exv10w2






Exhibit 10.2




AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT




     THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from
time to time, the “Security Agreement”) is entered into as of January 30, 2009 by and
between A. H. BELO CORPORATION, a Delaware corporation (“Belo”), THE DALLAS MORNING NEWS,
INC., a Delaware corporation (“Dallas”), DENTON PUBLISHING COMPANY, a Texas corporation
(“Denton”), DFW PRINTING COMPANY, INC., a Delaware corporation (“DFW”), DMI
ACQUISITION SUB, INC., a Delaware corporation (“DMI”), PRESS-ENTERPRISE COMPANY, a
California corporation (“Press”), THE PROVIDENCE JOURNAL COMPANY, a Delaware corporation
(“Providence”) and certain of their Subsidiaries who are listed on the signature pages
hereto (each a “Grantor”, and collectively, the “Grantors”), and JPMORGAN CHASE
BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) for the
lenders party to the Credit Agreement referred to below.



PRELIMINARY STATEMENT




     Belo, Dallas, Denton, DFW, DMI, Press and Providence entered into that certain Security
Agreement dated as of October 23, 2008 (the “Original Security Agreement”) with JPMorgan
Chase Bank, N.A., as administrative agent for the lenders party to that certain Credit Agreement
dated as of February 4, 2008 (as amended by that certain First Amendment and Waiver dated as of
October 23, 2008, the “Original Credit Agreement”).



     The Grantors, the Administrative Agent, the Loan Parties and the Lenders are entering into an
Amended and Restated Credit Agreement dated as of January 30, 2009 (as it may be amended or
modified from time to time, the “Credit Agreement”), which Credit Agreement amends and
restates the Original Credit Agreement. The Grantors also desire, among other things, to amend and
restate the Original Security Agreement in its entirety by entering into this Security Agreement.



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



ARTICLE I.

DEFINITIONS




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



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



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



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



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



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



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



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 1




 









 








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



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



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



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



     “Commercial Tort Claims” means the existing commercial tort claims of the Grantor
listed in Exhibit I.



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



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



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



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



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



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



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



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



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



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



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



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



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 2




 









 








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



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



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



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



     “Lock Boxes” shall have the meaning set forth in Section 7.1(a).



     “Lock Box Agreements” shall have the meaning set forth in Section 7.1(a).



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



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



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



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



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



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



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



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 3





 









 








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



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



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



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



ARTICLE II.

GRANT OF SECURITY INTEREST




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




	 	(i)	 	all Accounts;
	 
	 	(ii)	 	all Chattel Paper;
	 
	 	(iii)	 	all Copyrights, Patents and Trademarks;
	 
	 	(iv)	 	all Documents;
	 
	 	(v)	 	all Equipment;
	 
	 	(vi)	 	all General Intangibles;
	 
	 	(vii)	 	all Goods;
	 
	 	(viii)	 	all Instruments;
	 
	 	(ix)	 	all Inventory;
	 
	 	(x)	 	all Investment Property including or in
addition, the following:






          (i) all the capital stock, partnership interests, membership
interests and other ownership interests issued by, and all other
ownership interest in all Subsidiaries (other than Foreign



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 4




 









 









Subsidiaries) now existing and hereafter created or acquired and
owned by such Grantor;




          (ii) all the capital stock, partnership interests, membership
interests and other ownership interests issued by, and all other
ownership interest in all Foreign Subsidiaries of such Grantor,
whether now owned or hereafter acquired, provided that no more than
and not less than sixty–six and two-thirds percent (66 2/3%) of the
capital stock or other ownership interest in each such Foreign
Subsidiary which is entitled to vote is pledged hereunder




