically granted or created
hereunder or created or provided for by applicable law), except (1) for the
filings contemplated by clause (v) above and (2) as may be required, in
connection with the disposition of any Investment Related Property, by laws
generally affecting the offering and sale of


 


12












 


Securities, as may be required under 49 U.S.C. §11301,
or as may be required under federal laws pertaining to Intellectual Property,
including the filing of the Patent, Trademark, and Copyright Security
Agreements with USPTO and U.S. Copyright Office;


 


(viii)                       
all actions and
consents, including all filings, notices, registrations and recordings
necessary or desirable for the exercise by the Collateral Agent of the voting
or other rights provided for in this Agreement or the exercise of remedies in
respect of the Collateral have been made or obtained, except for (x) the filing
of this Agreement with the Surface Transportation Board with respect to
Collateral subject to 49 U.S.C. §11301, (y) the recording of the security
interest in the applicable U.S. Intellectual Property registries with respect
to applications and registrations of U.S. Intellectual Property owned by each
Grantor included in the Collateral and (z) the taking of actions outside the
United States that may be required to perfect the Collateral Agent’s Lien in
foreign registered or applied-for Intellectual Property owned by each Grantor
included in the Collateral which is protected under non-U.S. law; provided
that the exercise of remedies with respect to issued Patents, and registrations
and applications for other Intellectual Property included in the Collateral may
require additional recordings with the applicable Intellectual Property
registries;


 


(ix)                               
it has indicated on Schedule
I(A) (as such schedule may be amended or supplemented from time to time in
connection with the delivery of a Pledge Supplement hereunder): (w) the type of
organization of such Grantor, (x) the jurisdiction of organization of such Grantor,
(y) its organizational identification number and (z) the jurisdiction where the
chief executive office or its sole place of business is (or if such Grantor is
a natural person principal residence and principal place of business), and for
the one-year period preceding the date hereof has been, located;


 


(x)                                  
the full legal name
of such Grantor is as set forth on Schedule I(A) and it has not done,
during the five (5) years immediately prior to the Effective Date, business
under any other name (including any trade-name or fictitious business name)
except for those names set forth on Schedule I(B) (as such schedule may
be amended or supplemented from time to time in connection with the delivery of
a Pledge Supplement hereunder);


 


(xi)                               
except as provided on
Schedule I(C), it has not changed its name, jurisdiction of
organization, chief executive office or sole place of business (or, if such
Grantor is a natural person, principal residence or principal place of
business) or its corporate structure in any way (e.g. by merger, consolidation,
change in corporate form or otherwise) within the past five (5) years;


 


(xii)                            
such Grantor has not
within the last five (5) years become bound (whether as a result of merger or
otherwise) as debtor under a security agreement entered into by another Person,
which has not heretofore been terminated other than the agreements identified
on Schedule I(D) (as such schedule may be amended or supplemented from
time to time in connection with the delivery of a Pledge Supplement hereunder);


 


(xiii)                         
with respect to each
agreement identified on Schedule I(D), it has indicated on Schedule
I(A) and Schedule I(B) the information required pursuant to clauses
(viii) and (ix) of Section 4.1(a) with respect to each Grantor under each such agreement;


 


13












 


(xiv)                        
all information
supplied by any Grantor with
respect to any of the Collateral (in each case taken as a whole with respect to
any particular Collateral) is accurate and complete in all material respects;
and


 


(xv)                           
none of the
Collateral constitutes, or is the Proceeds of, “farm products”, as extracted
collateral or timber to be cut (as defined in Article 9 of the UCC).


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that:


 


(i)                                    
except for the
security interest created by this Agreement, it shall not create or suffer to
exist any Lien upon or with respect to any of the Collateral, except Liens
permitted by Section 6.02 of the Credit Agreement, and such Grantor shall
defend the Collateral against all Persons at any time claiming any interest
therein to the extent such Grantor has knowledge thereof;


 


(ii)                                 
it shall not produce,
use or permit any Collateral to be used unlawfully or in violation of any
provision of this Agreement or any applicable statute, regulation or ordinance
or any policy of insurance covering the Collateral;


 


(iii)                              
it shall not change
such Grantor’s name, identity, corporate structure (e.g. by merger,
consolidation, change in corporate form or otherwise), sole place of business,
chief executive office, type of organization or jurisdiction of organization
unless it shall have (a) notified the Collateral Agent in writing, by executing
and delivering to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Annex I, together with all Supplements to
Schedules thereto, without concurrently notifying the Collateral Agent of any
such change or establishment, identifying such new proposed name, identity,
corporate structure, sole place of business, chief executive office,
jurisdiction of organization or trade name and providing such other information
in connection therewith as the Collateral Agent may reasonably request and (b)
taken all actions reasonably necessary or advisable to maintain the continuous
validity, perfection and the same or better priority of the Collateral Agent’s
security interest in the Collateral granted or intended to be granted and
agreed to hereby; and


 


(iv)                             
it shall not sell,
transfer, assign, abandon or permit to lapse (by operation of law or otherwise)
any Collateral except for as permitted by the Credit Agreement.


 


4.2                              
Equipment and Inventory.


 


(a)                                 
Representations and
Warranties. 
Each Grantor represents and
warrants, on each Representation Date, that:


 


(i)                                    
as of each Compliance
Date, all of the Equipment and Inventory included in the Collateral is kept for
the past five (5) years only at the locations specified in Schedule II
(as such schedule may be amended or supplemented from time to time in
connection with the delivery of a Pledge Supplement hereunder).


 


(b)                                
Covenants and
Agreements. 
Each Grantor covenants and agrees
that:


 


14












 


(i)                                    
it shall keep the
Equipment and the Inventory (if any) included in the Collateral in the
locations specified on Schedule II (as such schedule may be amended
or supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder) or otherwise disclosed as required by Section 5.01(h)
of the Credit Agreement unless it shall have notified the Collateral Agent in
writing, by executing and delivering to the Collateral Agent a completed Pledge
Supplement, substantially in the form of Annex I, together with all
Schedules thereto, identifying such new locations and providing such other
information in connection therewith as the Collateral Agent may reasonably
request; provided that the foregoing shall not restrict (i) movement of
Equipment for repairs in the ordinary course of business or (ii) movement of
Collateral with an aggregate value of less than $500,000;


 


(ii)                                 
taken all actions
necessary or advisable to maintain the continuous validity, perfection and the
same or better priority of the Collateral Agent’s security interest in the
Collateral intended to be granted and agreed to hereby, or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder,
with respect to such Equipment and Inventory;


 


(iii)                              
to the extent any
Inventory is included in the Collateral, it shall keep correct and accurate
records of such Inventory in a manner sufficient to allow for timely delivery
of Borrowing Base Certificates and inventory reports required by Section 5.01
of the Credit Agreement; and


 


(iv)                             
with respect to any
item of Equipment which is covered by a certificate of title under a statute of
any jurisdiction under the law of which indication of a security interest on
such certificate is required as a condition of perfection thereof, upon the
request of the Collateral Agent, (A) provide information with respect to any
such Equipment in excess of $250,000 individually or $1,000,000 in the
aggregate, (B) assist the Collateral Agent with the execution and filing with
the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title and take any other actions reasonably requested by the Collateral Agent
in connection with noting or otherwise indicating the security interest created
hereunder on such certificate of title, and (C) deliver to the Collateral
Agent copies of all such applications or other documents filed during such
calendar quarter and copies of all such certificates of title issued during
such calendar quarter indicating the security interest created hereunder in the
items of Equipment covered thereby.


 


4.3                              
Receivables Contracts.


 


(a)                                 
Representations
and Warranties. 
Each Grantor represents and
warrants, on each Representation Date, that:


 


(i)                                    
no Account is
evidenced by, or constitutes, an Instrument or Chattel Paper which has not been
delivered to, or otherwise subjected to the control of, the Collateral Agent to
the extent required by, and in accordance with Section 4.3(c); and


 


(ii)                                 
each Grantor has delivered to the Collateral
Agent a complete and correct copy of each standard form of document under which
a Eligible Account may arise.


 


15












 


(b)                                
Covenants and
Agreements: 
Each Grantor hereby covenants and
agrees that:


 


(i)                                    
it shall keep and
maintain at its own cost and expense satisfactory and complete records of the
Receivables Contracts in a manner necessary to permit timely delivery of all
reports required by Section 5.01 of the Credit Agreement;


 


(ii)                                 
it shall perform in
all material respects all of its obligations with respect to the Receivables
Contracts relating to Eligible Accounts;


 


(iii)                              
it shall not amend,
modify, terminate or waive any provision of any Receivable except in the
ordinary course of business and in a manner which could not reasonably be
expected to have a Material Adverse Effect.  Other than in the ordinary
course of business as generally conducted by it on and prior to the date hereof
and except as otherwise provided in subsection (v) below, following an Event of
Default, such Grantor shall not (w) grant any extension or renewal of the time
of payment of any Receivable, (x) compromise or settle any dispute, claim or
legal proceeding with respect to any Receivable for less than the total unpaid
balance thereof, (y) release, wholly or partially, any Person liable for the
payment thereof, or (z) allow any credit or discount thereon;


 


(iv)                             
it shall mark
conspicuously, in form and manner reasonably satisfactory to the Collateral
Agent, all Chattel Paper and Instruments with a value in excess of $250,000
individually or $1,000,000 in the aggregate (other than any delivered to the
Collateral Agent as provided herein), with an appropriate reference to the fact
that the Collateral Agent has a security interest therein;


 


(c)                                 
Delivery and
Control of Receivables Contracts.  With respect to any Receivables Contracts in
excess of $250,000 individually or $1,000,000 in the aggregate that is evidenced
by, or constitutes, Tangible Chattel Paper or Instruments, each Grantor shall cause each originally
executed copy thereof to be delivered to the Collateral Agent (or its agent or
designee) appropriately indorsed to the Collateral Agent or indorsed in blank: 
(i) with respect to any such Receivables Contracts in existence on the date
hereof, on or prior to the date hereof and (ii) with respect to any such
Receivables Contracts hereafter arising, within thirty (30) days of such
Grantor acquiring rights therein.  With respect to any Receivables
Contracts in excess of $250,000 individually or $1,000,000 in the aggregate
which would constitute “electronic chattel paper” under Article 9 of the UCC,
each Grantor shall (a) notify the
Collateral Agent that such Receivables Contracts constitute “electronic chattel
paper” under Article 9 of the UCC and (b) take all steps reasonably requested
by the Collateral Agent to give the Collateral Agent control over such
Receivables Contracts (within the meaning of Section 9-105 of the UCC): 
(i) with respect to any such Receivables Contracts in existence on the date
hereof, on or prior to the date hereof and (ii) with respect to any such
Receivables Contracts hereafter arising, within ten (10) days of such
Grantor acquiring rights therein.  Any Receivable not otherwise required
to be delivered or subjected to the control of the Collateral Agent in
accordance with this subsection (c) shall be delivered or subjected to such
control upon request of the Collateral Agent.


