Exhibit 4.8


 


EXECUTION COPY


 


SECURITY AGREEMENT


 


SECURITY AGREEMENT dated as of July 8, 2005 (together with all
amendments, if any, from time to time hereto, this “Agreement”), by and
among NEFF RENTAL LLC, a Delaware limited liability company (“Neff LLC”),
NEFF FINANCE CORP., a Delaware corporation (“Neff Finance” and, together
with Neff LLC, the “Borrowers” and each, a “Borrower”), NEFF
RENTAL, INC., a Florida corporation (“NEFF”) and each other Person which
becomes party hereto as Grantor pursuant to Section 19 of this Agreement (such
Persons, together with the Borrowers and NEFF, collectively, the “Grantors”
and each, a “Grantor”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
collateral agent (in such capacity, the “Agent”) for the benefit of the
Secured Parties (as defined below).


 


W I T N E S S E T H:


 


WHEREAS, pursuant to the Indenture dated as of the date hereof (as from
time to time amended, restated, supplemented or otherwise modified, the “Indenture”),
among the Borrowers, NEFF, each of the other Persons named therein as a
Guarantor (as defined in the Indenture) and Wells Fargo Bank, National
Association, as Trustee, the Borrowers are co-issuing $245,000,000 aggregate
principal amount of their 111/4% Second Priority
Senior Secured Notes Due 2012 and may issue, from time to time, additional
notes in accordance with the provisions of the Indenture (collectively, the “Notes”);


 


WHEREAS, each Grantor will derive direct and indirect economic benefits
from the issuance of the Notes and other financial accommodations provided to
the Borrowers and the other Grantors pursuant to the Indenture;


 


WHEREAS,
in order to induce the Agent to enter into the Indenture and the other Note
Documents, each Grantor has agreed to grant a continuing Lien on the Collateral
(as hereinafter defined) to secure the Note Obligations;


 


NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and to induce the Trustee to enter into the Indenture and the
other Note Documents, it is agreed as follows:


 


1.            Defined Terms.


 


(a)           All capitalized terms used but not otherwise defined herein have the meanings
given to them in the Indenture. All other terms contained in this Agreement,
unless the context indicates otherwise, have the meanings provided for by the
Code to the extent the same are used or defined therein.


 


(b)          The following terms shall have the meanings assigned thereto in the
Code: as-extracted collateral, chattel paper, commodities intermediary,
commercial tort claim, deposit account, electronic chattel paper, financial
asset, letter-of-credit right, payment intangibles,


 

















 


proceeds,
securities intermediary, software, timber to be cut, supporting obligation and
uncertificated securities.


 


(c)          As used herein, the following terms shall
have the meaning set forth below:


 


“Account Debtor” means any Person who may become obligated to
any Credit Party under, with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a payment intangible).


 


“Accounts”
means all “accounts,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including (a) all accounts receivable,
other receivables, book debts, Rental Payments and other forms of obligations
(other than, except in the case of Rental Payments, forms of obligations
evidenced by Chattel Paper or Instruments), (including any such obligations
that may be characterized as an account or contract right under the Code), (b)
all of each Credit Party’s rights in, to and under all purchase orders or receipts
for goods or services, (c) all of each Credit Party’s rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to any
Credit Party for property sold, leased, licensed, assigned or otherwise
disposed of, for a policy of insurance issued or to be issued, for a secondary
obligation incurred or to be incurred, for energy provided or to be provided,
for the use or hire of a vessel under a charter or other contract, arising out
of the use of a credit card or charge card, or for services rendered or to be
rendered by such Credit Party or in connection with any other transaction (whether
or not yet earned by performance on the part of such Credit Party), (e) all
healthcare insurance receivables, and (f) all collateral security of any kind,
now or hereafter in existence, given by any Account Debtor or other Person with
respect to any of the foregoing.


 


“Blocked Account” means each Deposit Account that is subject to
a Control Agreement.


 


“Blocked Account Bank” means each depositary bank that is party
to a Control Agreement.


 


“Capital Lease” means, with respect to any Person, any lease of
any property (whether real, personal or mixed) by such Person as lessee that,
in accordance with GAAP, would be required to be classified and accounted for
as a capital lease on a balance sheet of such Person.


 


“Cash
Equivalents” means:


 


(a)           marketable securities (i) issued or directly and unconditionally
guaranteed as to interest and principal by the United States government or (ii)
issued by any agency of the United States government the obligations of which
are backed by the full faith and credit of the United States, in each case
maturing within one (1) year after acquisition thereof;


 

















 


(b)          marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after
acquisition thereof and having, at the time of acquisition, a rating of at
least A-l from S&P or at least P-l from Moody’s;


 


(c)           commercial paper maturing no more than one year from the date of
acquisition and, at the time of acquisition, having a rating of at least A-l
from S&P or at least P-l from Moody’s;


 


(d)          certificates of deposit or bankers’ acceptances issued or accepted by
any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia that is at least (i) “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (ii) has Tier 1 capital (as defined in such regulations) of not
less than $250,000,000, in each case maturing within one year after issuance or
acceptance thereof; and


 


(e)           shares of any money market mutual or similar funds that (i) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (a) through (d) above, (ii) has net assets
of not less than $500,000,000 and (iii) has the highest rating obtainable from
either S&P or Moody’s.


 


“Chattel
Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Credit Party, wherever located.


 


“Code”
means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the
extent that the Code is used to define any term herein or in any Note Document
and such term is defined differently in different Articles of the Code, the
definition of such term contained in Article 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, the
Agent’s or any Secured Party’s Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the Uniform Commercial Code
as enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.


 


“Collateral”
has the meaning specified in Section 2(a).


 


“Concentration Account” means any cash collateral account (which
may be a deposit account or a securities account) that is (a) established by
the Designated Agent from time to time in its sole discretion to receive cash
and Cash Equivalents (or purchase cash or Cash Equivalents with funds received)
from the Credit Parties or Persons acting on their behalf pursuant to the Note
Documents, (b) with such depositaries and securities intermediaries as the


 

















 


Designated Agent may
determine in its sole discretion, (c) in the name of the Designated Agent
(although such account may also have words referring to the Borrowers and the
account’s purpose), (d) under the control of the Designated Agent and (e) in
the case of a securities account, with respect to which the Designated Agent
shall be the Entitlement Holder (as defined in the Code) and the only Person
authorized to give Entitlement Orders (as defined in the Code).


 


“Contractual
Obligations” means, as applied to any Person, any indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.


 


“Control
Agreements” means:


 


(a)           in the case of any bank account, a tri-party
deposit account control agreement by and among the applicable Credit Party, the
Designated Agent and the depository, in form customarily signed by the
Designated Agent and otherwise in form and substance satisfactory in all
respects to the Designated Agent (it being understood a form customarily signed
by the Designated Agent is satisfactory) pursuant to which such depository
acknowledges the security interest of the Agent in the deposit account, agrees to
comply with instructions originated by the Designated Agent directing
disposition of the funds in the bank account without further consent from such
Credit Party or Subsidiary, and agrees to subordinate and limit any security
interest the bank may have in such bank account on terms satisfactory to the
Designated Agent;


 


(b)           in the case of any securities account, a
tri-party securities account control agreement by and among the applicable
Credit Party, the Designated Agent and the securities intermediary, in form
customarily signed by the Designated Agent and otherwise in form and substance
satisfactory in all respects to the Designated Agent (it being understood a
form customarily signed by the Designated Agent is satisfactory) pursuant to
which such securities intermediary acknowledges the security interest of the Agent
in the securities account, agrees to comply with instructions originated by the
Designated Agent directing disposition of the funds in the securities account
without further consent from such Credit Party or Subsidiary, and agrees to
subordinate and limit any security interest the securities intermediary may
have in such securities account on terms satisfactory to the Designated Agent;
and


 


(c)           in the case of any commodities account, a
tri-party commodities account control agreement by and among the applicable
Credit Party, the Designated Agent and the commodities intermediary, in form
customarily signed by the Designated Agent and otherwise in form and substance
satisfactory in all respects to the Designated Agent (it being understood a
form customarily signed by the Designated Agent is satisfactory) pursuant to
which such commodities intermediary acknowledges the security interest of the
Agent in the commodities account, agrees to comply with instructions originated
by the Designated Agent directing disposition of the funds in the commodities
account


 

















 


without
further consent from such Credit Party or Subsidiary, and agrees to subordinate
and limit any security interest the commodities intermediary may have in such
commodities account on terms satisfactory to the Designated Agent.


 


“Copyright License” means any and all rights
nor owned or hereafter acquired by any Credit Party under any written agreement
granting any right to use any Copyright or Copyright registration.


 


“Copyright Security Agreements” means the Copyright Security
Agreements made in favor of the Agent, on behalf of itself and the Secured
Parties, by each applicable Credit Party.


 


“Copyrights” means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof; and (b) all reissues, extensions or renewals thereof.


 


“Credit
Parties” means each of the Borrowers, NEFF, each of their respective
Subsidiaries and each other Person, in each case, who executes or becomes party
to this Agreement as a “Grantor” or who executes a guarantee of any Note
Obligations or who grants a Lien on all or part of its assets or properties to
secure all or part of the Note Obligations.


 


“Designated Agent” means (a) prior to the discharge of all
Priority Lien Obligations, the ABL Facility Agent, and (b) at any time after
the discharge of all Priority Lien Obligations, the Agent.


 


“Documents”
means any “document,” as such term is defined in the Code, including electronic
documents, now owned or hereafter acquired by any Credit Party, wherever
located.


 


“Domestic Person” means any “United States person” under and as
defined in Section 7701(a)(30) of the IRC.


 


“Domestic Subsidiary” with respect to any Person, means each
Subsidiary of such Person that is organized under the laws of a State of the
United States of America or under the laws of the United States of America.


 


“Eligible Credit Party” means each Domestic Subsidiary of either
of the Borrowers.


 


“Equipment” means all “equipment,” as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located
and, in any event, including


 

















 


all
such Credit Party’s machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.


 


“Excluded Equity” means any Voting Stock in excess of 65% of the
total outstanding Voting Stock of any direct Subsidiary of any Grantor that is
a Non-U.S. Person. For the purposes of this definition, “Voting Stock”
means, as to any issuer, the issued and outstanding shares of each class of
Stock of such issuer entitled to vote (within the meaning of Treasury
Regulations § 1.956-2(c)(2)).


 


“Excluded Property” means, collectively, (i) Excluded Equity,
(ii) any permit, lease, license, contract, Instrument or other agreement held
by any Grantor that prohibits or requires the consent of any Person other than
either of the Borrowers, NEFF or their respective Affiliates as a condition to
the creation by such Grantor of a Lien thereon, or any permit, lease, license,
contract or other agreement held by any Grantor to the extent that any laws
applicable thereto prohibits the creation of a Lien thereon, but only, in each
case, to the extent, and for so long as, such prohibition is not terminated or
rendered unenforceable or otherwise deemed ineffective by the Code (including,
without limitation, pursuant to Sections 9-406, 9-407, 9-408 and 9-409 of
the Code) or any other laws (including, without limitation, the Bankruptcy
Code) and (iii) Equipment owned by any Grantor that is subject to a purchase
money Lien or a Capital Lease if the contract or other agreement in which such
Lien is granted (or in the documentation providing for such Capital Lease)
prohibits or requires the consent of any Person other than either of the
Borrowers, NEFF or their respective Affiliates as a condition to the creation
of any other Lien on such Equipment; provided, however, “Excluded
Property” shall not include any Proceeds, substitutions or replacements of
Excluded Property (unless such Proceeds, substitutions or replacements would
constitute Excluded Property).


 


“Fixtures”
means all “fixtures” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party.


 


“General Intangibles” means “general intangibles,” as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contractual Obligation, all payment intangibles,
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual
Property, interests in partnerships, joint ventures and other business
associations, licenses, permits, copyrights, trade secrets, proprietary or
confidential information, inventions (whether or not


 

















 


patented
or patentable), technical information, procedures, designs, knowledge,
know-how, software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records, goodwill (including the goodwill
associated with any Trademark or Trademark License), all rights and claims in
or under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, chooses in
action, deposit, checking and other bank accounts, rights to receive tax
refunds and other payments, rights to receive dividends, distributions, cash,
Instruments and other property in respect of or in exchange for pledged Stock
and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of such Credit Party or any computer bureau or service company from
time to time acting for such Credit Party.


 


“Goods” means any “goods,” as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, wherever located,
including embedded software to the extent included in “goods” as defined in the
Code, manufactured homes, standing timber that is cut and removed for sale and
unborn young of animals.


 


“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.


 


“Instruments” means all “instruments,” as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.


 


“Intellectual Property” means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.


 


“Inventory”
means any “inventory,” as such term is defined in the Code, including Parts
Inventory and Rental Fleet and Equipment, now owned or hereafter acquired by
any Credit Party, wherever located, including inventory, merchandise, goods and
other personal property that are held by or on behalf of any Credit Party for
sale or lease or are furnished or are to be furnished under a contract of service,
or that constitute raw materials, work in process, finished goods, returned
goods, supplies or materials of any kind, nature or description used or
consumed or to be used or consumed in such Credit Party’s business or in the
processing, production, packaging, promotion, delivery or shipping of the same,
including all supplies and embedded software.


