Exhibit
10.2




 





GUARANTEE AND
COLLATERAL AGREEMENT


 


 


made by


 


B&G FOODS, INC.


and certain of its
Subsidiaries


in favor of


LEHMAN COMMERCIAL PAPER
INC.

as Administrative Agent


Dated as of October 14,
2004




 





 








 


Table of Contents


	
   

  	
   

  
	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINED TERMS

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Definitions

  
	
   

  	
  1.2.

  	
  Other Definitional
  Provisions

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  GUARANTEE

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Guarantee

  
	
   

  	
  2.2.

  	
  Right of Contribution

  
	
   

  	
  2.3.

  	
  No
  Subrogation

  
	
   

  	
  2.4.

  	
  Amendments,
  etc. with respect to the Borrower Obligations

  
	
   

  	
  2.5.

  	
  Guarantee Absolute
  and Unconditional

  
	
   

  	
  2.6.

  	
  Reinstatement

  
	
   

  	
  2.7.

  	
  Payments

  
	
   

  	
   

  
	
  SECTION
  3.

  	
  GRANT
  OF SECURITY INTEREST

  
	
   

  	
   

  
	
  SECTION
  4.

  	
  REPRESENTATIONS
  AND WARRANTIES

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Representations in
  Credit Agreement

  
	
   

  	
  4.2.

  	
  Title; No Other Liens

  
	
   

  	
  4.3.

  	
  Perfected First Priority
  Liens

  
	
   

  	
  4.4.

  	
  Jurisdiction of
  Organization; Identification Number; Chief Executive Office

  
	
   

  	
  4.5.

  	
  Inventory and Equipment

  
	
   

  	
  4.6.

  	
  Farm
  Products

  
	
   

  	
  4.7.

  	
  Pledged
  Securities

  
	
   

  	
  4.8.

  	
  Receivables

  
	
   

  	
  4.9.

  	
  Contracts

  
	
   

  	
  4.10.

  	
  Intellectual Property

  
	
   

  	
  4.11.

  	
  Vehicles

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Covenants in the
  Credit Agreement

  
	
   

  	
  5.2.

  	
  Delivery of Instruments,
  Certificated Securities and Chattel Paper

  
	
   

  	
  5.3.

  	
  Maintenance of Insurance

  
	
   

  	
  5.4.

  	
  Payment of Obligations

  
	
   

  	
  5.5.

  	
  Maintenance
  of Perfected Security Interest; Further Documentation

  
	
   

  	
  5.6.

  	
  Changes
  in Name, etc.

  
	
   

  	
  5.7.

  	
  Notices

  
	
   

  	
  5.8.

  	
  Pledged Securities

  
	
   

  	
  5.9.

  	
  Receivables

  



 


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  5.10.

  	
  Contracts

  
	
   

  	
  5.11.

  	
  Intellectual Property

  
	
   

  	
  5.12.

  	
  Deposit
  Accounts

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REMEDIAL
  PROVISIONS

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Certain Matters
  Relating to Receivables

  
	
   

  	
  6.2.

  	
  Communications with
  Obligors; Grantors Remain Liable

  
	
   

  	
  6.3.

  	
  Pledged
  Stock

  
	
   

  	
  6.4.

  	
  Proceeds to be Turned Over
  To Administrative Agent

  
	
   

  	
  6.5.

  	
  Application of Proceeds

  
	
   

  	
  6.6.

  	
  Code and Other Remedies

  
	
   

  	
  6.7.

  	
  Registration Rights

  
	
   

  	
  6.8.

  	
  Waiver; Deficiency

  
	
   

  	
   

  
	
  SECTION
  7.

  	
  THE
  ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Administrative Agent’s Appointment
  as Attorney-in-Fact, etc.

  
	
   

  	
  7.2.

  	
  Duty of Administrative
  Agent

  
	
   

  	
  7.3.

  	
  Financing Statements

  
	
   

  	
  7.4.

  	
  Authority of
  Administrative Agent

  
	
   

  	
   

  
	
  SECTION 8.

  	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Amendments in Writing

  
	
   

  	
  8.2.

  	
  Notices

  
	
   

  	
  8.3.

  	
  No Waiver by Course of
  Conduct; Cumulative Remedies

  
	
   

  	
  8.4.

  	
  Enforcement Expenses;
  Indemnification

  
	
   

  	
  8.5.

  	
  Successors and Assigns

  
	
   

  	
  8.6.

  	
  Set-Off

  
	
   

  	
  8.7.

  	
  Counterparts

  
	
   

  	
  8.8.

  	
  Severability

  
	
   

  	
  8.9.

  	
  Section
  Headings

  
	
   

  	
  8.10.

  	
  Integration

  
	
   

  	
  8.11.

  	
  GOVERNING LAW

  
	
   

  	
  8.12.

  	
  Submission To Jurisdiction;
  Waivers

  
	
   

  	
  8.13.

  	
  Acknowledgments

  
	
   

  	
  8.14.

  	
  Additional Grantors

  
	
   

  	
  8.15.

  	
  Releases

  
	
   

  	
  8.16.

  	
  WAIVER
  OF JURY TRIAL

  



 


 


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GUARANTEE AND COLLATERAL AGREEMENT


GUARANTEE AND COLLATERAL
AGREEMENT, dated as of October 14, 2004, made by each of the signatories hereto
(together with any other entity that may become a party hereto as provided
herein, the “Grantors”), in favor of LEHMAN COMMERCIAL PAPER INC., as
Administrative Agent (as defined below).


W I T N E S S E T H:


WHEREAS, B&G Foods, Inc., a Delaware corporation
(the “Borrower”) is party to the Credit Agreement, dated as of October
14, 2004 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), with the several banks and other financial
institutions from time to time parties thereto (the “Lenders”), Lehman
Brothers Inc., as sole advisor, sole lead arranger and sole bookrunner (in such
capacity, the “Arranger”), The Bank of New York, as documentation agent
(in such capacity, the “Documentation Agent”), Fleet National Bank, a
Bank of America company, as syndication agent (in such capacity, the “Syndication
Agent”), and Lehman Commercial Paper Inc., as administrative agent (in such
capacity, the “Administrative Agent”);


WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make, or to permit to continue to be outstanding,
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;


WHEREAS, the Borrower is a member of an affiliated
group of companies that includes each other Grantor;


WHEREAS, the proceeds of the extensions of credit
under the Credit Agreement  have been
and will be used in part to enable the Borrower to make valuable transfers to
one or more of the other Grantors in connection with the operation of their
respective businesses;


WHEREAS, the Borrower and the other Grantors are
engaged in related businesses, and each Grantor will derive substantial direct
and indirect benefit from the extensions of credit under the Credit Agreement;
and


WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective extensions of credit to the Borrower
under the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Administrative Agent for the ratable benefit of the
Secured Parties (as defined below);


NOW, THEREFORE, in consideration of the premises and
to induce the Arranger, the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:


 


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SECTION 1.  DEFINED TERMS


1.1.  Definitions. 
(a)  Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement and the following terms which
are defined in Articles 8 and 9 of the Uniform Commercial Code in effect in the
State of New York on the date hereof are used herein as so defined:  Accounts, Certificated Security, Chattel
Paper, Deposit Accounts, Documents, Equipment, Farm Products, Goods,
Instruments, Inventory, Letter of Credit Rights and Supporting Obligations.


