Exhibit



Exhibit 10.15
EXECUTION COPY







This ABL Pledge and Security Agreement is subject to the terms and provisions of the Intercreditor Agreement dated as of July 18, 2016 (as such agreement may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among JPMorgan Chase Bank, N.A., as agent for the ABL Secured Parties referred to therein, JPMorgan Chase Bank N.A., as agent for the Term Loan Secured Parties referred to therein (the “Term Loan Representative”), and each of the Loan Parties referred to therein.  




ABL PLEDGE AND SECURITY AGREEMENT


THIS ABL PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”) is entered into as of July 18, 2016  by and among Global Brass and Copper, Inc., a Delaware corporation (“Borrower”), Global Brass and Copper Holdings, Inc., a Delaware corporation (“Holdings”), the entities listed on the signature pages hereto (Borrower, Holdings and such listed entities, collectively, the “Initial Grantors”), and any additional entities which become parties to this Security Agreement by executing a Security Agreement Supplement hereto in substantially the form of Annex I hereto (such additional entities, together with the Initial Grantors, each a “Grantor”, and collectively, the “Grantors”), and JPMorgan Chase Bank, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the lenders party to the Credit Agreement referred to below).


PRELIMINARY STATEMENT


The Grantors, the Administrative Agent, and the Lenders are entering into a Credit Agreement dated as of July 18, 2016 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Each Grantor is entering into this Security Agreement in order to induce the Lenders to enter into and extend credit to Borrower under the Credit Agreement and to secure the Secured Obligations that it has agreed to guarantee pursuant to Article X of the Credit Agreement.  


ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured Parties, hereby agree as follows:


ARTICLE I
DEFINITIONS


1.1.    Terms Defined in Credit Agreement.  All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.


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


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













“Accounts” shall have the meaning set forth in Article 9 of the UCC.


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


“Cash Dominion Period” shall have the meaning set forth in the Credit Agreement.


“CFC” means any existing or future direct or indirect subsidiary of a Grantor that is a controlled foreign corporation for purposes of section 957 of the Code; provided that no Person that is a Domestic Subsidiary of any Grantor on the Effective Date shall be a CFC.


“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.


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


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


“Collateral Deposit Account” shall have the meaning set forth in Section 7.1(a).


“Collateral Report” means any certificate (including any Borrowing Base Certificate), report or other document delivered by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.


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


“Commercial Tort Claims” means commercial tort claims, as defined in the UCC of any Grantor, including each commercial tort claim specifically described in Exhibit J.


“Control” shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.


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


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




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


“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.


“Documents” shall have the meaning set forth in Article 9 of the UCC.


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


“Equipment” shall have the meaning set forth in Article 9 of the UCC.


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


“Excluded Accounts” shall mean (a) Deposit Accounts containing at all times less than $1,000,000 for each such Deposit Account or $1,000,000 in the aggregate of all such Deposit Accounts and the fair market value of all Pledged Collateral held in Securities Accounts set forth in clause (b); provided that no Deposit Account that receives remittances or any other payments from Account Debtors shall be an Excluded Account, (b) Securities Accounts containing Pledged Collateral with a fair market value all at of less than $1,000,0000 for each such Securities Account or $1,000,000 in the aggregate for all such Securities Accounts and the Deposit Accounts set forth in clause (a), (c) the Existing Commodity Accounts, (d) accounts used solely as zero balance accounts which funds are swept daily into a Deposit Account that is not an Excluded Account at the end of each Business Day, (e) any Deposit Account or Securities Account utilized solely for cash collateral pursuant to Section 6.02(j) of the Credit Agreement and (f) those accounts utilized solely for making payroll or employee benefit related payments, including, without limitation, for solely for segregating 401(k) contributions or contributions to an employee stock purchase plan or funding other employee health and benefit plans.


“Excluded Property” means, with respect to any Grantor, 


		
	(a)
	Equity Interests in any CFC or Excluded Domestic Holding Company directly owned by any Grantor representing in excess of 65% of the total issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of such CFC or Excluded Domestic Holding Company;  


		
	(b)
	Equity Interests in any Excluded Subsidiary; 


		
	(c)
	any and all assets of each Excluded Subsidiary and each CFC; 


		
	(d)
	any rights or interests in any contract, lease, sublease, permit, license, charter or similar agreement covering real, intangible or personal property, as such, if under the terms of such contract, lease, sublease, permit, license, charter or similar agreement, or applicable law with respect thereto, the valid grant of a security interest or Lien therein to Administrative Agent is prohibited (or would render such contract, lease, sublease, permit, license, charter or similar agreement cancelled, invalid or unenforceable) and such prohibition has not been or is not waived or the consent of the other party to such contract, lease, sublease, permit, license, charter or similar agreement has not been or is not otherwise obtained or under applicable law such prohibition cannot be waived; provided, that, the foregoing exclusion 




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shall in no way be construed (x) to apply if any such prohibition is unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC or other applicable law or (y) so as to limit, impair or otherwise affect Administrative Agent’s unconditional continuing security interests in and Liens upon any rights or interests of any Grantor in or to monies due or to become due under any such contract, lease, permit, license, charter or similar agreement; provided, further that such contract, lease, sublease, permit, license, charter or similar agreement will cease to be Excluded Property and will become subject to the Lien granted hereunder, immediately and automatically, at such time as the granting of a Lien hereunder is no longer prohibited;
		
	(e)
	any property to the extent the grant or maintenance of a Lien on such property is prohibited by any applicable Requirement of Law or would require a consent not obtained of any Governmental Authority pursuant to applicable Requirements of Law (other than to the extent that such prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the UCC); provided that, immediately upon the ineffectiveness, lapse or termination of such prohibition or the granting of such consent, such property shall automatically constitute Collateral; 


		
	(f)
	any contract, instrument, lease, license, agreement or other document to the extent that the grant of a security interest therein would result in a violation, breach, termination (or a right of termination) or default under such contract, instrument, lease, license, agreement or other document (other than to the extent such violation or breach, termination (or right of termination) or default would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the UCC); provided that, immediately upon the condition causing such violation, breach, termination (or right of termination) or default ceasing to exist (whether by ineffectiveness, lapse, termination or consent), such assets shall automatically constitute Collateral (but only to the extent such assets do not otherwise constitute Excluded Property hereunder);


		
	(g)
	any interests in joint ventures and non-wholly-owned Subsidiaries which may not be pledged without the consent of one or more third parties other than any Subsidiary of the Borrower (after giving effect to Sections 9-406, 9-407, 9-408, 9-409 or other applicable provisions of the UCC); provided that, immediately upon the ineffectiveness, lapse or termination of such prohibition or the granting of such third-party consent, such assets shall automatically constitute Collateral (but only to the extent such assets do not otherwise constitute Excluded Property hereunder);


		
	(h)
	intent-to-use trademark applications to the extent that, and solely during the period in which, the grant, attachment or enforcement of a security interest therein would, under applicable federal law, impair the registrability of such applications or the validity or enforceability of registrations issuing from such applications; 


		
	(i)
	assets owned by any Grantor that is subject to a Lien securing purchase money indebtedness or Capital Lease Obligations permitted to be incurred pursuant to Section 6.01 of the Credit Agreement, for so long as the contract or other agreement in which such Lien is granted (or the documentation providing for such purchase money indebtedness) prohibits the creation of any other Lien on such assets; and 


		
	(j)
	any Indebtedness owned by any Loan Party where the obligor is a Foreign Subsidiary or an Excluded Domestic Subsidiary.




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 “Excluded Subsidiary” means any Subsidiary that is a direct or indirect Subsidiary of a CFC or any CFC of a Excluded Domestic Holding Company.
“Exhibit” refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.