 


 

















 


“Investment
Property” means all “investment property,” as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
including: (a) all securities, whether certificated or uncertificated,
including stocks, bonds, interests in limited liability companies, partnership
interests, treasuries, certificates of deposit, and mutual fund shares; (b) all
securities entitlements of any Credit Party, including the rights of such
Credit Party to any securities account and the financial assets held by a
securities intermediary in such securities account and any free credit balance
or other money owing by any securities intermediary with respect to that
account; (c) all securities accounts of any Credit Party; (d) all commodity
contracts of any Credit Party; and (e) all commodity accounts held by any
Credit Party.


 


“Joinder Agreement” means a joinder agreement, in substantially
the form of Exhibit A hereto or such other documentation acceptable to the
Agent pursuant to which any Subsidiary of either of the Borrowers becomes a
party to this Agreement, the Pledge Agreement and the Intercreditor Agreement
after the date of this Agreement.


 


“License” means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.


 


“Material Adverse Effect” means a material adverse effect on (a)
the business, operations, condition (financial or otherwise), assets,
liabilities or properties of the Borrowers and their Subsidiaries, taken as a
whole, (b) the validity or enforceability of any Note Document, (c) or material
impairment of the ability of the Borrowers and the other Credit Parties to pay
and perform their respective Note Obligations under this Agreement or the other
Note Documents, (d) the Collateral or the Agent’s Liens, on behalf of the
Secured Parties, on the Collateral or the priority of such Liens, or (e) the
Agent’s or any Secured Party’s rights and remedies under this Agreement or the
other Note Documents.


 


“Neff Corp.” means Neff Corp., a Delaware corporation and owner
of 100% of the membership interests of Neff LLC.


 


“Non-U.S. Person” means any Person that is not a Domestic
Person.


 


“Note Obligations” means all Obligations owing by any Credit
Party arising under the Note Documents.


 


“Parts Inventory” means Inventory owned by
either Borrower or any Eligible Credit Party which consists of parts for Rental
Fleet and Equipment and parts to be sold or leased by such Person in the
ordinary course of business of such Person, which parts are not incorporated or
installed in or on, or affixed or appurtenant to, any such Inventory or to any
other property and which parts are new, unused, in good condition and are
resalable as new products without repackaging or reconditioning, including
Inventory that either Borrower or any such Eligible Credit Party currently
describes as “inventory (including whole goods)” but excluding any Inventory
that constitutes Rental Fleet and Equipment.


 

















 


“Patent License” means rights under any
written agreement now owned or hereafter acquired by any Credit Party granting
any right with respect to any invention on which a Patent is in existence.


 


“Patent Security Agreements” means the Patent Security
Agreements made in favor of the Agent, on behalf of itself and the Secured
Parties, by each applicable Credit Party.


 


“Patents” means all of the following in which
any Credit Party now holds or hereafter acquires any interest: (a) all letters
patent of the United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the United
States or of any other country, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions thereof.


 


“Pledge Agreement” means the Pledge Agreement of even date
herewith entered into by the Borrowers, NEFF and each other Credit Party that
is (or hereafter becomes) party thereto in favor of the Agent, for the benefit
of the Secured Parties, and any other pledge agreement entered into after the
date hereof by any Credit Party or any other Person.


 


“Power
of Attorney” has the meaning specified in Section 7.


 


“Rental
Fleet and Equipment” means Inventory which is of a type offered for sale or
lease by either Borrower or any Eligible Credit Party in the ordinary course of
business of the Borrower or any Eligible Credit Party, including of Inventory
that either Borrower or such Eligible Credit Party currently described as “rental
equipment, net” but excluding any Inventory that constitutes Parts Inventory.


 


“Rental
Payments” means rental payments due to either Borrower or any of their
Subsidiaries from the rental of Parts Inventory or Rental Fleet and Equipment
owned by such Person.


 


“Secured
Parties” means, collectively, the Agent and the holders of Note
Obligations.


 


“Stock”
means all shares, options, warrants, general or limited partnership interests,
membership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company or equivalent entity
whether voting or nonvoting, including common stock, preferred stock or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the SEC under the Exchange Act).


 


“Termination Date” means the first date on which (a)(i) the
Notes have been repaid in full, (ii) there has been a satisfaction and
discharge of the Indenture as set forth under Article 8 of the Indenture or
(iii) there has been a Legal Defeasance or Covenant Defeasance of the Notes as
set forth under Article 8 of the Indenture and (b) all other Obligations under
the


 

















 


Indenture
and the other Note Documents (other than contingent indemnification Obligations
to the extent no claim has been asserted) have been completely discharged.


 


“Trademark License” means rights under any
written agreement now owned or hereafter acquired by any Credit Party granting
any right to use any Trademark.


 


“Trademark Security Agreements” means the
Trademark Security Agreements made in favor of the Agent, on behalf of itself
and the Secured Parties, by each applicable Credit Party.


 


“Trademarks” means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all trademarks, trade names, corporate
names, business names, trade styles, service marks, logos, internet domain
names, other source or business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.


 


“Uniform Commercial Code Jurisdiction” means any jurisdiction
that has adopted all or substantially all of Article 9 of the Code.


 


2.            Grant of Lien.


 


(a)           To secure the prompt and complete payment,
performance and observance of all of the Note Obligations, each Grantor hereby
grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to the
Agent, for the benefit of the Secured Parties and their respective successors,
endorsees, transferees and assigns, a Lien upon all of its right, title and
interest in, to and under all personal property and other assets, whether now
owned by or owing to, or hereafter acquired by or arising in favor of such
Grantor (including under any trade names, styles or derivations thereof), and
whether owned or consigned by or to, or leased from or to, such Grantor, and
regardless of where located (all of which being hereinafter collectively
referred to as the “Collateral”), including:


 


(i)                                   all Accounts; 


 


(ii)                                all Chattel Paper; 


 


(iii)                             all Documents;


 


(iv)                            all General Intangibles (including Payment
Intangibles and Software);


 

















 


(v)                               all Goods (including Inventory, Equipment and
Fixtures);


 


(vi)                            all Instruments;


 


(vii)                         all Investment Property;


 


(viii)                      all Deposit Accounts;


 


(ix)                              all money, cash or Cash Equivalents of such
Grantor;


 


(x)                                 all Supporting Obligations and
Letter-of-Credit Rights of such Grantor;


 


(xi)                             the Commercial Tort Claims described on
Schedule V and on any supplement thereto received by the Agent pursuant to
Section 5(a)(ix); and


 


(xii)                          to the extent not otherwise included, all
Proceeds, tort claims, insurance claims and other rights to payment not
otherwise included in the foregoing and products of the foregoing and all
accessions to, substitutions and replacements for, and rents and profits of,
each of the foregoing;


 


provided, however, that “Collateral”
shall not include, nor shall security interest granted under Section 2(a)
hereof attach to, any Excluded Property; and provided, further,
that if and when any property shall cease to be Excluded Property, immediately
at and from such time, the Collateral shall include, and the security interest
granted by each Grantor shall attach to, such property.


 


(b)          Subject to the Intercreditor Agreement and
the rights of the Credit Agreement Agent and the Priority Lien Collateral Agent
(each as defined in the Intercreditor Agreement) thereunder, to secure the
prompt and complete payment, performance and observance of the Note Obligations
and in order to induce the Agent as aforesaid, each Grantor hereby grants to
the Agent, for the benefit of the Secured Parties, a right of setoff against
the property of such Grantor held by the Agent or any Secured Party, consisting
of Collateral now or hereafter in the possession or custody of or in transit to
the Agent or any Secured Party, for any purpose, including safekeeping,
collection or pledge, for the account of such Grantor, or as to which such
Grantor may have any right or power.


 


3.            The Agent’s and the Secured Parties’ Rights;
Limitations on the Agent’s and the Secured Parties’ Obligations.


 


(a)           It is expressly agreed by each Grantor that,
anything herein or in any other Note Document to the contrary notwithstanding,
each Grantor shall remain liable under each of its respective Contractual
Obligations, including all Licenses, to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. Neither the
Agent nor any Secured Party shall have any obligation or liability under any
Contractual Obligation by reason of or arising out of this Agreement or any other
Note Document or the granting herein of


 

















 


a
Lien thereon or the receipt by the Agent or any Secured Party of any payment
relating to any Contractual Obligation pursuant hereto. Neither the Agent nor
any Secured Party shall be required or obligated in any manner to perform or
fulfill any of the obligations of any Grantor under or pursuant to any
Contractual Obligation, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any Contractual Obligation, or to present
or file any claims, or to take any action to collect or enforce any performance
or the payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.


 


(b)           Subject to the Intercreditor Agreement and
the rights of the Credit Agreement Agent and the Priority Lien Collateral Agent
(each as defined in the Intercreditor Agreement) thereunder, at any time after
an Event of Default has occurred and is continuing, without prior notice to any
Grantor, the Agent may notify each Grantor’s Account Debtors and all other
Persons obligated on any of the Collateral that the Agent has a security
interest therein, and that payments shall be made directly to the Agent, for
the benefit of the Secured Parties. At any time after an Event of Default has
occurred and is continuing, upon the request of the Agent, each Grantor shall
so notify its Account Debtors and other Persons obligated on the Collateral. Once
any such notice has been given to any Account Debtor or other Person obligated
on the Collateral, none of the Grantors shall give any contrary instructions to
such Account Debtor or other Person without the Agent’s prior written consent.


 


(c)           Subject to the Intercreditor Agreement and
the rights of the Credit Agreement Agent and the Priority Lien Collateral Agent
(each as defined in the Intercreditor Agreement) thereunder, at any time after
an Event of Default has occurred and is continuing, the Agent may in the Agent’s
own name, in the name of a nominee of the Agent or in the name of any Grantor
communicate (by mail, telephone, facsimile or otherwise) with Account Debtors, parties
to Contractual Obligations and obligors in respect of Instruments to verify
with such Persons, to the Agent’s reasonable satisfaction, the existence,
amount, terms of, and any other matter relating to, Accounts, Instruments,
Chattel Paper and/or payment intangibles. If an Event of Default shall have
occurred and be continuing, at Grantor’s sole expense, the Agent shall have the
right to engage a consultant for, and each Grantor shall fully cooperate with
such consultant in, the preparation and delivery to the Agent and each Secured
Party at any time and from time to time the following reports with respect to
such Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all
Accounts; (iii) trial balances; and (iv) a test verification of such Accounts
as the Agent may request.


 


4.             Representations and Warranties. Each Grantor, jointly and severally,
represents and warrants that:


 


(a)           Each Grantor has rights in and the power to transfer each item of the
Collateral upon which it purports to grant a Lien hereunder, free and clear of
any and all Liens other than (i) subject to the Intercreditor Agreement, the
Priority Liens and (ii) other Permitted Liens.


 

















 


(b)           No effective security agreement, financing
statement, equivalent security or Lien instrument or continuation statement
covering all or any part of the Collateral is on file or of record in any
public office, except such as may have been filed (i) by any Grantor in favor of
the Agent pursuant to this Agreement or the other Note Documents, (ii) by any
Grantor in favor of the ABL Facility Agent pursuant to the ABL Credit Facility
and (iii) in connection with any other Permitted Liens.


 


(c)           This Agreement is effective to create a valid
and continuing Lien and, upon the filing of the appropriate financing
statements listed on Schedule I hereto, a perfected Lien in favor of the Agent,
for the benefit of the Secured Parties, on the Collateral with respect to which
a Lien may be perfected by filing pursuant to the Code. Such Lien is prior to
all other Liens, except Permitted Liens that would be prior to Liens in favor
of the Agent for the benefit of the Secured Parties as a matter of law, and is
enforceable as such as against any and all creditors of and purchasers from any
of the Grantors (other than purchasers and lessees of Inventory in the ordinary
course of business and non-exclusive licensees of General Intangibles in the
ordinary course of business). Except as set forth in Sections 4(d), 4(h) and
4(i) hereof, all action by each of the Grantors necessary or reasonably
advisable to protect and perfect such Lien on each item of the Collateral
(other than insurance claims and money) has been duly taken; provided,
that in the case of Intellectual Property, to the extent that the perfection of
such can be perfected by (i) filing a financing statement under the Code or
(ii) filing with, and acceptance thereof by, the United States Copyright Office
or the United States Patent and Trademark Office. None of the Grantors sells
any Inventory to any Person on approval or on any other basis which entitles
the customer to return, or which may obligate any Grantor to repurchase, such
Inventory. No authorization, approval or consent is required to be obtained
from any Governmental Authority or other Person for the grant of the security
interest herein, the perfection thereof or the exercise by the Agent or any
other Secured Party of its rights and remedies hereunder.