(b)   The following terms shall have the following
meanings:


“Agreement”: 
this Guarantee and Collateral Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.


“Borrower Foreign Letter of Credit Obligations”:  the collective reference to all obligations
and liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided in the documentation executed in
connection with any Permitted Foreign Currency Letter of Credit after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
to any Foreign Currency L/C Issuing Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, any Permitted
Foreign Currency Letter of Credit or any other document made, delivered or
given in connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements).


“Borrower Hedge Agreement Obligations”:  the collective reference to all obligations
and liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided in any Specified Hedge Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Lender or any Qualified Counterparty, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, any
Specified Hedge Agreement or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Lenders that are required to be paid by the Borrower pursuant to the terms of
any of the foregoing agreements).


“Borrower Obligations”:  the collective reference to (i) the Borrower
Revolving Credit Obligations, (ii) the Borrower Hedge Agreement Obligations,
but only to the extent that, and only so long as, the Borrower Revolving Credit
Obligations are secured and guaranteed pursuant hereto, (iii) Borrower Foreign
Letter of Credit Obligations, but 


 


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only to the extent that, and
only so long as, the Borrower Foreign Letter of Credit Obligations are secured
and guaranteed pursuant hereto, and (iv) all other obligations and liabilities
of the Borrower, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent or to the Lenders
that are required to be paid by the Borrower pursuant to the terms of this
Agreement or the Credit Agreement).


“Borrower Revolving Credit Obligations”:  the collective reference to the unpaid
principal of and interest on the Revolving Credit Loans, Swing Line Loans and
Reimbursement Obligations and all other obligations and liabilities of the
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Revolving Credit Loans, Swing Line Loans and Reimbursement Obligations and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Administrative Agent or any Revolving Credit Lender,
whether direct or indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, the other Loan Documents referred to in
the Credit Agreement, any Letter of Credit or any other document made,
delivered or given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Revolving Credit
Lenders that are required to be paid by the Borrower pursuant to the terms of
any of the foregoing agreements).


“Capital Markets Indentures”: the Senior Note
Indenture and Senior Subordinated Note Indenture and any indenture governing
Indebtedness permitted under Section 6.1 of the Credit Agreement which
refinances the Indebtedness under such indentures.


“Collateral”:  as defined in Section 3.


“Collateral Account”:  any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.


“Commitments”:  the Revolving Credit Commitments.


 “Copyright
Licenses”:  any written agreement
naming any Grantor as licensor or licensee (including, without limitation,
those listed in Schedule 6), granting any right under any Copyright.


“Copyrights”:  (i) all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished (including, without
limitation, those listed in Schedule


 


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6), all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to obtain
all renewals thereof.


“Excluded Assets”:  the collective reference to (a) any Capital Stock of any Excluded
Foreign Subsidiary in excess of 65% of the voting Capital Stock of such
Excluded Foreign Subsidiary (b) any real property and any interests therein and
(c) any contract, General Intangible, Intellectual Property, Copyright License,
Patent License or Trademark License (“Intangible Assets”), if and only
for so long as the grant of a security interest hereunder shall constitute or
result in a breach, termination or default under any such lease, license,
contract, property right or agreement (other than to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the Uniform Commercial Code of any relevant jurisdiction or any other
applicable law or principles of equity); provided  however, that
such security interest shall attach immediately to any portion of such lease,
license, contract, property rights or agreement that does not result in any of
the consequences specified above.


“Foreign Currency L/C Issuing Lender”: with
respect to any Permitted Foreign Currency Letters of Credit, the issuer thereof
that, at the time such Permitted Foreign Currency Letter of Credit was issued,
was a Lender or an affiliate of a Lender.


“General Intangibles”:  all “general intangibles” as such term is
defined in Section 9-102 of the Uniform Commercial Code in effect in the State
of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements, instruments
and indentures in any form, and portions thereof, to which such Grantor is a
party or under which such Grantor has any right, title or interest or to which
such Grantor or any property of such Grantor is subject, as the same may from
time to time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of such
Grantor to damages arising thereunder and (iii) all rights of such Grantor to
perform and to exercise all remedies thereunder.


“Guarantor Obligations”:  with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or
any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent or to the Lenders
that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).


“Guarantors”:  the collective reference to each Grantor other than the Borrower.


“Hedge Agreements”:  as to any Person, all interest rate swaps, currency exchange
agreements, commodity swaps, caps or collar agreements or similar arrangements
entered into by such Person providing for protection against fluctuations in
interest rates,


 


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currency exchange rates or
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies. 
For avoidance of doubt, Hedge Agreements shall include any interest rate
swap or similar agreement that provides for the payment by the Borrower or any
of its Subsidiaries of amounts based upon a floating rate in exchange for
receipt by the Borrower or such Subsidiary of amounts based upon a fixed rate.


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


“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to
sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.


“Intercompany Note”:  any promissory note evidencing loans made by
any Grantor to the Borrower or any of its Subsidiaries.


“Investment Property”:  the collective reference to (i)  all “investment property” as such term is
defined in Section 9-102(a)(49) of  the
New York UCC and (ii) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Stock.


“Issuers”: 
the collective reference to each issuer of a Pledged Security.


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


“Obligations”:  (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Guarantor, its Guarantor Obligations.


“Patent License”:  all agreements, whether written or oral, providing for the grant
by or to any Grantor of any right to manufacture, use or sell any invention
covered in whole or in part by a Patent, including, without limitation, any of
the foregoing referred to in Schedule 6.


“Patents”: 
(i) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof, including,
without limitation, any of the foregoing referred to in Schedule 6, (ii)
all applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof, including,
without limitation, any of the foregoing referred to in Schedules 6, and
(iii) all rights to obtain any reissues or extensions of the foregoing.


“Pledged Notes”:  all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held


 


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by any Grantor (other than
promissory notes issued in connection with extensions of trade credit by any
Grantor in the ordinary course of business).


“Pledged Securities”:  the collective reference to the Pledged
Notes and the Pledged Stock.


“Pledged Stock”:  the shares of Capital Stock listed on Schedule 2, together
with any other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect; provided,
that Excluded Assets shall not constitute Pledged Stock.


“Proceeds”: 
all “proceeds” as such term is defined in Section 9-102(a)(64) of the
Uniform Commercial Code in effect in the State of New York on the date hereof
and, in any event, including, without limitation, all dividends or other income
from Investment Property, collections thereon or distributions or payments with
respect thereto.


“Qualified Counterparty”:  with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.


“Receivable”:  any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).