(provided that the security interest in Investment Property under
this clause (x) shall not attach to the interest of (A) Belo
Enterprises, Inc. in iArchives, Inc., (B) Belo Enterprises, Inc. in
Mochila, Inc. or (C) True North Real Estate LLC in Sawbuck Realty,
Inc., in each case listed in Schedule 6.04, respectively, if and to
the extent that (1) any term of the agreement evidencing such
Investment Property prohibits, restricts, or requires the consent of
a Person other than a Borrower or a Subsidiary to, such security
interest or provides that the grant of any such security interest
would give rise to a default under such agreement and (2) any such
term described in clause (1) preceding is (y) effective under
applicable Requirements of Law other than the UCC and (z) is not
deemed ineffective under the UCC);




	 	(xi)	 	all cash or cash equivalents;
	 
	 	(xii)	 	all letters of credit, Letter-of-Credit Rights
and Supporting Obligations;
	 
	 	(xiii)	 	all Deposit Accounts with any bank or other financial
institution;
	 
	 	(xiv)	 	all Commercial Tort Claims; and
	 
	 	(xv)	 	and all accessions to, substitutions for and
replacements, proceeds (including Stock Rights), insurance
proceeds and products of the foregoing, together with all books
and records, customer lists, credit files, computer files,
programs, printouts and other computer materials and records
related thereto and any General Intangibles at any time
evidencing or relating to any of the foregoing;




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




ARTICLE III.

REPRESENTATIONS AND WARRANTIES




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



     3.1. Title, Perfection and Priority. Such Grantor has good and valid rights in or the
power to transfer the Collateral and title to the Collateral with respect to which it has purported
to grant a security interest hereunder, free and clear of all Liens except for Liens permitted
under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant



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hereto. When financing statements in proper form and identifying the Collateral have been
filed in the appropriate offices against such Grantor in the locations listed on Exhibit G,
the Administrative Agent will have a fully perfected first priority security interest in that
Collateral of the Grantor in which a security interest may be perfected by filing, subject only to
Liens permitted under Section 4.1(e).




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



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



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



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



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



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



     3.8. Accounts and Chattel Paper.



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




          (b) With respect to its Accounts, except as specifically disclosed on the most recent
Collateral Report, (i) all Accounts are Eligible Accounts; (ii) all Accounts represent bona fide
sales of Inventory or rendering of services to Account Debtors in the ordinary course of such
Grantor’s business and are not evidenced by a judgment, Instrument or Chattel Paper; (iii) there
are no setoffs, claims or disputes existing or asserted with respect thereto and such Grantor has
not made any agreement with any Account Debtor for any extension of time for the payment thereof,
any compromise or settlement for less than the full amount thereof, any release of any Account
Debtor from liability therefor, or any deduction therefrom except a discount or allowance allowed
by such Grantor in the ordinary course of its business




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for prompt payment and disclosed to the Administrative Agent; (iv) to such Grantor’s
knowledge, there are no facts, events or occurrences which in any way impair the validity or
enforceability thereof or could reasonably be expected to reduce the amount payable thereunder as
shown on such Grantor’s books and records and any invoices, statements and Collateral Reports with
respect thereto; (v) such Grantor has not received any written notice of proceedings or actions
which are threatened or pending against any Account Debtor which might result in any adverse change
in such Account Debtor’s financial condition; and (vi) such Grantor has no knowledge that any
Account Debtor is unable generally to pay its debts as they become due.




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




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



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



     3.11. Filing Requirements. None of its Equipment is covered by any certificate of
title, except for the vehicles described in Part I of Exhibit E. None of the Collateral
owned by it is of a type for which security interests or liens may be perfected by filing under any
federal statute except for (a) the vehicles described in Part II of Exhibit E and
(b) Patents and Trademarks held by such Grantor and described in Exhibit D.



     3.12. No Financing Statements, Security Agreements. No financing statement or
security agreement describing all or any portion of the Collateral which has not lapsed or been
terminated naming such Grantor as debtor has been filed or is of record in any jurisdiction except
(a) for financing statements



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or security agreements naming the Administrative Agent on behalf of the Lenders as the secured
party and (b) as permitted by Section 4.1(e).




     3.13. Pledged Collateral.



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




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




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




ARTICLE IV.