 


4.4                              
Investment Related Property.


 


4.4.1.                 
Pledged Equity Interests.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on each Representation Date, that:


 


16












 


(i)                                    
Schedule III (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder) sets forth under the headings “Pledged Stock, “Pledged LLC
Interests,” “Pledged Partnership Interests” and “Pledged Trust Interests,”
respectively, all of the Pledged Stock, Pledged LLC Interests, Pledged
Partnership Interests and Pledged Trust Interests owned by any Grantor and such Pledged Equity Interests
constitute the percentage of issued and outstanding shares of stock, percentage
of membership interests, percentage of partnership interests or percentage of
beneficial interest of the respective issuers thereof indicated on such
Schedule;


 


(ii)                                 
All of the Pledged
Stock has been duly authorized, validly issued and is fully paid and
nonassessable.


 


(iii)                              
except as set forth
on Schedule III(B) it has not acquired any equity interests of another
entity within the past five (5) years;


 


(iv)                             
it is the record and
beneficial owner of the Pledged Equity Interests free of all Liens, rights or
claims of other Persons other than Liens permitted by Section 6.02 of the
Credit Agreement, and except as set forth in Schedule III(C), there are no
outstanding warrants, options or other rights to purchase, or shareholder,
voting trust or similar agreements outstanding with respect to, or property
that is convertible into, or that requires the issuance or sale of, any Pledged
Equity Interests;


 


(v)                                
without limiting the
generality of clause (v) of Section 4.1(a), no consent of any Person
including any other general or limited partner, any other member of a limited
liability company, any other shareholder or any other trust beneficiary is
necessary or desirable in connection with the creation, perfection or first
priority status of the security interest of the Collateral Agent in any Pledged
Equity Interests or the exercise by the Collateral Agent of the voting or other
rights provided for in this Agreement or the exercise of remedies in respect
thereof; and


 


(vi)                             
none of the Pledged
LLC Interests nor Pledged Partnership Interests are or represent interests in
issuers that are:  (a) registered as investment companies, (b) are dealt
in or traded on securities exchanges or markets or (c) have opted to be treated
as securities under the uniform commercial code of any jurisdiction.


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that:


 


(i)                                    
without the prior
written consent of the Collateral Agent, it shall not vote to enable or take
any other action to: (a) amend or terminate any partnership agreement, limited
liability company agreement, certificate of incorporation, by-laws or other
organizational documents in any way that materially changes the rights of such
Grantor with respect to any Investment Related Property or adversely affects
the validity, perfection or priority of the Collateral Agent’s security
interest, (b) permit any issuer of any Pledged Equity Interest to issue any
additional stock, partnership interests, limited liability company interests or
other equity interests of any nature unless such issuer shall contemporaneously
cause such additional stock or other equity interests to become Pledged Equity
Interests hereunder or to issue securities convertible into or granting the right
of purchase or exchange for any stock or other equity interest of any 


 


17












 


nature of such issuer, (c) other than as permitted
under the Credit Agreement, permit any issuer of any Pledged Equity Interest to
dispose of all or a material portion of their assets, (d) waive any default
under or breach of any terms of organizational document relating to the issuer
of any Pledged Equity Interest or the terms of any Pledged Debt except to the
extent that such waiver (i) could not be reasonably expected to have a Material
Adverse Effect and (ii) could not reasonably be expected to have any adverse
affect on any Lender, Issuing Bank or Agent or their respective rights and
remedies under the Loan Documents or their interests in the Collateral, or (e)
cause any issuer of any Pledged Partnership Interests or Pledged LLC Interests
which are not securities (for purposes of the UCC) on the date hereof to elect
or otherwise take any action to cause such Pledged Partnership Interests or
Pledged LLC Interests to be treated as securities for purposes of the UCC; provided
that, if any issuer of any Pledged Partnership Interests or Pledged LLC
Interests takes any such action in violation of the foregoing in this clause
(e), such Grantor shall promptly notify the Collateral Agent in writing of any
such election or action and, in such event, shall take all steps necessary or
advisable to establish the Collateral Agent’s “control” thereof;


 


(ii)                                 
it shall comply with
all of its material obligations under any partnership agreement or limited
liability company agreement relating to Pledged Partnership Interests or
Pledged LLC Interests and shall enforce all of its material rights with respect
to any Investment Related Property;


 


(iii)                              
each Grantor consents to the grant by each
other Grantor of a security interest in all Investment Related Property to the
Collateral Agent and, without limiting the foregoing, consents to the transfer of any Pledged Equity Interest to
the Collateral Agent or its nominee following an Event of Default and to the
substitution of the Collateral Agent or its nominee as a partner in any
partnership or as a member in any limited liability company with all the rights
and powers related thereto.  Any transferee or assignee of any Pledged
Equity Interest shall become a holder of such interest to the same extent as
the Grantor, entitled to participate in the management of the person and, upon
the transfer of the entire interest of such Grantor, such Grantor shall, by
operation of law, cease to be a holder of such Pledged Equity Interest; and


 


(iv)                             
promptly upon any
change in applicable law after the date hereof such that the pledge of greater
than sixty-five percent (65%) of the issued and outstanding Equity Interests of
a Controlled Foreign Corporation (1) could not reasonably be expected to cause
the undistributed earnings of such Controlled Foreign Corporation as determined
for U.S. federal income tax purposes to be treated as a deemed dividend to such
Controlled Foreign Corporation’s U.S. parent and (2) could not reasonably be
expected to cause any material adverse tax consequences, each applicable
Grantor shall grant to the Collateral Agent a security interest and continuing
lien on any of such Grantor’s right, title and interest in, to and under any
Equity Interests of a Controlled Foreign Corporation in excess of sixty-five
percent (65%) up to such greater percentage by executing and delivering to the
Collateral Agent a completed Pledge Supplement, substantially in the form of Annex
I, together with all Supplements to Schedules thereto.


 


4.4.2.                 
Pledged Debt.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on the Effective Date and on the Representation Date, that, as of
each Compliance Date, (i) Schedule III (as such schedule may be amended
or supplemented from time to time in connection with the


 


18












 


delivery of a Pledge Supplement hereunder) sets forth
under the heading “Pledged Debt” all of the Pledged Debt owned by any Grantor
in excess of $250,000, and all of such Pledged Debt owed to such Grantor by any
other Grantor or the Subsidiary of any Grantor has been duly authorized, authenticated
or issued, and delivered and is the legal, valid and binding obligation of the
issuers thereof and is not in default and constitutes all of the issued and
outstanding inter-company indebtedness evidenced by an instrument or
certificated security of the respective issuers thereof owing to such Grantor
and (ii) none of the Pledged Debt is evidenced by an instrument or certificated
security, except for Pledged Debt which, in the aggregate, is less than
$250,000.


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that it shall notify the Collateral Agent of any default under any
Pledged Debt that has caused, either in any case or in the aggregate, a
Material Adverse Effect.


 


4.4.3.                 
Investment Accounts.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on each Representation Date, that:


 


(i)                                    
as of the Compliance
Date, Schedule III (as such schedule may be amended or supplemented from
time to time in connection with the delivery of a Pledge Supplement hereunder)
sets forth under the headings “Securities Accounts” and “Commodities Accounts,”
respectively, all of the Securities Accounts and Commodities Accounts in which
each Grantor has an interest;


 


(ii)                                 
each Grantor is the
sole entitlement holder of each such Securities Account and Commodities
Account, and such Grantor has not consented to, and is not otherwise aware of,
any Person (other than the Collateral Agent pursuant hereto) having “control”
(within the meanings of Sections 8-106 and 9-106 of the UCC) over, or any other
interest in, any such Securities Account or Commodity Account or any securities
or other property credited thereto; and


 


(iii)                              
each Grantor has taken all actions necessary or
desirable, including those specified in Section 4.4.3(b), to (a)
establish the Collateral Agent’s “control” (within the meanings of Sections
8-106 and 9-106 of the UCC) over any portion of the Investment Related
Property constituting Certificated Securities, Uncertificated Securities,
Securities Accounts, Securities Entitlements or Commodity Accounts (each as
defined in the UCC); and (b) to deliver all Instruments to the Collateral
Agent.


 


(b)                                
Delivery and
Control. 
With respect to any Investment Related Property consisting of Securities
Accounts or Securities Entitlements, it shall cause the securities intermediary
maintaining such Securities Account or Securities Entitlement to enter into an
agreement substantially in the form of Annex III pursuant to which it
shall agree to comply with the Collateral Agent’s “entitlement orders” without
further consent by such Grantor.  Each Grantor shall have entered into
such control agreement or agreements with respect to: (i) any Securities
Accounts or Securities Entitlements that exist on the Representation Date, as
of or prior to the Representation Date and (ii) any Securities Accounts or
Securities Entitlements that are created or acquired after the Representation
Date, as of or prior to the deposit or transfer of any such Securities
Entitlements or funds, whether constituting moneys or investments, into such
Securities Accounts or Deposit Accounts.


 


19












 


4.4.4.                 
Deposit Accounts.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and warrants, on each Representation Date, that:


 


(i)                                    
On of the date
hereof, Schedule III (as such schedule may be amended or supplemented
from time to time in connection with the delivery of a Pledge Supplement
hereunder) sets forth under the heading “Deposit Accounts”, all of the Deposit
Accounts maintained by each Grantor in which all cash, checks or similar
payments relating or constituting payments made in respect of Receivables
Contracts or other proceeds of Collateral will be deposited (as “Collateral Deposit Account”);


 


(ii)                                 
each Grantor is the
sole account holder of each such Collateral Deposit Account and such Grantor
has not consented to, and is not otherwise aware of, any Person (other than the
Collateral Agent pursuant hereto) having either sole dominion or control
(within the meaning of common law) or “control” (within the meaning of Section
9-104 of the UCC) over, or any other interest in, any such Collateral Deposit
Account or any money or other property deposited therein; and


 


(iii)                              
each Grantor has
taken all actions necessary or desirable, including those specified in Section
4.4.4(b), to establish the Collateral Agent’s “control” (within the meaning
of Section 9-104 of the UCC) over all Deposit Accounts other than (i) the
Deposit Accounts specifically listed on Schedule IV hereto (the “Excluded Accounts”), it being understood
that the balance of any such Excluded Account shall not at any time exceed
$50,000 individually or $250,000 in the aggregate for all Excluded Accounts and
(ii) payroll accounts maintained in the ordinary course of business consistent
with the past practices of such Grantor.