 


(d)           Schedule II hereto lists, as of the date
hereof, all Stock, Instruments, Documents, Letter-of-Credit Rights and Chattel
Paper (other than Chattel Paper (i) the value of which, in the aggregate for
all such Chattel Paper, does not exceed $500,000 or (ii) which evidences leases
of Inventory for a period of time that is less than one month in which each Grantor
has an interest as of the date hereof). All actions by each Grantor necessary
or reasonably advisable to protect and perfect the Lien of the Agent on each
item set forth on Schedule II (including (to the extent not delivered pursuant
to the Pledge Agreement) the delivery of all originals thereof to the
Designated Agent and the legending of all Chattel Paper as required by Section
5(b) hereof) have been duly taken. The Lien of the Agent, for the benefit of the
Secured Parties, on the Collateral listed on Schedule II hereto is prior to all
other Liens, except Permitted Liens that would be prior to the Liens in favor
of the Agent as a matter of law, and is enforceable as such against any and all
creditors of and purchasers from each Grantor.


 


(e)           Set forth on Schedule III hereto is (i) each
Grantor’s name as it appears in official filings in the state of its
incorporation or other organization, all prior names of each Grantor, as they
appeared from time to time in official filings in the state of its
incorporation or other organization, (ii) the type of entity of each Grantor
(including corporation, partnership,


 

















 


limited partnership or
limited liability company), (iii) organizational identification number issued
by each Grantor’s state of incorporation or organization or a statement that no
such number has been issued, (iv) each Grantor’s state of organization or
incorporation, (v) the location of each Grantor’s chief executive office or
principal place of business, (vi) other offices and other premises where
Inventory or Equipment is stored or located whether or not owned or leased by
such Grantor, and (vii) the locations of each Grantor’s books and records
concerning the Collateral, in each case as of the date hereof, and such
Schedule III also lists, with respect to this clause (i), (iv), (v), (vi) and
(vii), the applicable information for the five years preceding the date hereof.
Schedule III hereto also sets forth the name as it appears in official filings
in the state of its incorporation or other organization of any Person from whom
each Grantor, as the case may be, has acquired assets during the five (5) years
preceding the date hereof, other than assets acquired in the ordinary course of
such Grantor’s business. Each Grantor has only one state of incorporation or
organization.


 


(f)            With respect to the Accounts:


 


(i)
none of the Grantors has made any agreement with any of its Account Debtors for
any compromise or settlement for less than the full amount thereof, any release
of any of its Account Debtors from liability therefor, or any deduction
therefrom except a discount or allowance allowed by any Grantor in the ordinary
course of its business and consistent with its past practice;


 


(ii)
to each Grantor’s knowledge, there are no facts, events or occurrences which in
any way impair the validity or enforceability thereof or could reasonably be
expected to reduce the amount payable thereunder as shown on such Grantor’s
books and records and any invoices, statements or other collateral report
delivered to the Agent and Lenders with respect thereto;


 


(iii)
none of the Grantors has received any notice of proceedings or actions which
are threatened or pending against any of its Account Debtors which might result
in any adverse change in such Account Debtor’s financial condition;


 


(iv)
none of the Grantors has knowledge that any of its Account Debtors is unable
generally to pay its debts as they become due;


 


(v)
to each Grantor’s knowledge, such Accounts constitute the legally valid and
binding obligation of the applicable Account Debtors;


 


(vi)
all payments thereon have been or will be delivered to the Blocked Accounts or
the Agent to the extent required by, and in accordance with, Section 6(d); and


 


(vii)
to each Grantor’s knowledge, all of its Account Debtors have the capacity to
contract.


 

















 


(g)          With respect to any Inventory:


 


(i)
each Grantor has good, indefeasible and merchantable title;


 


(ii)
except as specifically disclosed in the most recent Borrowing Base Certificate
(as defined in the ABL Credit Facility) or other collateral report delivered to
the ABL Facility Agent, such Inventory is of good and merchantable quality,
free from any defects;


 


(iii)
such Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties which would require
any consent of any third party upon sale or other disposition of that Inventory
or the payment of any monies to any third party upon such sale or other
disposition; and


 


(iv)
the completion of manufacture, sale or other disposition of such Inventory by
the Agent following an Event of Default shall not require the consent of any
Person and shall not constitute a breach or default under any contract or
agreement to which any Grantor is a party or to which such property is subject.


 


(h)          None of the Grantors has any interest in, or
title to, any Patent, Trademark or Copyright except as set forth in Schedule IV
to this Agreement. This Agreement is effective to create a valid and continuing
Lien on and, upon filing of the Intellectual Property Security Agreements
substantially in the form attached hereto as Exhibit A, with the United States
Copyright Office or the United State Patent and Trademark Office, as the case
may be, and the filing of the financing statements listed on Schedule I hereto,
perfected Liens in favor of the Agent on each Grantor’s registered Patents,
Trademarks and Copyrights and such perfected Liens are enforceable as such as
against any and all creditors of and purchasers from any Grantor. Upon filing
of the Copyright Security Agreements with the United States Copyright Office
and filing of the Patent Security Agreements and the Trademark Security
Agreements with the United State Patent and Trademark Office and the filing of
appropriate financing statements listed on Schedule I hereto, all action
necessary or reasonably advisable to protect and perfect the Agent’s Lien on
each Grantor’s registered Patents, Trademarks or Copyrights shall have been
duly taken.


 


(i)            Substantially all motor vehicles owned by
each of the Grantors as of the date hereof are listed on Schedule V hereto, by
model, model year and, to the extent listed on the Schedule, vehicle
identification number. Also set forth on Schedule V is the location of the
title certificates for each motor vehicle listed on such Schedule V. Each
Grantor shall after the occurrence and during the continuance of an Event of
Default, deliver to the Designated Agent motor vehicle title certificates for
all motor vehicles from time to time owned by it and shall cause those title
certificates to be filed (with the Agent’s Lien noted thereon) in the
appropriate state motor vehicle filing office.


 

















 


5.            Covenants. Without limiting any Grantor’s covenants and agreements contained in
the Indenture and the other Note Documents, each Grantor covenants and agrees
with the Agent, for the benefit of the Agent and Secured Parties, that from and
after the date of this Agreement and until the Termination Date:


 


(a)           Further Assurances; Pledge of Instruments;
Chattel Paper; Motor Vehicles.


 


(i)            Each Grantor shall make, or cause to be made,
all recordings, registerings, filings, re recordings, re-registerings and
re-filings required to perfect and maintain the Liens granted hereunder or
under any Note Document. At any time and from time to time, upon the written
request of the Agent and at the sole expense of such Grantor, such Grantor
shall promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as the Agent may
reasonably deem necessary or advisable to obtain the full benefits of this
Agreement and of the rights and powers herein granted, including (A) using its
commercially reasonable efforts to secure all consents and approvals necessary
or appropriate for the assignment to or for the benefit of the Agent of any
Contractual Obligation, including any License, held by such Grantor and to
enforce the security interests granted hereunder; (B) filing any financing or
continuation statements under the Code with respect to the Liens granted
hereunder or under any other Note Document, including any amendment or
modification filings made necessary in connection with any assignment of the
Liens granted hereunder or under any Note Document; and (C) obtaining landlord’s
waivers and consent agreements, mortgagee agreements or bailee letters in favor
of the Agent with respect to Collateral.


 


(ii)           Upon (A) the Agent’s reasonable written
request and (B) unless the Agent shall otherwise consent in writing (which
consent may be revoked), the occurrence and during the continuance of an Event
of Default, unless such Collateral has been delivered pursuant to the Pledge
Agreement, such Grantor shall deliver to the Designated Agent all Collateral
consisting of negotiable Documents, certificated Stock, Chattel Paper and
Instruments (in each case, accompanied by stock powers, allonges or other
instruments of transfer executed in blank) promptly after such Credit Party
receives the same, upon acquiring (A) any negotiable Document or Instrument
having a value in excess of $500,000, (B) any certificated Stock (other than certificated
Stock of Subsidiaries of such Grantor delivered to the Agent pursuant to the
Pledge Agreement) or (C) any Chattel Paper (other than Chattel Paper (I) the
value of which, in the aggregate for all such Chattel Paper, does not exceed
$500,000 or (II) which evidences leases of Inventory for a period of time that
is less than one month), such Grantor will provide prompt written notice
thereof to the Agent.


 


(iii)          Such Grantor, as required by Section 6(e),
shall obtain authenticated Control Agreements from (A) each issuer of
Uncertificated Securities, (B)


 

















 


each
Securities Intermediary issuing or holding any Financial Assets to or for such
Grantor and (C) each Commodities Intermediary holding commodities for such
Grantor.


 


(iv)         As required by Section 6(e) or otherwise by this Agreement, such
Grantor shall obtain a Control Agreement with each bank or financial
institution holding a Deposit Account for such Grantor.


 


(v)          If such Grantor is or becomes the beneficiary of a letter of credit,
such Grantor shall promptly, and in any event within ten (10) Business Days
after becoming a beneficiary, notify the Agent thereof and unless otherwise
consented by the Agent, use commercially reasonable efforts to enter into a
tri-party agreement with the Designated Agent and the issuer and/or
confirmation bank with respect to Letter-of-Credit Rights assigning such
Letter-of-Credit Rights to the Agent and directing all payments thereunder to a
Deposit Account subject to a Control Agreement, all in form and substance reasonably
satisfactory to the Agent.


 


(vi)         Upon (A) the Agent’s reasonable written request or (B) unless the Agent
shall otherwise consent in writing (which consent may be revoked), the
occurrence and during the continuance, of an Event of Default, such Grantor
shall take all steps necessary to grant the Agent control of all Electronic
Chattel Paper in accordance with the Code and all “transferable records” as
defined in each of the Uniform Electronic Transactions Act and the Electronic
Signatures in Global and National Commerce Act.


 


(vii)        Such Grantor hereby irrevocably authorizes
the Agent at any time and from time to time to file in any filing office in any
Uniform Commercial Code Jurisdiction any initial financing statements and
amendments thereto that (a) indicate the Collateral (i) as all assets of such
Grantor or words of similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the Code or
such jurisdiction, or (ii) as being of an equal or lesser scope or with greater
detail, and (b) contain any other information required by part 5 of Article 9
of the Code for the sufficiency or filing office acceptance of any financing
statement or amendment, including (i) whether such Grantor is an organization,
the type of organization and any organization identification number issued to
such Grantor, and (ii) in the case of a financing statement filed as a fixture
filing or indicating Collateral as As-Extracted Collateral or timber to be cut,
a sufficient description of real property to which the Collateral relates. Such
Grantor agrees to furnish any such information to the Agent promptly upon
request therefor. Such Grantor also hereby ratifies its authorization for the
Agent to have filed in any Uniform Commercial Code Jurisdiction any initial
financing statements or amendments thereto if filed prior to the date hereof.


 


(viii)       Such Grantor shall promptly, and in any event within ten (10) Business
Days after the same is acquired by it, notify the Agent of Commercial Tort
Claims in excess of $1,000,000, individually or in the aggregate, acquired by
it and unless otherwise consented by the Agent, such Grantor shall enter into a
supplement to


 














 


this
Agreement, granting to the Agent a Lien in such Commercial Tort Claim. Any
supplement to Schedule V delivered pursuant to this Section 5(a)(ix) shall,
after the receipt thereof by the Agent, become part of Schedule V for all
purposes hereunder other than in respect of representations and warranties made
prior to the date of such receipt. 


 


(ix)          Upon delivery by any
Credit Party of a landlord’s waiver and consent agreement, mortgagee agreement
or bailee letter with respect to any Collateral in favor of the Designated
Agent pursuant to Section 2.6(a) or 2.6(b) of the ABL Facility Agreement, such
Credit Party shall deliver a landlord’s waiver and consent agreement, mortgagee
agreement or bailee letter, as applicable, with respect to the same Collateral
in favor of the Agent. 


 


(x)           The Borrowers and
NEFF shall comply with Section 2.10 of the ABL Facility Agreement. 


 


(b)          Covenants Regarding Patent,
Trademark and Copyright Collateral. 


 


(i)            Such
Grantor shall notify the Agent immediately if it knows or has reason to know
that any application or registration relating to any Patent, Trademark or
Copyright that is material to the conduct of any Grantor’s business or
operations (now or hereafter existing) may become abandoned or dedicated, or of
any adverse determination or material adverse development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding such Grantor’s ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same. 


 


(ii)           In no event shall
such Grantor, either directly or through any agent, employee, licensee or
designee, file an application for the registration of any Patent, Trademark or
Copyright with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency without giving the Agent prior
written notice thereof, and, upon request of the Agent, such Grantor shall
execute and deliver any and all Patent Security Agreements, Copyright Security
Agreements or Trademark Security Agreements as the Agent may request to
evidence the Agent’s Lien on such Patent, Trademark or Copyright, and the
General Intangibles of Grantor relating thereto or represented thereby. 


 


(iii)          Such Grantor shall take all actions
necessary or reasonably requested by the Agent to maintain and pursue (and not
abandon) each application, to obtain the relevant registration and to maintain
the registration of each of the Patents, Trademarks and Copyrights (now or
hereafter existing that is material to the conduct of any Grantor’s business or
operations), including the filing of applications for renewal, affidavits of
use, affidavits of noncontestability and opposition and interference and


 

















 


cancellation
proceedings, unless such Grantor shall determine that such Patent, Trademark or
Copyright is not material to the conduct of its business or operations. 