“Secured Parties”:  the collective reference to the Administrative Agent, the Other
Agents, the Lenders (including any Issuing Lender in its capacity as Issuing
Lender), any Foreign Currency L/C Issuing Lenders and any Qualified
Counterparties.


“Securities Act”:  the Securities Act of 1933, as amended.


“Specified Hedge Agreement”:  any Hedge Agreement (a) entered into by (i)
the Borrower or any of its Subsidiaries and (ii) any Qualified Counterparty.


“Trademark License”:  any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark,
including, without limitation, any of the foregoing referred to in Schedules
6.


“Trademarks”:  (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and all goodwill associated therewith,
now existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Schedules
6, and (ii) the right to obtain all renewals thereof.


 


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“Vehicles”: 
all cars, trucks, trailers, construction and earth moving equipment and
other vehicles covered by a certificate of title law of any state and all tires
and other appurtenances to any of the foregoing.


1.2.          Other
Definitional Provisions. 
(a)  The words “hereof”,
“herein”, “hereto” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.


(b)   The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.


(c)   Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to a Grantor, shall
refer to such Grantor’s Collateral or the relevant part thereof.


SECTION 2.  GUARANTEE


 


2.1           Guarantee.  (a) 
Each of the Guarantors hereby, jointly and severally, absolutely,
unconditionally and irrevocably, guarantees to the Administrative Agent, for
the ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.


(b)   Anything herein or in any other Loan Document
to the contrary notwithstanding, the maximum liability of each Guarantor
hereunder and under the other Loan Documents shall in no event exceed the
amount which can be guaranteed by such Guarantor under applicable federal and
state laws relating to the insolvency of debtors (after giving effect to the
right of contribution established in Section 2.2).


(c)   Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent or any Secured Party hereunder.


(d)   The guarantee contained in this Section 2
shall remain in full force and effect until (subject to reinstatement pursuant
to Section 2.6) all the Borrower Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.


(e)   No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall,


 


9

















 


notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or any payment received or collected from such Guarantor
in respect of the Borrower Obligations), remain liable for the Borrower
Obligations up to the maximum liability of such Guarantor hereunder until
(subject to reinstatement pursuant to Section 2.6) the Borrower Obligations are
paid in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.


2.2.          Right
of Contribution.  Each
Subsidiary Guarantor hereby agrees that to the extent that a Subsidiary Guarantor
shall have paid more than its proportionate share of any payment made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive
contribution from and against any other Subsidiary Guarantor hereunder which
has not paid its proportionate share of such payment.  Each Subsidiary Guarantor’s right of contribution shall be
subject to the terms and conditions of Section 2.3.  The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of any Subsidiary Guarantor to the Administrative
Agent and the Secured Parties, and each Subsidiary Guarantor shall remain
liable to the Administrative Agent and the Secured Parties for the full amount
guaranteed by such Subsidiary Guarantor hereunder.


2.3.          No
Subrogation.  Notwithstanding
any payment made by any Guarantor hereunder or any set-off or application of
funds of any Guarantor by the Administrative Agent or any Secured Party, no
Guarantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by
the Administrative Agent or any Secured Party for the payment of the Borrower
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing
to the Administrative Agent and the Secured Parties by the Borrower on account of
the Borrower Obligations are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated.  If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust
for the Administrative Agent and the Secured Parties, segregated from other
funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor,
be turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.


2.4.          Amendments,
etc. with respect to the Borrower Obligations.  Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without
notice to or further assent by any Guarantor, any demand for payment of any of
the Borrower Obligations made by the Administrative Agent or any Secured Party
may be rescinded by the Administrative Agent or such Secured Party and any of
the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Secured Party, and the Credit Agreement and the other Loan


 


10

















 


Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Secured Party for the payment of the
Borrower Obligations may be sold, exchanged, waived, surrendered or
released.  Neither the Administrative
Agent nor any Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Borrower
Obligations or for the guarantee contained in this Section 2 or, except as
provided in Section 7.2 hereof, any property subject thereto.


2.5.          Guarantee Absolute and Unconditional.  Each Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Borrower Obligations
and notice of or proof of reliance by the Administrative Agent or any Secured
Party upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower
and any of the Guarantors, on the one hand, and the Administrative Agent and
the Secured Parties, on the other hand, likewise shall be conclusively presumed
to have been had or consummated in reliance upon the guarantee contained in
this Section 2.  Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations.  Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute, irrevocable and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Borrower Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower, any Guarantor or any other Person against the Administrative
Agent or any Secured Party, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any other
instance.  When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Secured Party may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such
rights and remedies as it may have against the Borrower, any other Guarantor or
any other Person or against any collateral security or guarantee for the
Borrower Obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any Secured Party against any
Guarantor.  For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.


 


11

















 


2.6.          Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Secured Party upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Borrower or any Guarantor, or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower or any Guarantor or any substantial part of
its property, or otherwise, all as though such payments had not been made.


2.7.          Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or counterclaim
in Dollars at the Payment Office specified in the Credit Agreement.


SECTION 3.  GRANT OF SECURITY INTEREST


 


Each Grantor hereby assigns and transfers to the
Administrative Agent, for the ratable benefit of the Secured Parties, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now
owned or at any time hereafter acquired by such Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the “Collateral”), in each case as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:


(i)       all
Accounts;


(ii)      all
Chattel Paper;


(iii)     all
Documents;


(iv)     all
Equipment (other than Vehicles);


(v)      all  General Intangibles;


(vi)     all
Instruments;


(vii)    all
Intellectual Property;


(viii)   all
Inventory;


(ix)     all
Investment Property;


(x)      all
Deposit Accounts;


(xi)     all
Insurance;


 


(xii)    all
Letter of Credit Rights;


 


(xiii)   all
Goods and other personal property not otherwise described above;


 


 


12

















 


(xiv)   all books, records, ledger cards, files, correspondence, customer
lists, blueprints, technical specifications, manuals, computer printouts,
tapes, disks and other electronic storage media and similar items that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and


 


(xi)   to
the extent not otherwise included, all other property of the Grantor and all
Proceeds, products, accessions, rents and profits of any and all of the
foregoing and all collateral security, Supporting Obligations and guarantees
given by any Person with respect to any of the foregoing;


provided, that the Collateral shall
not include any Excluded Assets.


SECTION 4.  REPRESENTATIONS AND
WARRANTIES


To induce the Agents and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Secured Party that:


4.1.          Representations in Credit Agreement.  In the case of each Guarantor, the
representations and warranties set forth in Section 3 of the Credit Agreement
as they relate to such Guarantor or to the Loan Documents to which such
Guarantor is a party, each of which is hereby incorporated herein by reference,
are true and correct, and the Administrative Agent and each Secured Party shall
be entitled to rely on each of them as if they were fully set forth herein, provided
that each reference in each such representation and warranty to the Borrower’s
knowledge shall, for the purposes of this Section 4.1, be deemed to be a
reference to such Guarantor’s knowledge.