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and agrees that:


 


(i)                                    
on or before the
Effective Date, each Grantor shall (a) execute and deliver to the Collateral
Agent, for each Collateral Deposit Account (other than the Excluded Accounts),
an agreement in form and substance acceptable to the Collateral Agent, pursuant
to which (i) the Collateral Agent shall have “control” (within the meaning of
Section 9-104 of the UCC) over such Collateral Deposit Account, and (ii) upon
notice (a “Notice of Termination of Grantor’s
Management Rights”) by the Collateral Agent to the bank where the
Collateral Deposit Account is located, such bank shall no longer follow
instructions of such Grantor but shall follow instructions only of the
Collateral Agent, and (b) establish lock box service (the “Lock Boxes”) with the bank(s) set forth on Schedule
III under the heading “Lock Boxes”, which lock boxes shall be subject to
irrevocable lockbox agreements in form and substance acceptable to the
Collateral Agent and shall be accompanied by (i) an acknowledgment by the bank
where the Lock Box is located of the Lien of the Collateral Agent granted
hereunder and (ii) an agreement to, upon notice by the Collateral Agent to the
bank where the Lock Box is located, wire all amounts collected therein to the
Collection Account (a “Lock Box Agreement”). 
The Collateral Agent shall give such Notices of Termination of Grantor’s
Management Rights to the banks where the Collateral Deposit Accounts and Lock
Boxes are located (i) in the event that, at any time, Availability is less than
$35,000,000 and (ii) in its discretion, upon the occurrence of an Event of
Default (any such event, a “Dominion Event”);


 


20












 


(ii)                                 
each Grantor shall
direct all of its Account Debtors to forward payments directly to Lock Boxes
subject to Lock Box Agreements.  The Collateral Agent shall have sole
access to the Lock Boxes at all times and each Grantor shall take all actions
necessary to grant the Collateral Agent such sole access.  At no time
shall any Grantor remove any item from a Lock Box or from a Collateral Deposit
Account without the Collateral Agent’s prior written consent.  If any
Grantor should refuse or neglect to notify any Account Debtor to forward
payments directly to a Lock Box subject to a Lock Box Agreement after notice
from the Collateral Agent, the Collateral Agent shall, notwithstanding the
language set forth in clause (v) of Section 4.3(b), be entitled to make
such notification directly to the applicable Account Debtor.  If notwithstanding
the foregoing instructions, any Grantor receives any Proceeds of any
Receivables Contract, such Grantor shall receive such payments as the
Collateral Agent’s trustee, and shall immediately deposit all cash, checks or
other similar payments related to or constituting payments made in respect of
Receivables Contracts received by it to a Collateral Deposit Account. 
After the occurrence of a Dominion Event, all funds deposited into any Lock Box
subject to a Lock Box Agreement or a Collateral Deposit Account will be swept
on a daily basis into a collection account maintained by the U.S. Borrowers
with the Collateral Agent (the “Collection
Account”).  The Collateral Agent shall hold and apply funds
received into the Collection Account as provided by the terms of Section 7.2;


 


(iii)                              
before opening or
replacing any Collateral Deposit Account, other Deposit Account, or
establishing a new Lock Box, each Grantor shall (a) obtain the Collateral
Agent’s consent in writing to the opening of such Deposit Account or Lock Box,
and (b) cause each bank or financial institution in which it seeks to open (i)
a Deposit Account, to enter into a Deposit Account Control Agreement with the
Collateral Agent in order to give the Collateral Agent “control” (within the
meaning of Section 9-104 of the UCC) over such Deposit Account, or (ii) a Lock
Box, to enter into a Lock Box Agreement with the Collateral Agent in order to
give the Collateral Agent “control” (within the meaning of Section 9-104 of the
UCC) over the Lock Box.  In the case of Deposit Accounts or Lock Boxes
maintained with Lenders, the terms of such Deposit Account Control Agreement or
Lock Box Agreement shall be subject to the provisions of the Credit Agreement
regarding setoffs; and


 


(iv)                             
All amounts deposited
in the Collection Accounts shall be deemed received by the Collateral Agent in
accordance with Section 2.20 of the Credit Agreement and shall, after having
been credited in immediately available funds to the Collection Account, be
applied (and allocated) by Collateral Agent in accordance with Section 2.20 of
the Credit Agreement.  In no event shall any amount be so applied unless
and until such amount shall have been credited in immediately available funds
to the Collection Account.


 


4.4.5.  Investment
Related Property Generally.


 


(a)                                 
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that:


 


(i)            
in the event it
acquires rights in any Investment Related Property after the date hereof, it
shall deliver to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Annex I, together with all Supplements to
Schedules thereto, reflecting such new Investment Related Property and all
other


 


21












 


Investment Related Property.  Notwithstanding the
foregoing, it is understood and agreed that the security interest of the
Collateral Agent shall attach to all Investment Related Property immediately
upon any Grantor’s acquisition of rights therein and shall not be affected by
the failure of any Grantor to deliver a supplement to Schedule III as required
hereby;


 


(ii)                                 
except as provided in
the next sentence, in the event such Grantor receives any dividends, interest
or distributions on any Investment Related Property, or any securities or other
property upon the merger, consolidation, liquidation or dissolution of any
issuer of any Investment Related Property, then (a) such dividends, interest or
distributions and securities or other property shall be included in the
definition of Collateral without further action and (b) such Grantor shall
immediately take all steps, if any, necessary or advisable to ensure the
validity, perfection, priority and, if applicable, control of the Collateral
Agent over such Investment Related Property (including, without limitation,
delivery thereof to the Collateral Agent) and pending any such action such
Grantor shall be deemed to hold such dividends, interest, distributions,
securities or other property in trust for the benefit of the Collateral Agent
and shall be segregated from all other property of such Grantor. 
Notwithstanding the foregoing, so long as no Event of Default shall have
occurred and be continuing, the Collateral Agent authorizes each Grantor to retain all ordinary cash
dividends and distributions paid in accordance with Section 6.06 of the Credit
Agreement, and all scheduled payments of interest; and


 


(iii)                              
if any issuer of any
Investment Related Property is located in a jurisdiction outside of the United
States, each Grantor shall take
such reasonable additional actions, including, without limitation, causing the
issuer to register the pledge on its books and records or making such filings
or recordings, in each case as may be necessary or advisable, under the laws of
such issuer’s jurisdiction to insure the validity, perfection and priority of
the security interest of the Collateral Agent.  Upon the occurrence of an
Event of Default, the Collateral Agent shall have the right, without notice to
any Grantor, to transfer all or any portion of the Investment Related Property
to its name or the name of its nominee or agent.  In addition, the
Collateral Agent shall have the right at any time, without notice to any
Grantor, to exchange any certificates or instruments representing any
Investment Related Property for certificates or instruments of smaller or
larger denominations.


 


(b)                                
Delivery and
Control. 
Each Grantor agrees that with
respect to any Investment Related Property in which it currently has rights it
shall comply with the provisions of this Section 4.4.5(b) on or before
the Representation Date and with respect to any Investment Related Property
hereafter acquired by such Grantor it shall comply with the provisions of this Section
4.4.5(b) immediately upon acquiring rights therein, in each case in form
and substance satisfactory to the Collateral Agent.  With respect to any
Investment Related Property that is represented by a certificate or that is an
“instrument” (other than any Investment Related Property credited to a
Securities Account) it shall cause such certificate or instrument to be
delivered to the Collateral Agent, indorsed in blank by an “effective
indorsement” (as defined in Section 8-107 of the UCC), regardless of
whether such certificate constitutes a “certificated security” for purposes of
the UCC subject to the limits set forth in Section 2.2(c) hereof. 
With respect to any Investment Related Property that is an “uncertificated
security” for purposes of the UCC (other than any “uncertificated securities”
credited to a Securities Account), it shall cause the issuer of such
uncertificated security to either (i) register the Collateral Agent as the
registered owner thereof on the books and records of the issuer or (ii) execute
an agreement substantially in the form of Annex III, pursuant to which
such issuer agrees to comply with the Collateral Agent’s instructions with


 


22












 


respect to such uncertificated security without
further consent by such Grantor subject to the limits set forth in Section
2.2(c) hereof.


 


(c)                                 
Voting and
Distributions.


 


(i)                                    
So long as no Event
of Default shall have occurred and be continuing:


 


(A)                             
except as otherwise
provided under the covenants and agreements relating to Investment Related
Property in this Agreement or elsewhere herein or in the Credit Agreement, each Grantor shall be entitled to exercise or
refrain from exercising any and all voting and other consensual rights
pertaining to the Investment Related Property or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Credit
Agreement; provided, no Grantor shall exercise or refrain from
exercising any such right if the Collateral Agent shall have notified such
Grantor that, in the Collateral Agent’s reasonable judgment, such action would
have a Material Adverse Effect on the value of the Investment Related Property
or any part thereof; and provided further, such Grantor shall give the
Collateral Agent at least five (5) Business Days prior written notice of the
manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right; it being understood, however, that neither the
voting by such Grantor of any Pledged Stock for, or such Grantor’s consent to,
the election of directors (or similar governing body) at a regularly scheduled
annual or other meeting of stockholders or with respect to incidental matters
at any such meeting, nor such Grantor’s consent to or approval of any action
otherwise permitted under this Agreement and the Credit Agreement, shall be
deemed inconsistent with the terms of this Agreement or the Credit Agreement
within the meaning of this Section 4.4.5(c)(i)(A), and no notice of any
such voting or consent need be given to the Collateral Agent; and


 


(B)                               
the Collateral Agent
shall promptly execute and deliver (or cause to be executed and delivered) to each Grantor
all proxies, and other instruments as such Grantor may from time to time
reasonably request for the purpose of enabling such Grantor to exercise the
voting and other consensual rights when and to the extent which it is entitled
to exercise pursuant to clause (A) above; and


 


(ii)                                 
upon the occurrence
and during the continuation of an Event of Default:


 


(A)                             
all rights of each Grantor to exercise or refrain from
exercising the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in the Collateral Agent who shall thereupon have the
sole right to exercise such voting and other consensual rights; and


 


(B)                               
in order to permit
the Collateral


 


23












 


Agent to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive
hereunder: (1) each Grantor shall
promptly execute and deliver (or cause to be executed and delivered) to the
Collateral Agent all proxies, dividend payment orders and other instruments as
the Collateral Agent may from time to time reasonably request and (2) each Grantor acknowledges that the Collateral
Agent may utilize the power of attorney set forth in Section 6.


 


4.5                              
Material Contracts.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on each Representation Date, that:


 


(i)                                    
no Material Contract
of such Grantor prohibits assignment or requires consent of or notice to any
Person in connection with the assignment to the Collateral Agent hereunder,
except such as has been given or made or is currently sought pursuant to clause
(ii) of Section 4.5 (b).


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that:


 


(i)                                    
in addition to any
rights under the Section of this Agreement relating to Receivables Contracts,
the Collateral Agent may at any time notify, or require such Grantor to so
notify, the counterparty on any Material Contract of such Grantor of the
security interest of the Collateral Agent therein.  In addition, after the
occurrence and during the continuance of an Event of Default, the Collateral
Agent may upon written notice to the applicable Grantor, notify, or require
such Grantor to notify, the counterparty to make all payments under the
Material Contracts of such Grantor directly to the Collateral Agent;


 


(ii)                                 
with respect to any
Non-assignable Contract, each Grantor shall, unless the relevant restrictions
on transfer are overridden by Section 9-406 of the UCC, within thirty (30) days
of the date hereof with respect to any Non-Assignable Contract in effect on the
date hereof and within thirty (30) days after entering into any Non-Assignable
Contract after the Effective Date, request in writing the consent of the
counterparty or counterparties to the Non-Assignable Contract pursuant to the terms
of such Non-Assignable Contract or applicable law to the assignment or granting
of a security interest in such Non-Assignable Contract to Collateral Agent and
use its best efforts to obtain such consent as soon as practicable thereafter.