“Existing Commodity Accounts” shall mean those Securities Accounts set forth on Exhibit B on the Effective Date.


“Fixtures” shall have the meaning set forth in Article 9 of the UCC.


“General Intangibles” shall have the meaning set forth in Article 9 of the UCC. 


“Goods” shall have the meaning set forth in Article 9 of the UCC.


“Instruments” shall have the meaning set forth in Article 9 of the UCC.


“Inventory” shall have the meaning set forth in Article 9 of the UCC.


“Investment Property” shall have the meaning set forth in Article 9 of the UCC.


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


“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the UCC.


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


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


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


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


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




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“Securities Account” shall have the meaning set forth in Article 8 of the UCC.  


“Security” shall have the meaning set forth in Article 8 of the UCC.


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


“Security Agreement Supplement” shall mean any Security Agreement Supplement to this Security Agreement in substantially the form of Annex I hereto executed by an entity that becomes a Grantor under this Security Agreement after the date hereof.


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


“Supporting Obligations” shall have the meaning set forth in Article 9 of the UCC.


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


“UCC” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Administrative Agent’s or any other Secured Party’s Lien on any Collateral.  


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


ARTICLE II
GRANT OF SECURITY INTEREST


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


(i)    all Accounts; 


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(ii)    all Chattel Paper;
(iii)    all Copyrights, Patents and Trademarks; 
		
	(iv)
	all Documents; 


		
	(v)
	all Equipment; 


		
	(vi)
	all Fixtures; 


		
	(vii)
	all General Intangibles; 


		
	(viii)
	all Goods;


		
	(ix)
	all Instruments; 


		
	(x)
	all Inventory;


		
	(xi)
	all Investment Property; 


		
	(xii)
	all cash or cash equivalents; 


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


		
	(xiv)
	all Deposit Accounts with any bank or other financial institution;


		
	(xv)
	all Commercial Tort Claims; and 


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




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




ARTICLE III
REPRESENTATIONS AND WARRANTIES


Each Grantor represents and warrants, and each Grantor that becomes a party to this Security Agreement pursuant to the execution of a Security Agreement Supplement represents and warrants (after giving effect to supplements, if any, to each of the Exhibits hereto with respect to such Grantor as attached to such Security Agreement Supplement or as the Exhibits are otherwise updated from time to time in accordance with this Security Agreement), to the Administrative Agent and the Lenders that:


3.1.    Title, Authorization, Validity, Enforceability, Perfection and Priority.  Such Grantor has good and valid rights in or the power to transfer the Collateral owned by it and title to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for Liens permitted under Section 4.1(e), and has requisite power and authority to grant to the Administrative Agent the security interest in the Collateral pursuant hereto.  The execution and delivery by such Grantor of this Security Agreement has been duly authorized by proper corporate or limited liability company proceedings of such Grantor, as applicable, and this Security Agreement constitutes a legal valid and binding obligation of such Grantor and creates a security interest which is enforceable against such Grantor in all Collateral it now owns or hereafter acquires, subject to 


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applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.  When financing statements have been filed in the appropriate offices against such Grantor in the locations listed on Exhibit H, the Administrative Agent will have a fully perfected first priority security interest in that Collateral owned by such Grantor in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e).  


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


3.3.    Principal Location.  Such Grantor’s mailing address, which shall be its address for notices and other communications provided for herein and the location of its place of business (if it has only one) or its chief executive office (if it has more than one place of business), are disclosed in Exhibit A; such Grantor has no other places of business except those set forth in Exhibit A.


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


3.5.    Deposit Accounts and Securities Accounts.  All of such Grantor’s Deposit Accounts and Securities Accounts are listed on Exhibit B.


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


3.7.    Letter-of-Credit Rights and Chattel Paper.  Exhibit C (as updated from time to time by the Grantors) lists all Letter-of-Credit Rights and Chattel Paper having a face amount in excess of $250,000 owned by any of the Grantors.  All action by such Grantor necessary or reasonably desirable to protect and perfect the Administrative Agent’s Lien on each item listed on Exhibit C (including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) has been duly taken. The Administrative Agent will have a fully perfected first priority security interest (or a security interest with the priority required by the Intercreditor Agreement for so long as the Intercreditor Agreement is in effect) in the Collateral listed on Exhibit C, subject only to Liens permitted under Section 4.1(e). Such Grantor has not pledged, assigned or delivered any letter of credit or Chattel Paper to any third party other than the Administrative Agent.


3.8.    Accounts and Chattel Paper.  


(a)    Each Grantor will, and will cause each Subsidiary to, (a) keep proper books of record and accounts in a manner which is in compliance with the most recent SEC guidelines and regulations with respect to its business and activities and (b) permit any representatives designated by the Administrative Agent (or if an Event of Default has occurred and is continuing, any Lender) (including employees of the Administrative Agent, any Lender or any consultants, accountants, 


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lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at such Grantor’s premises field examinations of such Loan Party’s assets, liabilities, books and records, including examining and making extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. 


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


(c)    In addition, with respect to all of its Accounts, (i) such Accounts are deemed Accounts in accordance with GAAP; (ii) no payments have been or shall be made thereon except payments immediately delivered to a Collateral Deposit Account as required pursuant to Section 7.1; and (iii) to such Grantor’s knowledge, all Account Debtors have the capacity to contract.


3.9.    Inventory.  With respect to any of its Inventory scheduled or listed on the most recent Collateral Report as of the date of such Collateral Report, (a) such Inventory (other than Inventory in transit in the ordinary course of business) is located at one of the locations set forth on Exhibit A (as updated from time to time pursuant to Section 4.17 or the most recent Collateral Report), (b) [reserved], (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for Liens permitted under Section 4.1(e), (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and merchantable quality, free from any defects, (e) [reserved], (f) such Inventory has been produced in all material respects in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject. 


3.10.    Intellectual Property. Such Grantor does not have any ownership interest in, or title to, any issued Patent, registered Trademark or registered Copyright or any application for any of the foregoing except as set forth in Exhibit D.  This Security Agreement is effective to create a valid and continuing Lien and, upon filing of appropriate financing statements in the offices listed on Exhibit H and this Security Agreement with the United States Copyright Office and the United States Patent and 


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Trademark Office, fully perfected first priority security interests (or a security interest with the priority required by the Intercreditor Agreement for so long as the Interecreditor Agreement is in effect) in favor of the Administrative Agent on such Grantor’s Patents, Trademarks and Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such Grantor; and all reasonable action necessary to protect and perfect the Administrative Agent’s Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly taken or shall be in process.  


3.11.    Filing Requirements.  No individual piece of Equipment with a fair market value in excess of $250,000 is covered by any certificate of title, except for the vehicles and other Equipment described in Part I of Exhibit E.  None of the Collateral with a fair market value in excess of $1,000,000 owned by it is of a type for which security interests or liens may be perfected by filing under any federal statute except for (a) the Equipment described in Part II of Exhibit E and (b) Patents, Trademarks and Copyrights held by such Grantor and described in Exhibit D.  


3.12.    No Financing Statements, Security Agreements.  No valid financing statement or security agreement describing all or any portion of the Collateral which has not lapsed or been terminated (by a filing authorized by the secured party in respect thereof) naming such Grantor as debtor has been filed or is of record in any jurisdiction except for financing statements or security agreements (a) naming the Administrative Agent on behalf of the Secured Parties as the secured party, (b) naming the Term Loan Representative on behalf of the Term Loan Secured Parties (as defined in the Intercreditor Agreement) as the secured party and (c) as permitted by Section 4.1(e); provided, that nothing herein shall be deemed to constitute an agreement to subordinate any of the Liens of the Administrative Agent under the Loan Documents to any Liens otherwise permitted under Section 4.1(e). 