4.2.          Title; No
Other Liens.  Except for the security
interest granted to the Administrative Agent for the ratable benefit of the
Secured Parties pursuant to this Agreement and the other Liens permitted to
exist or be incurred on the Collateral by the Credit Agreement, such Grantor
owns each item of the Collateral free and clear of any and all Liens or claims
of others.  No financing statement or
other public notice with respect to all or any part of the Collateral is on
file or of record in any public office, except such as have been filed in favor
of the Administrative Agent, for the ratable benefit of the Secured Parties,
pursuant to this Agreement or as are permitted by the Credit Agreement.


4.3.          Perfected
First Priority Liens.  The
security interests granted pursuant to this Agreement  upon completion of the filings and other actions specified on Schedule 3
(which, in the case of all filings and other documents referred to on said
Schedule, have been delivered to the Administrative Agent in completed and, if
applicable, duly executed form), will constitute valid perfected security
interests in all of the Collateral subject hereto on the date hereof in favor
of the Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for such Grantor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of such Grantor and any Persons
purporting to purchase any Collateral from such Grantor, and are prior to all
other Liens on the Collateral in existence on the date hereof, except


 


13

















 


for (i) unrecorded Liens permitted by the Credit
Agreement which have priority over the Liens on the Collateral by operation of
law and (ii) Liens described on Schedule 7.


4.4.          Jurisdiction
of Organization; Identification Number; Chief Executive Office.  On the date hereof, such Grantor’s
jurisdiction of organization, identification number from the jurisdiction of
organization (if any), and the location of such Grantor’s chief executive
office or sole place of business, as the case may be, are specified on Schedule
4.  Such Grantor has furnished to
the Administrative Agent a certified charter, certificate of incorporation or
other organization document with respect to such Grantor and (to the extent
available from the relevant State) long-form good standing certificate with
respect to such Grantor as of a date which is recent to the date hereof.


4.5.          Inventory
and Equipment.  On the date
hereof, the Inventory and the Equipment (other than mobile goods) are kept at
the locations listed on Schedule 5.


4.6.          Farm Products.  None of the Collateral constitutes, or is
the Proceeds of, Farm Products.


4.7.          Pledged
Securities.  (a)  The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor (or 65% of
the voting Capital Stock of each Issuer that is an Excluded Foreign
Subsidiary).


(b)   All the shares of the Pledged Stock have been
duly and validly issued and are fully paid and nonassessable.


(c)   Each of the Intercompany Notes constitutes
the legal, valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, and, to such Grantor’s knowledge,
each of the other Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, in each case, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.  No obligor with respect to any Pledged Note has any defense,
offset or contribution regarding payment of such Pledged Note.


(d)   Such Grantor is the record and beneficial
owner of, and has good and marketable title to, the Pledged Securities pledged
by it hereunder, free of any and all Liens or options in favor of, or claims
of, any other Person, except the security interest created by this Agreement
and liens permitted by the Credit Agreement which attach to such Pledged
Securities without such Grantor’s consent.


4.8.          Receivables.  (a) 
No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent in accordance with the requirements
hereof.


(b)   On the date hereof, none of the obligors on any
Receivables is a Governmental Authority.


 


14

















 


(c)   The amounts represented by such Grantor to
the Secured Parties from time to time as owing to such Grantor in respect of
the Receivables will at such times be accurate.


4.9.   [Reserved]


4.10.   Intellectual Property.  (a)  Schedule
6 lists, with respect to all Intellectual Property owned by such Grantor in
its own name on the date hereof, all Patents, registrations and applications
included in the Copyrights, registrations and applications included in the
Trademarks, registrations for domain names actively used by the Grantors, and
all written Copyright Licenses, Trademark Licenses and Patent Licenses that
grant exclusive rights to any of the Grantors.


(b)   On the date hereof, all material Intellectual
Property is valid, subsisting, unexpired, has not been abandoned and, to the
knowledge of such Grantor, is enforceable and does not infringe the
intellectual property rights of any other Person.


(c)   Except as set forth in Schedule 6, on
the date hereof, none of the material Intellectual Property is the subject of
any licensing or franchise agreement pursuant to which such Grantor is the
licensor or franchisor.


(d)   No final holding, decision or judgment has
been rendered by any Governmental Authority which would limit, cancel or
question the validity of, or such Grantor’s rights in, any Intellectual
Property in any respect that could reasonably be expected to have a Material
Adverse Effect, except that with respect to the Intellectual Property listed on
Schedule 6, such representation is to the knowledge of such Grantor.


(e)   No action or proceeding is pending, or, to
the knowledge of such Grantor, threatened, on the date hereof (i) seeking to
limit, cancel or question the validity of any Intellectual Property or such
Grantor’s ownership interest therein, or (ii) which, if adversely determined,
would have a Material Adverse Effect on the value of any Intellectual Property,
except that with respect to the Intellectual Property listed on Schedule 6,
such representation is to the knowledge of such Grantor.


4.11.   Vehicles.  On
the date hereof, the aggregate book value of all Vehicles owned by all Grantors
is less than $1,000,000.


SECTION 5.  COVENANTS


Each Grantor covenants and agrees with the
Administrative Agent and the Secured Parties that, from and after the date of
this Agreement until the Obligations shall have been paid in full, no Letter of
Credit shall be outstanding and the Commitments shall have terminated:


5.1.          Covenants
in the Credit Agreement.  In the
case of each Guarantor, such Guarantor shall take, or shall refrain from
taking, as the case may be, each action that is necessary to be taken or not
taken, as the case may be, so that no Default or Event of Default is caused by
the failure to take such action or to refrain from taking such action by such
Guarantor or any of its Subsidiaries.


 


15

















 


5.2.          Delivery
of Instruments, Certificated Securities and Chattel Paper.  If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper, such Instrument, Certificated Security
or Chattel Paper shall be immediately delivered to the Administrative Agent,
duly indorsed in a manner satisfactory to the Administrative Agent, to be held
as Collateral pursuant to this Agreement.


5.3.          Maintenance
of Insurance.  (a)  Such Grantor will maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Inventory,
Equipment and Vehicles against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and
(ii) to the extent reasonably requested by the Administrative Agent, insuring
such Grantor against liability for personal injury and property damage relating
to such Inventory, Equipment and Vehicles, and naming the Administrative Agent
for the ratable benefit of the Secured Parties, as an additional insured party
or loss payee, such policies to be in such form and amounts and having such
coverage as are customary in the same general area for companies engaged in the
same or a similar business as such Grantor.


(b)   Such Guarantor shall not permit any cancellation,
material reduction in amount or material change in coverage of any of its
insurance policies to be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof. All such insurance shall
(i) name the Administrative Agent as an additional insured party or loss
payee, (ii) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (iii) be reasonably satisfactory in all
other respects to the Administrative Agent.


(c)   The Borrower shall deliver to the
Administrative Agent and the Lenders a report of a reputable insurance broker
with respect to such insurance substantially concurrently with the delivery by
the Borrower to the Administrative Agent of its audited financial statements for
each fiscal year and such supplemental reports with respect thereto as the
Administrative Agent may from time to time reasonably request.