 


(iv)         In
the event that any of the Patent, Trademark or Copyright Collateral that is
material to the conduct of any Grantor’s business or operations is infringed
upon, or misappropriated or diluted by a third party, each Grantor shall
promptly notify the Agent and, if applicable, comply with Section 5(a)(ix) of
this Agreement. Such Grantor shall, unless it shall reasonably determine that
such Patent, Trademark or Copyright Collateral is not material to the conduct
of its business or operations, promptly sue for infringement, misappropriation
or dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as the Agent
shall deem appropriate under the circumstances to protect such Patent,
Trademark or Copyright Collateral. 


 


(c)           Compliance with Terms of Accounts,
etc.  Such Grantor will perform and comply
in all material respects with all obligations in respect of the Collateral and
all other agreements to which it is a party or by which it is bound relating to
the Collateral. 


 


(d)           Limitation on Liens on Collateral.
 Such Grantor will not create, permit or suffer
to exist, and will defend the Collateral against, and take such other action as
is necessary to remove, any Lien on any of the Collateral except Permitted
Liens, and will defend the right, title and interest of the Agent and the
Secured Parties in and to any of such Grantor’s rights under the Collateral
against the claims and demands of all Persons whomsoever. 


 


(e)           Further Identification of
Collateral.  Such Grantor will, if so
reasonably requested by the Agent, furnish to the Agent, as often as the Agent
requests, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Agent may reasonably request, all in such detail as the Agent may specify. Such
Grantor shall promptly notify the Agent in writing upon acquiring any interest
thereafter in property that is of a type where a security interest or Lien must
be or may be registered, recorded or filed under, or notice thereof given
under, any federal statute or regulation. 


 


(f)            Notices. Such Grantor will
advise the Agent promptly, in reasonable detail, (i) of any Lien (other than
Permitted Liens) or claim made or asserted against a material portion of the
Collateral, and (ii) 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 Liens created hereunder or under any other Note
Document. 


 


(g)           Good Standing Certificates. If
and whenever requested by the Agent, such Grantor shall provide to the Agent a
certificate of good standing from its state of incorporation or organization. 


 

















 


(h)          Organizational/Collateral
Location Changes; No Reincorporation. Such Grantor will give the Agent at
least fifteen (15) days prior written notice of any change to the information
set forth on Schedule III, as applicable to the extent needed to make Schedule
III up to date and accurate. Without limiting the prohibitions on mergers
involving any Grantor as contained in the Indenture, none of the Grantors shall
reincorporate or reorganize itself under the laws of any jurisdiction other
than the jurisdiction in which it is incorporated or organized as of the date
hereof without the prior written consent of the Agent. 


 


(i)           Terminations;
Amendments Not Authorized. Such Grantor acknowledges that it is not
authorized to file any financing statement or amendment or termination
statement with respect to any financing statement filed in favor of the Agent
without the prior written consent of the Agent and agrees that it will not do
so without the prior written consent of the Agent, subject to such Grantor’s
rights under Section 9-509(d)(2) of the Code. 


 


(j)            Authorized
Terminations. Following the Termination Date or any Asset Sale expressly
permitted by the Indenture, the Agent will promptly deliver to such Grantor for
filing or authorize such Grantor to prepare and file termination statements and
releases in accordance with Section 9-513(c) of the Code. 


 


(k)           Use of Collateral.
Such Grantor will do nothing to impair the rights of the Agent in any of the
Collateral. Such Grantor will not use or permit any Collateral to be used
unlawfully or in violation of any provision of applicable law, or any insurance
policy covering any of the Collateral. Without limiting the foregoing, such
Grantor will not permit the production of Inventory in violation of any
provision of the Fair Labor Standards Act and such Grantor will not adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any Account Debtor thereof or allow any credit or discount thereon
(other than credits and discounts in the ordinary course of business). 


 


(l)            Federal
and State Claims. Such Grantor shall notify the Agent promptly of any of
the Collateral which constitutes a claim against the United States government
or any instrumentality or agent thereof or any state thereof, the assignment of
which claim is restricted by federal law or state law as the case may be. Upon
the request of the Agent, such Grantor shall take such steps as may be
reasonably necessary to comply with any applicable federal assignment of claims
laws or other comparable laws.


 


6.             Bank Accounts; Collection of
Accounts and Payments. 


 


(a)           Each Grantor shall enter into a
Control Agreement, in a form specified by the Designated Agent, with each
financial institution with which such Grantor maintains from time to time any
Deposit Account in accordance with Section 6(d). Each Control Agreement shall
provide, among other things, that (i) all items of payment deposited in each
Deposit Account subject thereto shall be held by the applicable financial
institution as Agent or bailee-in-possession for the Agent, on behalf of itself
and the Secured Parties, (ii) the financial institution executing such
agreement has no rights of offset or recoupment of any other claim against any


 

















 


Deposit
Account subject thereto, as the case may be, other than for payment of its
services and other charges directly related to the administration of each such
Deposit Account and for returned checks or other items of payment, and (iii) in
accordance with this Section 6, the financial institution will transfer all
amounts held or deposited from time to time in any such Deposit Account as the
Agent may so direct. Each Grantor hereby grants to the Agent, for the benefit
of the Secured Parties, a continuing Lien upon, and security interest in, all
such Deposit Accounts and all funds at any time paid, deposited, credited or
held in such Deposit Accounts (whether for collection, provisionally or
otherwise) or otherwise in the possession of such financial institutions, and
each such financial institution shall act as the Agent’s agent in connection
therewith. Except as specifically permitted under Section 6(d), none of the
Grantors shall establish any Deposit Account with any financial institution
unless prior thereto the Agent and the applicable Grantor shall have entered
into a Control Agreement with such financial institution. 


 


(b)           From and after receipt by any Blocked
Account Bank of written notice from the Designated Agent to such Blocked
Account Bank that an Event of Default has occurred and is continuing, all
amounts held or deposited from time to time in the Blocked Accounts held by
such Blocked Account Bank shall be transferred on a daily basis to the
Designated Agent or to any of the Concentration Accounts, as the Designated
Agent may direct. Subject to the foregoing, each Grantor hereby agrees that all
payments received by the Agent or any Secured Parties whether by cash, check,
wire transfer or any other instrument, made to such Deposit Accounts or
otherwise received by the Agent or any Secured Parties and whether on the Accounts
or as proceeds of other Collateral or otherwise will be, subject to the
Intercreditor Agreement, the sole and exclusive property of the Secured Parties.
Each Grantor, and any of its Affiliates, employees, agents and other Persons
acting for or in concert with any Grantor shall, acting as trustee for the
Agent and Secured Parties, receive, as the sole and exclusive property of the
Secured Parties, any moneys, checks, notes, drafts or other payments relating
to and/or constituting proceeds of Accounts or other Collateral which come into
the possession or under the control of such Grantor or any Affiliates,
employees, agent, or other Persons acting for or in concert with any Grantor,
and immediately upon receipt thereof, such Grantor or such Persons shall, to
the extent required by Section 6(d), deposit the same or cause the same to be
deposited in kind, in a Deposit Account or other account subject to a Control
Agreement. 


 


(c)           If at any time a Blocked Account Bank
is obligated to transfer to the Agent or any Concentration Account, all amounts
held or deposited in the Blocked Accounts held by such Blocked Account Bank, no
Grantor shall and no Grantor shall permit any Subsidiary to, accumulate or
maintain cash in any disbursement or payroll account, as of any date, in an
amount in excess of checks outstanding against such account as of such date and
amounts necessary to meet minimum balance requirements. 


 


(d)           (x) 
The Borrowers and NEFF shall, and shall cause each other Credit Party to
(i) enter into Control Agreements with respect to each deposit account,
securities account and commodities account maintained by either Borrower, NEFF
or any such Credit Party as of or after the date of this Agreement, (ii)
deposit in a deposit account subject to a


 

















 


Control Agreement all cash
received on each Business Day and (iii) not establish or maintain any deposit
account, securities account or commodities account unless such deposit account,
securities account or commodities account is subject to a Control Agreement as provided in Section
6(e), in each case, other than (A) any payroll account so long as such payroll
account is a zero balance account, (B) any disbursement account so long as (I)
such disbursement account is a zero balance account or (II) the cash and Cash
Equivalents on deposit in such disbursement account shall not exceed $250,000,
(C) any disbursement cash and Cash Equivalents on deposit in or credited to the
balance of withholding tax and other fiduciary accounts and (D) cash and Cash
Equivalents in an amount not to exceed $100,000 in the aggregate. Each such
Control Agreement shall be in form and substance satisfactory to the Designated
Agent. Each Borrower and each Grantor shall enter into and maintain with one or
more banks and pursuant to agreements in form and substance reasonably
satisfactory to the Designated Agent, lock-box arrangements. 


 


(y)          The Borrowers and NEFF shall, and shall cause
each Credit Party, to (i) provide each Account Debtor or other Person obligated
to make a payment to any of them under any Account or General Intangible with
an envelope addressed to the applicable Credit Party for such Account Debtor or
other Person to make such payment directly to a lockbox account or other
deposit account subject to a Control Agreement and (ii) deposit in a deposit
account or securities account (as applicable) subject to a Control Agreement
promptly (but in any event within three (3) Business Days) upon receipt of all
Proceeds of such Accounts and General Intangibles received by either Borrower
or any such Credit Party from any other Person. 


 


(z)           Notwithstanding anything to the contrary in
the foregoing clauses (x) or (y), it is understood and agreed that:


 


(i)            the
Agent shall not, unless it is the Designated Agent, deliver a notice of control
or other similar notice to any depository institution, securities intermediary
or commodities intermediary, as applicable, pursuant to any Control Agreement,
and if the Agent is the Designated Agent, it shall not deliver such notice
unless an Event of Default shall be continuing; and


 


(ii)           if an Event of
Default shall be continuing, a notice of control or similar notice has been
given by the Designated Agent in accordance with the applicable Control
Agreement and the immediately preceding clause (i), amounts deposited in or
credited to deposit accounts, securities accounts or commodities accounts
subject to Control Agreements or credited to the lock-box account will be
transferred on a daily basis to the Concentration Account and shall be
available to the applicable Credit Party. 


 


(e)           The Credit Parties shall not:


 

















 


(i)            establish any new bank accounts without prior
written notice to the Agent and unless the Designated Agent and the depository
institution at which the account is to be opened enter into a Control
Agreement; provided, that the Agent (if it shall be the Designated
Agent) shall not cause (or deliver notice to the applicable depository
institution to cause) amounts credited to such deposit accounts to be
transferred on a daily basis to the Concentration Account or otherwise unless
an Event of Default shall have occurred and be continuing;


 


(ii)           establish any new securities accounts without
prior written notice to the Agent and unless the Designated Agent and the
securities intermediary at which the account is to be opened enter into a
Control Agreement; provided, that the Agent (if it shall be the
Designated Agent) shall not cause (or deliver notice to the applicable
securities intermediary to cause) amounts credited to such securities accounts
to be transferred on a daily basis to the Concentration Account or otherwise
unless an Event of Default shall have occurred and be continuing; and


 


(iii)          establish any new commodities accounts without prior written notice to
the Agent and unless the Designated Agent and the commodities intermediary at
which the account is to be opened enter into a Control Agreement; provided,
that the Agent (if it shall be the Designated Agent) shall not cause (or
deliver notice to the applicable commodities intermediary to cause) amounts
credited to such commodities accounts to be transferred on a daily basis to the
Concentration Account or otherwise unless an Event of Default shall have
occurred and be continuing. 


 


7.             The Agent’s Appointment as
Attorney-In-Fact. 


 


On
the date of this Agreement, each Grantor shall execute and deliver to the Agent
a power of attorney (the “Power of Attorney”) substantially in the form
attached hereto as Exhibit B. The power of attorney granted pursuant to the
Power of Attorney is a power coupled with an interest and shall be irrevocable
until the Termination Date. The powers conferred on the Agent, for the benefit
of the Agent and Secured Parties, under the Power of Attorney are solely to
protect the Agent’s interests (for the benefit of the Agent and Secured
Parties) in the Collateral and shall not impose any duty upon the Agent or any
Secured Parties to exercise any such powers. The Agent agrees that (a) except
for the powers granted in clause (h) of the Power of Attorney, it shall not
exercise any power or authority granted under the Power of Attorney unless an
Event of Default has occurred and is continuing, (b) the Agent shall account
for any moneys received by the Agent in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney provided that none
of the Agent nor any Secured Parties shall have any duty as to any Collateral,
and the Agent and Secured Parties shall be accountable only for amounts they
actually receive as a result of the exercise of such powers, and (c) any action
taken pursuant to the Power of Attorney shall be subject to the Intercreditor
Agreement and the rights of the Credit Agreement Agent and the Priority Lien
Collateral Agent (each as defined in the Intercreditor Agreement) thereunder. NONE
OF THE AGENT, SECURED PARTIES OR THEIR RESPECTIVE AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR


 

















 


REPRESENTATIVES
SHALL BE RESPONSIBLE TO ANY GRANTOR FOR ANY ACT OR FAILURE TO ACT UNDER ANY
POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE
SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES. 