3.13.    Pledged Collateral.  


(a)    Exhibit G sets forth a complete and accurate list of all Pledged Collateral owned by such Grantor.  Such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being owned by it, free and clear of any Liens, except for any Liens permitted by Section 4.1(e).  Such Grantor further represents and warrants that (i) all Pledged Collateral owned by it constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized, validly issued, are fully paid and non‐assessable, (ii) with respect to any certificates delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Administrative Agent so that the Administrative Agent may take steps to perfect its security interest therein as a General Intangible, (iii) all such Pledged Collateral held by a securities intermediary is covered by a control agreement among such Grantor, the securities intermediary and the Administrative Agent pursuant to which the Administrative Agent has Control and (iv) all Pledged Collateral which represents Indebtedness in a principal amount in excess of $500,000 individually or $1,000,000 in the aggregate, owed to such Grantor has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.  


(b)    In addition, (i) none of the Pledged Collateral owned by it has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (ii) no options, warrants, calls or 


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commitments of any character whatsoever (A) exist relating to such Pledged Collateral or (B) obligate the issuer of any Equity Interest included in the Pledged Collateral to issue additional Equity Interests, and (iii) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Security Agreement or for the execution, delivery and performance of this Security Agreement by such Grantor, or for the exercise by the Administrative Agent of the voting or other rights provided for in this Security Agreement or for the remedies in respect of the Pledged Collateral pursuant to this Security Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally.  


(c)    Except as set forth in Exhibit G, such Grantor owns 100% of the issued and outstanding Equity Interests which constitute Pledged Collateral owned by it and none of the Pledged Collateral which represents Indebtedness in a principal amount in excess of $500,000 individually or $1,000,000 in the aggregate, owed to such Grantor is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture. 




ARTICLE IV
COVENANTS


From the date of this Security Agreement and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each Grantor party hereto as of the date hereof agrees, and from and after the effective date of any Security Agreement Supplement applicable to any Grantor (and after giving effect to supplements, if any, to each of the Exhibits hereto with respect to such subsequent Grantor as attached to such Security Agreement Supplement or as the Exhibits are otherwise updated from time to time in accordance with this Security Agreement) and thereafter until this Security Agreement is terminated pursuant to the terms hereof, each such additional Grantor agrees that:


4.1.    General.


(a)    Collateral Records.  Each Grantor will, and will cause each Subsidiary to, (a) keep proper books of record and accounts in a manner which is in compliance with the most recent SEC guidelines and regulations with respect to its business and activities and (b) permit any representatives designated by the Administrative Agent (or if an Event of Default has occurred and is continuing, any Lender) (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at such Grantor’s premises field examinations of such Grantor’s assets, liabilities, books and records, including examining and making extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. 


(b)    Authorization to File Financing Statements; Ratification.  Such Grantor hereby authorizes the Administrative Agent to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents and take such other actions as may from time to time be requested by the Administrative Agent in order to maintain a first priority perfected security interest (or at any time when the Intercreditor Agreement is in effect, a perfected security interest with the priority required pursuant thereto) in and, if applicable, Control of, the Collateral owned by such Grantor, in each case subject to Liens permitted by Section 4.1(e).  Any financing statement filed by 


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the Administrative Agent may be filed in any filing office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets of the Grantor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates.  Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Administrative Agent promptly upon request.  


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


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


(e)    Liens.  Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except (i) the security interest created by this Security Agreement, and (ii) Liens permitted pursuant to Section 6.02 of the Credit Agreement.  


(f)    Other Financing Statements.  Such Grantor will not authorize the filing of any financing statement naming it as debtor covering all or any portion of the Collateral owned by it, except for financing statements (i) naming the Administrative Agent on behalf of the Secured Parties as the secured party, and (ii) as permitted by Section 4.1(e).  Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement filed in favor of the Administrative Agent pursuant to this Security Agreement or any other Loan Document without the prior written consent of the Administrative Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.


(g)    Locations. Such Grantor will not change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by the Credit Agreement.


(h)    Compliance with Terms.  Such Grantor will perform and comply with all obligations in respect of the Collateral owned by it and all agreements to which it is a party or by which it is bound relating to such Collateral except where the failure to perform or comply would be reasonably likely to result in Material Adverse Effect.


4.2.    Receivables.




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(a)    Certain Agreements on Receivables.  Such Grantor will not make or agree to make any discount, credit, rebate or other reduction in the original amount owing on a Receivable or accept in satisfaction of a Receivable less than the original amount thereof, except that such Grantor may take any such action listed above in accordance with its reasonable business judgment.


(b)    Collection of Receivables.  Except as otherwise provided in this Security Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense, the amounts due or hereafter due to such Grantor under the Receivables owned by it as it determines in its reasonable business judgment.


(c)    Inspection of Invoices.  Each Grantor will, and will cause each Subsidiary to, permit any representatives designated by the Administrative Agent (or if an Event of Default has occurred and is continuing, any Lender) (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, to conduct at such Grantor’s premises field examinations of such Grantor’s assets, liabilities, books and records, including examining and making extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.


(d)    Disclosure of Counterclaims on Receivables.  If, to the knowledge of such Grantor, any dispute, claim, or defense exists or has been asserted or threatened with respect to any such Receivable in an amount in excess of $5,000,000, such Grantor will promptly disclose such fact to the Administrative Agent in writing.  Such Grantor shall send the Administrative Agent a copy of each credit memorandum in excess of $5,000,000 as soon as issued, and such Grantor shall promptly report each credit memorandum and each of the facts required to be disclosed to the Administrative Agent in accordance with this Section 4.2(d) on the Borrowing Base Certificates submitted by it. Each Grantor shall apply any discount, credit or agreement to make a rebate or to otherwise reduce the amount owing on any Receivable in accordance with its reasonable business judgment.


(e)    Electronic Chattel Paper.  Such Grantor shall take all steps necessary to grant the Administrative Agent Control of all electronic chattel paper if (i) the face amount thereof is in excess of $1,000,000 or (ii) the face amount thereof, when taken together with all other electronic chattel paper to which the Administrative Agent was not previously granted Control is in excess of $1,000,000 in the aggregate (with all such electronic chattel paper then being required to be made subject to the Administrative Agent’s Control), in accordance with the UCC and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.


4.3.    Inventory and Equipment.


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




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(b)    Returned Inventory.  If an Account Debtor returns any Inventory to Such Grantor, such Grantor shall immediately report to the Administrative Agent any return involving an amount in excess of $5,000,000.  Each such report shall indicate the reasons for the returns and the locations and condition of the returned Inventory.  In the event any Account Debtor returns Inventory to such Grantor when an Event of Default exists, such Grantor, upon the request of the Administrative Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) [reserved]; (iii) dispose of the returned Inventory solely according to the Administrative Agent’s written instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s prior written consent.  All returned Inventory shall be subject to the Administrative Agent’s Liens thereon.  Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory and such returned Inventory shall not be Eligible Inventory.
(c)    Inventory Count.  Such Grantor will conduct at its discretion either (A) a physical count of its Eligible Inventory at least once per fiscal year (and during the continuation of an Event of Default at such other times as the Administrative Agent requests) or (B) a cycle count of its Eligible Inventory throughout each fiscal year (and during the continuation of an Event of Default at such other times as the Administrative Agent requests); provided, that no more than $2,000,000 in Eligible Inventory in the aggregate shall be at locations which are not subject to Clause (A) or (B) above; provided, further that after and during the continuation of an Event of Default, the Administrative Agent shall determine in its sole discretion whether Grantors shall be required to implement Clause (A) or (B) above with respect to its Eligible Inventory.
(d)    [Reserved].
(e)    Titled Equipment.  At any time the fair market value of any single piece of Equipment (including, without limitation, vehicles) covered by a certificate of title owned by all of the Grantors exceeds $250,000, then the applicable Grantors shall deliver notice thereof to the Administrative Agent and, subject to the Intercreditor Agreement, deliver to the Administrative Agent, upon request, the original of any such Equipment title certificate and provide and/or file all other documents or instruments necessary to have the Lien of the Administrative Agent noted on any such certificate or with the appropriate state office. 