 


4.6                              
Letter of Credit Rights.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on each Representation Date, that:


 


(i)                                    
all material letters
of credit to which such Grantor has rights is listed on Schedule V (as such schedule may be amended or
supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder); and


 


24












 


(ii)                                 
it has obtained the
consent of each issuer of any material letter of credit to which such Grantor
has rights to the assignment of the proceeds of the letter of credit to the
Collateral Agent.


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that with respect to any material letter of credit hereafter arising to
which such Grantor has rights it shall obtain the consent of the issuer thereof
to the assignment of the proceeds of the letter of credit to the Collateral
Agent and shall deliver to the Collateral Agent a completed Pledge Supplement,
substantially in the form of Annex I, together with all Supplements to
Schedules thereto.


 


4.7                              
Intellectual Property.


 


(a)                                 
Representations
and Warranties. 
Except as disclosed in Schedule VI(e) (as such schedule may be amended
or supplemented from time to time in connection with the delivery of a Pledge
Supplement hereunder), each Grantor
hereby represents and warrants, on each Representation Date, that:


 


(i)                                    
as of each Compliance
Date, Schedule VI (as such schedule may be amended or supplemented from
time to time in connection with the delivery of a Pledge Supplement hereunder)
sets forth a true and complete list of the Intellectual Property such Grantor
owns or is licensed to use as of the Effective Date separately identifying
Material Intellectual Property and material Software and including for each of
the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which
such item has been registered or otherwise arises or in which an application
for registration has been filed, and (4) as applicable, the registration or
application number and registration or application date.  As of each
Compliance Date, the Intellectual Property set forth on Schedule VI
constitutes all of the Intellectual Property material to the business of such
Grantor as currently conducted and as proposed to be conducted.


 


(ii)                                 
as of each Compliance
Date, all Intellectual Property included in the Collateral is standing in the
name of such Grantor as identified on Schedule VI;


 


(iii)                              
as of each Compliance
Date, such Grantor owns or has the valid right to use the Intellectual Property
used in or necessary to conduct its business free and clear of all Liens,
claims, encumbrances and material licenses, granted by such Grantor, except for
Liens permitted by Section 6.02 of the Credit Agreement and the Intellectual
Property Licenses set forth on Schedule VI (as such schedule may be
amended or supplemented from time to time in connection with the delivery of a
Pledge Supplement hereunder);


 


(iv)                             
as of each Compliance
Date, with the exception of the Trademarks listed on Annex I to Schedule
VI(e), all Material Intellectual Property owned by such Grantor and, to the
best of such Grantor’s knowledge, licensed to such Grantor: (i) is valid, in
full force and effect, subsisting, unexpired and enforceable and has not been
abandoned and (ii) has not been adjudged invalid or unenforceable, in whole or
in part, and such Grantor has
performed all acts and has paid all renewal, maintenance, and other fees and taxes
required to maintain each item of Intellectual Property set forth on Schedule
VI, in full force and effect;


 


25












 


(v)                                
no action,
investigation, suit, audit, claim, demand, order dispute or proceeding is
pending or, to the best of such Grantor’s knowledge, threatened against such
Grantor challenging the enforceability of, or such Grantor’s right to register,
the validity of, or such Grantor’s right to own, use, or license any Material
Intellectual Property;


 


(vi)                             
to the knowledge of
such Grantor, the conduct of such
Grantor’s business does not infringe upon any Intellectual Property right owned
or controlled by a third party; no claim is pending, or to the best of such
Grantor’s knowledge, threatened, that the conduct of such Grantor’s business or
the use of any Intellectual Property owned or used by such Grantor violates the
asserted rights of any third party;


 


(vii)                          
no third party is, to
the best of such Grantor’s knowledge, infringing upon, misappropriating or
otherwise violating any Intellectual Property owned or used by such Grantor, or
any of its respective licensees, and no claims of infringement or other
violation have been asserted by such Grantor that remain unresolved;


 


(viii)                       
no settlement or
consents, covenants not to sue, co-existence agreements, nonassertion
assurances, or releases have been entered into by such Grantor, or to which such Grantor is
bound, that materially adversely effect such Grantor’s rights to own or use any
Intellectual Property; and


 


(ix)                               
there is no effective
financing statement or other document or instrument now executed, or on file or
recorded in any public office, granting a security interest in or otherwise
encumbering any part of the Intellectual Property owned, used or held for use
by such Grantor, other than in favor of the Collateral Agent.


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees as follows:


 


(i)                                    
such Grantor shall
(and shall cause its licensees to) not do any act or omit to do any act whereby
any of the Material Intellectual Property included in the Collateral may lapse,
become abandoned, invalidated, harmed, become destroyed, dedicated to the
public, unenforceable or otherwise impaired;


 


(ii)                                 
such Grantor shall
promptly notify the Collateral Agent if it knows or has reason to know that any
item of Intellectual Property included in the Collateral that is in use or is
planned on being used in the future and has material value may become (a)
forfeited, misused, abandoned or dedicated to the public or placed in the
public domain, (b) invalid or unenforceable, or (c) subject to any adverse
determination or development (including the institution of proceedings) in any
action or proceeding in the USPTO, the United States Copyright Office, any
state registry, any foreign counterpart of the foregoing, or any court arbitral
tribunal or regulatory agency, regarding the validity or enforceability of such
Grantor’s ownership of, interest in, right to use, register, own or maintain
any such item of Intellectual Property;


 


(iii)                              
such Grantor shall
(and shall cause all its licensees to) not knowingly do any act or omit to do
any act to infringe, misappropriate, dilute, violate or otherwise impair the
Intellectual Property of any other person;


 


26












 


(iv)                             
such Grantor shall
take all necessary and reasonable steps in the USPTO, the United States
Copyright Office, any state registry or any foreign counterpart of the
foregoing, including the payment of applicable fees, to pursue any application for,
and maintain any issued Patent and registration of, each Trademark, Patent and
Copyright owned by such Grantor and which is now or shall become included in
the Collateral, including, but not limited to, those items on Schedule VI
(as such schedule may be amended or supplemented from time to time in
connection with the delivery of a Pledge Supplement hereunder) except for those
items of Intellectual Property that are no longer in use or planned on being
used in the future and which do not have material value;


 


(v)                                
in the event that any
Intellectual Property owned by or exclusively licensed to such Grantor is
infringed, misappropriated, diluted or otherwise violated by a third party,
such Grantor shall promptly take all necessary and reasonable actions to stop
such infringement, misappropriation, dilution or other violation and to protect
its exclusive rights in such Intellectual Property, including, but not limited
to, the initiation of a suit for injunctive relief and to recover damages;


 


(vi)                             
such Grantor shall
take all steps reasonably necessary to protect the secrecy of all material
Trade Secrets, including, without limitation, entering into confidentiality
agreements with employees and labeling and restricting access to secret
information and documents;


 


(vii)                          
such Grantor shall
promptly (but in no event more than thirty (30) days) report to the Collateral
Agent of any and all of the following:  (i) the filing by such Grantor or
on its behalf of any application to register any Intellectual Property owned by
such Grantor in whole or in part, with the USPTO, the United States Copyright
Office, any state registry or any foreign counterpart of the foregoing, (ii)
the registration of any Intellectual Property owned by such Grantor in whole or
in part by any such office, or (iii) the acquisition by such Grantor of any
issued Patent, or application or registration of any other Intellectual
Property, and (iv) the existence of any Contract granting an Intellectual
Property License which is in the nature of a Contract described in Section
4.7(a)(xii), and, in each case, such Grantor shall execute and deliver to the
Collateral Agent a completed Pledge Supplement, substantially in the form of Annex
I, together with all Supplements to Schedules thereto and signed
counterparts of the Trademark Security Agreement, Patent Security Agreement, or
Copyright Security Agreement, as applicable, together with all supplements to
the schedules thereto; and any and all additional agreements, instruments,
documents, and papers as the Collateral Agent may reasonably request to
evidence the Collateral Agent’s and the Secured Parties’ security interest in
such Intellectual Property


 


(viii)                       
except with the prior
written consent of the Collateral Agent or as permitted under the Credit
Agreement, such Grantor shall not execute, and there will not be on file in any
public office, any financing statement or other document or instruments, except
financing statements or other documents or instruments filed or to be filed in
favor of the Collateral Agent and such Grantor
shall not sell, assign, transfer, license, grant any option with respect to, or
create any Lien upon, the Intellectual Property, except for Liens permitted by
Section 6.02 of the Credit Agreement and the Lien created by and under this
Security Agreement and the other Loan Documents;


 


27












 


(ix)                               
such Grantor shall
use best efforts to avoid the inclusion in any Intellectual Property License or
any other material Contract regarding Intellectual Property to which it
hereafter becomes a party, of provisions that would impair or prevent the
creation of a security interest in, or the assignment of, such Grantor’s rights
and interests under such Contract or in any Intellectual Property acquired
under such Contracts;


 


(x)                                  
such Grantor shall
use best efforts to continue to collect, at its own expense, all amounts and
royalties due or to become due to such Grantor in respect of any Intellectual
Property.  In connection with such collections, such Grantor may take (and, at the Collateral
Agent’s reasonable direction, shall take) such action as such Grantor or the Collateral
Agent may deem reasonably necessary or advisable to enforce collection of such
amounts.  Notwithstanding the foregoing, the Collateral Agent shall have
the right at any time, to notify, or require any Grantor to notify, any
obligors with respect to any such amounts of the existence of the security
interest created hereby; and


 


(xi)                               
such Grantor shall
execute and deliver to the Collateral Agent in form and substance reasonably
acceptable to the Collateral Agent and suitable for filing in the Applicable
Intellectual Property Office, a Patent Security Agreement in the form attached
hereto as Annex IV (Form of Patent
Security Agreement) for all Patents of such Grantor, a Trademark
Security Agreement in the form attached hereto as Annex V (Form of Trademark Security Agreement) for
all Trademarks of such Grantor, and a Copyright Security Agreement in the form
attached hereto as Annex VI (Form of
Copyright Security Agreement) for all Copyrights of such Grantor,
and shall record with the applicable Internet domain name registrar a duly
executed form of assignment of all Internet domain names of such Grantor
(together with appropriate supporting documentation as may be requested by the
Collateral Agent).


 


4.8                              
Commercial Tort Claims.


 


(a)                                 
Representations
and Warranties. 
Each Grantor hereby represents and
warrants, on each Representation Date, that Schedule VII (as such
schedule may be amended or supplemented from time to time in connection with
the delivery of a Pledge Supplement hereunder) sets forth all Commercial Tort
Claims of such Grantor under which such Grantor expects
to recover more than $100,000; and


 


(b)                                
Covenants and
Agreements. 
Each Grantor hereby covenants and
agrees that with respect to any Commercial Tort Claim hereafter arising under
which such Grantor expects to recover more than $100,000, it shall deliver to
the Collateral Agent a completed Pledge Supplement, substantially in the form
of Annex I, together with all Supplements to Schedules thereto,
identifying such new Commercial Tort Claims.