COVENANTS




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



     4.1. General.



          (a) Collateral Records. Such Grantor will maintain complete and accurate books and
records with respect to the Collateral owned by it, and furnish to the Administrative Agent, with
sufficient




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copies for each of the Lenders, such reports relating to such Collateral as the Administrative
Agent shall from time to time request.




          (b) Authorization to File Financing Statements; Ratification. Such Grantor hereby
authorizes the Administrative Agent to file, and if requested will deliver to the Administrative
Agent, all financing statements and other documents and take such other actions as may from time to
time be requested by the Administrative Agent in order to maintain a first perfected security
interest in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing
statement filed by the Administrative Agent may be filed in any filing office in any UCC
jurisdiction and may (i) indicate such Grantor’s Collateral (1) as all assets of the Grantor or
words of similar effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9 of the UCC or such jurisdiction, or (2) by any other
description which reasonably approximates the description contained in this Security Agreement, and
(ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency
or filing office acceptance of any financing statement or amendment, including (A) whether such
Grantor is an organization, the type of organization and any organization identification number
issued to such Grantor, and (B) in the case of a financing statement filed as a fixture filing or
indicating such Grantor’s Collateral as as-extracted collateral or timber to be cut, a sufficient
description of real property to which the Collateral relates. Such Grantor also agrees to furnish
any such information to the Administrative Agent promptly upon request. Such Grantor also ratifies
its authorization for the Administrative Agent to have filed in any UCC jurisdiction any initial
financing statements or amendments thereto if filed prior to the date hereof.




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




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




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




          (f) Other Financing Statements. Such Grantor will not authorize the filing of any
financing statement naming it as debtor covering all or any portion of the Collateral owned by it,
except as permitted by Section 4.1(e). Such Grantor acknowledges that it is not authorized
to file any financing statement or amendment or termination statement with respect to any financing
statement without the prior written consent of the Administrative Agent, subject to such Grantor’s
rights under Section 9-509(d)(2) of the UCC.




          (g) Locations. Such Grantor will not (i) maintain any Collateral owned by it at any
location other than those locations listed on Exhibit A, (ii) otherwise change, or add to,
such locations without the Administrative Agent’s prior written consent as required by the Credit
Agreement (and if the Administrative Agent gives such consent, such Grantor will concurrently
therewith obtain a Collateral Access Agreement for each such location to the extent such Grantor
wants to include Accounts for which books and records are at such location or Inventory at such
location in the Borrowing Base), or




AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 9




 









 







(iii) change its principal place of business or chief executive office from the location
identified on Exhibit A, other than as permitted by the Credit Agreement.




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




     4.2. Receivables.



          (a) Certain Agreements on Receivables. Such Grantor will not make or agree to make
any discount, credit, rebate or other reduction in the original amount owing on a Receivable or
accept in satisfaction of a Receivable less than the original amount thereof, except that, so long
as no Event of Default exists, such Grantor may reduce the amount of Accounts arising from the sale
of Inventory in accordance with its present policies and in the ordinary course of business.




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




          (c) Delivery of Invoices. Such Grantor will deliver to the Administrative Agent
immediately upon its request duplicate invoices with respect to each Account owned by it bearing
such language of assignment as the Administrative Agent shall specify.




          (d) Disclosure of Counterclaims on Receivables. If (i) any discount, credit or
agreement to make a rebate or to otherwise reduce the amount owing on any Receivable owned by such
Grantor exists or (ii) if, to the knowledge of such Grantor, any dispute, setoff, claim,
counterclaim or defense exists or has been asserted or threatened with respect to any such
Receivable, such Grantor will promptly disclose such fact to the Administrative Agent in writing.
Such Grantor shall send the Administrative Agent a copy of each credit memorandum in excess of
$100,000 as soon as issued, and such Grantor shall promptly report each credit memo and each of the
facts required to be disclosed to the Administrative Agent in accordance with this
Section 4.2(d) on the Borrowing Base Certificates submitted by it.