 


8.            Remedies; Rights Upon Default.



 


(a)           Subject to the Intercreditor Agreement
and the rights of the Credit Agreement Agent and the Priority Lien Collateral
Agent (each as defined in the Intercreditor Agreement) thereunder, in addition
to all other rights and remedies granted to it under this Agreement, the Notes,
the Indenture, the other Note Documents and under any other instrument or
agreement securing, evidencing or relating to any of the Note Obligations, if
any Event of Default shall have occurred and be continuing, the Agent may
exercise all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, each Grantor expressly agrees that in
any such event the Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon any Grantor or any other Person
(all and each of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the Code and other applicable law),
may forthwith (personally or through its agents or attorneys) enter upon the
premises where any Collateral is located, without any obligation to pay rent,
through self-help, without judicial process, without first obtaining a final
judgment or giving any Grantor or any other Person notice and opportunity for a
hearing on the Agent’s claim or action and may take possession of, collect,
receive, assemble, process, appropriate, remove and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, license,
assign, give an option or options to purchase, or otherwise dispose of and
deliver said Collateral (or contract to do so), or any part thereof, in one or
more parcels at a public or private sale or sales, at any exchange at such
prices as it may deem acceptable, for cash or on credit or for future delivery
without assumption of any credit risk. To facilitate the foregoing, the Agent
shall have the right to take possession of each Grantor’s original books and
records, to obtain access to each Grantor’s data processing equipment, computer
hardware and Software and to use all of the foregoing and the information
contained therein in any manner which the Agent deems appropriate. The Agent or
any Secured Parties shall have the right upon any such public sale or sales
and, to the extent permitted by law, upon any such private sale or sales, to
purchase for the benefit of the Agent and Secured Parties, the whole or any
part of said Collateral so sold, free of any right or equity of redemption,
which equity of redemption each Grantor hereby releases. Such sales may be
adjourned and continued from time to time with or without notice. The Agent
shall have the right to conduct such sales on each Grantor’s premises or
elsewhere and shall have the right to use each Grantor’s premises without
charge for such time or times as the Agent deems necessary or advisable. 


 


If any Event of Default shall have occurred and be
continuing, each Grantor further agrees, at the Agent’s request, to assemble
the Collateral and make it available to the


 

















 


Agent at a place or places
designated by the Agent which are reasonably convenient to the Agent and such
Grantor, whether at such Grantor’s premises or elsewhere. Without limiting the
foregoing, the Agent shall also have the right to require that each Grantor
store and keep any Collateral pending further action by the Agent, and while
Collateral is so stored or kept, provide such guards and maintenance services
as shall be necessary to protect the same and to preserve and maintain Collateral
in good condition. Until the Agent is able to effect a sale, lease, license or
other disposition of Collateral, the Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for
the purpose of preserving Collateral or its value or for any other purpose
deemed appropriate by the Agent. The Agent shall not have any obligation to any
Grantor to maintain or preserve the rights of any Grantor as against third
parties with respect to Collateral while Collateral is in the possession of the
Agent. The Agent may, if it so elects, seek the appointment of a receiver or
keeper to take possession of Collateral and to enforce any of the Agent’s
remedies (for the benefit of the Agent and Secured Parties), with respect to
such appointment without prior notice or hearing as to such appointment. The
Agent shall apply the net proceeds of any sale, lease, license, other
disposition of, or any collection, recovery, receipt, or realization on, the
Collateral to the Note Obligations as provided in the Indenture, and only after
so paying over such net proceeds, and after the payment by the Agent of any
other amount required by any provision of law, need the Agent account for the
surplus, if any, to any Grantor. To the maximum extent permitted by applicable
law, each Grantor waives all claims, damages, and demands against the Agent or
any Secured Parties arising out of the repossession, retention or sale of the
Collateral except such as arise solely out of the gross negligence or willful
misconduct of the Agent or such Secured Party as finally determined by a court
of competent jurisdiction. Each Grantor agrees that ten (10) days prior notice
by the Agent of the time and place of any public sale or of the time after
which a private sale may take place is reasonable notification of such matters.
Notwithstanding any such notice of sale, the Agent shall not be obligated to
make any sale of Collateral. In connection with any sale, lease, license or
other disposition of Collateral, the Agent may disclaim any warranties that
might arise in connection therewith and the Agent shall have no obligation to
provide any warranties at such time. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay all Note Obligations, including any attorneys’ fees or
other expenses incurred by the Agent or any Secured Parties to collect such
deficiency. 


 


(b)           Except as otherwise
specifically provided herein, each Grantor hereby waives presentment, demand,
protest or any notice (to the maximum extent permitted by applicable law) of
any kind in connection with this Agreement or any Collateral. 


 


(c)           To the extent that
applicable law imposes duties on the Agent to exercise remedies in a
commercially reasonable manner, each Grantor acknowledges and agrees that it is
not commercially unreasonable for the Agent (i) to fail to incur expenses
reasonably deemed significant by the Agent to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain governmental or
third party consents for the collection or disposition of Collateral to be
collected or disposed of, (iii) to fail to exercise collection remedies


 

















 


against Account Debtors or
other Persons obligated on Collateral or to remove Liens on or any adverse
claims against Collateral, (iv) to exercise collection remedies against Account
Debtors and other Persons obligated on Collateral directly or through the use
of collection agencies and other collection specialists, (v) to advertise dispositions
of Collateral through publications or media of general circulation, whether or
not the Collateral is of a specialized nature, (vi) to contact other Persons,
whether or not in the same business as any Grantor, for expressions of interest
in acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Agent against risks of loss, collection or
disposition of Collateral or to provide to the Agent a guaranteed return from
the collection or disposition of Collateral, or (xii) to the extent deemed
appropriate by the Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Agent in the
collection or disposition of any of the Collateral. Each Grantor acknowledges
that the purpose of this Section 8(c) is to provide non-exhaustive indications
of what actions or omissions by the Agent would not be commercially
unreasonable in the Agent’s exercise of remedies against the Collateral and
that other actions or omissions by the Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 8(c).
Without limitation upon the foregoing, nothing contained in this Section 8(c)
shall be construed to grant any rights to any Grantor or to impose any duties
on the Agent that would not have been granted or imposed by this Agreement or
by applicable law in the absence of this Section 8(c). 


 


(d)          Neither
the Agent nor any Secured Parties shall be required to make any demand upon, or
pursue or exhaust any of their rights or remedies against, any Grantor, any
other obligor, guarantor, pledger or any other Person with respect to the
payment of the Note Obligations or to pursue or exhaust any of their rights or
remedies with respect to any Collateral therefor or any direct or indirect
guarantee thereof. Neither the Agent nor any Secured Parties shall be required
to marshal the Collateral or any guarantee of the Note Obligations or to resort
to the Collateral or any such guarantee in any particular order, and all of its
and their rights hereunder or under any other Note Document shall be cumulative.
To the extent it may lawfully do so, each Grantor absolutely and irrevocably
waives and relinquishes the benefit and advantage of, and covenants not to
assert against the Agent or any Secured Parties, any valuation, stay,
appraisement, extension, redemption or similar laws and any and all rights or
defenses it may have as a surety now or hereafter existing which, but for this
provision, might be applicable to the sale of any Collateral made under the
judgment, order or decree of any court, or privately under the power of sale conferred by this Agreement, or
otherwise. 


 


9.            Grant of License
to Use Property. Subject to the Intercreditor Agreement and the rights of
the Credit Agreement Agent and the Priority Lien Collateral Agent (each as
defined in the Intercreditor Agreement) thereunder, for the purpose of enabling
the Agent to


 

















 


exercise
rights and remedies under Section 8 hereof (including, without limiting the
terms of Section 8 hereof, in order to take possession of, collect, receive,
assemble, process, appropriate, remove, realize upon, sell, lease, license,
assign, give an option or options to purchase or otherwise dispose of
Collateral) at such time as the Agent shall be lawfully entitled to exercise
such rights and remedies, each Grantor hereby grants to the Agent, for the
benefit of the Agent and Secured Parties, an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to such Grantor)
to use, license or sublicense any Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including
in such license access to all media in which any of the licensed items may be
recorded or stored and to all Software and programs used for the compilation or
printout thereof and an irrevocable license (exercisable without payment of
rent or other compensation to such Grantor) to use and occupy all real estate
owned or leased by such Grantor. 


 


10.
         Limitation on the Agent’s and
the Secured Parties’ Duty in Respect of Collateral. The Agent and each
Secured Party shall use reasonable care with respect to the Collateral in its
possession or under its control. Neither the Agent nor any Secured Parties
shall have any other duty as to any Collateral in its possession or control or
in the possession or control of any agent or nominee of the Agent or such
Secured Party, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto. The Agent shall
be deemed to have exercised reasonable care in the custody and preservation the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property. The Agent shall
not be liable or responsible for any loss or damage to any of the Collateral,
or for any diminution in the value thereof, by reason of the act or omission of
any warehousemen, carrier, forwarding agency, consignee or other agent or
bailee selected by the Agent in good faith. 


 


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


 


12.          Expenses and Attorneys Fees. Without
limiting any Grantor’s obligations under the Notes, the Indenture or the other
Note Documents, each Grantor agrees to promptly pay all reasonable fees, costs
and expenses (including reasonable attorneys’ fees and expenses incurred in
connection with (a) protecting, storing, warehousing, appraising, insuring, handling,
maintaining and shipping the Collateral, (b) creating, perfecting, maintaining
and enforcing the


 

















 


Agent’s
Liens and (c) collecting, enforcing, retaking, holding, preparing for
disposition, processing and disposing of Collateral. 


 


13.
         Notices. Except as
otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other party, or
whenever any of the parties desires to give and serve upon any other party any
communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be given in the manner, and deemed received, as provided for
in the Indenture. 


 


14.
         Limitation by Law. All
rights, remedies and powers provided in this Agreement may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling, and to be
limited to the extent necessary so that they shall not render this Agreement
invalid, unenforceable, in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law. 


 


15.
         Termination of this Agreement.
Subject to Section 11 hereof, this Agreement shall terminate upon the
Termination Date. 


 


16.
         Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that no Grantor may assign
any of its rights or obligations hereunder without the written consent of the Agent.
No sales of participations, other sales, assignments, transfers or other
dispositions of any agreement governing or instrument evidencing the Note
Obligations or any portion thereof or interest therein shall in any manner
impair the Lien granted to the Agent, for the benefit of the Agent and the
Secured Parties, hereunder. 


 


17.
         Counterparts. This
Agreement and any amendments, waivers, consents or supplements may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an original,
but all of which counterparts taken together shall constitute but one in the
same instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto. This Agreement may be
authenticated by manual signature, facsimile or, if approved in writing by the
Agent, electronic means, all of which shall be equally valid. 


 


18.
         Applicable Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES. 


 

















 


19.
          Additional Grantors If,
pursuant to Section 4.18 of the Indenture, the Borrowers shall be required to
cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such
Subsidiary shall execute and deliver to the Agent a Joinder Agreement substantially
in the form of Exhibit C to this Agreement and shall thereafter for all
purposes be a party hereto and have the same rights, benefits and obligations
as a Grantor party hereto on the date of this Agreement. 


 


20.
          Headings. Section
headings are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purposes or be given
substantive effect. 


 


21.
          Benefit of the Secured
Parties. All Liens granted or contemplated hereby shall be for the benefit
of the Agent on behalf of the Secured Parties, and all proceeds or payments
realized from Collateral in accordance herewith shall be applied to the Note Obligations
in accordance with the terms of the Indenture. 


 


22.
          Additional Rights of Agent.



 


(a)           The
Agent shall be entitled to all of the rights, protections, immunities and indemnities
of the Trustee set forth in the Indenture. 


 


(b)          Neither
the Agent, nor any of its respective officers, directors, employees, agents or
counsel shall be liable for any action lawfully taken or omitted to be taken by
it or them hereunder or in connection herewith, except for actions taken or
omitted to be taken as a result of its or their own gross negligence or wilful
misconduct as finally determined by a court of competent jurisdiction. 


 


23.
          INTERCREDITOR AGREEMENT
GOVERNS. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE SECURITY
INTEREST GRANTED TO WELLS FARGO BANK, NATIONAL ASSOCIATION, AS AGENT, FOR THE
BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY
RIGHT OR REMEDY BY THE AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE
SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY
CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT
AND THIS AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.



 


[Remainder of Page Intentionally Left Blank]


 

















 


IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above. 


 


	
   

  	
   

  	
  NEFF RENTAL LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  /s/ Mark Irion

  	
   

  
	
   

  	
   

  	
   

  	
    Name:           Mark
  Irion

  
	
   

  	
   

  	
   

  	
    Title:             Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEFF FINANCE CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  /s/ Mark Irion

  	
   

  
	
   

  	
   

  	
   

  	
    Name:           Mark
  Irion

  
	
   

  	
   

  	
   

  	
    Title:             Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEFF RENTAL INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  /s/ Mark Irion

  	
   

  
	
   

  	
   

  	
   

  	
    Name:           Mark
  Irion

  
	
   

  	
   

  	
   

  	
    Title:             Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Agent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
   

  	
    Title:

  



 

















 


IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above. 