 


SECTION
5                                                      
ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS


 


5.1                              
Access; Right of Inspection.  The Collateral Agent and its representatives
shall have the right to enter any premises of any Grantor during normal
business hours, and upon the occurrence and continuance of an Event of Default,
at any time, and inspect any property of each Grantor where any of the Collateral of such Grantor granted pursuant
to this Agreement is located for the purpose of inspecting the same, observing
its use or otherwise protecting its interests therein.


 


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5.2                              
Further Assurances.


 


(a)                                 
Each Grantor agrees that from time to time, at
the expense of such Grantor, that it shall promptly Authenticate, execute and
deliver all further instruments and documents, and take all further action,
that may be reasonably necessary or desirable, or that the Collateral Agent may
reasonably request, in order to create and/or maintain the validity, perfection
or priority of and protect any security interest granted or purported to be
granted hereby or to enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral.  Without
limiting the generality of the foregoing, each Grantor shall:


 


(i)                                    
file such financing
or continuation statements, or amendments thereto, and execute and deliver such
other agreements, instruments, endorsements, powers of attorney or notices, as
may be necessary or desirable, or as the Collateral Agent may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby;


 


(ii)                                 
take all actions
reasonably necessary to ensure the recordation of appropriate evidence of the
liens and security interest granted hereunder in Intellectual Property with any
intellectual property registry in which said Intellectual Property is
registered or in which an application for registration is pending including,
without limitation, the USPTO, the United States Copyright Office, the various
Secretaries of State, and the foreign counterparts on any of the foregoing;


 


(iii)                              
at any reasonable
time, upon request by the Collateral Agent, assemble all or part of the
Collateral as directed by the Collateral Agent and make it available to the
Collateral Agent at a place to be designated by the Collateral Agent that is
reasonably convenient to both parties and allow inspection of the Collateral by
the Collateral Agent, or persons designated by the Collateral Agent; and


 


(iv)                             
at the Collateral
Agent’s request, appear in and defend any action or proceeding that may affect
such Grantor’s title to or the Collateral Agent’s security interest in all or
any part of the Collateral.


 


(b)                                
Each Grantor hereby
authorizes the Collateral Agent to take all steps it deems reasonably necessary
to maintain and preserve the Collateral, consistent with the Grantor’s
obligations to do so hereunder, including, with respect to Intellectual
Property included in the Collateral, the making of additional filings, the
payment of maintenance fees, and the defense of challenges to the Grantor’s
title or validity, all at the Grantor’s expense.


 


(c)                                 
Each Grantor hereby authorizes the filing of
any financing statements or continuation statements, and amendments to
financing statements, or any similar document in any jurisdictions and with any
filing offices as the Collateral Agent may determine, in its sole discretion,
are necessary or advisable to perfect the security interest granted to the
Collateral Agent herein.  Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner
as the Collateral Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to the Collateral Agent herein, including, without
limitation, describing such property as “all assets” or “all personal property,
whether now owned or hereafter acquired.  Each Grantor shall furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Collateral
Agent may reasonably request, all in reasonable detail.


 


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(d)                                
Each Grantor hereby authorizes the Collateral
Agent to modify this Agreement after obtaining such Grantor’s approval of or
signature to such modification by amending Schedule VI (as such
schedule may be amended or supplemented from time to time in connection
with the delivery of a Pledge Supplement hereunder) to include reference to any
right, title or interest in any existing Intellectual Property or any
Intellectual Property acquired or developed by any Grantor after the execution
hereof.


 


5.3                              
Additional Grantors.  From time to time subsequent to the date hereof,
additional Persons may become parties hereto as additional Grantors (each, an “Additional Grantor”), by executing and
delivering to the Collateral Agent a completed Pledge Supplement, substantially
in the form of Annex II.  Upon delivery of any such counterpart
agreement to the Collateral Agent, notice of which is hereby waived by
Grantors, each Additional Grantor shall be a Grantor and shall be as fully a
party hereto as if Additional Grantor were an original signatory hereto. 
Each Grantor expressly agrees that
its obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Grantor hereunder, nor by any election of
Collateral Agent not to cause any subsidiary of Grantors to become an
Additional Grantor hereunder.  This Agreement shall be fully effective as
to any Grantor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Grantor hereunder.


 


SECTION 6                                                      
COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT


 


6.1                              
Power of Attorney.  Each Grantor hereby
irrevocably appoints the Collateral Agent (such appointment being coupled with
an interest) as such Grantor’s attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor, the Collateral
Agent or otherwise, from time to time in the Collateral Agent’s discretion to
take any action and to execute any instrument that the Collateral Agent may
deem reasonably necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, the following:


 


(a)                                 
to prepare, sign, and
file for recordation in any Intellectual Property registry, appropriate
evidence of the lien and security interest granted herein in the Intellectual
Property in the name of such Grantor as assignor or pledgor;


 


(b)                                
to take or cause to
be taken all actions necessary to perform or comply or cause performance or
compliance with the terms of this Agreement, including, without limitation,
upon the occurrence and continuance of an Event of Default, access to pay or
discharge taxes or Liens (other than Liens permitted by Section 6.02 of
the Credit Agreement) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent in its sole
discretion, any such payments made by the Collateral Agent to become
obligations of such Grantor to the Collateral Agent, due and payable
immediately without demand; and


 


(c)                                 
Upon the occurrence
and during the continuance of any Event of Default:


 


(i)                                    
to obtain and adjust
insurance required to be maintained by such Grantor or paid to the Collateral Agent
pursuant to the Loan Documents;


 


(ii)                                 
to ask for, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in respect of any of the Collateral;


 


30












 


(iii)                              
to receive, endorse
and collect any drafts or other instruments, documents and chattel paper in
connection with clause (b) above;


 


(iv)                             
to file any claims or
take any action or institute any proceedings that the Collateral Agent may deem
necessary or desirable for the collection of any of the Collateral or otherwise
to enforce the rights of the Collateral Agent with respect to any of the
Collateral; and


 


(v)                                
to sell, transfer,
assign, lease, license, pledge, make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
the Collateral Agent’s option and such Grantor’s expense, at any time or from
time-to-time, all acts and things that the Collateral Agent deems reasonably
necessary to protect, preserve, or realize upon the Collateral and the
Collateral Agent’s security interest therein as fully and effectively as such
Grantor might do.


 


(d)                                
The powers conferred
on the Collateral Agent hereunder are solely to protect its interest in the
Collateral and the interests of the Secured Parties and shall not impose any
duty upon it to exercise any such powers.  Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining
to any Collateral.  The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property.  Neither the Collateral Agent
nor any of its directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or otherwise. 
If any Grantor fails to perform any agreement contained herein, the Collateral
Agent may itself perform, or cause performance of, such agreement, and the
expenses of the Collateral Agent incurred in connection therewith shall be
payable by each Grantor under the Section in this Agreement relating to
the payment of expenses (Section 12.2).


 


SECTION 7                                                      
REMEDIES


 


7.1                              
Generally.


 


(a)                                 
If any Event of Default
shall have occurred and be continuing, the Collateral Agent may exercise in
respect of the Collateral, in addition to all other rights and remedies
provided for herein or otherwise available to it at law or in equity, all the
rights and remedies of the Collateral Agent on default under the UCC (whether
or not the UCC applies to the affected Collateral) to collect, enforce or
satisfy any Secured Obligations then owing, whether by acceleration or
otherwise, and also may pursue any of the following separately, successively or
simultaneously:


 


(i)                                    
require any Grantor
to, and each Grantor hereby agrees
that it shall at its expense and promptly upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the Collateral
Agent and make it available to the Collateral Agent at a place the Collateral
Agent shall reasonably select;


 


(ii)                                 
enter onto the
property where any Collateral is located through self-help, without any
obligation to pay rent and take possession thereof with or without judicial
process;


 


31












 


(iii)                              
prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent the Collateral Agent deems appropriate; provided that processed,
reconditioned, or repaired products that are sold under the Grantor’s
Trademarks shall be of at least substantially comparable quality to the same
products those sold under such Trademarks at the time of the Event of Default,
and shall, if applicable, be labeled as “reconditioned”, or the like, to the
extent required by law;


 


(iv)                             
require that each
Grantor store and keep any Collateral pending further action by the Collateral
Agent, and while Collateral is so stored or kept, provide such guards and
maintenance services as shall be necessary to protect the same and to preserve
and maintain Collateral in good condition, and prior to its disposition, 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 Collateral Agent; provided
that the Collateral Agent shall not have any obligation to any Grantor to
maintain or preserve the rights of any Grantor as against third parties with
respect to Collateral while Collateral is in the possession of the Collateral
Agent;


 


(v)                                
seek the appointment
of a receiver or keeper to take possession of the Collateral and to enforce any
of the Collateral Agent’s remedies (for the benefit of the Secured Parties),
with respect to such appointment without prior notice or hearing as to such
appointment; and


 


(v)                                
without notice,
except as specified below or under the UCC, sell, assign, lease, license (on an
exclusive or nonexclusive basis, to the extent the Grantor has the lawful right
to do so), or otherwise dispose of the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Collateral Agent’s
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as the
Collateral Agent may deem best.


 


(b)                                
The Collateral Agent
or any Secured Party may be the purchaser of any or all of the Collateral at
any public or private (to the extent to portion of the Collateral being
privately sold is of a kind that is customarily sold on a recognized market or
the subject of widely distributed standard price quotations) sale in accordance
with the UCC and the Collateral Agent, as Collateral Agent for and
representative of the Secured Parties, shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such sale made in accordance with the
UCC, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by the Collateral Agent at such
sale.  Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and each Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted.  Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten (10)
days notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification.  The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.  The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so
adjourned.  Each Grantor
agrees that it would not be commercially unreasonable for the Collateral Agent
to dispose of the Collateral or any portion thereof by using Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing


 


32












 


so, or that match buyers and sellers of assets. 
Each Grantor hereby waives any
claims against the Collateral Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale, even if
the Collateral Agent accepts the first offer received and does not offer such
Collateral to more than one offeree.  If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, each Grantor shall be
liable for the deficiency and the fees of any attorneys employed by the
Collateral Agent to collect such deficiency.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section will cause irreparable
injury to the Collateral Agent, that the Collateral Agent has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities. 
Nothing in this Section shall in any way alter the rights of the
Collateral Agent hereunder.


 


(c)                                 
The Collateral Agent
may sell the Collateral without giving any warranties as to the
Collateral.  The Collateral Agent may specifically disclaim or modify any
warranties of title or the like.  This procedure will not be considered to
adversely effect the commercial reasonableness of any sale of the Collateral.


 


(d)                                
The Collateral Agent
shall have no obligation to marshal any of the Collateral.