(d)   So long as no Event of Default shall have
occurred and be continuing, all casualty payments shall be paid to the relevant
Grantor.  If an Event of Default has
occurred and is continuing, all casualty payments shall be paid to the
Administrative Agent for application pursuant to Section 2.7 of the Credit
Agreement.


5.4.          Payment
of Obligations.  Such Grantor
will pay and discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the Collateral or in respect of
income or profits therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with respect thereto
have been provided on the books of such Grantor and such proceedings could not
reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any material interest therein.


 


16

















 


5.5.          Maintenance of Perfected Security
Interest; Further Documentation.  (a)  Such Grantor shall
maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 4.3 and
shall defend such security interest against the claims and demands of all
Persons whomsoever.


(b)   Such Grantor will furnish to the
Administrative Agent and the Lenders from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.


(c)   At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole expense of such
Grantor, such Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of 
Investment Property,  taking any
actions necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect
thereto.


5.6.          Changes in
Name, etc.  Such Grantor
will not, except upon 10 days’ prior written notice to the Administrative Agent
and delivery to the Administrative Agent of 
all additional financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection and
priority of the security interests provided for herein:


(a)   change its jurisdiction of organization or
the location of its chief executive office or sole place of business from that
referred to in Section 4.3; or


(b)   change its name.


5.7.          Notices.  Such Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of:


(a)   any Lien (other than security interests
created hereby or Liens permitted under the Credit Agreement) on any of the
Collateral which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder; and


(b)   of the occurrence of any other event which
could reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the security interests created hereby.


5.8.          Pledged
Securities.  (a)  If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of,


 


17

















 


or in exchange for, any shares of the Pledged Stock,
or otherwise in respect thereof, such Grantor shall accept the same as the
agent of the Administrative Agent and the Secured Parties, hold the same in
trust for the Administrative Agent and the Secured Parties and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations; provided,
that in no event shall more than 65% of the voting Capital Stock of any Excluded
Foreign Subsidiary be required to be pledged hereunder.  Any sums paid upon or in respect of the
Pledged Securities upon the liquidation or dissolution of any Issuer shall be
paid over to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any distribution of
capital shall be made on or in respect of the Pledged Securities or any
property shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of
the Administrative Agent for the benefit of the Secured Parties, be delivered
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations.  If any
sums of money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Secured Parties, segregated from other funds of such
Grantor, as additional collateral security for the Obligations; provided
that the Grantors may pay cash dividends as permitted by the Credit
Agreement.  Notwithstanding the
foregoing, the Grantors shall not be required to pay over to the Administrative
Agent or deliver to the Administrative Agent as Collateral any proceeds of any
liquidation or dissolution of any Issuer, or any distribution of capital or
property in respect of any Investment Property, to the extent that
(i) such liquidation, dissolution or distribution would be permitted by
the Credit Agreement and  (ii) the
proceeds thereof are applied toward prepayment of Loans and reduction of
Commitments to the extent required by the Credit Agreement.


(b)   Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity
securities of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other equity
securities of any nature of any Issuer, except to the extent that any such
securities so issued are pledged hereunder, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Pledged Securities or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Pledged Securities or Proceeds thereof, or any interest therein,
except for the security interests created by this Agreement and liens permitted
by the Credit Agreement which attach to such Pledged Securities without such
Grantor’s consent or (iv) enter into any agreement or undertaking (other than
the Loan Documents and the Capital Markets Indentures) restricting the right or
ability of such Grantor or the Administrative Agent to sell, assign or transfer
any of the Pledged Securities or Proceeds thereof.


(c)   In the case of each Grantor which is an
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Pledged Securities issued by it and


 


18

















 


will comply with such terms
insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events
described in Section 5.8(a) with respect to the Pledged Securities issued by it
and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 with respect to the Pledged Securities issued
by it.


(d)   Each Issuer that is a partnership or a
limited liability company (i) confirms that none of the terms of any equity interest
issued by it provides that such equity interest is a “security” within the
meaning of Sections 8-102 and 8-103 of the New York UCC (a “Security”),
(ii) agrees that it will take no action to cause or permit any such equity
interest to become a Security, (iii) agrees that it will not issue any
certificate representing any such equity interest and (iv) agrees that if,
notwithstanding the foregoing, any such equity interest shall be or become a
Security, such Issuer will (and the Grantor that holds such equity interest
hereby instructs such Issuer to) comply with instructions originated by the
Administrative Agent without further consent by such Grantor.


5.9.          Receivables.  (a) 
Other than in the ordinary course of business consistent with its past
practice, such Grantor will not (i) grant any extension of the time of payment
of any material Receivable, (ii) compromise or settle any material Receivable
for less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any material Receivable, (iv) allow any credit
or discount whatsoever on any material Receivable or (v) amend, supplement or
modify any material Receivable in any manner that could adversely affect the
value thereof.


(b)   Such Grantor will deliver to the
Administrative Agent a copy of each material demand, notice or document
received by it that questions or calls into doubt the validity or
enforceability of more than 5% of the aggregate amount of the then outstanding
Receivables.


5.10.   [Reserved]


5.11.   Intellectual Property.  (a) 
Such Grantor (either itself or through licensees) will (i) continue to
use each material Trademark in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, except in connection with
Dispositions permitted pursuant to Section 6.5 of the Credit Agreement or the
non-use of a given Trademark for specific goods and services in the ordinary
course of business, (ii) maintain as in the past the quality of products and
services offered under such Trademark, and (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required
by applicable Requirements of Law.


(b)   Such Grantor (either itself or through
licensees) will not (and not permit any licensee or sublicensee thereof to)
knowingly do any act or knowingly omit to do any act whereby any (i) material
Trademark may become invalidated or impaired in any way, (ii) material Patent
may become forfeited, abandoned or dedicated to the public, or (iii) material
Copyrights may become invalidated or otherwise impaired or fall into the public
domain.


(c)   Such Grantor (either itself or through
licensees) will not knowingly do any act that infringes the intellectual
property rights of any other Person.


 


19

















 


(d)   Such Grantor will notify the Administrative
Agent and the Lenders immediately if it knows, or has reason to know, that any
application or registration relating to any material Intellectual Property has
become, or is reasonably likely to become, forfeited, abandoned or dedicated to
the public, or of any material adverse determination or development (including,
without limitation, the institution of, or any such material determination or
development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court or tribunal in any
country) regarding such Grantor’s ownership of, or the validity of, any
material Intellectual Property or such Grantor’s right to register the same or
to own and maintain the same.


(e)   To the extent a breach of Sections 5.11(a),
(b), (c) or (d) would result in an Event of Default, it shall not be considered
an Event of Default if such breach is cured within 30 days after written notice
from the Administrative Agent and results in no Material Adverse Affect to the
affected Intellectual Property.