4.4.    Delivery of Instruments, Securities, Chattel Paper and Documents. Subject to the Intercreditor Agreement and the Credit Agreement, such Grantor will (a) deliver to the Administrative Agent the originals of all Chattel Paper, Securities and Instruments constituting Collateral owned by it (if any then exist) if (i) the amount thereof is in excess of $1,000,000 or (ii) the amount thereof, when taken together with all other Chattel Paper, Securities and Instruments not previously delivered to the Administrative Agent is in excess of $1,000,000 in the aggregate (with all such Chattel Paper, Securities and Instruments then being required to be delivered to the Administrative Agent), (b) hold in trust for the Administrative Agent upon receipt and immediately thereafter deliver to the Administrative Agent any such Chattel Paper, Securities and Instruments constituting Collateral, (c) upon the Administrative Agent’s request, deliver to the Administrative Agent (and thereafter hold in trust for the Administrative Agent upon receipt and immediately deliver to the Administrative Agent) any Document evidencing or constituting Collateral and (d) promptly upon the Administrative Agent’s request, deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit I hereto (the “Amendment”), pursuant to which such Grantor will pledge such additional Collateral.  Such Grantor hereby authorizes the Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral owned by it set forth in such Amendments shall be considered to be part of the Collateral.


    


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4.5.    Uncertificated Pledged Collateral. Such Grantor will permit the Administrative Agent from time to time to cause the appropriate issuers (and, if held with a securities intermediary, such securities intermediary) of uncertificated securities or other types of Pledged Collateral owned by it not represented by certificates to mark their books and records with the numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral not represented by certificates and all rollovers and replacements therefor to reflect the Lien of the Administrative Agent granted pursuant to this Security Agreement.  With respect to any Pledged Collateral owned by it, such Grantor will take any actions necessary to cause (a) the issuers of uncertificated securities which are Pledged Collateral and (b) any securities intermediary which is the holder of any such Pledged Collateral, in each case to cause the Administrative Agent to have and retain Control over such Pledged Collateral.  Without limiting the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a securities intermediary (including in connection with a Securities Account that is not an Excluded Account) within ninety (90) days of the Effective Date (as such period may be extended by the Administrative Agent in its sole discretion), cause such securities intermediary to enter into a control agreement with the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, giving the Administrative Agent Control. 


4.6.    Pledged Collateral.


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


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


(c)    Registration of Pledged Collateral.  Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Administrative Agent or its nominee at any time at the reasonable option of the Administrative Agent.


(d)    Exercise of Rights in Pledged Collateral.  


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


(ii)    Such Grantor will permit the Administrative Agent or its nominee at any time after the occurrence of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, 


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exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interest or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.


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


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


(v)    Such Grantor hereby authorizes and instructs each issuer of any Investment Property pledged by such Grantor hereunder to, and each Grantor that is an issuer of Investment Property pledged by another Grantor agrees and consents to, after the occurrence and during the continuance of an Event of Default, (i) comply with any instruction received by it from the Administrative Agent in writing (and any other issuer from time to time hereby agrees to comply with such instruction) that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Security Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Investment Property directly to the Administrative Agent.




(e)    Interests in Limited Liability Companies and Limited Partnerships.  Each Grantor agrees that no ownership interests in a limited liability company or a limited partnership which are included within the Collateral owned by such Grantor shall at any time constitute a Security under Article 8 of the UCC of the applicable jurisdiction.


4.7.    Intellectual Property.  


(a)    [Reserved].


(b)    Such Grantor shall notify the Administrative Agent promptly if it knows or has reason to know that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) necessary to Grantor’s business may become abandoned or dedicated, or of 


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any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.


(c)    If Grantor, either directly or through any agent, employee, licensee or designee, file an application for the registration of any Patent or Trademark with the United States Patent and Trademark Office  or any similar office or agency such Grantor shall provide an updated version of Exhibit D to this Security Agreement as set forth in Section 4.17 and required by Section 5.01(c) of the Credit Agreement, and with respect to Copyrights, such Grantor shall provide the Administrative Agent written notice within five (5) days after filing any application with the United States Copyright Office. Upon request of the Administrative Agent, such Grantor shall execute and deliver any and all security agreements as the Administrative Agent may request to evidence the Administrative Agent’s first priority security interest (or a security interest with the priority required by the Intercreditor Agreement for so long as the Intercreditor Agreement is in effect) on such Patent, Trademark or Copyright, and the General Intangibles of such Grantor relating thereto or represented thereby.


(d)    Such Grantor shall take all actions necessary or reasonably requested by the Administrative Agent to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings; provided that no such actions shall be required in connection with any applications or Patents, Trademarks and Copyrights that such Grantor reasonably determines are no longer necessary or cost effective for its business or operations.


(e)    Such Grantor shall, use its reasonable business judgment in determining whether to sue for infringement, misappropriation or dilution and use its reasonable business judgment in determining what amount to recover from damages for such infringement, misappropriation or dilution, and shall take such other actions as it deems consistent with its reasonable business judgment under the circumstances to protect such Patent, Trademark or Copyright.  In the event that such Grantor institutes suit for claims in excess of $1,000,000 in the aggregate because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.


4.8    Commercial Tort Claims.  If, after the date hereof, any Grantor identifies the existence of a Commercial Tort Claim belonging to such Grantor that it reasonably determines to be worth in excess of $1,000,000 and that has arisen in the course of such Grantor’s business in addition to the Commercial Tort Claims described in Exhibit J, which are all of such Grantor’s Commercial Tort Claims as of the Effective Date, such Grantor shall within thirty (30) days after the same is acquired by it (i) notify the Administrative Agent of such Commercial Tort Claim and (ii) unless the Administrative Agent otherwise consents, promptly enter into an amendment to this Security Agreement, in the form of Exhibit I hereto, granting to Administrative Agent a first priority security interest (or a security interest with the priority required by the Intercreditor Agreement for so long as the Intercreditor Agreement is in effect) in such Commercial Tort Claim. 


4.9.    Letter-of-Credit Rights.  If such Grantor is or becomes the beneficiary of a letter of credit in excess of $1,000,000,  it  shall promptly, and in any event within thirty (30) days after becoming a beneficiary, notify the Administrative Agent thereof and shall use commercially reasonable efforts to cause the issuer and/or confirmation bank to (i) consent to the assignment of any 


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Letter-of-Credit Rights to the Administrative Agent and (ii) subject to the Intercreditor Agreement (for so long as the Intercreditor Agreement is in effect), agree to direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a Deposit Account Control Agreement for application to the Secured Obligations, in accordance with Section 2.18 of the Credit Agreement, all in form and substance reasonably satisfactory to the Administrative Agent. 


4.10.    [Reserved].  


4.11.    No Interference.  Such Grantor agrees that it will not interfere with any right, power and remedy of the Administrative Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies.


4.12.    Insurance.  (a)    In the event any Collateral is located in any area that has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such Grantor shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on any real property leased by such Loan Party within a “Special Flood Hazard Area”).  The amount of  flood insurance required by this Section shall be in an amount equal to the lesser of the total Commitment or the total replacement cost value of the improvements and at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973, as amended. 