 


(e)                                 
To the extent that
applicable law impose duties on the Collateral Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is
not commercially unreasonable for the Collateral Agent:


 


(i)                                    
to fail to incur
significant costs, expenses or other liabilities reasonably deemed as such by
the Collateral Agent to prepare Collateral for disposition or otherwise to
complete raw material or work in process into finished goods or other finished
products for disposition;


 


(ii)                                 
to fail to obtain
Permits or other consents for access to Collateral to sell or otherwise dispose
of or for the collection or sale or disposition of Collateral, or, if not
required by other applicable law, to fail to obtain Permits or other consents
for the collection or disposition of Collateral;


 


(iii)                              
to fail to exercise
remedies against account debtors or other Persons obligated on Collateral or to
remove Liens on Collateral or to remove any adverse claims against Collateral;


 


(iv)                             
to advertise
dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature or to
contact other Persons, whether or not in the same business as any Grantor, for
expressions of interest in acquiring any of such Collateral;


 


(v)                                
to exercise
collection remedies against account debtors and other Persons obligated on
Collateral, directly or through the use of collection agencies or other
collection specialists, to hire one or more professional auctioneers to assist
in the disposition of Collateral, whether or not the Collateral is of a
specialized nature or, to the extent deemed appropriate by the Collateral
Agent, to obtain the services


 


33












 


of other brokers, investment bankers, consultants and
other professionals to assist the Collateral Agent in the collection or
disposition of any of the Collateral, or to utilize Internet sites that provide
for the auction of assets of the types included in Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets to
dispose of Collateral;


 


(vi)                             
to dispose of assets
in wholesale rather than retail markets;


 


(vii)                          
to disclaim
disposition warranties, such as title, possession or quiet enjoyment; and


 


(viii)                       
to purchase insurance
or credit enhancements to insure the Collateral Agent against risks of loss,
collection or disposition of Collateral or to provide to the Collateral Agent a
guaranteed return from the collection or disposition of Collateral.


 


Each Grantor acknowledges
that the purpose of this clause is to provide a non-exhaustive list of actions
or omissions that are commercially reasonable when exercising remedies against
the Collateral and that other actions or omissions by the Secured Parties shall
not be deemed commercially unreasonable solely on account of not being
indicated in this clause.  Without limitation upon the foregoing, nothing
contained in this clause shall be construed to grant any rights to any Grantor
or to impose any duties on the Collateral Agent that would not have been
granted or imposed by this Agreement or by applicable law in the absence of
this clause.


 


7.2                              
Application of Proceeds.  Except as expressly provided elsewhere in this
Agreement, all proceeds received by the Collateral Agent in respect of any
sale, any collection from, or other realization upon all or any part of the
Collateral shall be applied in full or in part by the Collateral Agent against,
the Secured Obligations in the following order of priority:  first,
to the payment of all costs and expenses of such sale, collection or other
realization, including reasonable compensation to the Collateral Agent and its
agents and counsel, and all other expenses, liabilities and advances made or
incurred by the Collateral Agent in connection therewith, and all amounts for
which the Collateral Agent is entitled to indemnification hereunder (in its
capacity as the Collateral Agent) and all advances made by the Collateral Agent
hereunder for the account of the applicable Grantor, and to the payment of all
costs and expenses paid or incurred by the Collateral Agent in connection with
the exercise of any right or remedy hereunder or under any Loan Document, all
in accordance with the terms hereof or thereof; second, to the extent of
any excess of such proceeds, to the payment of all other Secured Obligations
for the ratable benefit of each Secured
Party in the order set forth in Section 2.20 of the Credit Agreement, and third,
to the extent of any excess of such proceeds, to the payment to or upon the
order of such Grantor or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.


 


7.3                              
Sales on Credit.  If Collateral Agent sells any of the Collateral upon credit,
Grantor will be credited only with payments actually made by purchaser and
received by Collateral Agent and applied to indebtedness of the
Purchaser.  In the event the purchaser fails to pay for the Collateral,
Collateral Agent may resell the Collateral and Grantor shall be credited with
proceeds of the sale.


 


7.4                              
Investment Related Property.


 


(a)                                 
Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933 and applicable
state securities laws, the Collateral Agent may be compelled,


 


34












 


with respect to any sale of all or any part of the
Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof.  Each Grantor
acknowledges that any such private sale may be at prices and on terms less
favorable than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under
the Securities Act) and, notwithstanding such circumstances, each Grantor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
the Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Investment Related Property for the period
of time necessary to permit the issuer thereof to register it for a form of
public sale requiring registration under the Securities Act or under applicable
state securities laws, even if such issuer would, or should, agree to so
register it.  If the Collateral Agent determines to exercise its right to
sell any or all of the Investment Related Property, upon written request, each Grantor shall and shall cause each issuer
of any Pledged Stock to be sold hereunder, each partnership and each limited
liability company from time to time to furnish to the Collateral Agent all such
information as the Collateral Agent may request in order to determine the
number and nature of interest, shares or other instruments included in the
Investment Related Property which may be sold by the Collateral Agent in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to
time in effect.  Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Investment Related Property pursuant to this
clause valid and binding and in compliance with all applicable Requirements of
Law.  Each Grantor further agrees that a breach of any covenant contained
in this clause will cause irreparable injury to the Collateral Agent and other
Secured Parties, that the Collateral Agent and the other Secured Parties have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this clause shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defense against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.


 


(b)                                
Upon the occurrence
and during the continuation of an Event of Default, the Collateral Agent shall
have the right to apply the balance from any Deposit Account or instruct the
bank at which any Deposit Account is maintained to pay the balance of any
Deposit Account to or for the benefit of the Collateral Agent.


 


(c)                                 
Each Grantor hereby
expressly irrevocably authorizes and instructs, without any further
instructions from such Grantor, each issuer of any Pledged Equity Interest
pledged hereunder by such Grantor to (i) comply with any instruction received
by it from the Collateral Agent in writing that states that an Event of Default
is continuing and is otherwise in accordance with the terms of this Agreement
and each Grantor agrees that such issuer shall be fully protected from
liabilities to such Grantor in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividend or make any other payment with
respect to the Pledged Equity Interests directly to the Collateral Agent.


 


(d)                                
Notwithstanding any
other provision of this Agreement, none of the rights and remedies granted to
the Collateral Agent herein in respect of any Pledged NSULC Stock (other than
the grant of the security interest) shall be exercisable or otherwise vest in
the Collateral Agent or any other Secured Party hereunder and the applicable
Grantor shall remain the legal and beneficial owner of the Pledged NSULC Stock
and shall retain all of the incidents of such ownership until (i) an Event of
Default has occurred, and (ii) the Collateral Agent has given notice to the
applicable Grantor of such Event of Default and its intention to exercise such
rights and remedies in respect of such Pledged NSULC


 


35












 


Stock.  Nothing herein shall be construed to
subject the Collateral Agent or any other Secured Party hereunder to liability
as a member or owner of shares of a Nova Scotia unlimited liability company.


 


7.5                              
Intellectual Property.


 


(a)                                 
Anything contained
herein to the contrary notwithstanding, upon the occurrence and during the
continuation of an Event of Default:


 


(i)                                    
the Collateral Agent
shall have the right (but not the obligation) to bring suit or otherwise
commence any action or proceeding in the name of any Grantor, the Collateral
Agent or otherwise, in the Collateral Agent’s sole discretion, to enforce any
Intellectual Property which is included in the Collateral, in which event, such
Grantor shall, at the request of the Collateral Agent, do any and all lawful
acts and execute any and all documents required by the Collateral Agent in aid
of such enforcement and such Grantor shall promptly, upon demand, reimburse and
indemnify the Collateral Agent as provided in the Section in this
Agreement relating to indemnity and expenses (Section 11 hereof) in
connection with the exercise of its rights under this Section, and, to the
extent that the Collateral Agent shall elect not to bring suit to enforce any
Intellectual Property as provided in this Section, each Grantor agrees to take all reasonable
measures, whether by action, suit, proceeding or otherwise, to prevent the
infringement of any of the Intellectual Property by others, and for that
purpose, agrees to diligently maintain any action, suit or proceeding against
any Person so infringing as shall be necessary to prevent such infringement;


 


(ii)                                 
upon written demand
from the Collateral Agent, each Grantor
shall assign, convey or otherwise transfer to the Collateral Agent, or such
Collateral Agent’s designee, all of such Grantor’s right, title and interest in
and to the Intellectual Property included in the Collateral, and shall execute
and deliver to the Collateral Agent such documents as are necessary to
effectuate and record such assignment, conveyance, or transfer of, or other
evidence of foreclosure upon, such Intellectual Property;


 


(iii)                              
in the event of any
assignment, conveyance or other transfer of any of the Trademarks included in
the Collateral, the goodwill symbolized by any such Trademarks shall be
included in such sale or transfer, and such Grantor shall supply to the
Collateral Agent or its designee such Grantor’s manufacturing, advertising, and
distribution know-how, and copies of records embodying such know-how, relating
to products and services theretofore sold under such Trademarks;


 


(iv)                             
each Grantor agrees that an assignment,
conveyance, or transfer of any Intellectual Property included in the Collateral
shall be applied to reduce the Secured Obligations outstanding only to the
extent that the Collateral Agent receives cash proceeds in respect of such
assignment, conveyance, or other transfer of the Intellectual Property;


 


(v)                                
within five (5)
Business Days after written notice from the Collateral Agent, each Grantor shall make available to the
Collateral Agent, to the extent within such Grantor’s power and authority, such
personnel in such Grantor’s employ on the date of such Event of Default as the
Collateral Agent may reasonably designate, by name, title or by job
responsibility, to permit such Grantor to continue, directly or indirectly, to
produce, advertise, and sell the products and services sold or delivered by


 


36












 


such Grantor under Intellectual Property included in
the Collateral on the Collateral Agent’s behalf and to be compensated by the
Collateral Agent at such Grantor’s expense) consistent with the salary and
benefit structure applicable to each, as of the date of such Event of Default;


 


(vi)                             
the Collateral Agent
shall have the right to notify, or require each Grantor to notify, any obligors with respect to material
payments due or to become due to such Grantor in respect of the Intellectual
Property, of the existence of the security interest created herein, to direct
such obligors to make payment of all such amounts directly to the Collateral
Agent, and, upon such notification and at the expense of such Grantor, to
enforce collection of any such amounts and to adjust, settle or compromise the
amount of such payment, to the same extent as such Grantor could have done;


 


(vii)                          
all amounts and
proceeds (including checks and other instruments) received by any Grantor in
respect of amounts due to such Grantor in respect of the Collateral or any
portion thereof shall be received in trust for the benefit of the Collateral
Agent hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to the Collateral Agent in the same form as
so received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by the Section in this Agreement relating to cash
proceeds (Section 7.6); and


 


(viii)                       
no Grantor shall adjust, settle or compromise the
amount or payment of any such amount or release wholly or partly any obligor
with respect thereto or allow any credit or discount thereon.