 


	
   

  	
   

  	
  NEFF RENTAL LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEFF FINANCE CORP.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEFF RENTAL INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Agent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  /s/ Joseph P. O’Donnell

  	
   

  
	
   

  	
   

  	
   

  	
    Name:           JOSEPH P. O’DONNELL

  
	
   

  	
   

  	
   

  	
    Title:             VICE PRESIDENT

  



 

















 


SCHEDULE I


to


SECURITY AGREEMENT


 


Filing Jurisdictions


 


1.
Neff Rental, Inc. - Florida


 


2.
Neff Rental LLC - Delaware


 


3.
Neff Finance Corp. - Delaware


 

















 


SCHEDULE II


to


SECURITY AGREEMENT


 


Stock, Instruments, Documents,
Chattel Paper

and Letter of Credit Rights


 


Neff Rental LLC


 


Stock
of Neff Rental, Inc.


 


Stock
of Neff Finance Corp. 


 


Neff Rental, Inc. 


 


None


 


Neff Finance Corp. 


 


None


 














 


SCHEDULE III


to


SECURITY AGREEMENT


 


Schedule of Organizational
Identification, Offices,


Locations of Collateral

and Records Concerning Collateral


 


I.              Grantor’s official name:


 


A.
   Neff Finance Corp.


 


B.
   Neff Rental, Inc. 


 


C.
   Neff Rental LLC


 


The information set forth
above is consistent for the previous five years from the date hereof. 


 


II.                                   Type of entity (e. g. corporation,
partnership, business trust, limited partnership, limited liability company):


 


A.
   Neff Finance Corp.


 


Corporation


 


B.
   Neff Rental, Inc.


 


Corporation


 


C.
   Neff Rental LLC


 


Limited
Liability Company


 


	
  III.

  	
   

  	
  Organizational
  identification number issued by Grantor’s state of incorporation or
  organization or a statement that no such number has been issued:

  



 


A.
   Neff Finance Corp.


 


3986723


 


B.
   Neff Rental, Inc.


 


K54671


 


C.
   Neff Rental LLC


 


3986725


 

















 


IV.
          State of organization or
incorporation of Grantor:


 


A.
   Neff Finance Corp.


 


Delaware


 


B.
   Neff Rental, Inc.


 


Florida


 


C.
   Neff Rental LLC


 


Delaware


 


The
information set forth above is consistent for the previous five years from the
date hereof. 


 


V.
           Chief executive office and
principal place of business of Grantor:


 


A.
   Neff Finance Corp. 


 


Doral
Corporate Plaza


3750
N.W. 87 Avenue


Suite
400


Miami,
FL 33178


 


B.
   Neff Rental, Inc. 


 


Doral
Corporate Plaza


3750
N.W. 87 Avenue


Suite
400


Miami,
FL 33178


 


C.
   Neff Rental LLC


 


Doral
Corporate Plaza


3750
N.W. 87 Avenue


Suite
400


Miami,
FL 33178


 


The
information set forth above is consistent for the previous five years from the
date hereof. 


 


VI.                                Other offices of Grantor and other premises where Inventory or
Equipment is stored or located:


 


A.
   Neff Finance Corp.


 


None


 


B.
   Neff Rental, Inc. 


 

















 


Collateral
is located with customers and is sent out for repairs in the ordinary course of business and


 


	
  Port Commerce Center III,
  Lot 2 1860 Martin Luther King Jr. Blvd

  	
   

  	
  Riviera Beach

  	
   

  	
  FL 33404

  	
   

  
	
  2200 NW 17th Street

  	
   

  	
  Pompano Beach

  	
   

  	
  FL 33069

  	
   

  
	
  11700 Metro Parkway

  	
   

  	
  Ft. Meyers

  	
   

  	
  FL 33912

  	
   

  
	
  4580 Ashton Road, Unit A

  	
   

  	
  Sarasota

  	
   

  	
  FL 34233

  	
   

  
	
  5955 Phillips Highway

  	
   

  	
  Jacksonville

  	
   

  	
  FL 32216

  	
   

  
	
  3971 Woodville Hwy.

  	
   

  	
  Tallahassee

  	
   

  	
  FL 32311

  	
   

  
	
  11909 South Orange Blossom
  Trail

  	
   

  	
  Orlando

  	
   

  	
  FL 32837

  	
   

  
	
  500 Aero Lane

  	
   

  	
  Sanford

  	
   

  	
  FL 32711

  	
   

  
	
  490 Sun Valley Drive
  Building 2

  	
   

  	
  Roswell

  	
   

  	
  GA 30076

  	
   

  
	
  3763 Longmire Way

  	
   

  	
  Doraville

  	
   

  	
  GA 30340

  	
   

  
	
  5035 Highway 85 South

  	
   

  	
  Forest Park

  	
   

  	
  GA 30297

  	
   

  
	
  5085 Highway 85 South

  	
   

  	
  Forest Park

  	
   

  	
  GA 30297

  	
   

  
	
  1808 Sanderson Road

  	
   

  	
  Knoxville

  	
   

  	
  TN 37921

  	
   

  
	
  1111 Shallowford Road

  	
   

  	
  Marietta

  	
   

  	
  GA 30066

  	
   

  
	
  3908 North Graham Street

  	
   

  	
  Charlotte

  	
   

  	
  NC 28206

  	
   

  
	
  2325 Tubman Home Road

  	
   

  	
  Augusta

  	
   

  	
  GA 30906

  	
   

  
	
  7430 Peppermill Parkway

  	
   

  	
  N. Charleston

  	
   

  	
  SC 29418

  	
   

  
	
  4 Commerce Parkway

  	
   

  	
  Fredericksburg

  	
   

  	
  VA 22406

  	
   

  
	
  5640 Raby Road

  	
   

  	
  Norfolk

  	
   

  	
  VA 23502

  	
   

  
	
  600 Industrial Park Drive

  	
   

  	
  Newport News

  	
   

  	
  VA 23608

  	
   

  
	
  11228 Hopson Road

  	
   

  	
  Ashland

  	
   

  	
  VA 23005

  	
   

  
	
  973 Metro Media Place

  	
   

  	
  Dallas

  	
   

  	
  TX 75247

  	
   

  
	
  128 21st Streets

  	
   

  	
  Texas City

  	
   

  	
  TX 77590

  	
   

  
	
  1248 E. Industrial

  	
   

  	
  Saginaw

  	
   

  	
  TX 76131

  	
   

  
	
  1622 West 2nd Street

  	
   

  	
  Odessa

  	
   

  	
  TX 79763

  	
   

  
	
  390 South Van Avenue

  	
   

  	
  Houma

  	
   

  	
  LA 70361

  	
   

  
	
  4000 Railroad Avenue

  	
   

  	
  Morgan City

  	
   

  	
  LA 70380

  	
   

  
	
  1407 General Mouton Avenue

  	
   

  	
  Lafayette

  	
   

  	
  LA 70501

  	
   

  
	
  3718 Hwy. 14

  	
   

  	
  New Iberia

  	
   

  	
  LA 70560

  	
   

  
	
  10300 Airline Highway

  	
   

  	
  St. Rose

  	
   

  	
  LA 70087

  	
   

  
	
  37010 Highway 30

  	
   

  	
  Geismar

  	
   

  	
  LA 70734

  	
   

  
	
  5117 Highway 90 East

  	
   

  	
  Lake Charles

  	
   

  	
  LA 70615

  	
   

  
	
  664 A.O. Rappelet Road

  	
   

  	
  Golden Meadow

  	
   

  	
  LA 70357

  	
   

  
	
  42990 Highway 23 South

  	
   

  	
  Venice

  	
   

  	
  LA 70091

  	
   

  
	
  3100 West Sahara Avenue
  Suite 215

  	
   

  	
  Las Vegas

  	
   

  	
  NV 89102

  	
   

  
	
  1835 S. Black Canyon
  Highway

  	
   

  	
  Phoenix

  	
   

  	
  AZ 85009

  	
   

  
	
  5850 Dahlia Street

  	
   

  	
  Commerce City

  	
   

  	
  CO 80022

  	
   

  
	
  8401 Iliff Avenue

  	
   

  	
  Denver

  	
   

  	
  CO 80231

  	
   

  
	
  12410 Mead Way

  	
   

  	
  Littleton

  	
   

  	
  CO 80125

  	
   

  
	
  222 Valley Street

  	
   

  	
  San Bernardino

  	
   

  	
  CA 92408

  	
   

  
	
  5856 N.E. Columbia
  Boulevard

  	
   

  	
  Portland

  	
   

  	
  OR 97218

  	
   

  
	
  4305 Agnes Street

  	
   

  	
  Corpus Christi

  	
   

  	
  TX 78405

  	
   

  
	
  6501 N.W. 77 Avenue

  	
   

  	
  Miami

  	
   

  	
  FL 33166

  	
   

  



 

















 


	
  4406 Darien Highway

  	
   

  	
  Brunswick

  	
   

  	
  GA 31525

  	
   

  
	
  3500 S.R. 520 West (3500 A
  W King Street)

  	
   

  	
  Cocoa

  	
   

  	
  FL 32926

  	
   

  
	
  4321 North Highway 301

  	
   

  	
  Tampa

  	
   

  	
  FL 33610

  	
   

  
	
  520 Pirkle Ferry Road,
  Suite H

  	
   

  	
  Cumming

  	
   

  	
  GA 30040

  	
   

  
	
  201 Howertown Street,
  a.k.a, 200 North 2nd Street

  	
   

  	
  Nashville

  	
   

  	
  TN 37213

  	
   

  
	
  1460 Chase Street

  	
   

  	
  Athens

  	
   

  	
  GA 30601

  	
   

  
	
  1360 US Highway 82 West

  	
   

  	
  Leesburg

  	
   

  	
  GA 31763

  	
   

  
	
  5340 Hawkinsville Road

  	
   

  	
  Macon

  	
   

  	
  GA 31216

  	
   

  
	
  1716 E. Palmetto Street

  	
   

  	
  Florence

  	
   

  	
  SC 29506

  	
   

  
	
  749 Jason Blvd.

  	
   

  	
  Myrtle Beach

  	
   

  	
  SC 29577

  	
   

  
	
  1936 Highway 101 South

  	
   

  	
  Greer

  	
   

  	
  SC 29651

  	
   

  
	
  2323 South Alston Avenue

  	
   

  	
  Durham

  	
   

  	
  NC 27707

  	
   

  
	
  108 N. Montague Drive

  	
   

  	
  Columbia

  	
   

  	
  SC 29203

  	
   

  
	
  Wilmington Branch 

  	
   

  	
  Wilmington

  	
   

  	
  NC 28401

  	
   

  
	
  3813 US Highway 421 North

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5357 Highway 11

  	
   

  	
  South Winterville

  	
   

  	
  NC 28590

  	
   

  
	
  765 North Pike West

  	
   

  	
  Sumter

  	
   

  	
  SC 29150

  	
   

  
	
  6382 Burnt Poplar Rd.

  	
   

  	
  Greensboro

  	
   

  	
  NC 27409

  	
   

  
	
  2012 Raleigh Boulevard

  	
   

  	
  Raleigh

  	
   

  	
  NC 27604

  	
   

  
	
  27615 Rowland Road

  	
   

  	
  Raleigh

  	
   

  	
  NC 27604

  	
   

  
	
  140 Pepsi Lane

  	
   

  	
  Fayetteville

  	
   

  	
  NC 28301

  	
   

  
	
  7601 Jefferson Avenue

  	
   

  	
  Landover

  	
   

  	
  MD 20785

  	
   

  
	
  Suite 204

  	
   

  	
  Houston

  	
   

  	
  TX 77018

  	
   

  
	
  256 North Sam Houston
  Parkway

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  101 North Loop

  	
   

  	
  Houston

  	
   

  	
  TX 77018

  	
   

  
	
  12949 Research Blvd.

  	
   

  	
  Austin

  	
   

  	
  TX 78750

  	
   

  
	
  8700 Fruitridge Road

  	
   

  	
  Sacramento

  	
   

  	
  CA 95826

  	
   

  
	
  2819 W. Ruthrauff Road

  	
   

  	
  Tucson

  	
   

  	
  AZ 85705

  	
   

  
	
  3682 S. Valley View Blvd.

  	
   

  	
  Las Vegas

  	
   

  	
  NV 89013

  	
   

  
	
  1354 N. Red Gum Ave.

  	
   

  	
  Anaheim

  	
   

  	
  CA 92806

  	
   

  
	
  955 W. Mission Avenue

  	
   

  	
  Escondido

  	
   

  	
  CA 92025

  	
   

  
	
  957 W. Mission Avenue

  	
   

  	
  Escondido

  	
   

  	
  CA 92025

  	
   

  
	
  4007 East Trent Avenue

  	
   

  	
  Spokane

  	
   

  	
  WA 99202

  	
   

  
	
  9923 East Trent Avenue

  	
   

  	
  Spokane

  	
   

  	
  WA 99202

  	
   

  
	
  621 L. Street

  	
   

  	
  Chula Vista

  	
   

  	
  CA 91911

  	
   

  
	
  5668 So Commerce Drive

  	
   

  	
  Murray

  	
   

  	
  UT 84107

  	
   

  
	
  1620 E. Cardinal Drive

  	
   

  	
  Beaumont

  	
   

  	
  TX 77705

  	
   

  
	
  3030 North 73rd St.

  	
   

  	
  Scottsdale

  	
   

  	
  AZ

  	
   

  
	
  4381 Bettencourt Way

  	
   

  	
  Union

  	
   

  	
  CA

  	
   

  
	
  6900 NW 74th Ave

  	
   

  	
  Miami

  	
   

  	
  FL 33166

  	
   

  
	
  117 Indigo Drive

  	
   

  	
  Brunswick

  	
   

  	
  GA

  	
   

  
	
  2054 Highway 400 South

  	
   

  	
  Dawsonville

  	
   

  	
  GA

  	
   

  
	
  101 Hooker Road

  	
   

  	
  Greenville

  	
   

  	
  NC

  	
   

  
	
  4010 Market Street

  	
   

  	
  Wilmington

  	
   

  	
  NC

  	
   

  
	
  3401 South Service Road

  	
   

  	
  Moore

  	
   

  	
  OK

  	
   

  
	
  2211 Brazos Port Blvd.

  	
   

  	
  Freeport

  	
   

  	
  TX

  	
   

  



 

















 


C. Neff Rental LLC


 


None


 


The information set forth
above is consistent for the previous five years from the date hereof.