     (b)    All insurance policies required hereunder and under Section 5.10 of the Credit Agreement shall name the Administrative Agent (for the benefit of the Administrative Agent and the Lenders) as an additional insured or as lender loss payee, as applicable, and shall contain lender loss payable clauses, through endorsements in form and substance satisfactory to the Administrative Agent, which provide that, subject to the Intercreditor Agreement (for so long as the Intercreditor Agreement is in effect): (i) all proceeds thereunder with respect to any Collateral shall be payable to the Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy; and (iii) such policy and lender loss payable or mortgagee clauses may be canceled, amended, or terminated only upon at least thirty (30) days prior written notice given to the Administrative Agent.


(c)    Upon the request of the Administrative Agent, the Borrower shall execute and deliver, and cause each other applicable Loan Party to execute and deliver, to Administrative Agent a collateral assignment, in form and substance satisfactory to Administrative Agent, of each business interruption insurance policy maintained by the Loan Parties.


(d)    All premiums on any such insurance shall be paid when due by such Grantor, and copies of the policies delivered to the Administrative Agent.  If such Grantor fails to obtain any insurance as required by this Section, and such failure shall continue unremedied for five (5) Business Days, the Administrative Agent may obtain such insurance at the Borrower’s expense. By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from the Grantor’s failure to maintain such insurance or pay any premiums therefor.   


4.13.      Collateral Access Agreements.   Subject to Section 5.15 of the Credit Agreement, such Grantor shall use commercially reasonable efforts to obtain a Collateral Access Agreement, from the lessor of each leased or sub-leased property, mortgagee of owned property or bailee or consignee with respect to any warehouse, processor or converter facility or other location where Collateral is stored or located in excess of $50,000, which agreement or letter shall provide access rights, contain a waiver or 


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subordination of all Liens or claims that the landlord, mortgagee, bailee or consignee may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to the Administrative Agent.  Subject to Section 5.15 of the Credit Agreement and subject to the Administrative Agent’s ability to establish Reserves with respect to Collateral locations as set forth in the Credit Agreement, the Grantors shall have the reasonable discretion to determine (i) if it is commercially reasonable to pursue a Collateral Access Agreement at a specific location and (ii) if it has made commercially reasonable efforts to obtain an effective, fully executed Collateral Access Agreement with respect to any of its locations.
 
4.14.      Deposit Account Control Agreements.  Subject to Section 5.15 of the Credit Agreement and Section 7.2, such Grantor will provide to the Administrative Agent promptly upon the Administrative Agent’s request, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit account (other than an Excluded Account) of such Grantor as set forth in Exhibit B of this Security Agreement.


4.15.  Change of Name or Location.  Such Grantor shall not (a) change its name as it appears in official filings in the state of its incorporation or organization, (b) change its chief executive office, principal place of business, mailing address, corporate offices or warehouses or locations at which Collateral is held or stored, or the location of its records concerning the Collateral as set forth in this Security Agreement, (c) change the type of entity that it is, (d) change its organization identification number, if any, issued by its state of incorporation or other organization, or (e) change its state of incorporation or organization, in each case, unless (i) such Grantor provides three (3) Business Days prior written notice of such change to the Administrative Agent and (ii) such Grantor promptly takes or completes any reasonable action requested by the Administrative Agent in connection with preserving the validity, perfection or priority of the Administrative Agent’s security interest in the Collateral (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of the Secured Parties, in any Collateral); provided that, any new location shall be in the continental U.S. or Puerto Rico.  


4.16.  Excluded Property and Excess Securities. 


(a)    Notwithstanding anything to the contrary set forth in this Security Agreement or in the Credit Agreement, no Grantor shall be required to (i) take any action in order to create or perfect a security interest in any Excluded Property or (ii) deliver any security documents, collateral documents, or similar agreements under the laws of any jurisdiction other than the U.S., its territories or jurisdictions located therein.


(b)    If any Grantor delivers certificated Securities to the Administrative Agent representing in excess of 65% of the total issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of any CFC or Excluded Domestic Holding Company (such excess, the “Excess Securities”) in order to facilitate compliance with ‎this Article, the Administrative Agent agrees that (i) such Excess Securities shall not constitute Pledged Collateral or Collateral, (ii) the Administrative Agent shall have no right, title or interest in or to such Excess Securities and (iii) the Administrative Agent shall hold such Excess Securities solely as a nominee for the benefit of such Grantor.


4.17.  Updating of Exhibits to the Security Agreement.  The Borrower will provide to the Administrative Agent, (i) concurrently with the delivery of the certificate of a Financial Officer of the 


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Borrower as required by Section 5.01(d) of the Credit Agreement, updated versions of the Exhibits to this Security Agreement (provided that if there have been no changes to any such Exhibits since the previous updating thereof required hereby, the Borrower shall indicate that there has been “no change” to the applicable Exhibit(s)) or (ii) as often as the Borrower deems appropriate or required to make its representations and warranties materially true and accurate, updated versions of the Exhibits to this Security Agreement delivered with an officer’s certificate of the Borrower reasonably satisfactory to the Administrative Agent, that certifies that the updated versions of the Exhibits are true and correct as of the date such officer’s certificate is delivered.




ARTICLE V
EVENTS OF DEFAULT AND REMEDIES


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


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


(b)    Any Grantor shall fail to observe or perform any of the terms or provisions of Sections 4.1(b), 4.1(f), 4.1(g), 4.6(d)(v), 4.11, 4.15, 7.1(a), 7.1(b) and 7.2.


(c)    Any Grantor shall fail to observe or perform any of the terms or provisions of this Security Agreement (other than a breach which constitutes an Event of Default under any other Section of this Article V) and such failure shall continue unremedied for a period of thirty (30) days after the earlier of knowledge of such breach or notice thereof from the Administrative Agent.  


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


(e)    Any Equity Interest which is included within the Collateral shall at any time constitute a Security or the issuer of any such Equity Interest shall take any action to have such interests treated as a Security unless (i) all certificates or other documents constituting such Security have been delivered to the Administrative Agent and such Security is properly defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise, or (ii) the Administrative Agent has entered into a control agreement in form and substance satisfactory to the Administrative Agent with the issuer of such Security or with a securities intermediary relating to such Security and such Security is defined as such under Article 8 of the UCC of the applicable jurisdiction, whether as a result of actions by the issuer thereof or otherwise.
     
		
	5.2.
	Remedies.  




(a)    Upon the occurrence of an Event of Default, the Administrative Agent may or at the direction of the Required Lenders, shall exercise any or all of the following rights and remedies:


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




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


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


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


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


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


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


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




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(e)    If, after the Credit Agreement has terminated by its terms and all of the Obligations have been paid in full, there remain Swap Agreement Obligations or Banking Services Obligations outstanding, the Secured Parties holding in the aggregate at a least a majority of the aggregate net early termination payments and all other amounts then due and unpaid under outstanding Swap Agreements and agreements evidencing Banking Services may exercise the remedies provided in this Section 5.2 upon the occurrence of any event which would allow or require the termination or acceleration of any Swap Agreement Obligations pursuant to the terms of the Swap Agreement or any Banking Services Obligations pursuant to the terms of any agreement evidencing Banking Services.