 


(b)                                
If (i) an Event of
Default shall have occurred and, by reason of cure, waiver, modification,
amendment or otherwise, no longer be continuing, (ii) no other Event of Default
shall have occurred and be continuing, (iii) an assignment or other transfer to
the Collateral Agent of any rights, title and interests in and to the Intellectual
Property shall have been previously made and shall have become absolute and
effective, and (iv) the Secured Obligations shall not have become immediately
due and payable, upon the written request of any Grantor, the Collateral Agent shall promptly execute and
deliver to such Grantor, at such Grantor’s sole cost and expense, such
assignments or other transfer as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to the
Collateral Agent as aforesaid, subject to any disposition thereof (including a
lease or license) that may have been made by the Collateral Agent; provided,
after giving effect to such reassignment, the Collateral Agent’s security
interest granted pursuant hereto, as well as all other rights and remedies of
the Collateral Agent granted hereunder, shall continue to be in full force and
effect; and provided further, the rights, title and interests so reassigned
shall be free and clear of any Liens granted by or on behalf of the Collateral
Agent and the Collateral Agents.


 


(c)                                 
Solely for the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Section 7, at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent, to the extent it has the lawful right to do so, an irrevocable,
non-exclusive worldwide license (exercisable without payment of royalty or
other compensation to such Grantor), to use, operate under, license, or
sublicense any Intellectual Property now or hereafter owned by or licensed to
such Grantor, subject, in the case of Trademarks, to the maintenance of quality
standards with respect to the products and services sold under such Trademarks
at a level at least substantially comparable to that prevailing at the time of
Event of Default.  The foregoing license grant to the Collateral Agent is
in addition to, and not in limitation of, Collateral Agreement’s rights under Section 7.1
or the Power of Attorney granted under Section 6.


 


37












 


7.6                              
Cash Proceeds. 
In addition to the rights of the Collateral Agent specified in the
Section of the Agreement relating to Receivables Contracts with respect to
payments of Receivables Contracts, Cash Proceeds shall be held by such Grantor
in trust for the Collateral Agent, segregated from other funds of such Grantor,
and shall, forthwith upon receipt by such Grantor, unless otherwise provided
pursuant to clause (v) of Section 4.3(b), be turned over to the
Collateral Agent in the exact form received by such Grantor (duly indorsed by
such Grantor to the Collateral Agent, if required) and held by the Collateral
Agent in the Collateral Account.  Any Cash Proceeds received by the
Collateral Agent (whether from a Grantor or otherwise) (i) if no Event of
Default shall have occurred and be continuing, shall be held by the Collateral
Agent for the benefit of the Secured Parties, as collateral security for the
Secured Obligations (whether matured or unmatured) and (ii) if an Event of
Default shall have occurred and be continuing, may, in the sole discretion of
the Collateral Agent, (A) be held by the Collateral Agent for the ratable
benefit of each Secured Party, as collateral security for the Secured
Obligations (whether matured or unmatured) and/or (B) then or at any time
thereafter may be applied by the Collateral Agent against the Secured
Obligations then due and owing in accordance with Section 2.19 of the
Credit Agreement.


 


SECTION 8                                                      
COLLATERAL AGENT


 


(a)                                 
The Collateral Agent
has been appointed to act as Collateral Agent hereunder by each Secured Party either pursuant to the Loan
Documents or by their acceptance of the benefits hereof.  The Collateral
Agent shall only be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement.  Without the written consent of the
Secured Parties that would be affected thereby, no amendment, modification,
termination, or consent shall be effective if the effect thereof would release
all or substantially all of the Collateral except as expressly provided
herein.  In furtherance of the foregoing provisions of this Section, each
Secured Party, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to realize upon any of the Collateral hereunder, it
being understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by the Collateral Agent for the benefit of
each Secured Party in accordance with the terms of this Section.


 


(b)                                
Subject to the
appointment and acceptance of a successor Collateral Agent as provided in this
paragraph, the Collateral Agent may resign at any time by notifying the
Lenders, the Administrative Agents, the Issuing Banks and the Administrative
Borrower.  Upon any such resignation, the applicable Required Lenders
shall have the right, in consultation with the Administrative Borrower, to
appoint a successor.  If no successor shall have been so appointed by such
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Collateral Agent gives notice of its resignation, then the
retiring Collateral Agent may, on behalf of the Lenders and the Issuing Banks,
appoint a successor Collateral Agent which shall be a commercial bank or an
Affiliate of any such commercial bank.


 


(c)                                 
Upon the acceptance
of any appointment as Collateral Agent under the terms of this Section by
a successor Collateral Agent, that successor Collateral Agent shall thereby
also be deemed the successor Collateral Agent and such successor Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent under this Agreement,
and the retiring Collateral Agent under this Agreement shall promptly
(i) transfer to such successor Collateral Agent all sums, Securities and
other items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Collateral Agent under this Agreement, and
(ii) execute and deliver to such successor Collateral Agent such
amendments to financing statements, and take such other actions, as may be


 


38












 


necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the security interests created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Agreement.  After
any retiring or removed Collateral Agent’s resignation or removal hereunder as
the Collateral Agent, the provisions of this Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was the Collateral Agent hereunder.


 


SECTION 9                                                      
CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS


 


This Agreement shall
create a continuing security interest in the Collateral and shall remain in
full force and effect until the payment in full of all Secured Obligations, the
cancellation or termination of the commitments and any other contingent
obligation included in the Secured Obligations, be binding upon each Grantor, its successors and assigns, and
inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Collateral Agent and its successors, transferees and
assigns.  Without limiting the generality of the foregoing, but subject to
the terms of the Loan Documents, each Secured Party may assign or otherwise
transfer any Secured Obligations held by it to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to each Secured Party
herein or otherwise.  Upon the payment in full of all Secured Obligations,
the cancellation or termination of the commitments and any other contingent
obligation included in the Secured Obligations, the security interest granted
hereby shall terminate hereunder and of record and all rights to the Collateral
shall revert and be deemed reassigned to Grantors.  Upon any such
termination, the Collateral Agent shall, at the Grantors’ request and expense,
execute and deliver to Grantors such
documents as Grantors shall reasonably request to evidence such termination
reversions and/or reassignment, without recourse, representation, or warranty
of any kind.


 


SECTION 10                                               
STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM


 


The powers conferred on
the Collateral Agent hereunder are solely to protect its interest in the
Collateral and the interests of the Secured Parties and shall not impose any
duty upon it to exercise any such powers.  Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral.  The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property.  Neither the Collateral Agent
nor any of its directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or otherwise. 
If any Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by each Grantor under the Section in this
Agreement relating to the payment of expenses (Section 12.2).


 


SECTION 11                                               
INDEMNITY AND EXPENSES


 


(a)                                 
Each Grantor agrees:


 


(i)                                    
to defend (subject to
Indemnitees’ selection of counsel), indemnify, pay and hold harmless each
Indemnitee, from and against any and all claims, losses and liabilities in any
way relating to, growing out of or resulting from this


 


39












 


Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result from such Indemnitee’s gross
negligence or willful misconduct; and


 


(ii)                                 
to pay to the
Collateral Agent promptly following written demand the amount of any and all
reasonable costs and reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents in accordance with the
terms and conditions of the Credit Agreement.


 


(b)                                
The obligations of
each Grantor in this
Section 11 shall survive the termination of this Agreement and the
discharge of such Grantor’s other obligations under this Agreement, the Credit
Agreement, the Swap Agreements, Banking Services and any other Loan Documents.


 


SECTION 12                                               
MISCELLANEOUS


 


12.1                       
Reinstatement.  Each Grantor agrees that, if any
payment made by any Loan Party or other Person and applied to the Secured
Obligations is at any time annulled, avoided, set aside, rescinded,
invalidated, declared to be fraudulent or preferential or otherwise required to
be refunded or repaid, or the proceeds of Collateral are required to be
returned by any Secured Party to such Loan Party, its estate, trustee, receiver
or any other party, including any Grantor, under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent of such payment
or repayment, any Lien or other Collateral securing such liability shall be and
remain in full force and effect, as fully as if such payment had never been
made.  If, prior to any of the foregoing, any Lien or other Collateral securing
such Grantor’s liability hereunder shall have been released or terminated by
virtue of such cancellation or surrender, such Lien or other Collateral shall
be reinstated in full force and effect and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise affect the
obligations of any such Grantor in respect of any Lien or other Collateral
securing such obligation or the amount of such payment.


 


12.2                       
Notices. 
All notices and other communications provided for herein shall be shall be made
at the addresses, in the manner and with the effect provided in
Section 9.01 of the Credit Agreement, provided, however, that for this
purpose, the address of each Grantor shall be the one specified opposite its signature
below.


 


12.3                       
Expenses. 
(b)                     
Each Grantor will
upon demand pay to the Collateral Agent the amount of any and all reasonable
expenses to the same extent and on the same terms as set forth in
Section 9.04(a) of the Credit Agreement..


 


12.4                       
Amendments and Waivers.


 


(a)                                 
Collateral Agent’s
Consent. 
Subject to Section 12.3(b), no amendment, modification, termination
or waiver of any provision of this Agreement, or consent to any departure by
any Grantor therefrom, shall in any event be effective without the written
concurrence of the Collateral Agent.


 


(b)                                
No Waiver;
Remedies Cumulative. 
No failure or delay on the part of the Collateral Agent in the exercise of any
power, right or privilege hereunder or under any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof
or of any other power, right or privilege.  All rights, powers and


 


40












 


remedies existing under this Agreement and the other
Loan Documents are cumulative, and not exclusive of, any rights or remedies
otherwise available. Any forbearance or failure to exercise, and any delay in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.


 


12.5                       
Successors and Assigns.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns including all persons
who become bound as debtor to this Agreement.  No Grantor shall, without the prior written
consent of the Collateral Agent, assign any right, duty or obligation
hereunder.


 


12.6                       
Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.


 


12.7                       
Survival of Representations, Warranties and Agreements.  All representations, warranties
and agreements made herein shall survive the execution and delivery
hereof.  Notwithstanding anything herein or implied by law to the
contrary, the agreements of each Grantor
set forth in Sections 11 and 12.2 shall survive the payment of
the Secured Obligations and the termination hereof.


 


12.8                       
Marshaling; Payments Set Aside.  Collateral Agent shall not be under any
obligation to marshal any assets in favor of any Grantor or any other Person or
against or in payment of any or all of the Secured Obligations.


 


12.9                       
Severability. 
In case any provision in or obligation hereunder shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.


 


12.10                
Headings. 
Section headings herein are included herein for convenience of reference
only and shall not constitute a part hereof for any other purpose or be given
any substantive effect.


 


12.11                
GOVERNING LAW.
 THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


12.12                
CONSENT TO JURISDICTION.


 


(a)                                 
EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF
AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW
YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT.  EACH GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL


 


41












 


BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL
AFFECT ANY RIGHT THAT THE COLLATERAL AGENT OR ANY SECURED PARTY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.


 


(b)                                
Each Grantor hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement in any court referred to in Section 12.11(a). 
Each Grantor hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.


 


(c)                                 
Each party to this
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 12.1.  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.


 


12.13                
WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


12.14                
Counterparts.
This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.


 


12.15                
Effectiveness. 
This Agreement shall become effective upon the execution of a counterpart
hereof by each of the parties hereto and receipt by Grantors and the Collateral
Agent of written or telephonic notification of such execution and authorization
of delivery thereof.