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




     4.3. Inventory and Equipment.



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




          (b) Returned Inventory. If an Account Debtor returns any Inventory to such Grantor
when no Event of Default exists, then such Grantor shall promptly determine the reason for such
return and, to the extent such Account Debtor is entitled to a refund, shall issue a credit
memorandum to the Account Debtor in the appropriate amount. Such Grantor shall immediately report
to the Administrative Agent any return involving an amount in excess of $25,000. Each such report
shall indicate the reasons for the returns and the locations and condition of the returned
Inventory. In the event any Account Debtor returns Inventory to such Grantor when an Event of
Default exists, such Grantor, upon the request of the




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Administrative Agent, shall: (i) hold the returned Inventory in trust for the Administrative
Agent; (ii) segregate all returned Inventory from all of its other property; (iii) dispose of the
returned Inventory solely according to the Administrative Agent’s written instructions; and
(iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s
prior written consent. All returned Inventory shall be subject to the Administrative Agent’s Liens
thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the
extent of the amount owing by the Account Debtor with respect to such returned Inventory and such
returned Inventory shall not be Eligible Inventory if not in good repair and working and saleable
condition.




          (c) Inventory Count. Such Grantor will conduct a physical count of its Inventory at
least once per Fiscal Year, and after and during the continuation of an Event of Default, at such
other times as the Administrative Agent requests. Such Grantor, at its own expense, shall deliver
to the Administrative Agent the results of each physical verification, which such Grantor has made,
or has caused any other Person to make on its behalf, of all or any portion of its Inventory.




          (d) Equipment. Such Grantor shall promptly inform the Administrative Agent of any
additions to or deletions from its Equipment which individually exceed $250,000. Such Grantor
shall not permit any Equipment to become a fixture with respect to real property or to become an
accession with respect to other personal property with respect to which real or personal property
the Administrative Agent does not have a Lien. Such Grantor will not, without the Administrative
Agent’s prior written consent, alter or remove any identifying symbol or number on any of such
Grantor’s Equipment constituting Collateral.




          (e) Titled Vehicles. Such Grantor will give the Administrative Agent notice of its
acquisition of any vehicle covered by a certificate of title and deliver to the Administrative
Agent, upon request, the original of any vehicle title certificate and provide and/or file all
other documents or instruments necessary to have the Lien of the Administrative Agent noted on any
such certificate or with the appropriate state office.




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



     4.5. Uncertificated Pledged Collateral. Such Grantor will permit the Administrative
Agent from time to time to cause the appropriate issuers (and, if held with a securities
intermediary, such securities intermediary) of uncertificated securities or other types of Pledged
Collateral owned by it not represented by certificates to mark their books and records with the
numbers and face amounts of all such uncertificated securities or other types of Pledged Collateral
not represented by certificates and all rollovers and replacements therefor to reflect the Lien of
the Administrative Agent granted pursuant to this Security Agreement. With respect to any Pledged
Collateral owned by it, such Grantor will take any actions necessary to cause (a) the issuers of
uncertificated securities which are Pledged Collateral and



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(b) any securities intermediary which is the holder of any such Pledged Collateral, to cause
the Administrative Agent to have and retain Control over such Pledged Collateral. Without limiting
the foregoing, such Grantor will, with respect to any such Pledged Collateral held with a
securities intermediary, cause such securities intermediary to enter into a control agreement with
the Administrative Agent, in form and substance satisfactory to the Administrative Agent, giving
the Administrative Agent Control.




     4.6. Pledged Collateral.



          (a) Changes in Capital Structure of Issuers. Such Grantor will not (i) permit or
suffer any issuer of an Equity Interest constituting Pledged Collateral owned by it to dissolve,
merge, liquidate, retire any of its Equity Interests or other Instruments or Securities evidencing
ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for
Permitted Encumbrances and sales of assets permitted pursuant to Section 4.1(d)) or merge
or consolidate with any other entity (except as permitted under Section 6.03 of the Credit
Agreement), or (ii) vote any such Pledged Collateral in favor of any of the foregoing.




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




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




          (d) Exercise of Rights in Pledged Collateral.