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


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


 5.3.  Grantor’s Obligations Upon Default.  Upon the request of the Administrative Agent following the occurrence and during the continuance of an Event of Default, each Grantor will:


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


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


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




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


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


5.4.  Grant of Intellectual Property License.  For the purpose of enabling the Administrative Agent to exercise the rights and remedies under this Article V after and during the continuance of an Event of Default at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby (a) grants to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any intellectual property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased the Grantor’s Inventory from such Grantor and in connection with any such sale or other enforcement of the Administrative Agent’s rights under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to such Grantor and any Inventory that is covered by any Copyright owned by or licensed to such Grantor and the Administrative Agent may finish any work in process and affix any Trademark owned by or licensed to such Grantor and sell such Inventory as provided herein. The foregoing rights are subject to the Administrative Agent using all Intellectual Property substantially in a manner consistent with that used by each Grantor prior to the Event of Default and substantially the same level of quality as the same or similar products and services of such Grantor prior to the Event of Default, in each case, to the extent necessary to preserve the validity of such Intellectual Property.


ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY


6.1.    Account Verification.  Upon five (5) Business Days prior written notice to such Grantor, the Administrative Agent may at any time, in the Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Administrative Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables; provided that no notice to such Grantor shall be required if an Event of Default has occurred and is continuing.  


6.2.    Authorization for Administrative Agent to Take Certain Action.  




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(a)    Each Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the sole discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, (ii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement (which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agent’s security interest in the Collateral, and (iii) after the occurrence and during the continuance of an Event of Default, (A) to endorse and collect any cash proceeds of the Collateral, (B) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over such Pledged Collateral, (C) to apply, subject to the Intercreditor Agreement (for so long as the Intercreditor Agreement is in effect) the proceeds of any Collateral received by the Administrative Agent to the Secured Obligations as provided in Section 7.3, (D) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are permitted by Section 4.1(e)), (E) to contact Account Debtors for any reason, (F) to demand payment or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (G) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (H) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (I) to settle, adjust, compromise, extend or renew the Receivables, (J) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (K) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (L) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (M) to change the address for delivery of mail addressed to such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (N) to do all other acts and things necessary to carry out this Security Agreement; and such Grantor agrees to reimburse the Administrative Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the foregoing; provided that, this authorization shall not relieve such Grantor of any of its obligations under this Security Agreement or under the Credit Agreement. 


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


6.3.    Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS ITS PROXY AND ATTORNEY‐IN‐FACT (AS SET FORTH IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS 


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PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A DEFAULT.  


6.4.    Nature of Appointment; Limitation of Duty.  THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NONE OF THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER SECURED PARTY, ANY OF THEIR AFFILIATES, OR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT  IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.


ARTICLE VII
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS


7.1.    Collection of Receivables.  


(a)     Subject to Section 5.15 of the Credit Agreement, on or before the Effective Date, each Grantor shall execute and deliver to the Administrative Agent Deposit Account Control Agreements for each Deposit Account (other than Excluded Accounts) maintained by such Grantor into which all cash, checks or other similar payments relating to or constituting payments made in respect of Receivables will be deposited (each, a “Collateral Deposit Account”), which Collateral Deposit Accounts are identified as such on Exhibit B.  After the Effective Date, each Grantor will comply with the terms of Section 7.2.


(b)    Each Grantor shall direct all of its Account Debtors to forward payments directly to a Collateral Deposit Account.  At no time after the occurrence and during the continuance of an Event of Default or during a Cash Dominion Period shall any Grantor remove any item from a Collateral Deposit Account without the Administrative Agent’s prior written consent.  If any Grantor should refuse or neglect to notify any Account Debtor to forward payments directly to a Collateral Deposit Account after notice from the Administrative Agent, the Administrative Agent shall be entitled to make such notification directly to such Account Debtor.  If notwithstanding the foregoing instructions, any Grantor receives any proceeds of any Receivables, such Grantor shall receive such 


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payments as the Administrative Agent’s trustee, and shall immediately deposit all cash, checks or other similar payments related to or constituting payments made in respect of Receivables received by it to a Collateral Deposit Account.  At all times after the occurrence and during the continuance of an Event of Default or during a Cash Dominion Period all funds deposited into a Collateral Deposit Account will be swept on a daily basis into a concentration account (the “Collection Account”) maintained by such Grantor at a bank or banks satisfactory to the Administrative Agent in its sole discretion (which, at the discretion of the Administrative Agent may be an account maintained by such Grantor with the Administrative Agent) which Collection Account shall be in the sole Control of the Administrative Agent.   No Grantor shall have any Control whatsoever over the Collection Account.  The Administrative Agent shall have sole access to the Collection Account at all times and each Grantor shall take all actions necessary to grant the Administrative Agent such sole access.  The Administrative Agent shall hold and apply funds received into the Collection Account as provided by the terms of Section 7.3. 


7.2.    Covenant Regarding New Deposit Accounts.  Within fifteen (15) days (or such later date as the Administrative Agent may agree in its sole discretion) after opening or replacing any Collateral Deposit Account or other Deposit Account (other than an Excluded Account) each Grantor shall (a) deliver written notice thereof to the Administrative Agent, which notice shall include an updated Exhibit B with respect to such new Deposit Account, and (b) cause each bank or financial institution in which it has opened such Collateral Deposit Account or such other Deposit Account, to enter into a Deposit Account Control Agreement with the Administrative Agent in order to give the Administrative Agent Control of such Collateral Deposit Account or such other Deposit Account.  In the case of Deposit Accounts maintained with Lenders, the terms of such letter shall be subject to the provisions of the Credit Agreement regarding setoffs.


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


ARTICLE VIII
GENERAL PROVISIONS




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8.1.    Waivers.  Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made.  To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article IX, at least ten (10) days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made.  To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Administrative Agent or any other Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative Agent or such other Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any other Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Security Agreement, or otherwise.  Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.


8.2.    Limitation on Administrative Agent’s and Other Secured Parties’ Duty with Respect to the Collateral.  The Administrative Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each other Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.  Neither the Administrative Agent nor any other Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Administrative Agent or such other Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the services 


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of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the collection or disposition of any of the Collateral.  Each Grantor acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive indications of what actions or omissions by the Administrative Agent would  be commercially reasonable in the Administrative Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Administrative Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2.  Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by applicable law in the absence of this Section 8.2.


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


8.4.    Secured Party Performance of Debtor Obligations.  Without having any obligation to do so, the Administrative Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors shall reimburse the Administrative Agent for any reasonable and documented out-of-pocket expenses paid by the Administrative Agent pursuant to this Section 8.4.  The Grantors’ obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation payable in accordance with Section 2.18(g) of the Credit Agreement.


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


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




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


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


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


8.10.    Benefit of Agreement.  The terms and provisions of this Security Agreement shall be binding upon and inure to the benefit of the Grantors, the Administrative Agent and the other Secured Parties and their respective permitted successors and assigns (including all persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the Administrative Agent.  No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, hereunder.




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


8.12.    Expenses.  The Grantors shall reimburse the Administrative Agent for any and all reasonable out‐of‐pocket expenses and internal charges (including reasonable attorneys’, auditors’ and accountants’ fees) paid or incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and, to the extent provided in the Credit Agreement, in the audit, analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any periodic or special audit of the Collateral).  Any and all costs and expenses incurred by the Grantors in the performance of actions required pursuant to the terms hereof shall be borne solely by the Grantors.


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


8.14.    Termination.  


(a)    This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there may be no Secured Obligations outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Secured Obligations have been indefeasibly paid and performed in full (or with respect to any outstanding Letters of Credit, such Letter of Credit has been cash collateralized as required by Section 2.06(j) of the Credit Agreement) other than contingent indemnification obligations as to which no claim has been made and no commitments of the Administrative Agent or the other Secured Parties which would give rise to any Secured Obligations are outstanding.


(b)    Liens on the Collateral will be released in accordance with Section 9.02(c) of the Credit Agreement and Section 4.2 of the Intercreditor Agreement.