(f)    Whenever such Grantor, either by itself or
through any agent, employee, licensee or designee, shall file an application
for the registration of any Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, as
applicable, such Grantor shall report such filing to the Administrative Agent
within 30 Business Days after the last day of the fiscal quarter in which such
filing occurs, provided that failure to give notice shall not be deemed an
Event of Default if notice is given with reasonable time such that there is no
Material Adverse Effect.  Upon written
request of the Administrative Agent, such Grantor shall execute and deliver,
and have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the
Administrative Agent’s and the Secured Parties’ security interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby, to the extent such security
interest may be perfected by filings with a Governmental Authority in the
United States.


(g)   Consistent with such Grantor’s reasonable
business judgment, such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof, as
applicable, to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the material Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.


(h)   In the event that any Grantor becomes aware
that any material Intellectual Property is infringed, misappropriated or
diluted by a third party, such Grantor shall (i) take such actions as such
Grantor shall reasonably deem appropriate under the circumstances to protect
such Intellectual Property and (ii) promptly notify the Administrative Agent
after it learns thereof and take such action against such third party as it
reasonably deems appropriate under the circumstances, including, without
limitation, suing for infringement, misappropriation or dilution, seeking
injunctive relief where appropriate and recovering any and all damages for such
infringement, misappropriation or dilution.


 


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5.12.   Deposit Accounts.  Upon the request of the Administrative Agent at any time when an
Event of Default shall have occurred and be continuing, promptly take all
actions necessary to cause the Administrative Agent to have “control” (within
the meaning of Section 9-314 of the New York UCC) of any Deposit Account of any
Grantor in which the daily average amount on deposit, during the 30-day period
preceding such request by the Administrative Agent, was in excess of
$1,000,000.


SECTION
6.  REMEDIAL PROVISIONS


6.1.          Certain Matters Relating to
Receivables.  (a)  The Administrative Agent shall have the
right to make test verifications of the Receivables in any manner and through
any medium that it reasonably considers advisable, and each Grantor shall
furnish all such assistance and information as the Administrative Agent may
require in connection with such test verifications.  At any time and from time to time, upon the Administrative
Agent’s request and at the expense of the relevant Grantor, such Grantor shall
cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables, but not more frequently than annually if no Event of Default shall
have occurred and be continuing; provided, however, that if no
Event of Default shall have occurred and be continuing, the Administrative
Agent may not contact any obligor under any Receivable in its own name.


(b)   The Administrative Agent hereby authorizes
each Grantor to collect such Grantor’s Receivables, subject to the
Administrative Agent’s direction and control, and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default.  If required by the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if
required, in a Collateral Account maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by the Administrative
Agent for the account of the Secured Parties only as provided in Section 6.5,
and (ii) until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of
such Grantor.  Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.


(c)   At the Administrative Agent’s request, each
Grantor shall deliver to the Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.


 


21

















 


6.2.          Communications
with Obligors; Grantors Remain Liable.  (a)  The Administrative
Agent in its own name or in the name of others may at any time after the
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Administrative
Agent’s satisfaction the existence, amount and terms of any Receivables.


(b)   Upon the request of the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, each Grantor shall notify obligors on the Receivables that the
Receivables have been assigned to the Administrative Agent for the ratable
benefit of the Secured Parties and that payments in respect thereof shall be
made directly to the Administrative Agent.


(c)   Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Receivables
to observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto.  Neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Secured Party of any payment relating thereto, nor
shall the Administrative Agent or any Secured Party be obligated in any manner
to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party thereunder,
to present or file any claim, to take any action to enforce any performance or
to collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.


6.3.          Pledged Stock.  (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends and other distributions paid in respect of the
Pledged Stock and all payments made in respect of the Pledged Notes, in each
case paid in the normal course of business of the relevant Issuer and
consistent with past practice, to the extent permitted in the Credit Agreement,
and to exercise all voting and corporate rights with respect to the Pledged
Securities; provided, however, that no vote shall be cast or
corporate right exercised or other action taken which would impair the
Collateral in any material respect or which would result in any violation of
any provision of the Credit Agreement, this Agreement or any other Loan
Document.


(b)   If an Event of Default shall occur and be
continuing and the Administrative Agent shall give notice of its intent to
exercise such rights to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Pledged Securities
and make application thereof to the Obligations in the order set forth in
Section 6.5, and (ii) any or all of the Pledged Securities shall be registered
in the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (x) all voting, corporate and
other rights pertaining to such Pledged Securities at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and (y) any
and all rights of conversion, exchange and subscription and any other


 


22

















 


rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.


(c)   Each Grantor hereby authorizes and instructs
each Issuer of any Pledged Securities pledged by such Grantor hereunder to (i)
comply with any instruction received by it from the Administrative Agent in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this 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 Pledged Securities directly to the Administrative Agent.


6.4.          Proceeds
to be Turned Over To Administrative Agent.  In addition to the rights of the
Administrative Agent and the Secured Parties specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required).  All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in a Collateral
Account maintained under its sole dominion and control.  All Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.


6.5.          Application
of Proceeds.  If an Event of
Default shall have occurred and be continuing, at any time at the
Administrative Agent’s election, the Administrative Agent may apply all or any
part of Proceeds constituting Collateral, whether or not held in any Collateral
Account, and any proceeds of the guarantee set forth in Section 2, in payment
of the Obligations in the following order:


First, to pay incurred and unpaid fees and expenses of the
Administrative Agent under the Loan Documents;


Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in respect
of the Obligations, pro  rata


 


23

















 


among the Secured Parties
according to the amounts of the Obligations then due and owing and remaining
unpaid to the Secured Parties;


Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro  rata among the Secured
Parties according to the amounts of the Obligations then held by the Secured
Parties;


Fourth, to the Administrative Agent, for application by it
towards replacement of outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Secured Parties on terms and conditions satisfactory to
the Administrative Agent and each applicable Issuing Lender; and


Fifth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.


6.6.          Code
and Other Remedies.  If an Event
of Default shall occur and be continuing, the Administrative Agent, on behalf
of the Secured Parties, may exercise, in addition to all other rights and
remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the New York UCC or any other applicable
law.  Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Administrative Agent or
any Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk.  The Administrative Agent or any Secured
Party 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 the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and
released.  Each Grantor further agrees,
at the Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the
proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Administrative Agent
may elect, and only after such application and after the payment by the
Administrative Agent of any other


 


24

















 


amount required by any provision of law, including,
without limitation, Section 9-615(a)(3) of the New York UCC, need the
Administrative Agent account for the surplus, if any, to any Grantor.  To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Secured Party arising out of the exercise by them
of any rights hereunder.  If any notice
of a proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.


6.7.          Registration
Rights.  (a)  If the Administrative Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 6.6, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor
will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may be, in the opinion of the Administrative Agent, necessary or advisable to register
the Pledged Stock, or that portion thereof to be sold, under the provisions of
the Securities Act, (ii) use its best efforts to cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the Pledged
Stock, or that portion thereof to be sold, and (iii) make all amendments
thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto.  Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.