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




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




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



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payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, such Pledged Collateral; provided however, that until
actually paid, all rights to such distributions shall remain subject to the Lien
created by this Security Agreement; and





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



     4.7. Intellectual Property.



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




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




          (c) 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 or Trademark with the United
States Patent and Trademark Office or any similar office or agency without giving the
Administrative Agent prior written notice thereof, and, upon request of the Administrative Agent,
such Grantor shall execute and deliver any and all security agreements as the Administrative Agent
may request to evidence the Administrative Agent’s first priority security interest on such Patent
or Trademark and the General Intangibles of such Grantor relating thereto or represented thereby.




          (d) Such Grantor shall take all actions necessary or requested by the Administrative Agent to
maintain and pursue each application, to obtain the relevant registration and to maintain the
registration of each of its Patents, Trademarks or Copyrights (now or hereafter existing) to the
extent commercially reasonable to do so, including the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and interference and cancellation
proceedings, unless the Administrative Agent shall reasonably determine that such Patent or
Trademark is not material to the conduct of such Grantor’s business.




          (e) Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or
Copyright is in no way 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, subject to Section 4.16 hereof, shall take such
other actions as the Administrative Agent shall deem appropriate under the circumstances to protect
such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of
its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated
or diluted by a third party, such Grantor shall comply with Section 4.8.




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     4.8. Commercial Tort Claims. Such Grantor shall promptly, and in any event within
five Business Days after the same is acquired by it, notify the Administrative Agent of any
commercial tort claim (as defined in the UCC) acquired by it and, unless the Administrative Agent
otherwise consents, such Grantor shall enter into an amendment to this Security Agreement, in the
form of Exhibit H hereto, granting to Administrative Agent a first priority security
interest in such commercial tort claim.



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



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



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



     4.12. Insurance.



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




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




          (c) All premiums on any such insurance shall be paid when due by such Grantor, and copies of
the policies delivered to the Administrative Agent. If such Grantor fails to obtain any insurance
as required by this Section, the Administrative Agent may obtain such insurance at the Grantor’s
expense.




     4.13. Collateral Access Agreements. With respect to such locations or warehouse space
leased as of the Effective Date and thereafter, if the Administrative Agent has not received a
Collateral Access Agreement as of the Effective Date (or, if later, as of the date such location is
acquired or leased), Grantor’s Accounts for which books and records are at such location and
Inventory at that location shall be excluded from the Borrowing Base. After the Effective Date, no
real property or warehouse space



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shall be leased by such Grantor and no Inventory shall be shipped to a processor or converter
under arrangements established after the Effective Date, unless and until a satisfactory Collateral
Access Agreement shall first have been obtained with respect to such location and if it has not
been obtained, Grantor’s Accounts for which books and records are at that location and Inventory at
that location shall be excluded from the Borrowing Base. Such Grantor shall timely and fully pay
and perform its obligations under all leases and other agreements with respect to each leased
location or third party warehouse where any Collateral is or may be located.




     4.14. Deposit Account Control Agreements. Such Grantor will provide to the
Administrative Agent a Deposit Account Control Agreement duly executed on behalf of each financial
institution holding a Deposit Account of such Grantor as set forth in the Security Agreement;
provided that, unless an Event of Default has occurred and is continuing, no Grantor shall be
required to provide a Deposit Account Control Agreement for any Deposit Account with an account
balance of less than $10,000 so long as (a) such Deposit Account is not a Collateral Deposit
Account (as defined herein) and (b) the aggregate account balance in all such Deposit Accounts
shall not exceed $100,000 at any time.