 


VII.          Locations of records concerning Collateral:


 


A. Neff Finance Corp.


 


Doral Corporate Plaza 


3750 N.W. 87 Avenue 


Suite 400 


Miami, FL 33178


 


B. Neff Rental, Inc.


 


Doral Corporate Plaza 


3750 N.W. 87 Avenue 


Suite 400


Miami, FL 33178


 


Iron
Mountain Locations:


 


The local office of Iron
Mountain is as follows:


 


Iron Mountain


3821 SW 47th Ave


Ft. Lauderdale, FL 33314


 


Data that is stored off-site
is stored at the following Iron Mountain warehouses:


 


Building
#1 7460 N.W. 52nd St., Miami, FL 33166 


Building
#2 4185 N.W. 77th Ave., Miami, FL 33166 


Building
#7 3415 N.W. 112th St., Miami, FL 33167 


Building
#8 12300 N.W. 32nd Ave., Miami, FL 33167 


Building
#12 6900 N.W. 74th Ave., Miami, FL 33166 


Building
#14 2925 N.W. 120th Terrace, Miami, FL 33167


 

















 


C. Neff Rental LLC


 


Doral Corporate Plaza


3750 N.W. 87 Avenue 


Suite 400 


Miami, FL 33178


 


The information set forth
above is consistent for the previous five years from the date hereof.


 


VIII. Persons from whom assets have been acquired, during the past five
years, other than in the ordinary course of business:


 


A. Neff Finance Corp.


 


None


 


B. Neff Rental, Inc.


 


None


 


C. Neff Rental LLC


 


None


 

















 


EXHIBIT A


 


FORM OF
INTELLECTUAL PROPERTY SECURITY AGREEMENT


 


THIS
INTELLECTUAL PROPERTY SECURITY AGREEMENT (together with all amendments, if any,
from time to time, this “Intellectual Property Security Agreement”), dated
as                          ,
200  , is made by EACH OF THE GRANTORS LISTED ON THE SIGNATURE PAGES
HERETO AND EACH ADDITIONAL PARTY WHICH BECOMES A GRANTOR HERETO PURSUANT TO
SECTION 8 HEREOF (collectively, “Grantors” and each, a “Grantor”),
in favor of Wells Fargo Bank, National Association, in its capacity as Agent
for the Secured Parties (each as defined in the Security Agreement referred to
below).


 


W I  T  N  E  S
S  E  T  H:


 


WHEREAS,
pursuant to the Indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “Indenture”),
among the Borrowers, NEFF, each of the other Persons named therein as a
Guarantor (as defined in the Indenture) and Wells Fargo Bank, National
Association, as Trustee, the Borrowers are co-issuing $245,000,000 aggregate
principal amount of their 111/4% Second Priority Senior Secured Notes Due 2012 and may issue, from
time to time, additional notes in accordance with the provisions of the
Indenture (collectively, the “Notes”);


 


WHEREAS,
the Grantors have entered into a Security Agreement (the “Security Agreement”)
of even date herewith, with the Agent for the benefit of the Secured Parties;


 


WHEREAS,
each Grantor will derive direct and indirect economic benefits from the
issuance of the Notes and other financial accommodations provided to the
Borrower and the other Grantors pursuant to the Indenture;


 


WHEREAS,
in order to induce the Agent to enter into the Indenture and the other Note
Documents, each Grantor has agreed to grant a continuing Lien on the Collateral
to secure the Note Obligations;


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and to induce the Trustee to enter into the Indenture and the other
Note Documents, it is agreed as follows:


 


1.             DEFINED TERMS. All capitalized terms used (including in
the Recitals hereto) but not otherwise defined herein have the meanings given
to them in the Security Agreement.


 


2.             GRANT OF SECURITY INTEREST IN INTELLECTUAL
PROPERTY COLLATERAL. (a) To
secure the prompt and complete payment, performance and observance of all the
Note Obligations, each Grantor hereby grants, assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Agent, for the benefit of the
Secured Parties, a continuing second priority security interest in and Lien
upon all of its right, title and interest in, to and under the following,
whether presently existing or hereafter created or acquired by or arising in
favor of


 

















 


such Grantor and whether
owned or consigned by or to, or licensed from
or to, such Grantor (collectively, the “Intellectual Property
Collateral”):


 


(i)            [all of its Patents and Patent Licenses to
which it is a party including those referred to on Schedule I hereto;]


 


(ii)           [all of its Trademarks and Trademark Licenses
to which it is a party including those referred to on Schedule I hereto;]


 


(iii)          [all of its Copyrights and Copyright Licenses
to which it is a party including those referred to on Schedule I hereto;]


 


(iv)          all reissues, continuations or extensions of
the foregoing;


 


(v)           all goodwill of the business connected with
the use of, and symbolized by, each Patent, each Patent License, each
Trademark, each Trademark License, each Copyright and each Copyright License;
and


 


(vi)          all products and proceeds of the foregoing,
including, without limitation, any claim by such Grantor against third parties
for past, present or future (A) infringement or dilution of any Patent or
Patent licensed under any Patent License, (B) injury to the goodwill associated
with any Patent or any Patent licensed under any Patent License, (C)
infringement or dilution of any Trademark or Trademark licensed under any
Trademark License, (D) injury to the goodwill associated with any Trademark or
any Trademark licensed under any Trademark License, (E) infringement or
dilution of any Copyright or Copyright licensed under any Copyright License,
and (F) injury to the goodwill associated with any Copyright or any Copyright
licensed under any Copyright License.


 


(b)          In addition, to secure the prompt and
complete payment, performance and observance of the Note Obligations and in
order to induce the Agent and Trustee as aforesaid, each Grantor hereby grants
to the Agent, for the benefit of the Secured Parties, a right of setoff,
against the property of such Grantor held by the Agent or any Lender,
consisting of property described above in Section 2(a) now or hereafter in the
possession or custody of or in transit to the Agent or any Lender, for any
purpose, including safekeeping, collection or pledge, for the account of such
Grantor, or as to which such Grantor may have any right or power.


 


3.             REPRESENTATIONS AND WARRANTIES. Each Grantor, jointly and severally,
represents and warrants, as of the date of this Agreement, that (a) each
Patent, (b) each Trademark that is registered or pending registration with the
US Patent and Trademark Office, (c) each Copyright that is registered or
pending registration with the US Copyright Office, (d) material unregistered
trademarks, service marks and trade names, (e) material unregistered copyrights,
(f) computer software (other than commercially available off-the-shelf software
purchased or licensed for less than a total cost of $500,000 in the aggregate);
and (g) each License, is set forth on the schedules hereto. This Intellectual
Property Security Agreement is


 


2

















 


effective to create a valid
and continuing Lien on and, upon the filing hereof with the United States
Patent and Trademark Office and the United States Copyright Office, as
applicable and the filing of appropriate financing statements listed on
Schedule I to the Security Agreement, perfected security interests in favor of
the Agent in all of Grantors’ Patents, Trademarks and Copyrights and such
perfected security interests are enforceable as such as against any and all
creditors of, and purchasers from, Grantors. Upon filing of this Intellectual
Property Security Agreement with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable and the filing of
appropriate financing statements listed on Schedule I to the Security
Agreement, all action necessary or otherwise requested by the Agent to protect
and perfect the Agent’s Lien on Grantor’s Patents, Trademarks and Copyrights
shall have been duly taken.


 


In
addition to any representations and warranties contained herein, each Grantor
hereby acknowledges and affirms the representations and warranties made to the
Agent with respect to the Intellectual Property Collateral made in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.


 


4.             COVENANTS; SECURITY AGREEMENT. The security interests granted pursuant to
this Intellectual Property Security Agreement are granted in conjunction with the
security interests granted to the Agent pursuant to the Security Agreement. In
addition to the covenants contained herein, each Grantor hereby acknowledges
and affirms the covenants of such Grantor with respect to the Intellectual
Property Collateral in the Security Agreement, the terms and provisions of
which are incorporated herein as if fully set forth herein. In addition, each
Grantor hereby acknowledges and affirms that the rights and remedies of the
Agent with respect to the security interest in the Intellectual Property
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.


 


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


 


6.             NOTICES. Whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or may be given to
or


 


3

















 


served upon any of the
parties by any other party, or whenever any of the parties desires to give or
serve upon another any such communication with respect to this Intellectual
Property Security Agreement, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and shall be
addressed to the party to be notified at the address set forth in Section 12.02
of the Indenture.


 


7.             ADDITIONAL GRANTORS. The initial Grantors hereunder are the Credit
Parties as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Credit Parties may become parties
hereto, as additional Grantors (each, an “Additional Grantor”), by
executing a counterpart of this Intellectual Property Security Agreement
substantially in the form of Exhibit A attached hereto. Upon delivery of any
such counterpart to the Agent, notice of which is hereby waived by the
Grantors, each Additional Grantor shall be a Grantor and shall be as fully a
party hereto as if such Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder nor by any election of the Agent not to cause any Credit Party or any
other Person to become an Additional Grantor hereunder. This Intellectual
Property Security Agreement shall be fully effective as to any Grantor that is
or becomes a party hereto regardless of whether any other Person becomes or
fails to become or ceases to be a Grantor hereunder.


 


8.             TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 5 hereof, this
Intellectual Property Security Agreement shall terminate upon the Termination
Date.


 


9.             NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Intellectual Property Security
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Intellectual Property Security Agreement shall be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Intellectual Property Security Agreement.


 


10.           ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Intellectual Property Security
Agreement with its counsel.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


4

















 


IN
WITNESS WHEREOF, each Grantor has caused this Intellectual Property Security
Agreement to be executed and delivered by its duly authorized officer as of the
date first set forth above.


 


	
   

  	
  [NAME OF GRANTOR],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
  [NAME OF GRANTOR],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Acknowledged and Agreed

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 

















 


ACKNOWLEDGMENT OF GRANTORS


 


	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss.

  
	
  COUNTY OF

  	
  )

  	
   

  



 


On this        day
of             ,
200   , before me personally appeared                                            ,
proved to me on the basis of satisfactory evidence to be the person who
executed the foregoing instrument on behalf of [                                     ],
who being by me duly sworn did depose and say that he is an authorized officer
of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged
said instrument to be the free act and deed of said corporation.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
   

  
	
   

  	
   

  
	
  {seal}

  	
   

  



 

















 


[SCHEDULE I


to


INTELLECTUAL PROPERTY
SECURITY AGREEMENT]


 


I.              PATENT REGISTRATIONS


 


	
  Grantor

  	
   

  	
  Patent

  	
   

  	
  Reg. No.

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


II.            PATENT APPLICATIONS


 


	
  Grantor

  	
   

  	
  Patent

  	
   

  	
  Application No.

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III.           PATENT LICENSES


 


	
  Grantor

  	
   

  	
  Name of Agreement

  	
   

  	
  Date of Agreement

  	
   

  	
  Parties

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


[SCHEDULE I


to


INTELLECTUAL PROPERTY SECURITY AGREEMENT]


 


I.              TRADEMARK REGISTRATIONS


 


	
  Grantor

  	
   

  	
  Mark

  	
   

  	
  Reg. No.

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


II.            TRADEMARK APPLICATIONS


 


	
  Grantor

  	
   

  	
  Mark

  	
   

  	
  Application No.

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III.           TRADEMARK LICENSES


 


	
  Grantor

  	
   

  	
  Name of Agreement

  	
   

  	
  Date of Agreement

  	
   

  	
  Parties

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


[SCHEDULE I


to


INTELLECTUAL PROPERTY SECURITY AGREEMENT]


 


I.              COPYRIGHT REGISTRATIONS


 


	
  Grantor

  	
   

  	
  Copyright

  	
   

  	
  Reg. No.

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


II.            COPYRIGHT APPLICATIONS


 


	
  Grantor

  	
   

  	
  Copyright

  	
   

  	
  Application No.