8.15.    Entire Agreement.  This Security Agreement, together with the other Loan Documents embodies the entire agreement and understanding between the Grantors and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings among the Grantors and the Administrative Agent relating to the Collateral.


8.16.    CHOICE OF LAW.  THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.


8.17.    CONSENT TO JURISDICTION.  EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND 


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IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.  


8.18.    WAIVER OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).


8.19.    Indemnity.  Each Grantor shall, jointly and severally, indemnify the Administrative Agent, the Secured Parties and each related party of any of the foregoing persons (each such person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of the execution of this Security Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation, condition, sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether or not discoverable by the Administrative Agent or the other Secured Parties or any Grantor, and any claim for Patent, Trademark or Copyright infringement); provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. 


8.20.    Counterparts.  This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart.  Delivery of an executed counterpart of a signature page of this Security Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Security Agreement.  


8.21.    Subordination of Intercompany Indebtedness.  Each Grantor agrees that any and all claims of such Grantor against any other Grantor (each an “Obligor”) with respect to any “Intercompany Indebtedness” (as hereinafter defined), any endorser, obligor or any other guarantor of all or any part of the Secured Obligations, or against any of its properties shall be subordinate and subject in right of payment to the prior payment, in full and in cash, of all Secured Obligations, provided that, and not in contravention of the foregoing, so long as no Default or Event of Default has occurred and is continuing, such Grantor may make loans to and receive payments in the ordinary course of business with respect to such Intercompany Indebtedness from each such Obligor to the extent not prohibited by the terms of this Security Agreement and the other Loan Documents.  Notwithstanding any right of any Grantor to ask, demand, sue for, take or receive any payment from any Obligor, all rights, liens and security interests of such Grantor, whether now or hereafter arising 


31







and howsoever existing, in any assets of any other Obligor shall be and are subordinated to the rights of the Secured Parties and the Administrative Agent in those assets.  No Grantor shall have any right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until this Security Agreement has terminated in accordance with Section 8.14.  If all or any part of the assets of any Obligor, or the proceeds thereof, are subject to any distribution, division or application to the creditors of such Obligor, whether partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or if the business of any such Obligor is dissolved or if substantially all of the assets of any such Obligor are sold, then, and in any such event (such events being herein referred to as an “Insolvency Event”), any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable upon or with respect to any indebtedness of any Obligor to any Grantor (“Intercompany Indebtedness”) shall be paid or delivered directly to the Administrative Agent for application on any of the Secured Obligations, due or to become due, until such Secured Obligations (other than contingent indemnity obligations) shall have first been fully paid and satisfied (in cash).  Should any payment, distribution, security or instrument or proceeds thereof be received by the applicable Grantor upon or with respect to the Intercompany Indebtedness after any Insolvency Event and prior to the termination of this Security Agreement in accordance with Section 8.14, such Grantor shall receive and hold the same in trust, as trustee, for the benefit of the Secured Parties and shall forthwith deliver the same to the Administrative Agent, for the benefit of the Secured Parties, in precisely the form received (except for the endorsement or assignment of the Grantor where necessary), for, subject to the Intercreditor Agreement (for so long as the Intercreditor Agreement is in effect), application to any of the Secured Obligations, due or not due, and, until so delivered, the same shall be held in trust by the Grantor as the property of the Secured Parties.  If any such Grantor fails to make any such endorsement or assignment to the Administrative Agent, the Administrative Agent or any of its officers or employees is irrevocably authorized to make the same.  Each Grantor agrees that until the termination of this Security Agreement in accordance with Section 8.14, no Grantor will assign or transfer to any Person (other than the Administrative Agent or the Borrower or another Grantor) any claim any such Grantor has or may have against any Obligor.
8.22.    Intercreditor Agreement.  Notwithstanding anything to the contrary contained in this Security Agreement, the Liens, security interests and rights granted pursuant to this Security Agreement or any other Loan Document shall be as set forth in, and subject to the terms and conditions of (and the exercise of any right or remedy by the Administrative Agent hereunder or thereunder shall be subject to the terms and conditions of), the Intercreditor Agreement. In the event of any conflict between this Security Agreement or any other Loan Document and the Intercreditor Agreement, the Intercreditor Agreement shall control, and no right, power, or remedy granted to the Administrative Agent hereunder or under any other Loan Document shall be exercised by the Administrative Agent, and no direction shall be given by the Administrative Agent in contravention of the Intercreditor Agreement.
Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Administrative Agent (and the Secured Parties) shall be subject to the terms of the Intercreditor Agreement, and, with respect to the Term Loan Priority Collateral until the Term Loan Obligations Payment Date (as defined in the Intercreditor Agreement), any obligation of the Borrower and other Grantors hereunder or under any other Loan Document with respect to the delivery or control of any Term Loan Priority Collateral, the novation of any lien on any certificate of title, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person, in each case in 


32







connection with any Term Loan Priority Collateral shall be deemed to be satisfied if the applicable Grantor complies with the requirements of the similar provision of the applicable Term Loan Document. Until the Term Loan Obligations Payment Date, the delivery of any Term Loan Priority Collateral to the Term Loan Representative pursuant to the Term Loan Documents shall satisfy any delivery requirement hereunder or under any other Loan Document.


ARTICLE IX
NOTICES


 9.1.    Sending Notices.  Any notice required or permitted to be given under this Security Agreement shall be sent in accordance with Section 9.01 of the Credit Agreement. 


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


ARTICLE X
THE ADMINISTRATIVE AGENT


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


[Signature Page Follows]








33












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


	
			
	 
	 
	GRANTORS:

	 
	 
	 

	 
	 
	GLOBAL BRASS AND COPPER, INC.

	 
	 
	GLOBAL BRASS AND COPPER HOLDINGS, INC.

	 
	 
	CHASE BRASS, LLC

	 
	 
	CHASE INDUSTRIES, LLC

	 
	 
	CHASE BRASS AND COPPER COMPANY, LLC

	 
	 
	GBC METALS, LLC

	 
	 
	OLIN FABRICATED METAL PRODUCTS, LLC

	 
	 
	BRYAN METALS, LLC

	 
	 
	A.J. OSTER, LLC

	 
	 
	A.J. OSTER FOILS, LLC

	 
	 
	A.J. OSTER CARIBE, LLC

	 
	 
	A.J. OSTER WEST, LLC






 


	
			
	By:
	 
	/s/ Christopher J. Kodosky

	 
	 
	Name:  Christopher J. Kodosky

	 
	 
	Title:  Chief Financial Officer










(Signature Page to ABL Pledge and Security Agreement) 











	
			
	 
	 
	JPMORGAN CHASE BANK, N.A.,

	 
	 
	as Administrative Agent






	
			
	By:
	 
	/s/ Lindsay R. Griffard

	 
	 
	Name:  Lindsay R. Griffard

	 
	 
	Title:  Authorized Officer




















(Signature Page to ABL Pledge and Security Agreement) 








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




NOTICE ADDRESS FOR ALL GRANTORS


                    
c/o                    
                    
Attention:                
Facsimile:                


INFORMATION AND COLLATERAL LOCATIONS OF {Insert name of applicable Grantor}




I.    Name of Grantor: _____________________________________


II.    State of Incorporation or Organization: _______________________________


III.    Type of Entity: _______________________________________


IV.    Organizational Number assigned by State of Incorporation or Organization: _________________


V.    Federal Identification Number: ________________________________


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




                    
                    
                    
                    


Attention:            


VII.    Locations of Collateral:


(a)    Properties Owned by the Grantor:










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












    