     4.15. Change of Name or Location; Change of Fiscal Year. Such Grantor shall not
(a) change its name as it appears in official filings in the state of its incorporation or
organization, (b) change its chief executive office, principal place of business, mailing address,
corporate offices or warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral as set forth in the Security Agreement, (c) change the
type of entity that it is, (d) change its organization identification number, if any, issued by its
state of incorporation or other organization, or (e) change its state of incorporation or
organization, in each case, unless the Administrative Agent shall have received at least thirty
days prior written notice of such change and the Administrative Agent shall have acknowledged in
writing that either (1) such change will not adversely affect the validity, perfection or priority
of the Administrative Agent’s security interest in the Collateral, or (2) any reasonable action
requested by the Administrative Agent in connection therewith has been completed or taken
(including any action to continue the perfection of any Liens in favor of the Administrative Agent,
on behalf of Lenders, in any Collateral), provided that, any new location shall be in the
continental U.S. Such Grantor shall not change its fiscal year which currently ends on
December 31.



     4.16. Copyrights; Exceptions to Perfection. Notwithstanding anything to the contrary
herein, except to the extent requested by the Administrative Agent during the existence of a
Default, no Grantor shall be required to (a) provide a list of such Grantor’s Copyrights or (b)
file any security agreement with the United States Copyright Office to further perfect the
Administrative Agent’s security interest in the Copyrights of such Grantor. If a Default exists
and the Administrative Agent requests, then the Grantors shall take such action as the
Administrative Agent may request to perfect and protect the security interests of the
Administrative Agent in all Copyrights of the Grantors including, without limitation, executing,
delivering and filing a security agreement with the United States Copyright Office.



ARTICLE V.

EVENTS OF DEFAULT AND REMEDIES




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



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




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




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




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




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




     5.2. Remedies.



          (a) During the existence of an Event of Default, the Administrative Agent may, with the
concurrence or at the direction of the Required Secured Parties, exercise any or all of the
following rights and remedies:





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




          (ii) those rights and remedies available to a secured party under the UCC or
under any other applicable law (including, without limitation, any law governing the
exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default
under a security agreement;




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




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




          (v) concurrently with written notice to the applicable Grantor, transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or larger
denominations, to



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exercise the voting and all other rights as a holder with respect thereto, to
collect and receive all cash dividends, interest, principal and other distributions
made thereon and to otherwise act with respect to the Pledged Collateral as though
the Administrative Agent was the outright owner thereof.



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




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




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




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




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




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




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



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




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




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




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




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




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



ARTICLE VI.

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY




     6.1. Account Verification. The Administrative Agent may at any time, in the

Administrative Agent’s own name, in the name of a nominee of the Administrative Agent, or in the
name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account
Debtors of any such Grantor,




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parties to contracts with any such Grantor and obligors in respect of Instruments of any such
Grantor to verify with such Persons, to the Administrative Agent’s reasonable satisfaction, the
existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel
Paper, payment intangibles and/or other Receivables.



     6.2. Authorization for Secured Party to Take Certain Action.



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



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




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



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 19





 









 







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




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



ARTICLE VII.

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS




     7.1. Collection of Receivables.



          (a) On or before February 13, 2009, each Grantor shall (a) execute and deliver to the
Administrative Agent Deposit Account Control Agreements for each Deposit Account maintained by such
Grantor at an institution other than the Administrative Agent into which all cash, checks or other
similar payments relating to or constituting payments made in respect of Receivables will be
deposited (a “Collateral Deposit Account”), which Collateral Deposit Accounts are
identified as such on Exhibit B, and (b) establish lock box service (the “Lock
Boxes”) with the bank(s) set forth in Exhibit B, which lock boxes shall be subject to
irrevocable lockbox agreements in the form provided by or otherwise acceptable to the
Administrative Agent and shall be accompanied by an acknowledgment by the bank where the Lock Box
is located of the Lien of the Administrative Agent granted hereunder and of irrevocable
instructions to wire all amounts collected therein to the Collection Account (a “Lock Box
Agreement”). After the Effective Date, each Grantor will comply with the terms of Section 7.2.