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


III.           COPYRIGHT LICENSES


 


	
  Grantor

  	
   

  	
  Name of Agreement

  	
   

  	
  Date of Agreement

  	
   

  	
  Parties

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT A


 


COUNTERPART TO INTELLECTUAL


PROPERTY SECURITY AGREEMENT


 


This counterpart, dated                      is
delivered pursuant to Section 8 of that certain Intellectual Property Security Agreement dated as of                      , 200    (as from time to
time amended, modified or supplemented, the “IP Security Agreement”; the
terms defined therein and not otherwise defined herein being used as therein
defined), among [                                        ],
as Grantor[s] and Wells Fargo Bank, National Association, as Agent. The
undersigned hereby agrees (i) that this counterpart may be attached to the IP
Security Agreement, and (ii) that the undersigned will comply with and be
subject to, including representations and warranties, all the terms and
conditions of the IP Security Agreement as if it were an original signatory
thereto.


 


	
   

  	
  [NAME OF ADDITIONAL
  GRANTOR],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  	
   

  
	
   

  	
   

  	
    Title:

  	
   

  



 

















 


EXHIBIT B


 


POWER OF
ATTORNEY


 


This
Power of Attorney is executed and delivered by [INSERT NAME OF APPLICABLE
GRANTORS] (collectively, the “Grantors” and each a “Grantor”) to
Wells Fargo Bank, National Association (hereinafter referred to as “Attorney”),
as Agent for the benefit of the Secured Parties, under an Indenture and a
Security Agreement, both dated as of July 8, 2005, and other related documents
(the “Note Documents”). No person to whom this Power of Attorney is
presented, as authority for Attorney to take any action or actions contemplated
hereby, shall be required to inquire into or seek confirmation from any Grantor
as to the authority of Attorney to take any action described below, or as to
the existence of or fulfillment of any condition to this Power of Attorney,
which is intended to grant to Attorney unconditionally the authority to take
and perform the actions contemplated herein, and each Grantor irrevocably
waives any right to commence any suit or action, in law or equity, against any
person or entity which acts in reliance upon or acknowledges the authority
granted under this Power of Attorney. The power of attorney granted hereby is coupled
with an interest, may not be revoked or canceled by any Grantor without
Attorney’s written consent and shall terminate on the Termination Date.


 


Each
Grantor hereby irrevocably constitutes and appoints Attorney (and all officers,
employees or agents designated by Attorney), with full power of substitution,
as such Grantor’s 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, from time to time in Attorney’s discretion, to take
any and all appropriate action and to execute and deliver any and all documents
and instruments which may be necessary or reasonably advisable to accomplish
the purposes of the Note Documents and, without limiting the generality of the
foregoing, each Grantor hereby grants to Attorney the power and right, on
behalf of such Grantor, without notice to or assent by any Grantor, and at any
time following the occurrence of and during the continuance of an Event of
Default and subject to the terms of the Intercreditor Agreement, to do the
following: (a) change the mailing address of such Grantor, open a post office
box on behalf of such Grantor, open mail for such Grantor, and ask, demand,
collect, give acquittances and receipts for, take possession of, endorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, and notices in
connection with any property of such Grantor; (b) effect any repairs to any
asset of such Grantor, or continue to obtain any insurance required to be
maintained by such Grantor pursuant to the Note Documents and pay all or any
part of the premiums therefor and costs thereof, and make, settle and adjust
all claims under such policies of insurance, and make all determinations and
decisions with respect to such policies; (c) pay or discharge any taxes, liens,
security interests, or other encumbrances levied or placed on or threatened
against such Grantor or its property; (d) defend any suit, action or proceeding
brought against such Grantor if such Grantor does not defend such suit, action
or proceeding or if Attorney believes that such Grantor is not pursuing such
defense in a manner that will maximize the recovery to Attorney, and settle,
compromise or adjust any suit, action, or proceeding described above and, in
connection therewith, give such discharges or releases as Attorney may deem
appropriate; (e) file or prosecute any claim, litigation, suit or proceeding in
any court of competent jurisdiction or before any arbitrator, or take any other
action otherwise deemed appropriate by Attorney for the purpose of collecting
any and all such moneys due to such Grantor whenever payable and to enforce any
other right in


 

















 


respect of such Grantor’s
property; (f) cause the certified public accountants then engaged by such
Grantor to prepare and deliver to Attorney at any time and from time to time,
promptly upon Attorney’s request, the following reports: (1) a reconciliation
of all accounts, (2) an aging of all accounts, (3) trial balances, (4) test
verifications of such accounts as Attorney may request, and (5) the results of
each physical verification of inventory; (g) communicate in its own name with
any party to any contract with regard to the assignment of the right, title and
interest of such Grantor in and under the contract and other matters relating
thereto; (h) to file such financing statements with respect to the Security
Agreement, with or without such Grantor’s signature, or to file a photocopy of
the Security Agreement in substitution for a financing statement, as the Agent
may deem appropriate, and to execute in such Grantor’s name such financing
statements and amendments thereto and continuation statements which may require
such Grantor’s signature; (i) execute, in connection with any sale provided for
in any Note Document, any endorsements, assignments or other instruments of
conveyance or transfer with respect to any collateral subject to the Note
Documents and to otherwise direct such sale or resale; (j) exercise the rights
of such Grantor with respect to the obligation of all account debtors to make
payment or otherwise render performance to such Grantor; (k) exercise the
rights of such Grantor to, and take any and all actions that Attorney deems
appropriate to realize the benefit of, any intellectual property; and (1)
assert any claims such Grantor may have, from time to time, against any other
party to any contract to which such Grantor is a party and to otherwise exercise
any right or remedy of such Grantor thereunder, all as though Attorney were the
absolute owner of the property of such Grantor for all purposes, and to do, at
Attorney’s option and such Grantor’s expense, at any time or from time to time,
all acts and other things that Attorney reasonably deems necessary to perfect,
preserve, or realize upon such Grantor’s property or assets and Attorney’s
liens thereon, all as fully and effectively as such Grantor might do. Each
Grantor hereby ratifies, to the extent permitted by law, all that said Attorney
shall lawfully do or cause to be done by virtue hereof.


 


IN
THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT AND THIS POWER OF ATTORNEY, THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT SHALL CONTROL.


 


2

















 


IN
WITNESS WHEREOF, this Power of Attorney is executed by each Grantor pursuant to
the authority of its board of directors this       day
of        , 20   .


 


	
   

  	
  [NAME OF GRANTOR],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
  [NAME OF GRANTOR], 

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 


3

















 


NOTARY
PUBLIC CERTIFICATE


 


On this                 day
of         , 20     ,                                      
who is personally known to me appeared before me in his/her capacity as the
[INSERT TITLE] of                                                ,
a                           [INSERT
TYPE OF ENTITY] (“Grantor”) and executed on behalf of Grantor the Power
of Attorney in favor of Wells Fargo Bank, National Association, to which this
Certificate is attached.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  



 


4

















 


NOTARY
PUBLIC CERTIFICATE


 


On this                 day
of          , 20        ,                                who
is personally known to me appeared before me in his/her capacity as the [INSERT
TITLE] of                                                                ,
a                           [INSERT
TYPE OF ENTITY] (“Grantor”) and executed on behalf of Grantor the Power
of Attorney in favor of Wells Fargo Bank, National Association, to which this
Certificate is attached.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  



 


5

















 


EXHIBIT A


 


FORM OF JOINDER AGREEMENT


 


JOINDER AGREEMENT (this “Agreement”)
dated as of                          ,
20     is by and among                                  ,
a
                                                          [corporation][limited
liability company] (the “New Subsidiary”) and Wells Fargo Bank, National
Association, as collateral agent (in such capacity, the “Agent”) for the
holders of Note Obligations (as defined below).


 


Pursuant to the Indenture dated as of July 8,
2005 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the “Indenture”), among Neff Rental LLC, a Delaware
limited liability company (“Neff LLC”), Neff Finance Corp., a Delaware
corporation (“Neff Finance” and, together with Neff LLC, the “Borrowers”
and each, a “Borrower”), Neff Rental, Inc., a Florida corporation (“NEFF”),
each of the other Persons named therein as a Guarantor (as defined in the
Indenture), and Wells Fargo Bank, National Association, as Trustee, and the
Security Agreement dated as of July 8, 2005 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”; capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Security Agreement) the
Credit Parties are required by Section 4.18 of the Indenture and Section 19 of
the Security Agreement to cause the new Subsidiary (“New Subsidiary”) to
become a Credit Party thereunder. Accordingly, the New Subsidiary hereby agrees
as follows with the Agent, for the benefit of the Secured Parties, that:


 


1.             The New Subsidiary hereby acknowledges,
agrees and confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed to be a party to the Indenture for all purposes of the
Indenture and the other Note Documents, and shall have all of the obligations
of a Credit Party thereunder as if it had executed the Indenture. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions applicable to the Credit Parties in
the Indenture and the other Note Documents.


 


2.             The New Subsidiary hereby acknowledges,
agrees and confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed to be a party to the Security Agreement as a Grantor
for all purposes of the Security Agreement and the other Note Documents, and
shall have all the obligations of a Grantor thereunder as if it had executed
the Security Agreement. The New Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Security Agreement. Without limiting generality of the
foregoing terms of this paragraph 2, the New Subsidiary hereby grants, assigns,
conveys, mortgages, pledges, hypothecates and transfers to Agent, for the benefit
of the Secured Parties, a Lien upon all of its right, title and interest in, to
and under all of the Collateral of such New Subsidiary, whether owned or
consigned by or to, or leased from or to, such New Subsidiary, and regardless
of where located, to secure the prompt payment and performance in full when
due, whether by lapse of time, acceleration, mandatory prepayment or otherwise,
of the Note Obligations.


 


3.             The New Subsidiary hereby acknowledges,
agrees and confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed to be a party to the Pledge Agreement and a Pledger
(as defined in the Pledge Agreement) for all purposes of the Pledge Agreement
and the other Note Documents, and shall have all the obligations of a Pledgor thereunder
as if it had executed the Pledge Agreement. The New Subsidiary hereby ratifies,
as


 

















 


of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Pledge Agreement. Without limiting generality of the foregoing terms of
this paragraph 3, the New Subsidiary hereby grants and pledges to Agent, for
the benefit of the Secured Parties, a second priority security interest in the
Pledged Collateral (as defined in the Pledge Agreement) of the New Subsidiary
identified on Schedule 1 hereto and all other Pledged Collateral of the New
Subsidiary to secure the prompt payment and performance in full when due,
whether by lapse of time, acceleration, mandatory prepayment or otherwise, of
the Secured Obligations (as defined in the Pledge Agreement).


 


4.             The Subsidiary hereby represents and warrants
to the Agent that:


 


(a)           The New Subsidiary’s official name, type of
entity and state of organization or incorporation are as set forth on the
signature pages hereto.


 


(b)           The New Subsidiary’s chief executive office
and principal place of business and other offices are located at the locations
set forth on Schedule 2 hereto.


 


(c)           Other than as set forth on Schedule 3 hereto,
the New Subsidiary has not changed its official name or changed its state of
organization or incorporation, been party to a merger, consolidation or other
change in structure or used any tradename in the prior five years.


 


(d)           Schedule 4 hereto includes all warehouses,
consignees and processors with whom Inventory is stored or located and other
premises where Collateral is stored or located.


 


(e)           Schedule 5 hereto includes all the locations
of the New Subsidiary’s books and records concerning the Collateral.


 


(f)            Schedule 6 hereto includes a list of Persons
from whom the New Subsidiary has acquired assets during the past five (5)
years, other than assets acquired in the ordinary course of the New Subsidiary’s
business.


 


(g)           Schedule 7 hereto includes all Patents,
Trademarks and Copyrights owned by or licensed to the New Subsidiary in its own
name, or to which the New Subsidiary is a party, as of the date hereof, that is
used in or necessary for the conduct of its business as currently conducted
that is material to the condition (financial or otherwise).


 


(h)           Schedule 8 hereto includes all Commercial
Tort Claims before any Governmental Authority by or in favor of the New
Subsidiary.


 


(i)            Schedule 9 hereto lists all real property
that is owned, leased or subleased by the New Subsidiary as of the date hereof.
Schedule 9 hereto further lists any real property with respect to which the New
Subsidiary or any of its Subsidiaries is a lessor, sublessor or assignor as of
the date hereof.


 


2

















 


(h)           Schedule 10 hereto lists all locations of
tangible personal property that is owned or leased by the New Subsidiary as of
the date.


 


5.             The New Subsidiary hereby acknowledges,
agrees and confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed to be a party to the Intercreditor Agreement and a
Credit Party (as defined in the Intercreditor Agreement) for all purposes of
the Intercreditor Agreement and the other Note Documents, and shall have all the
obligations of a Credit Party thereunder as if it had executed the
Intercreditor Agreement. The New Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
contained in the Intercreditor Agreement.


 


6.             This Agreement may be executed in any number
of counterparts and by different parties in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are attached to the same document.
Delivery of an executed signature page of this Agreement by facsimile transmission
shall be as effective as delivery of a manually executed counterpart hereof.


 


7.             THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES.


 


3