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









INFORMATION AND COLLATERAL LOCATIONS OF {Insert name of applicable Grantor}




I.    Name of Grantor: _____________________________________


II.    State of Incorporation or Organization: _______________________________


III.    Type of Entity: _______________________________________


IV.    Organizational Number assigned by State of Incorporation or Organization: _________________


V.    Federal Identification Number: ________________________________


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




                    
                    
                    
                    


Attention:            


VII.    Locations of Collateral:


(a)    Properties Owned by the Grantor:










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












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





















[NOTE:  ADD ADDITIONAL INFORMATION PAGE FOR EACH GRANTOR]











EXHIBIT B
(See Sections 3.5 and 7.1 of Security Agreement)


DEPOSIT ACCOUNTS


    
	
					
	



Name of Grantor
	



Name of Institution
	



Account Number
	Check here if Deposit Account is a Collateral Deposit Account
	Description of Deposit Account if not a Collateral Deposit Account

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 










SECURITIES ACCOUNTS


	
			
	Name of Grantor
	Name of Institution
	Account Number

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

















EXHIBIT C
(See Section 3.7 of Security Agreement)


LETTER OF CREDIT RIGHTS


















CHATTEL PAPER













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


INTELLECTUAL PROPERTY RIGHTS


PATENTS


	
				
	Name of Grantor
	Patent Description
	Patent Number
	Issue Date

	 
	 
	 
	 

	 
	 
	 
	 






PATENT APPLICATIONS


	
				
	Name of Grantor
	Patent Application
	Application Filing Date
	Application Serial Number

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 






TRADEMARKS


	
				
	Name of Grantor
	Trademark
	Registration Date
	Registration Number

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 






TRADEMARK APPLICATIONS


	
				
	Name of Grantor
	Trademark Application
	Application Filing Date
	Application Serial Number

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 






COPYRIGHTS


	
				
	Name of Grantor
	Copyright
	Registration Date
	Registration Number

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 






COPYRIGHT APPLICATIONS


	
				
	Name of Grantor
	Copyright Application
	Application Filing Date
	Application Serial Number

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 













INTELLECTUAL PROPERTY LICENSES


	
				
	Name of Grantor
	Name of Agreement
	Date of Agreement
	Parties to Agreement

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 






REQUIRED CONSENT OR APPROVALS











EXHIBIT E
(See Section 3.11 of Security Agreement)


TITLE DOCUMENTS


I. Vehicles/Equipment subject to certificates of title:
        
	
				
	Name of Grantor
	Description
	Title Number
	State Where Issued

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 








II. Aircraft/engines/parts, ships, railcars and other vehicles governed by federal statute:
            
	
			
	Name of Grantor
	Description
	Registration Number

	 
	 
	 

	 
	 
	 

	 
	 
	 








    









EXHIBIT F


[Reserved]


    









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


LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY




STOCKS
    
	
						
	

Name of Grantor
	



Issuer
	

Certificate Number(s)
	

Number of Shares
	



Class of Stock
	Percentage of Outstanding Shares

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 








BONDS


	
						
	Name of Grantor
	Issuer
	Number
	Face Amount
	Coupon Rate
	Maturity

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 






    
GOVERNMENT SECURITIES


	
							
	Name of Grantor
	Issuer
	Number
	Type
	Face Amount
	Coupon Rate
	Maturity

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 








OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED)


	
				
	Name of Grantor
	Issuer
	Description of Collateral
	Percentage Ownership Interest

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

















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









EXHIBIT H
(See Section 3.1 of Security Agreement)


OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN FILED













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


AMENDMENT




This Amendment, dated ________________, ___ is delivered pursuant to Section 4.4 of the Security Agreement referred to below.  All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Security Agreement.  The undersigned hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be true and correct.  The undersigned further agrees that this Amendment may be attached to that certain ABL Pledge and Security Agreement, dated ____________ __, ____, between the undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Security Agreement”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations referred to in the Security Agreement.  


                        
	
			
	 
	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 















SCHEDULE  I TO AMENDMENT


STOCKS
    
	
						
	

Name of Grantor
	



Issuer
	

Certificate Number(s)
	

Number of Shares
	



Class of Stock
	Percentage of Outstanding Shares

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 






BONDS


	
						
	Name of Grantor
	Issuer
	Number
	Face Amount
	Coupon Rate
	Maturity

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 




    
GOVERNMENT SECURITIES


	
							
	Name of Grantor
	Issuer
	Number
	Type
	Face Amount
	Coupon Rate
	Maturity

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 






OTHER SECURITIES OR OTHER INVESTMENT PROPERTY
(CERTIFICATED AND UNCERTIFICATED)


	
				
	Name of Grantor
	Issuer
	Description of Collateral
	Percentage Ownership Interest

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 






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


COMMERCIAL TORT CLAIMS


	
				
	Name of Grantor
	Description of Claim
	Parties
	Case Number; Name of Court where Case was Filed

	 
	 
	 
	 

	 
	 
	 
	 













ANNEX I TO ABL PLEDGE AND SECURITY AGREEMENT 


Reference is hereby made to the ABL Pledge and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”), dated as of ____________, 2016 by and among by and among Global Brass and Copper, Inc., a Delaware corporation (“Borrower”), Global Brass and Copper Holdings, Inc., a Delaware corporation (“Holdings”), the entities listed on the signature pages hereto (Borrower, Holdings and such listed entities, collectively, the “Initial Grantors”), and certain other entities which become parties to the Security Agreement from time to time, including, without limitation, those that become party thereto by executing a Security Agreement Supplement in substantially the form hereof (such parties, including the undersigned, together with the [_____________], the “Grantors”), in favor of JPMorgan Chase Bank, N.A., as Administrative Agent (the “Administrative Agent”), for the benefit of the Secured Parties under the Credit Agreement. Each capitalized terms used herein and not defined herein shall have the meanings given to it in the Security Agreement.


By its execution below, the undersigned, [NAME OF NEW GRANTOR], a [__________________________] [corporation] [partnership] [limited liability company] (the “New Grantor”) agrees to become, and does hereby become, a Grantor under the Security Agreement and agrees to be bound by such Security Agreement as if originally a party thereto.  The New Grantor hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable benefit of the Secured Parties, a security interest in all of the New Grantor’s right, title and interest in and to the Collateral, whether now owned or hereafter acquired, to secure the prompt and complete payment and performance of the Secured Obligations.  


By its execution below, the New Grantor represents and warrants as to itself that all of the representations and warranties contained in the Security Agreement are true and correct in all respects as of the date hereof.  The New Grantor represents and warrants that the supplements to the Exhibits to the Security Agreement attached hereto are true and correct in all respects and such supplements set forth all information required to be scheduled under the Security Agreement.  The New Grantor shall take all steps necessary to perfect, in favor of the Administrative Agent, a first-priority security interest (or a security interest with the priority required by the Intercreditor Agreement for so long as the Intercreditor Agreement is in effect) in and lien against the New Grantor’s Collateral, including, without limitation, delivering all certificated Pledged Collateral to the Administrative Agent (and other Collateral required to be delivered under the Security Agreement), and taking all steps necessary to properly perfect the Administrative Agent’s interest in any uncertificated Pledged Collateral.


IN WITNESS WHEREOF, [NAME OF NEW GRANTOR], a [__________________] [corporation] [partnership] [limited liability company] has executed and delivered this Annex I counterpart to the Security Agreement as of this ___________ day of ____________, ____. 


	
			
	 
	 
	[NAME OF NEW GRANTOR] 

	 
	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

















EXHIBIT J 
(See Definition of “Commercial Tort Claims”)


COMMERCIAL TORT CLAIMS 
 
[Describe parties, case number (if applicable), nature of dispute]