          (b) Each Grantor shall direct all of its Account Debtors to forward payments directly to Lock
Boxes subject to Lock Box Agreements. The Administrative Agent shall have sole access to the Lock
Boxes at all times and each Grantor shall take all actions necessary to grant the Administrative
Agent such sole access. At no time shall any Grantor remove any item from a Lock Box or from a
Collateral Deposit Account without the Administrative Agent’s prior written consent. If any
Grantor should refuse or neglect to notify any Account Debtor to forward payments directly to a
Lock Box subject to a Lock Box Agreement after written notice from the Administrative Agent, the
Administrative Agent shall, notwithstanding the language set forth in Section 6.2(b), be entitled
to make such notification directly to Account Debtor. If notwithstanding the foregoing
instructions, any Grantor receives any




AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 20






 









 







proceeds of any Receivables, such Grantor shall receive such payments as the Administrative
Agent’s trustee, and shall immediately deposit all cash, checks or other similar payments related
to or constituting payments made in respect of Receivables received by it to a Collateral Deposit
Account. All funds deposited into any Lock Box subject to a Lock Box Agreement or a Collateral
Deposit Account will be swept on a daily basis into a collection account maintained by such Grantor
with the Administrative Agent (the “Collection Account”). The Administrative Agent shall
hold and apply funds received into the Collection Account as provided by the terms of Section 7.3.




     7.2. Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing
any Collateral Deposit Account, other Deposit Account, or establishing a new Lock Box, each Grantor
shall (a) obtain the Administrative Agent’s consent in writing to the opening of such Deposit
Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to open
(i) a Deposit Account, to enter into a Deposit Account Control Agreement with the Administrative
Agent in order to give the Administrative Agent Control of such Deposit Account, or (ii) a Lock
Box, to enter into a Lock Box Agreement with the Administrative Agent in order to give the
Administrative Agent Control of the Lock Box. In the case of Deposit Accounts or Lock Boxes
maintained with Lenders, the terms of such letter shall be subject to the provisions of the Credit
Agreement regarding setoffs. Notwithstanding the foregoing, no Grantor shall be required to provide
a Deposit Account Control Agreement for any Deposit Account with an account balance of less than
$10,000 so long as (i) such Deposit Account is not a Collateral Deposit Account and (ii) the
aggregate account balance in all such Deposit Accounts shall not exceed $100,000 at any time.



     7.3. Application of Proceeds; Deficiency. All amounts deposited in the Collection
Account shall be deemed received by the Administrative Agent in accordance with Section 2.18 of the
Credit Agreement and shall, after having been credited to the Collection Account, be applied (and
allocated) by Administrative Agent in accordance with Section 2.10(b) of the Credit Agreement. The
Administrative Agent shall require all other cash proceeds of the Collateral, which are not
required to be applied to the Obligations pursuant to Section 2.11 of the Credit Agreement, to be
deposited in a special non-interest bearing cash collateral account with the Administrative Agent
and held there as security for the Secured Obligations. No Grantor shall have any control
whatsoever over said cash collateral account. Any such proceeds of the Collateral shall be applied
in the order set forth in Section 2.18 of the Credit Agreement unless a court of competent
jurisdiction shall otherwise direct. The balance, if any, after all of the Secured Obligations
have been satisfied, shall be deposited by the Administrative Agent into such Grantor’s general
operating account with the Administrative Agent. The Grantors shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all
Secured Obligations, including any attorneys’ fees and other expenses incurred by Administrative
Agent or any Lender to collect such deficiency.



ARTICLE VIII.

GENERAL PROVISIONS




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



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 21






 









 







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




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



     8.3. Compromises and Collection of Collateral. The Grantors and the Administrative
Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors
with respect to certain of the Receivables, that certain of the Receivables may be or become
uncollectible in whole or



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in part and that the expense and probability of success in litigating a disputed Receivable
may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable.
In view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and
from time to time, if an Event of Default has occurred and is continuing, compromise with the
obligor on any Receivable, accept in full payment of any Receivable such amount as the
Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any such
action by the Administrative Agent shall be commercially reasonable so long as the Administrative
Agent acts in good faith based on information known to it at the time it takes any such action.