 


12.16                
Entire Agreement.  This Agreement and the other Loan Documents embody the entire
agreement and understanding between Grantors and the Collateral Agent and
supersede all prior agreements and understandings between such parties relating
to the subject matter hereof and thereof.  Accordingly, the Loan Documents
may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties.  There are no unwritten oral agreements
between the parties.


 


42












 


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


 


	
   

  	
  PROGRESS RAIL SERVICES
  HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PROGRESS METAL
  RECLAMATION COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WEST VIRGINIA AUTO
  SHREDDING, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PROGRESS RAIL SERVICES
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PROGRESS RAIL HOLDINGS,
  INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FM INDUSTRIES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  



 












 


	
   

  	
  SOUTHERN MACHINE AND
  TOOL COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RAILCAR, LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHEMETRON RAILWAY
  PRODUCTS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UNITED INDUSTRIES
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KENTUCKIANA RAILCAR
  REPAIR & STORAGE

  FACILITY, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Progress Rail Services
  Corporation, as Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  United Industries
  Corporation, as Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  



 












 


	
   

  	
  PROGRESS VANGUARD
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  S&L RAILROAD, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Name:  William
  H. Wangerin, Jr.

  	
   

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  	
   

  



 












 


	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION,

  
	
   

  	
  as U.S. Collateral
  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Edward
  N. Parkes IV

  	
   

  
	
   

  	
   

  	
  Name:  Edward
  N. Parkes IV

  	
   

  
	
   

  	
   

  	
  Title:  Vice
  President

  	
   

  



 












 


SCHEDULE I

TO PLEDGE AND SECURITY AGREEMENT


 


GENERAL
INFORMATION


 


(A)                             
Full Legal Name, Type
of Organization, Jurisdiction of Organization, Chief Executive Office/Sole
Place of Business (or Residence if Grantor is a Natural Person) and
Organizational Identification Number of each Grantor:


 


	
  Full
  Legal Name

  	
   

  	
  Type
  of Organization

  	
   

  	
  Jurisdiction
  of

  Organization

  	
   

  	
  Chief
  Executive

  Office/Sole Place of

  Business (or

  Residence if Grantor

  is a Natural Person)

  	
   

  	
  Organization
  I.D.#

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(B)                               
Other Names
(including any Trade-Name or Fictitious Business Name) under which each Grantor
has conducted business for the past five (5) years:


 


	
  Name of
  Grantor

  	
   

  	
  Description
  of Agreement

  
	
   

  	
   

  	
   

  



 


(C)                               
Changes in Name,
Jurisdiction of Organization, Chief Executive Office or Sole Place of Business
(or Principal Residence if Grantor is a Natural Person) and Corporate Structure
within past five (5) years:


 


	
  Full
  Legal Name

  	
   

  	
  Trade
  Name or Fictitious Business Name

  
	
   

  	
   

  	
   

  



 


(D)                              
Agreements pursuant
to which any Grantor is found as debtor within past five (5) years:


 


	
  Name of
  Grantor

  	
   

  	
  Date
  of Change

  	
   

  	
  Description
  of Change

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


(E)                                
Financing Statements:


 


	
  Name of
  Grantor

  	
   

  	
  Filing
  Jurisdiction(s)

  
	
   

  	
   

  	
   

  



 


S-I-1












 


SCHEDULE II

TO PLEDGE AND SECURITY AGREEMENT


 


COLLATERAL
LOCATIONS


 


	
  Name of
  Grantor

  	
   

  	
  Location(s)
  of Equipment and Inventory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


 


S-II-1












 


SCHEDULE III

TO PLEDGE AND SECURITY AGREEMENT


 


INVESTMENT
RELATED PROPERTY


 


Pledged Stock:


 


	
  Grantor

  	
   

  	
  Stock

  Issuer

  	
   

  	
  Class

  of

  Stock

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Stock

  Certificate

  No.

  	
   

  	
  Par

  Value

  	
   

  	
  No.
  of

  Pledged

  Stock

  	
   

  	
  %
  of

  Outstanding

  Stock of the

  Stock Issuer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pledged LLC Interests:


 


	
  Grantor

  	
   

  	
  Limited
  Liability

  Company

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Certificate

  No. (if any)

  	
   

  	
  No.
  of Pledged

  Units

  	
   

  	
  %
  of

  Outstanding

  LLC Interests

  of the Limited

  Liability

  Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pledged Partnership Interests:


 


	
  Grantor

  	
   

  	
  Partnership

  	
   

  	
  Type
  of

  Partnership

  Interests (e.g.,

  general or

  limited)

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Certificate
  No.

  (if any)

  	
   

  	
  %
  of

  Outstanding

  Partnership

  Interests of the

  Partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Pledged Trust Interests:


 


	
  Grantor

  	
   

  	
  Trust

  	
   

  	
  Class
  of Trust

  Interests

  	
   

  	
  Certificated

  (Y/N)

  	
   

  	
  Certificate
  No.

  (if any)

  	
   

  	
  %
  of Outstanding

  Trust Interests of

  the Trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


S-III-1












 


Pledged Debt:


 


	
  Grantor

  	
   

  	
  Issuer

  	
   

  	
  Original
  Principal

  Amount

  	
   

  	
  Outstanding

  Principal

  Balance

  	
   

  	
  Issue
  Date

  	
   

  	
  Maturity

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Securities Account:


 


	
  Grantor

  	
   

  	
  Share
  of

  Securities

  Intermediary

  	
   

  	
  Account
  Number

  	
   

  	
  Account
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Commodities Accounts:


 


	
  Grantor

  	
   

  	
  Name
  of

  Commodities

  Intermediary

  	
   

  	
  Account
  Number

  	
   

  	
  Account
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Deposit Accounts:


 


	
  Grantor

  	
   

  	
  Name
  of

  Depositary Bank

  	
   

  	
  Account
  Number

  	
   

  	
  Account
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Lock Boxes:


 


	
  Grantor

  	
   

  	
  Name
  of Lock

  Box Bank

  	
   

  	
  Account
  Number

  	
   

  	
  Account
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(B)


 


	
  Name of
  Grantor

  	
   

  	
  Date
  of Acquisition

  	
   

  	
  Description
  of Acquisition

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


(C)  Warrants, Options and other Rights:


 


S-III-2












 


SCHEDULE IV

TO PLEDGE AND SECURITY AGREEMENT


 


EXCLUDED
DEPOSIT ACCOUNTS


 


	
  Owner

  	
   

  	
  Ledger
  Name

  	
   

  	
  Account
  Number

  	
   

  	
  Financial
  Institution

  	
   

  	
  Comment

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


S-IV-1












 


SCHEDULE V

TO PLEDGE AND SECURITY AGREEMENT


 


	
  Name of
  Grantor

  	
   

  	
  Description
  of Letters of Credit

  
	
   

  	
   

  	
   

  



 


S-V-1












 


SCHEDULE VI

TO PLEDGE AND SECURITY AGREEMENT


 


INTELLECTUAL
PROPERTY


 


(a)                                                                                  
Copyrights include
jurisdiction, title, owner, date registered (or filed, for copyright
applications) and registration number (for copyright registrations)


 


(b)                                                                                 
Patents include
jurisdiction, title, owner, date issued (or filed, for patent applications) and
patent number (or application number, for patent applications)


 


(c)                                                                                  
Trademarks include
jurisdiction, title, owner, date registered (or filed, for trademark
applications) and registration number (or serial number, for trademark
applications)


 


(d)                                                                                 
Internet Domain Names
include jurisdiction, title, owner and date


 


(e)                                                                                  
Intellectual Property
Licenses


 


(f)                                                                                    
Intellectual Property
Matters


 


S-VI-1












 


SCHEDULE VII

TO PLEDGE AND SECURITY AGREEMENT


 


	
  Name of
  Grantor

  	
   

  	
  Commercial
  Tort Claims

  
	
   

  	
   

  	
   

  



 


 


S-VII-1












 


ANNEX I


 


PLEDGE
SUPPLEMENT


 


This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by [GRANTOR] a [NAME OF STATE OF INCORPORATION/FORMATION]  [corporation/limited liability company]
(the “Grantor”) pursuant to the Pledge and Security Agreement, dated as of [—], 2005 (as it may be from time to time
amended, restated, modified or supplemented, the “Security Agreement”), among Progress Rail Services Parent
Corp., the other Grantors named therein, and General Electric Capital
Corporation, as the Collateral Agent.  Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the Security
Agreement.


 


A-1












 


ANNEX II


 


NEW
GRANTOR PLEDGE SUPPLEMENT


 


This PLEDGE SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF NEW GRANTOR] a [NAME OF STATE OF INCORPORATION/FORMATION]  [corporation/limited liability company]
(the “New Grantor”) pursuant to the Pledge and Security Agreement, dated as of [—], 2005 (as it may be from time to time
amended, restated, modified or supplemented, the “Security Agreement”), among Progress Rail Services Parent
Corp., the other Grantors named therein, and General Electric Capital
Corporation, as the Collateral Agent.  Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.


 


New Grantor hereby
confirms the grant to the Collateral Agent set forth in the Security Agreement
of, and does hereby grant to the Collateral Agent, a security interest in all
of New Grantor’s right, title and interest in and to all Collateral to secure
the Secured Obligations, in each case whether now or hereafter existing or in
which New Grantor now has or hereafter acquires an interest and wherever the
same may be located.  From and after the date hereof, New Grantor shall be
a “Grantor” for all purposes of the Security Agreement.  New Grantor
hereby makes all of the representations and warranties set forth in the
Security Agreement.  New Grantor represents and warrants that the attached
Supplements to Schedules accurately and completely set forth all additional
information required pursuant to the Security Agreement and hereby agrees that
such Supplements to Schedules shall constitute part of the Schedules to the
Security Agreement.


 


IN
WITNESS WHEREOF,
New Grantor has caused this Pledge Supplement to be duly executed and delivered
by its duly authorized officer as of [mm/dd/yy].


 


	
   

  	
  [NAME
  OF NEW GRANTOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 












 


Annex III

TO PLEDGE AND SECURITY AGREEMENT


 


FORM
OF CONTROL AGREEMENT FOR SECURITIES ACCOUNTS


 


[See
Attached]


 












 


Annex IV

TO PLEDGE AND SECURITY AGREEMENT


 


FORM
OF PATENT SECURITY AGREEMENT


 


[See
Attached]


 












 


Annex V

TO PLEDGE AND SECURITY AGREEMENT


 


FORM
OF TRADEMARK SECURITY AGREEMENT


 


[See
Attached]


 












 


Annex VI

TO PLEDGE AND SECURITY AGREEMENT


 


FORM
OF COPYRIGHT SECURITY AGREEMENT


 


[See
Attached]


 












 


Annex VII

TO PLEDGE AND SECURITY AGREEMENT


 


FORM
OF COLLATERAL ACCESS AGREEMENT


 


[See
Attached]


 


7












 


Annex VIII

TO PLEDGE AND SECURITY AGREEMENT


 


FORM
OF BAILEE AGREEMENT


 


[See
Attached]


 


8