(b)   Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof.  Each Grantor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.


(c)   Each Grantor agrees to use its best efforts
to do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Stock pursuant to this
Section 6.7 valid and binding and in compliance with any and all other
applicable Requirements of Law.  Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 6.7 will cause irreparable injury to the Administrative Agent and the
Secured Parties, that the Administrative Agent and the Secured Parties have no
adequate 


 


25

















 


remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred.


6.8.          Waiver;
Deficiency.  Each Grantor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay its Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent or
any Secured Party to collect such deficiency.


SECTION
7.  THE ADMINISTRATIVE AGENT


7.1.          Administrative
Agent’s Appointment as Attorney-in-Fact, etc.  (a) 
Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable power
and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:


(i)            in the name of such Grantor or its
own name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any Receivable or
Contract or with respect to any other Collateral whenever payable;


(ii)           in the case of any Intellectual
Property, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may request to
evidence the Administrative Agent’s and the Secured Parties’ security interest
in such Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;


(iii)          pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or any part
of the premiums therefor and the costs thereof;


(iv)          execute, in connection with any sale
provided for in Section 6.6 or 6.7, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and


(v)           (1) direct any party liable for any
payment under any of the Collateral to make payment of any and all moneys due
or to become due thereunder directly to the


 


26

















 


Administrative Agent or as
the Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of any
Collateral; (3) sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any
Collateral; (5) defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral; (6) settle, compromise or adjust any
such suit, action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem appropriate; (7)
assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains), throughout
the world for such term or terms, on such conditions, and in such manner, as
the Administrative Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at the Administrative Agent’s option and such Grantor’s expense, at any time,
or from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Secured Parties’ security interests therein and
to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.


Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not exercise any
rights under the power of attorney provided for in this Section 7.1(a) unless
an Event of Default shall have occurred and be continuing.


(b)   If any Grantor fails to perform or comply
with any of its agreements contained herein, the Administrative Agent, at its
option following notice to such Grantor of such failure, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.


(c)   The expenses of the Administrative Agent
incurred in connection with actions undertaken as provided in this Section 7.1,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Revolving Credit Loans that
are Base Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.


(d)   Each Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby
are released.


7.2.          Duty
of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession,


 


27

















 


under Section 9-207 of the New York UCC or otherwise,
shall be to deal with it in the same manner as the Administrative Agent deals
with similar property for its own account. 
Neither the Administrative Agent, any Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Administrative
Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers.  The
Administrative Agent and the Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.


7.3.          Financing
Statements.  Pursuant to the New
York UCC or any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the
Administrative Agent reasonably determines appropriate to perfect the security
interests of the Administrative Agent under this Agreement.  Each Grantor authorizes the Administrative
Agent to use the collateral description “all personal property” or “all assets”
in any such financing statements.  Each Grantor
hereby ratifies and authorizes the filing by the Administrative Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.


7.4.          Authority of Administrative Agent.  Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Agreement with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor or other Person
(except a Lender) shall be under any obligation, or entitlement, to make any
inquiry respecting such authority. 
Notwithstanding any other provision herein or in any Loan Document, the
only duty or responsibility of the Administrative Agent to any Qualified Counterparty
or to any Foreign Currency L/C Issuing Lender, in its capacity as such, under
this Agreement is the duty to remit to such Qualified Counterparty or such
Foreign Currency L/C Issuing Lender any amounts to which it is entitled
pursuant to Section 6.5.


SECTION
8.  MISCELLANEOUS


8.1.          Amendments
in Writing.  None of the terms
or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except in accordance with Section 9.1 of the Credit
Agreement.


28

















 


8.2.          Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 9.2 of the Credit Agreement; provided
that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on Schedule 1.


8.3.          No
Waiver by Course of Conduct; Cumulative Remedies.  Neither the Administrative Agent nor any
Secured Party shall by any act (except by a written instrument pursuant to
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default.  No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or any
Secured Party of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion.  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.


8.4.          Enforcement
Expenses; Indemnification. 
(a)  Each Guarantor agrees to pay
or reimburse each Secured Party and the Administrative Agent for all its costs
and expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and expenses of in-house counsel) to each Secured Party and
of counsel to the Administrative Agent.


(b)   Each Guarantor agrees (subject to Section
2.15 of the Credit Agreement) to pay, and to save the Administrative Agent and
the Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by this
Agreement.


(c)   Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement to the extent the Borrower would be required to do so
pursuant to Section 9.5 of the Credit Agreement.


(d)   The agreements in this Section shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.


8.5.          Successors
and Assigns.  This Agreement
shall be binding upon the successors and assigns of each Grantor and shall
inure to the benefit of the Administrative Agent and the Secured Parties and
their successors and assigns; provided that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Agreement
(except by operation of


 


29

















 


law as a result of a merger permitted by the Credit
Agreement) without the prior written consent of the Administrative Agent and
each Lender and any attempted such assignment, transfer or delegation without
such consents shall be null and void.


8.6.          Set-Off.  Each Grantor hereby irrevocably authorizes
the Administrative Agent and each Secured Party at any time and from time to
time while an Event of Default shall have occurred and be continuing, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such
Secured Party to or for the credit or the account of such Grantor, or any part
thereof in such amounts as the Administrative Agent or such Secured Party may
elect, against and on account of the obligations and liabilities of such
Grantor to the Administrative Agent or such Secured Party hereunder and claims
of every nature and description of the Administrative Agent or such Secured
Party against such Grantor, in any currency, whether arising hereunder, under
the Credit Agreement, under any other Loan Document or otherwise, as the
Administrative Agent or such Secured Party may elect, whether or not the
Administrative Agent or any Secured Party has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured.  The Administrative Agent and
each Secured Party shall notify such Grantor promptly of any such set-off and
the application made by the Administrative Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall
not affect the validity of such set-off and application.  The rights of the Administrative Agent and
each Secured Party under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Secured Party may have.


8.7.          Counterparts.  This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.


8.8.          Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


8.9.          Section
Headings.  The Section headings
used in this Agreement are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.


8.10.      Integration. 
This Agreement and the other Loan Documents represent the entire
agreement of the Grantors, the Administrative Agent and the Secured Parties
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Secured Party relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Loan Documents.


 


30

















 


8.11.      GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.


8.12.      Submission To Jurisdiction; Waivers.  Each Grantor hereby irrevocably and
unconditionally:


(a)   submits for itself and its property in any
legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of
the Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;


(b)   consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;


(c)   agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Grantor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant thereto;


(d)   agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and


(e)   waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.


8.13.      Acknowledgments.  Each Grantor hereby acknowledges that:


(a)   it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party;


(b)   neither the Administrative Agent nor any
Secured Party has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and


(c)   no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors and the
Secured Parties.


 


31

















 


8.14.     Additional Grantors.  Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 5.10 of the
Credit Agreement  shall become a Grantor
for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.