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



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



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



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



     8.8. Limitation by Law; Severability of Provisions. All rights, remedies and powers
provided in this Security Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this Security Agreement
are intended to be subject to all applicable mandatory provisions of law that may be controlling
and to be limited to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any
provision in any this Security Agreement that is held to be inoperative, unenforceable, or invalid
in any jurisdiction shall, as to that jurisdiction, be



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 23






 









 







inoperative, unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Security Agreement are declared to be
severable.




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



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



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



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



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



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



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 24






 









 








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



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



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



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



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



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



     8.21. Amendment and Restatement. This Security Agreement amends and restates the
Original Security Agreement in its entirety but does not extinguish the Liens which were created
thereby in the



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 25






 









 







collateral pledged under the Original Security Agreement, which Liens are continued under the
terms of this Security Agreement.




ARTICLE IX.

NOTICES




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



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



ARTICLE X.

THE ADMINISTRATIVE AGENT




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



[Signature Page Follows]




AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 26






 









 








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



	 	 	 	 	 
	 	GRANTORS:




A.H. BELO CORPORATION

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Senior Vice President/Chief Financial Officer 	 
	 
	 	THE DALLAS MORNING NEWS, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	DENTON PUBLISHING COMPANY

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	DFW PRINTING COMPANY, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	DMI ACQUISITION SUB, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 27





 









 








	 	 	 	 	 
	 	PRESS-ENTERPRISE COMPANY

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	THE PROVIDENCE JOURNAL COMPANY

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	A.H. BELO MANAGEMENT SERVICES, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	AL DIA, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	THE BELO COMPANY

 	 
	 	By:  	/s/
Julian H. Baumann, Jr.	 
	 	 	Julian H. Baumann, Jr., 	 
	 	 	Vice President/Assistant Secretary 	 
	 
	 	BELO ENTERPRISES, INC.

 	 
	 	By:  	/s/
Julian H. Baumann, Jr.	 
	 	 	Julian H. Baumann, Jr., 	 
	 	 	Vice President/Assistant Secretary 	 
	 



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 28





 









 










	 	 	 	 	 
	 	BELO INTERACTIVE, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	BELO INVESTMENTS II, INC.

 	 
	 	By:  	/s/
Julian H. Baumann, Jr.	 
	 	 	Julian H. Baumann, Jr., 	 
	 	 	Vice President/Assistant Secretary 	 
	 
	 	BELO TECHNOLOGY ASSETS, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	NEWS-TEXAN, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 
	 	PROVIDENCE HOLDINGS, INC.

 	 
	 	By:  	/s/
Julian H. Baumann, Jr.	 
	 	 	Julian H. Baumann, Jr., 	 
	 	 	Vice President/Assistant Secretary 	 
	 
	 	RHODE ISLAND MONTHLY COMMUNICATIONS, INC.

 	 
	 	By:  	/s/
Alison K. Engel	 
	 	 	Alison K. Engel, 	 
	 	 	Treasurer/Assistant Secretary 	 
	 



AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 29





 









 









	 	 	 	 	 	 	 
	 	 	TDMN NEW PRODUCTS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Alison K. Engel
	 	 	 	 	 
	 	 	 	 	Alison K. Engel,
	 	 	 	 	Treasurer/Assistant Secretary
	 
	 	 	 	 	 	 
	 	 	TRUE NORTH REAL ESTATE LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	A. H. Belo Corporation, its the sole member
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/
Alison K. Engel
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Alison K. Engel, Senior Vice President/Chief
Financial Officer
	 
	 	 	 	 	 	 
	 	 	WASHINGTON STREET GARAGE CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Alison K. Engel
	 	 	 	 	 
	 	 	 	 	Alison K. Engel,
	 	 	 	 	Treasurer/Assistant Secretary
	 
	 	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT:
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,
	 	 	as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Jeff A. Tompkins
	 	 	 	 	 
	 	 	 	 	Name: Jeff A. Tompkins
	 

	 	 	 	 	 	 
	 	 	 	 	Title: Vice President
	 

	 	 	 	 	 	 





AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT, Page 30