8.15.     Releases.  (a)            At such time as the Borrower
Revolving Credit Obligations and any obligations owing pursuant to this
Agreement shall have been indefeasibly paid in full, the Commitments have been
terminated and no Letters of Credit shall be outstanding, the Collateral shall
be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantors.  At the request and sole expense of any
Grantor following any such termination, the Administrative Agent shall deliver
to such Grantor any Collateral held by the Administrative Agent hereunder, and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.


(b)   If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Grantor in a transaction permitted
by the Credit Agreement, then the Administrative Agent, at the request and sole
expense of such Grantor, shall execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the release of the
Liens created hereby on such Collateral. 
At the request and sole expense of the Borrower, a Subsidiary Guarantor
shall be released from its obligations hereunder in the event that all the
Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement; provided
that the Borrower shall have delivered to the Administrative Agent, at least 10
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Subsidiary Guarantor and the terms of the sale
or other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a certification by the Borrower
stating that such transaction is in compliance with the Credit Agreement and
the other Loan Documents.


(c)   No consent of any Qualified Counterparty or
Foreign Currency L/C Issuing Lender, in its capacity as such, shall be required
for any action under this Agreement, the Credit Agreement or the other Loan
Documents, including, without limitation, 
release of Collateral or Guarantors pursuant to this Section.


8.16   WAIVER OF
JURY TRIAL. 
EACH
GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED
PARTY, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.


 


32

















 


IN WITNESS WHEREOF, each of the undersigned has caused
this Guarantee and Collateral Agreement to be duly executed and delivered as of
the date first above written.


 


	
   

  	
  B&G FOODS, INC.

  
	
   

  	
  BGH  HOLDINGS, INC.

  
	
   

  	
  BLOCH & GUGGENHEIMER, INC.

  
	
   

  	
  POLANER, INC.

  
	
   

  	
  TRAPPEY’S FINE FOODS,
  INC.

  
	
   

  	
  MAPLE GROVE FARMS OF
  VERMONT, INC.

  
	
   

  	
  HERITAGE ACQUISITION
  CORP.

  
	
   

  	
  ORTEGA HOLDINGS INC.

  
	
   

  	
  WILLIAM UNDERWOOD
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert C. Cantwell

  	
   

  
	
   

  	
   

  	
  Name:  Robert C. Cantwell

  
	
   

  	
   

  	
  Title:

  



 


 


33

















 


 


 


Schedule 1


NOTICE ADDRESSES OF GUARANTORS


 


34

















 


 


Schedule 2


 


DESCRIPTION OF PLEDGED SECURITIES


Pledged
Stock:


 


	
  Issuer

  	
   

  	
  Class of Stock

  	
   

  	
  Stock Certificate No.

  	
   

  	
  No. of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


 


Pledged
Notes:


 


	
  Issuer

  	
   

  	
  Payee

  	
   

  	
  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 

















 


 


 


Schedule 3




FILINGS AND OTHER ACTIONS

REQUIRED TO PERFECT SECURITY INTERESTS


Uniform Commercial Code Filings


[List each office where a financing statement is to be
filed]


 


Patent and Trademark Filings


[List all filings]


 


 


Actions with respect to Pledged Stock


 


Other Actions


 


[Describe other actions to be taken]








Schedule 4


JURISDICTION OF
ORGANIZATION, IDENTIFICATION NUMBER AND

LOCATION OF CHIEF EXECUTIVE OFFICE


 


 


	
   

  	
   

  	
  Jurisdiction of

  	
   

  	
  Identification

  	
   

  	
  Location of Chief

  
	
  Grantor

  	
   

  	
  Organization

  	
   

  	
  Number      

  	
   

  	
  Executive Office

  



 


 








 


Schedule 5


 


LOCATION OF INVENTORY AND
EQUIPMENT


 


	
  Grantor

  	
   

  	
  Locations

  



 


 








Schedule 6


 


COPYRIGHTS AND COPYRIGHT LICENSES


 


PATENTS AND PATENT LICENSES


 


TRADEMARKS AND TRADEMARK LICENSES








Schedule 7


EXISTING PRIOR LIENS


 


 








ACKNOWLEDGMENT AND CONSENT


The undersigned hereby acknowledges receipt of a copy
of the Guarantee and Collateral Agreement dated as of October 14, 2004 (the “Agreement”),
made by the Grantors parties thereto for the benefit of Lehman Commercial Paper
Inc., as Administrative Agent.  The
undersigned agrees for the benefit of the Administrative Agent and the Secured
Parties as follows:


1.             The
undersigned will notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5.8(a) of the Agreement
with respect to the Pledged Securities issued by it.


2.             The
terms of Sections 6.7 of the Agreement shall apply to it, mutatis  mutandis,
with respect to all actions that may be required of it pursuant to Section 6.7
of the Agreement.


 


	
   

  	
  [NAME OF ISSUER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax: 

  	
   

  



 








Exhibit 10.2


Annex 1 to

Guarantee and Collateral Agreement


ASSUMPTION AGREEMENT, dated as of [                           ],
made by [                           ]
(the “Additional Grantor”), in favor of LEHMAN COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the “Administrative Agent”) for
the banks and other financial institutions (the “Lenders”) parties to
the Credit Agreement referred to below. 
All capitalized terms not defined herein shall have the meaning ascribed
to them in the Credit Agreement.


W  I  T  N
E  S  S  E  T  H :


WHEREAS, B&G FOODS, INC. (the “Borrower”),
the Lenders, the Administrative Agent, and others have entered into the Credit
Agreement, dated as of October 14, 2004 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”);


WHEREAS, in connection with the Credit Agreement, the
Borrower and certain of its Affiliates (other than the Additional Grantor) have
entered into the Guarantee and Collateral Agreement, dated as of October 14,
2004 (as amended, supplemented or otherwise modified from time to time, the “Guarantee
and Collateral Agreement”), in favor of the Administrative Agent, for the
ratable benefit of the Lenders;


WHEREAS, the Credit Agreement requires the Additional
Grantor to become a party to the Guarantee and Collateral Agreement; and


WHEREAS, the Additional Grantor has agreed to execute
and deliver this Assumption Agreement in order to become a party to the
Guarantee and Collateral Agreement;


NOW, THEREFORE, IT IS AGREED:


Guarantee and Collateral Agreement. 
By executing and delivering this Assumption Agreement, the Additional
Grantor, as provided in Section 8.14 of the Guarantee and Collateral Agreement,
hereby becomes a party to the Guarantee and Collateral Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder.  The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules
____________*** to the Guarantee and Collateral Agreement.  The Additional Grantor hereby represents and
warrants that, with respect to itself, each of the representations and
warranties contained in Section 4 of the Guarantee and Collateral Agreement is
true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.












***  Refer to each Schedule which needs to be
supplemented.


 

















 


 


GOVERNING
LAW. 
THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


IN WITNESS WHEREOF, the undersigned has caused this
Assumption Agreement to be duly executed and delivered as of the date first
above written.


	
   

  	
  [ADDITIONAL GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title: