exv10w1






Exhibit 10.1




GUARANTEE AND COLLATERAL AGREEMENT




Dated and effective as of May 29, 2007,




among




BAUBLE HOLDINGS CORP.,




BAUBLE ACQUISITION SUB, INC. (to be merged with and into Claire’s Stores, Inc.),

as Borrower,




each Subsidiary Loan Party,


and




CREDIT SUISSE,

as Administrative Agent




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE I 	 	 	 	 
	 

	 	DEFINITIONS 	 	 	 	 
	Section 1.01.

	 	Credit Agreement
	 	 	1	 
	Section 1.02.

	 	Other Defined Terms
	 	 	1	 
	 

	 	ARTICLE II 	 	 	 	 
	 

	 	GUARANTEE 	 	 	 	 
	Section 2.01.

	 	Guarantee
	 	 	4	 
	Section 2.02.

	 	Guarantee of Payment
	 	 	5	 
	Section 2.03.

	 	No Limitations, Etc.
	 	 	5	 
	Section 2.04.

	 	Reinstatement
	 	 	6	 
	Section 2.05.

	 	Agreement To Pay; Contribution; Subrogation
	 	 	7	 
	Section 2.06.

	 	Information
	 	 	7	 
	Section 2.07.

	 	Maximum Liability
	 	 	7	 
	Section 2.08.

	 	Payment Free and Clear of Taxes
	 	 	7	 
	 

	 	ARTICLE III 	 	 	 	 
	 

	 	PLEDGE OF SECURITIES 	 	 	 	 
	Section 3.01.

	 	Pledge
	 	 	8	 
	Section 3.02.

	 	Delivery of the Pledged Collateral
	 	 	8	 
	Section 3.03.

	 	Representations, Warranties and Covenants
	 	 	9	 
	Section 3.04.

	 	Registration in Nominee Name; Denominations
	 	 	11	 
	Section 3.05.

	 	Voting Rights; Dividends and Interest, Etc.
	 	 	11	 
	 

	 	ARTICLE IV 	 	 	 	 
	 

	 	SECURITY INTERESTS IN OTHER PERSONAL PROPERTY 	 	 	 	 
	Section 4.01.

	 	Security Interest
	 	 	13	 
	Section 4.02.

	 	Representations and Warranties
	 	 	15	 
	Section 4.03.

	 	Covenants
	 	 	17	 
	Section 4.04.

	 	Other Actions
	 	 	20	 
	Section 4.05.

	 	Covenants Regarding Patent, Trademark and Copyright Collateral
	 	 	21	 
	Section 4.06.

	 	Intercreditor Relations
	 	 	21	 
	 

	 	ARTICLE V 	 	 	 	 
	 

	 	REMEDIES 	 	 	 	 
	Section 5.01.

	 	Remedies Upon Default
	 	 	23	 






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	 	 	 	 	Page
	Section 5.02.

	 	Application of Proceeds
	 	 	24	 
	Section 5.03.

	 	Securities Act, Etc.
	 	 	25	 
	 

	 	ARTICLE VI 	 	 	 	 
	 

	 	INDEMNITY, SUBROGATION AND SUBORDINATION 	 	 	 	 
	Section 6.01.

	 	Indemnity
	 	 	26	 
	Section 6.02.

	 	Contribution and Subrogation
	 	 	26	 
	Section 6.03.

	 	Subordination
	 	 	27	 
	 

	 	ARTICLE VII	 	 	 	 
	 

	 	MISCELLANEOUS	 	 	 	 
	Section 7.01.

	 	Notices
	 	 	29	 
	Section 7.02.

	 	Security Interest Absolute
	 	 	29	 
	Section 7.03.

	 	Limitation By Law
	 	 	29	 
	Section 7.04.

	 	Binding Effect; Several Agreement
	 	 	29	 
	Section 7.05.

	 	Successors and Assigns
	 	 	30	 
	Section 7.06.

	 	Collateral Agent’s Fees and Expenses; Indemnification
	 	 	30	 
	Section 7.07.

	 	Collateral Agent Appointed Attorney-in-Fact
	 	 	30	 
	Section 7.08.

	 	GOVERNING LAW
	 	 	31	 
	Section 7.09.

	 	Waivers; Amendment
	 	 	31	 
	Section 7.10.

	 	WAIVER OF JURY TRIAL
	 	 	32	 
	Section 7.11.

	 	Severability
	 	 	32	 
	Section 7.12.

	 	Counterparts
	 	 	32	 
	Section 7.13.

	 	Headings
	 	 	32	 
	Section 7.14.

	 	Jurisdiction; Consent to Service of Process
	 	 	32	 
	Section 7.15.

	 	Termination or Release
	 	 	33	 
	Section 7.16.

	 	Additional Subsidiaries
	 	 	34	 
	Section 7.17.

	 	Right of Set-off
	 	 	34	 
	 
	 	 	 	 	 	 
	Schedules
	 	 	 	 	 	 
	Schedule I

	 	Subsidiary Parties	 	 	 	 
	Schedule II

	 	Pledged Stock; Debt Securities	 	 	 	 
	Schedule III

	 	Intellectual Property	 	 	 	 
	Schedule IV

	 	Filing Jurisdictions	 	 	 	 
	Schedule V

	 	Commercial Tort Claims	 	 	 	 
	Schedule VI

	 	Matters Relating to Accounts and Inventory	 	 	 	 
	 
	 	 	 	 	 	 
	Exhibits
	 	 	 	 	 	 
	Exhibit I

	 	Form of Supplement to the Guarantee and Collateral Agreement	 	 	 	 







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          GUARANTEE AND COLLATERAL AGREEMENT dated and effective as of May 29, 2007 (this
“Agreement”), among BAUBLE HOLDINGS CORP., a Delaware corporation (“Holdings”),
BAUBLE ACQUISITION SUB, INC., a Florida corporation (the “Borrower”) each Subsidiary Loan
Party and CREDIT SUISSE, as administrative agent and collateral agent (in such capacities, the
“Administrative Agent”) for the Secured Parties (as defined below).



          Reference is made to the Credit Agreement dated as of May 29, 2007 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “Credit Agreement”),
among Holdings, the Borrower, the LENDERS party thereto from time to time, CREDIT SUISSE, as
administrative agent and collateral agent for the Lenders, BEAR STEARNS CORPORATE LENDING INC. and
MIZUHO CORPORATE BANK, LTD., as co-syndication agents, and LEHMAN COMMERCIAL PAPER INC. and LASALLE
BANK NATIONAL ASSOCIATION, as co-documentation agents.



          The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions
set forth in the Credit Agreement. The obligations of the Lenders to extend such credit are
conditioned upon, among other things, the execution and delivery of this Agreement. Holdings and
the Subsidiary Parties are affiliates of the Borrower, will derive substantial benefits from the
extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and
deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the
parties hereto agree as follows:



ARTICLE I




DEFINITIONS




          Section 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not
otherwise defined herein have the respective meanings assigned thereto in the Credit Agreement.
All capitalized terms defined in the New York UCC (as defined herein) and not defined in this
Agreement have the meanings specified therein. The term “instrument” shall have the meaning
specified in Article 9 of the New York UCC.



          (b) The rules of construction specified in Section 1.02 of the Credit Agreement also apply to
this Agreement.



          Section 1.02. Other Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:



          “Account Debtor” means any person who is or who may become obligated to any Pledgor
under, with respect to or on account of an Account, Chattel Paper, General Intangibles, Instruments
or Investment Property.



          “Article 9 Collateral” has the meaning assigned to such term in Section 4.01.



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          “Collateral” means the collective reference to Article 9 Collateral and Pledged
Collateral.



          “Copyright License” means any written agreement, now or hereafter in effect, granting
any right to any Pledgor under any Copyright now or hereafter owned by any third party, and all
rights of any Pledgor under any such agreement (including, without limitation, any such rights that
such Pledgor has the right to license).



          “Copyrights” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all copyright rights in any work subject to the copyright laws of the United States
or any other country, whether as author, assignee, transferee or otherwise, (b) all registrations
and applications for registration of any such Copyright in the United States or any other country,
including registrations, supplemental registrations and pending applications for registration in
the United States Copyright Office and the right to obtain all renewals thereof, including those
listed on Schedule III, (c) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including damages and payments for
past or future infringement thereof.



          “Credit Agreement” has the meaning assigned to such term in the preliminary statement
of this Agreement.



          “Federal Securities Laws” has the meaning assigned to such term in Section 5.03.



          “General Intangibles” means all “General Intangibles” as defined in the New York UCC,
including all choses in action and causes of action and all other intangible personal property of
any Pledgor of every kind and nature (other than Accounts) now owned or hereafter acquired by any
Pledgor, including corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other
agreements), Intellectual Property (but excluding “intent-to-use” applications for trademark or
service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051,
unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of
the Lanham Act has been filed, to the extent that, and solely during the period for which, any
assignment of an “intent-to-use” application prior to such filing would violate the Lanham Act),
goodwill, registrations, franchises, tax refund claims and any guarantee, claim, security interest
or other security held by or granted to any Pledgor to secure payment by an Account Debtor of any
of the Accounts.



          “Guarantors” means Holdings (prior to a Borrower Qualified IPO), and the Subsidiary
Loan Parties.



          “Intellectual Property” means all intellectual property of every kind and nature now
owned or hereafter acquired by any Pledgor, including inventions, designs, Patents, Copyrights,
Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade secrets, domain names,
confidential or proprietary technical and business information, know-how, show-how or other data or
information and all related documentation.



2









 





          “Intellectual Property Security Agreement” means a security agreement in the form
hereof or a short form hereof, in each case, which form shall be reasonably acceptable to the
Administrative Agent.



          “IP Agreements” means all material Copyright Licenses, Patent Licenses, Trademark
Licenses, and all other agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any material Intellectual Property to which a Pledgor,
now or hereafter, is a party or a beneficiary, including, without limitation, the agreements set
forth on Schedule III hereto.



          “Loan Document Obligations” has the meaning assigned to such term in the
Credit Agreement.



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



          “Obligations” has the meaning assigned to such term in the Credit Agreement.



          “Patent License” means any written agreement, now or hereafter in effect, granting to
any Pledgor any right to make, use or sell any invention covered by a Patent, now or hereafter
owned by any third party (including, without limitation, any such rights that such Pledgor has the
right to license).



          “Patents” means all of the following now owned or hereafter acquired by any Pledgor:
(a) all letters patent of the United States or the equivalent thereof in any other country or
jurisdiction, including those listed on Schedule III, and all applications for letters
patent of the United States or the equivalent thereof in any other country or jurisdiction,
including those listed on Schedule III, (b) all provisionals, reissues, extensions,
continuations, divisions, continuations-in- part, reexaminations or revisions thereof, and the
inventions disclosed or claimed therein, including the right to make, use, import and/or sell the
inventions disclosed or claimed therein, (c) all claims for, and rights to sue for, past or future
infringements of any of the foregoing and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including damages and payments for
past or future infringement thereof.



          “Permitted Liens” means any Lien permitted by Section 6.02 of the Credit Agreement.



          “Pledged Collateral” has the meaning assigned to such term in Section 3.01.



          “Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.



          “Pledged Securities” means any promissory notes, stock certificates or other
certificated securities now or hereafter included in the Pledged Collateral, including all
certificates, instruments or other documents representing or evidencing any Pledged Collateral.



          “Pledged Stock” has the meaning assigned to such term in Section 3.01.



          “Pledgor” shall mean the Borrower and each Guarantor.



3









 





          “Secured Parties” means (a) the Lenders (and any Affiliate of a Lender designated by
the Borrower as a provider of cash management services to which any obligation referred to in
clause (c) of the definition of the term Obligations is owed), (b) the Administrative Agent, (c)
each Issuing Bank, (d) each counterparty to any Swap Agreement entered into with a Loan Party or
any Affiliate of a Loan Party, the obligations under which constitute Obligations, (e) the
beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan
Document and (f) the successors and permitted assigns of each of the foregoing.



          “Security Interest” has the meaning assigned to such term in Section 4.01.



          “Subsidiary Loan Party” means any Subsidiary that is a party hereto or any Subsidiary
that becomes a party hereto pursuant to Section 7.16.



          “Trademark License” means any written agreement, now or hereafter in effect, granting
to any Pledgor any right to use any Trademark now or hereafter owned by any third party (including,
without limitation, any such rights that such Pledgor has the right to license).



          “Trademarks” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all trademarks, service marks, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations thereof (if any), and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United States Patent and
Trademark Office or any similar offices in any State of the United States or any other country or
any political subdivision thereof (except for “intent-to-use” applications for trademark or service
mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and
until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of the Lanham
Act has been filed, to the extent that any assignment of an “intent-to-use” application prior to
such filing would violate the Lanham Act), and all renewals thereof, including those listed on
Schedule III, (b) all goodwill associated therewith or symbolized thereby, (c) all claims
for, and rights to sue for, past or future infringements of any of the foregoing and (d) all
income, royalties, damages and payments now or hereafter due and payable with respect to any of the
foregoing, including damages and payments for past or future infringement thereof.



ARTICLE II




GUARANTEE




          Section 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the
other Guarantors and severally, to the Administrative Agent, for the ratable benefit of the Secured
Parties, as a primary obligor and not merely as a surety, the due and punctual payment and
performance of the Obligations. Each Guarantor further agrees that the Obligations may be extended
or renewed, in whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. Each
Guarantor waives presentment to, demand of payment from and protest to the



4









 




Borrower or any other Loan Party of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment.




          Section 2.02. Guarantee of Payment. Each Guarantor further agrees that its guarantee
hereunder constitutes a guarantee of payment when due (whether at the stated maturity, by
acceleration or otherwise) and not of collection, and waives any right to require that any resort
be had by the Administrative Agent or any other Secured Party to any security held for the payment
of the Obligations or to any balance of any deposit account or credit on the books of the
Administrative Agent or any other Secured Party in favor of the Borrower or any other person.



          Section 2.03. No Limitations, Etc. (a) Except for termination of a Guarantor’s
obligations hereunder as expressly provided for in Section 7.15 and except as provided in Section
2.07, the obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise (other than defense of payment or performance).
Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder, to
the fullest extent permitted by applicable law, shall not be discharged or impaired or otherwise
affected by, and each Guarantor hereby waives any defense to the enforcement hereof by reason of:




     (i) the failure of the Administrative Agent or any other Secured Party to assert any
claim or demand or to exercise or enforce any right or remedy under the provisions of any
Loan Document or otherwise;




     (ii) any rescission, waiver, amendment or modification of, increase in the Obligations
with respect to, or any release from any of the terms or provisions of, any Loan Document or
any other agreement, including with respect to any other Guarantor under this Agreement;




     (iii) the failure to perfect any security interest in, or the exchange, substitution,
release or any impairment of, any security held by the Administrative Agent or any other
Secured Party for the Obligations;




     (iv) any default, failure or delay, willful or otherwise, in the performance of the
Obligations;




     (v) any other act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of
law or equity (other than the payment in full in cash or immediately available funds of all
the Obligations);




     (vi) any illegality, lack of validity or enforceability of any Obligation;



5









 






     (vii) any change in the corporate existence, structure or ownership of any Loan Party,
or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Loan
Party or its assets or any resulting release or discharge of any Obligation;




     (viii) the existence of any claim, set-off or other rights that the Guarantors may have
at any time against the Borrower, the Administrative Agent, any other Secured Party or any
other person, whether in connection herewith or any unrelated transactions; provided
that nothing herein will prevent the assertion of any such claim by separate suit or
compulsory counterclaim;




     (ix) any action permitted or authorized hereunder; or




     (x) any other circumstance (including without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Administrative Agent or any
other Secured Party that might otherwise constitute a defense to, or a legal or equitable
discharge of, the Borrower or any Guarantor or any other guarantor or surety.


Each Guarantor expressly authorizes the Secured Parties to take and hold security for the payment
and performance of the Obligations, to exchange, waive or release any or all such security (with or
without consideration), to enforce or apply such security and direct the order and manner of any
sale thereof in their sole discretion or to release or substitute any one or more other guarantors
or obligors upon or in respect of the Obligations, all without affecting the obligations of any
Guarantor hereunder.




          (b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based
on or arising out of any defense of any other Loan Party or the unenforceability of the Obligations
or any part thereof from any cause, or the cessation from any cause of the liability of any other
Loan Party, other than the payment in full in cash or immediately available funds of all the
Obligations (other than contingent or unliquidated obligations or liabilities). The Administrative
Agent and the other Secured Parties may, at their election, foreclose on any security held by one
or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party or exercise any other right or remedy available to them
against any other Loan Party, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations (other than contingent or unliquidated
obligations or liabilities) have been paid in full in cash or immediately available funds. To the
fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any
such election even though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor
against any other Loan Party, as the case may be, or any security.



          Section 2.04. Reinstatement. Each Guarantor agrees that its guarantee hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Obligation is rescinded or must otherwise be restored by the Administrative Agent
or any other Secured Party upon the bankruptcy or reorganization of the Borrower or any other Loan
Party or otherwise.



6









 





          Section 2.05. Agreement To Pay; Contribution; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Administrative Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of
the Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the applicable
Secured Parties in cash the amount of such unpaid Obligation. Each Guarantor hereby
unconditionally and irrevocably agrees that in the event any payment shall be required to be made
to any Secured Party under this guarantee or any other guarantee, such Guarantor will contribute,
to the maximum extent permitted by law, such amounts to each other Guarantor and each other
guarantor so as to maximize the aggregate amount paid to the Secured Parties under or in respect of
the Loan Documents. Upon payment by any Guarantor of any sums to the Administrative Agent as
provided above, all rights of such Guarantor against the Borrower, or other Loan Party or any other
Guarantor arising as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article VI.



          Section 2.06. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the financial condition and assets of the Borrower and each other Loan
Party, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Administrative Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such circumstances or
risks.



          Section 2.07. Maximum Liability. Each Guarantor, and by its acceptance of this
guarantee, the Administrative Agent and each Secured Party hereby confirms that it is the intention
of all such Persons that this guarantee and the Obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of the U.S. Bankruptcy Code or any
other federal, state or foreign bankruptcy, insolvency, receivership or similar law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or
state law to the extent applicable to this guarantee and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Administrative Agent, the Secured Parties
and the Guarantors hereby irrevocably agree that the Obligations of each Guarantor under this
guarantee at any time shall be limited to the maximum amount as will result in the Obligations of
such Guarantor under this guarantee not constituting a fraudulent transfer or conveyance. 



          Section 2.08. Payment Free and Clear of Taxes. Any and all payments by or on account
of any obligation of any Guarantor hereunder or under any other Loan Document shall be made free
and clear of, and without deduction for, any Indemnified Taxes or Other Taxes on the same terms and
to the same extent that payments by any Loan Party are required to be made pursuant to the terms of
Section 2.17 of the Credit Agreement. The provisions of Section 2.17 of the Credit Agreement shall
apply to each Guarantor mutatis mutandis.



7









 





ARTICLE III




PLEDGE OF SECURITIES




          Section 3.01. Pledge. As security for the payment or performance, as the case may be,
in full of its Obligations, each Pledgor hereby assigns and pledges to the Administrative Agent,
its successors and permitted assigns, for the ratable benefit of the Secured Parties, and hereby
grants to the Administrative Agent, its successors and permitted assigns, for the ratable benefit
of the Secured Parties, a security interest in all of such Pledgor’s right, title and interest in,
to and under (a) the Equity Interests directly owned by it (including those listed on Schedule II)
and any other Equity Interests obtained in the future by such Pledgor and any certificates
representing all such Equity Interests (the “Pledged Stock”); provided that the Pledged Stock shall
not include (i)(A) more than 65% of the issued and outstanding voting Equity Interests of any
“first tier” Foreign Subsidiary directly owned by such Pledgor, (B) more than 65% of the issued and
outstanding voting Equity Interests of any “first tier” Qualified CFC Holding Company directly
owned by such Pledgor, (C) any issued and outstanding Equity Interest of any Foreign Subsidiary
that is not a first tier Foreign Subsidiary, or (D) any issued and outstanding Equity Interests of
any Qualified CFC Holding Company that is not a “first tier” Qualified CFC Holding Company, (ii) to
the extent applicable law requires that a Subsidiary of such Pledgor issue directors’
qualifying shares or similar shares, such shares or nominee or other similar shares, (iii) any
Equity Interests with respect to which a grant of security is not required by reason of Section
5.10(g) of the Credit Agreement, or (iv) any Equity Interests of a Subsidiary (which Subsidiary is
set forth on Schedule 1.01A to the Credit Agreement) to the extent that, as of the Closing Date,
and for so long as, such a pledge of such Equity Interests would violate applicable law or an
enforceable contractual obligation binding on or relating to such Equity Interests; (b)(i) the debt
obligations listed opposite the name of such Pledgor on Schedule II, (ii) any debt securities in
the future issued to such Pledgor and (iii) the certificates, promissory notes and any other
instruments, if any, evidencing such debt securities (the “Pledged Debt Securities”); (c) subject
to Section 3.05 hereof, all payments of principal or interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed in respect of, in
exchange for or upon the conversion of, and all other proceeds received in respect of, the property
referred to in clauses (a) and (b) above; (d) subject to Section 3.05 hereof, all rights and
privileges of such Pledgor with respect to the securities and other property referred to in clauses
(a), (b) and (c) above; and (e) all proceeds of any of the foregoing (the items referred to in
clauses (a) through (e) above being collectively referred to as the “Pledged Collateral”).



          TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Administrative Agent, its
successors and permitted assigns, for the ratable benefit of the Secured Parties, forever;
subject, however, to the terms, covenants and conditions hereinafter set forth.



          Section 3.02. Delivery of the Pledged Collateral. (a) Each Pledgor agrees promptly
to deliver or cause to be delivered to the Administrative Agent, for the ratable benefit of the
Secured Parties, any and all Pledged Securities to the extent such Pledged Securities are either
(i) Equity Interests or (ii) promissory notes or other instruments evidencing Indebtedness required
to be delivered pursuant to paragraph (b) of this Section 3.02. If any Pledged Stock that



8









 




is uncertificated on the date hereof shall hereafter become certificated, the applicable
Pledgor shall promptly cause the certificate or certificates representing Pledged Stock to be
delivered to the Administrative Agent, as agent for the Secured Parties, together with the
accompanying stock powers or other documentation required by Section 3.02(c). None of the Pledgors
shall permit any other party to “control” (for purposes of Section 8-106 of the New York UCC (or
any analogous provision of the Uniform Commercial Code in effect in the jurisdiction whose law
applies)) any uncertificated securities that constitute Pledged Collateral other than the
Administrative Agent, as agent for the Secured Parties.




          (b) Each Pledgor will cause any Indebtedness for borrowed money having an aggregate principal
amount in excess of $5.0 million (other than (i) intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management operations of Holdings, the
Borrower and its Subsidiaries or (ii) to the extent that a pledge of such promissory note or
instrument would violate applicable law) owed to such Pledgor by any person to be evidenced by a
duly executed promissory note that is pledged and delivered to the Administrative Agent, for the
ratable benefit of the Secured Parties, pursuant to the terms hereof. To the extent any such
promissory note is a demand note, each Pledgor party thereto agrees, if requested by the
Administrative Agent, to immediately demand payment thereunder upon an Event of Default specified
under Section 7.01(b), (c), (f), (h) or (i) of the Credit Agreement unless such demand would not be
commercially reasonable or would otherwise expose such Pledgor to liability to the maker.



          (c) Upon delivery to the Administrative Agent, (i) any Pledged Securities required to be
delivered pursuant to the foregoing paragraphs (a) and (b) of this Section 3.02 shall be
accompanied by stock powers or note powers, as applicable, duly executed in blank or other
instruments of transfer reasonably satisfactory to the Administrative Agent and by such other
instruments and documents as the Administrative Agent may reasonably request and (ii) all other
property comprising part of the Pledged Collateral delivered pursuant to the terms of this
Agreement shall be accompanied to the extent necessary to perfect the security interest in or allow
realization on the Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents (including issuer acknowledgments in
respect of uncertificated securities) as the Administrative Agent may reasonably request. Each
delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which
schedule shall be attached hereto as Schedule II (or a supplement to Schedule II,
as applicable) and made a part hereof; provided that failure to attach any such schedule
hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so
delivered shall supplement any prior schedules so delivered.



          (d) In the event any Pledged Securities constitute uncertificated securities, each Pledgor
shall, pursuant to an agreement in form and substance reasonably satisfactory to the Administrative
Agent, either (i) cause the issuer to agree to comply with instructions from the Administrative
Agent without further consent of any Pledgor or (ii) cause the issuer to register the
Administrative Agent as the registered owner of such uncertificated security.



          Section 3.03. Representations, Warranties and Covenants. The Pledgors, jointly and
severally, represent, warrant and covenant to and with the Administrative Agent, for the ratable
benefit of the Secured Parties, that:



9









 





          (a) Schedule II correctly sets forth the percentage of the issued and outstanding
shares of each class of the Equity Interests of the issuer thereof represented by such Pledged
Stock and includes all Equity Interests, debt securities and promissory notes or instruments
evidencing Indebtedness required to be (i) pledged in order to satisfy the Collateral and Guarantee
Requirement, or (ii) delivered pursuant to Section 3.02(b);



          (b) the Pledged Stock and Pledged Debt Securities (solely with respect to Pledged Debt
Securities issued by a person that is not a Subsidiary of Holdings or an Affiliate of any such
subsidiary, to the best of each Pledgor’s knowledge) have been duly and validly authorized and
issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and
nonassessable (other than with respect to Pledged Stock consisting of membership interests of
limited liability companies to the extent provided in Sections 18-502 and 18-607 of the Delaware
Limited Liability Company Act) and (ii) in the case of Pledged Debt Securities (solely with respect
to Pledged Debt Securities issued by a person that is not a Subsidiary of Holdings or an Affiliate
of any such subsidiary, to the best of each Pledgor’s knowledge) are legal, valid and binding
obligations of the issuers thereof, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally, general equitable principles (whether considered in a proceeding at law or in
equity) and an implied covenant of good faith and fair dealing;



          (c) except for the security interests granted hereunder, each Pledgor (i) is and, subject to
any transfers made in compliance with the Credit Agreement, will continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by
such Pledgor, (ii) holds the same free and clear of all Liens, other than Permitted Liens, (iii)
will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any
security interest in or other Lien on, the Pledged Collateral, other than pursuant to a transaction
permitted by the Credit Agreement and other than Permitted Liens and (iv) subject to the rights of
such Pledgor under the Loan Documents to dispose of Pledged Collateral, will use commercially
reasonable efforts to defend its title or interest hereto or therein against any and all Liens
(other than Permitted Liens), however arising, of all persons;



          (d) other than as set forth in the Credit Agreement or the schedules thereto, and except for
restrictions and limitations imposed by the Loan Documents or securities laws generally or
otherwise permitted to exist pursuant to the terms of the Credit Agreement, the Pledged Stock
(other than partnership interests) is and will continue to be freely transferable and assignable,
and none of the Pledged Stock is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction of any nature that
might prohibit, impair, delay or otherwise affect the pledge of such Pledged Stock hereunder, the
sale or disposition thereof pursuant hereto or the exercise by the Administrative Agent of rights
and remedies hereunder;



          (e) each Pledgor has the power and authority to pledge the Pledged Collateral pledged by it
hereunder in the manner hereby done or contemplated;



          (f) other than as set forth in the Credit Agreement or the schedules thereto, no consent or
approval of any Governmental Authority, any securities exchange or any other person



10









 




was or is necessary to the validity of the pledge effected hereby (other than such as have
been obtained and are in full force and effect);




          (g) by virtue of the execution and delivery by the Pledgors of this Agreement and the Foreign
Pledge Agreements, when any Pledged Securities (including Pledged Stock of any Domestic Subsidiary,
any Qualified CFC Holding Company or any foreign stock covered by a Foreign Pledge Agreement) are
delivered to the Administrative Agent, for the ratable benefit of the Secured Parties, in
accordance with this Agreement and a financing statement covering such Pledged Securities is filed
in the appropriate filing office, the Administrative Agent will obtain, for the ratable benefit of
the Secured Parties, a legal, valid and perfected lien upon and security interest in such Pledged
Securities under the New York UCC, subject only to Permitted Liens, as security for the payment and
performance of the Obligations;



          (h) each Pledgor that is an issuer of the Pledged Collateral confirms that it has received
notice of the security interest granted hereunder and consents to such security interest and agrees
to transfer record ownership of the securities issued by it in connection with any request by the
Administrative Agent; and



          (i) the Pledgors shall not amend, or permit to be amended, the limited liability company
agreement (or operating agreement or similar agreement) or partnership agreement of any Subsidiary
of any Loan Party whose Equity Interests are, or are required to be, Collateral in a manner to
cause such Equity Interests to not constitute a security under Section 8-103 of the New York UCC or
the corresponding code or statute of any other applicable jurisdiction unless such Loan Party shall
have first delivered 30 days written notice to the Administrative Agent and shall have taken all
actions contemplated hereby and as otherwise reasonably required by the Administrative Agent to
maintain the security interest of the Administrative Agent therein as a valid, perfected, first
priority security interest.



          Section 3.04. Registration in Nominee Name; Denominations. The Administrative Agent,
on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to
hold the Pledged Securities in the name of the applicable Pledgor, endorsed or assigned in blank or
in favor of the Administrative Agent or, if an Event of Default shall have occurred and be
continuing, in its own name as pledgee or the name of its nominee (as pledgee or as sub-agent).
Each Pledgor will promptly give to the Administrative Agent copies of any notices or other
communications received by it with respect to Pledged Securities registered in the name of such
Pledgor. If an Event of Default shall have occurred and be continuing, the Administrative Agent
shall have the right to exchange the certificates representing Pledged Securities for certificates
of smaller or larger denominations for any purpose consistent with this Agreement. Each Pledgor
shall use its commercially reasonable efforts to cause any Loan Party that is not a party to this
Agreement to comply with a request by the Administrative Agent, pursuant to this Section 3.04, to
exchange certificates representing Pledged Securities of such Loan Party for certificates of
smaller or larger denominations.



          Section 3.05. Voting Rights; Dividends and Interest, Etc. (a) Unless and until an
Event of Default shall have occurred and be continuing and the Administrative Agent shall have
given notice to the relevant Pledgors of the Administrative Agent’s intention to exercise its
rights hereunder:



11









 






     (i) Each Pledgor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Collateral or any part thereof
for any purpose consistent with the terms of this Agreement, the Credit Agreement and the
other Loan Documents; provided that, except as permitted under the Credit Agreement,
such rights and powers shall not be exercised in any manner that could materially and
adversely affect the rights inuring to a holder of any Pledged Collateral, the rights and
remedies of any of the Administrative Agent or the other Secured Parties under this
Agreement, the Credit Agreement or any other Loan Document or the ability of the Secured
Parties to exercise the same.




     (ii) The Administrative Agent shall promptly execute and deliver to each Pledgor, or
cause to be executed and delivered to such Pledgor, all such proxies, powers of attorney and
other instruments as such Pledgor may reasonably request for the purpose of enabling such
Pledgor to exercise the voting and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above.




     (iii) Each Pledgor shall be entitled to receive and retain any and all dividends,
interest, principal and other distributions paid on or distributed in respect of the Pledged
Collateral to the extent and only to the extent that such dividends, interest, principal and
other distributions are permitted by, and otherwise paid or distributed in accordance with,
the terms and conditions of the Credit Agreement, the other Loan Documents and applicable
laws; provided that (A) any noncash dividends, interest, principal or other
distributions, payments or other consideration in respect thereof, including any rights to
receive the same to the extent not so distributed or paid, that would constitute Pledged
Securities, whether resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities, received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, as a result of any
merger, consolidation, acquisition or other exchange of assets to which such issuer may be a
party or otherwise and (B) any non-cash dividends and other distributions paid or payable in
respect of any Pledged Securities that would constitute Pledged Securities in connection
with a partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid in surplus, shall be and become part of the Pledged
Collateral, and, if received by any Pledgor, shall not be commingled by such Pledgor with
any of its other funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Administrative Agent, for the ratable benefit of the
Secured Parties, and shall be forthwith delivered to the Administrative Agent, for the
ratable benefit of the Secured Parties, in the same form as so received (endorsed in a
manner reasonably satisfactory to the Administrative Agent).



          (b) Upon the occurrence and during the continuance of an Event of Default and after notice by
the Administrative Agent to the Borrower of the Administrative Agent’s intention to exercise its
rights hereunder, all rights of any Pledgor to dividends, interest, principal or other
distributions that such Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this
Section 3.05 shall cease, and all such rights shall thereupon become vested, for the ratable
benefit of the Secured Parties, in the Administrative Agent which shall have the sole and exclusive
right and authority to receive and retain such dividends, interest, principal or other
distributions; provided, however, that even after the occurrence of an Event of Default,
any



12









 




Pledgor may continue to exercise dividend and distribution rights solely to the extent
permitted under subclause (i), subclause (iii) and subclause (v) of Section 6.06(b) of the Credit
Agreement. All dividends, interest, principal or other distributions received by any Pledgor
contrary to the provisions of this Section 3.05 shall not be commingled by such Pledgor with any of
its other funds or property but shall be held separate and apart therefrom, shall be held in trust
for the benefit of the Administrative Agent, for the ratable benefit of the Secured Parties, and
shall be forthwith delivered to the Administrative Agent, for the ratable benefit of the Secured
Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the
Administrative Agent). Any and all money and other property paid over to or received by the
Administrative Agent pursuant to the provisions of this paragraph (b) shall be retained by the
Administrative Agent in an account to be established by the Administrative Agent upon receipt of
such money or other property and shall be applied in accordance with the provisions of Section 5.02
hereof. After all Events of Default have been cured or waived and the Borrower has delivered to
the Administrative Agent a certificate to that effect, the Administrative Agent shall promptly
repay to each Pledgor (without interest) all dividends, interest, principal or other distributions
that such Pledgor would otherwise be permitted to retain pursuant to the terms of paragraph
(a)(iii) of this Section 3.05 and that remain in such account.




          (c) Upon the occurrence and during the continuance of an Event of Default and after notice by
the Administrative Agent to the Borrower of the Administrative Agent’s intention to exercise its
rights hereunder, all rights of any Pledgor to exercise the voting and/or consensual rights and
powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.05, and the
obligations of the Administrative Agent under paragraph (a)(ii) of this Section 3.05, shall cease,
and all such rights shall thereupon become vested in the Administrative Agent, for the ratable
benefit of the Secured Parties, which shall have the sole and exclusive right and authority to
exercise such voting and consensual rights and powers; provided that, unless otherwise
directed by the Required Lenders, the Administrative Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived and the Borrower has delivered to
the Administrative Agent a certificate to that effect, each Pledgor shall have the right to
exercise the voting and/or consensual rights and powers that such Pledgor would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above.



ARTICLE IV




SECURITY INTERESTS IN OTHER PERSONAL PROPERTY




          Section 4.01. Security Interest. (a) As security for the payment or performance when
due (whether at the stated maturity, by acceleration or otherwise), as the case may be, in full of
the Obligations, each Pledgor hereby assigns and pledges to the Administrative Agent, its
successors and permitted assigns, for the ratable benefit of the Secured Parties, and hereby grants
to the Administrative Agent, its successors and permitted assigns, for the ratable benefit of the
Secured Parties, a security interest (the “Security Interest”) in all right, title and interest in
or to any and all of the following assets and properties now owned or at any time hereafter
acquired



13









 




by such Pledgor or in which such Pledgor now has or at any time in the future may acquire any
right, title or interest (collectively, the “Article 9 Collateral”):





     (i) all Accounts;




     (ii) all Chattel Paper;




     (iii) all cash and Deposit Accounts;




     (iv) all Documents;




     (v) all Equipment;




     (vi) all General Intangibles;




     (vii) all Instruments;




     (viii) all Inventory;




     (ix) all Investment Property;




     (x) all Letter of Credit Rights;




     (xi) all Commercial Tort Claims;




     (xii) all other personal property not otherwise described above (except for property
specifically excluded from any defined term used in any of the foregoing clauses);




     (xiii) all books and records pertaining to the Article 9 Collateral; and




     (xiv) to the extent not otherwise included, all proceeds, Supporting Obligations and
products of any and all of the foregoing and all collateral security and guarantees given by
any person with respect to any of the foregoing.


Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a
grant of a security interest in (a) any vehicle covered by a certificate of title or ownership,
whether now owned or hereafter acquired, (b) any assets (including Equity Interests), whether now
owned or hereafter acquired, with respect to which the Collateral and Guarantee Requirement or the
other paragraphs of Section 5.10 of the Credit Agreement would not be required to be satisfied by
reason of Section 5.10(g) of the Credit Agreement if hereafter acquired, (c) any property excluded
from the definition of Pledged Collateral by virtue of the proviso to Section 3.01 hereof, (d) any
Letter of Credit Rights to the extent any Pledgor is required by applicable law to apply the
proceeds of a drawing of such Letter of Credit for a specified purpose, (e) any Pledgor’s right,
title or interest in any license, contract or agreement to which such Pledgor is a party or any of
its right, title or interest thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement, result in a breach of the terms of,
or constitute a default under, or result in the abandonment,


14









 






invalidation or unenforceability of, any license, contract or agreement to which such Pledgor is a
party (other than to the extent that any such term would be rendered ineffective pursuant to
Section 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law (including,
without limitation, Title 11 of the United States Code) or principles of equity); provided
that immediately upon the ineffectiveness, lapse or termination of any such provision, the
Collateral shall include, and such Pledgor shall be deemed to have granted a security interest in,
all such rights and interests as if such provision had never been in effect or (f) any Equipment
owned by any Pledgor that is subject to a purchase money lien or a Capital Lease Obligation if the
contract or other agreement in which such Lien is granted (or the documentation providing for such
Capital Lease Obligation) prohibits or requires the consent of any person other than the Pledgors
as a condition to the creation of any other security interest on such Equipment.




          (b) Each Pledgor hereby irrevocably authorizes the Administrative Agent at any time and from
time to time to file in any relevant jurisdiction any initial financing statements (including
fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments
thereto that contain the information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment, including (i)
whether such Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) in the case of a financing statement filed as a
fixture filing, a sufficient description of the real property to which such Article 9 Collateral
relates and (iii) a description of collateral that describes such property in any other manner as
the Administrative Agent may reasonably determine is necessary or advisable to ensure the
perfection of the security interest in the Article 9 Collateral granted under this Agreement,
including describing such property as “all assets” or “all property”. Each Pledgor agrees to
provide such information to the Administrative Agent promptly upon request.



          The Administrative Agent is further authorized to file with the United States Patent and
Trademark Office or United States Copyright Office (or any successor office) such documents as may
be reasonably necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Pledgor, without the signature of
such Pledgor, and naming such Pledgor or the Pledgors as debtors and the Administrative Agent as
secured party. Notwithstanding anything to the contrary herein, no Pledgor shall be required to
take any action under the laws of any jurisdiction other than the United States (or any political
subdivision thereof) and its territories and possessions for the purpose of perfecting the Security
Interest in any Article 9 Collateral of such Pledgor constituting Patents, Trademarks or Copyrights
unless required by the Administrative Agent in its reasonable discretion.



          (c) The Security Interest is granted as security only and shall not subject the Administrative
Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of
any Pledgor with respect to or arising out of the Article 9 Collateral.



          Section 4.02. Representations and Warranties. The Pledgors jointly and severally
represent and warrant to the Administrative Agent and the Secured Parties that:



          (a) Each Pledgor has good and valid rights in and title to the Article 9 Collateral with
respect to which it has purported to grant a Security Interest hereunder and has



15









 




full power and authority to grant to the Administrative Agent the Security Interest in such
Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of any other person
other than any consent or approval that has been obtained and is in full force and effect or has
otherwise been disclosed herein or in the Credit Agreement.




          (b) The information set forth in the schedules attached hereto is correct and complete, in all
material respects, as of the Closing Date. The Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral that have been prepared by the
Administrative Agent for filing in each governmental, municipal or other office specified in
Schedule IV (or specified by notice from the Borrower to the Administrative Agent after the
Closing Date in the case of filings, recordings or registrations required by Section 5.10 of the
Credit Agreement) constitute all the filings, recordings and registrations (except to the extent
that filings are required to be made in the United States Patent and Trademark Office and the
United States Copyright Office, or any similar office in any other jurisdiction, in order to
perfect the Security Interest in Article 9 Collateral consisting of United States Patents, United
States registered Trademarks and United States registered Copyrights) that are necessary to publish
notice of and protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Administrative Agent (for the ratable benefit of the Secured Parties) in
respect of all Article 9 Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or amendments. Each Pledgor
represents and warrants that a fully executed Intellectual Property Security Agreement containing a
description of all Article 9 Collateral consisting of Intellectual Property with respect to United
States Patents (and Patents for which United States applications are pending), United States
registered Trademarks (and Trademarks for which United States registration applications are
pending) and United States registered Copyrights (and Copyrights for which United States
registration applications are pending) has been delivered to the Administrative Agent for recording
with the United States Patent and Trademark Office and the United States Copyright Office pursuant
to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as
applicable, and reasonably requested by the Administrative Agent, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the Administrative Agent, for
the ratable benefit of the Secured Parties, in respect of all Article 9 Collateral consisting of
such Intellectual Property in which a security interest may be perfected by recording with the
United States Patent and Trademark Office and the United States Copyright Office, and no further or
subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary
(other than the Uniform Commercial Code financings statements referred to above, and other than
such actions as are necessary to perfect the Security Interest with respect to any Article 9
Collateral consisting of United States Patents, Trademarks and Copyrights (or registration or
application for registration thereof) acquired or developed after the date hereof).



          (c) The Security Interest constitutes (i) a legal and valid security interest in all the
Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to




16












 




the filings described in Section 4.02(b), a perfected security interest in all Article 9 Collateral in
which a security interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such
jurisdictions and (iii) a security interest that shall be perfected in all Article 9 Collateral in
which a security interest may be perfected upon the receipt and recording of the Intellectual
Property Security Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall be prior to any other
Lien on any of the Article 9 Collateral other than Permitted Liens.




          (d) The Article 9 Collateral is owned by the Pledgors free and clear of any Lien, other than
Permitted Liens. None of the Pledgors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other applicable laws
covering any Article 9 Collateral, (ii) any assignment in which any Pledgor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article 9 Collateral with
the United States Patent and Trademark Office or the United States Copyright Office or (iii) any
assignment in which any Pledgor assigns any Article 9 Collateral or any security agreement or
similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment, security agreement or
similar instrument is still in effect, except, in each case, for Permitted Liens.



          (e) None of the Pledgors holds any Commercial Tort Claim individually in excess of $5.0
million as of the Closing Date except as indicated on Schedule V.



          (f) Except as set forth in Schedule VI, as of the Closing Date, all Accounts have been
originated by the Pledgors and all Inventory has been produced or acquired by the Pledgors in the
ordinary course of business.



          (g) As to itself and its Article 9 Collateral consisting of Intellectual Property (the
“Intellectual Property Collateral”), to the best of each Pledgor’s knowledge:




     (i) The Intellectual Property Collateral set forth on Schedule III includes all
of the material Patents, domain names, Trademarks, Copyrights and IP Agreements owned by
such Pledgor as of the date hereof.




     (ii) The Intellectual Property Collateral is subsisting and has not been adjudged
invalid or unenforceable in whole or part (except for office actions issued in the ordinary
course by the United States Patent and Trademark Office or any similar office in any foreign
jurisdiction), and, to the best of such Pledgor’s knowledge, is valid and enforceable,
except as would not reasonably be expected to have a Material Adverse Effect. Such Pledgor
is not aware of any uses of any item of Intellectual Property Collateral that would be
expected to lead to such item becoming invalid or unenforceable, except as would not
reasonably be expected to have a Material Adverse Effect.




     (iii) Such Pledgor has made or performed all commercially reasonable acts, including
without limitation filings, recordings and payment of all required fees and



17









 






taxes, required to maintain and protect its interest in each and every item of Intellectual Property
Collateral in full force and effect in the United States and such Pledgor has used proper
statutory notice in connection with its use of each Patent, Trademark and Copyright in the
Intellectual Property Collateral, in each case, except to the extent that the failure to do
so would not reasonably be expected to have a Material Adverse Effect.




     (iv) With respect to each IP Agreement, the absence, termination or violation of which
would reasonably be expected to have a Material Adverse Effect: (A) such Pledgor has not
received any notice of termination or cancellation under such IP Agreement; (B) such Pledgor
has not received any notice of a breach or default under such IP Agreement, which breach or
default has not been cured or waived; and (C) neither such Pledgor nor any other party to
such IP Agreement is in breach or default thereof in any
material respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination, modification or
acceleration under such IP Agreement.




     (v) Except as would not reasonably be expected to have a Material Adverse Effect, no
Pledgor or Intellectual Property Collateral is subject to any outstanding consent,
settlement, decree, order, injunction, judgment or ruling restricting the use of any
Intellectual Property Collateral or that would impair the validity or enforceability of such
Intellectual Property Collateral.



          Section 4.03. Covenants. (a) Each Pledgor agrees to provide at least 10 days’ prior
written notice to the Administrative Agent of any change (i) in its corporate or organization name
(other than the Name Changes), (ii) in its identity or type of organization or corporate structure,
(iii) in its Federal Taxpayer Identification Number or organizational identification number or (iv)
in its “location” (determined as provided in UCC Section 9-307). Each Pledgor agrees promptly to
provide the Administrative Agent with certified organizational documents reflecting any of the
changes described in the immediately preceding sentence. Each Pledgor agrees not to effect or
permit any change referred to in the first sentence of this paragraph (a) unless all filings have
been made, or will have been made within any applicable statutory period, under the Uniform
Commercial Code or otherwise that are required in order for the Administrative Agent to continue at
all times following such change to have a valid, legal and perfected first priority security
interest in all the Article 9 Collateral, for the ratable benefit of the Secured Parties. Each
Pledgor agrees promptly to notify the Administrative Agent if any material portion of the Article 9
Collateral owned or held by such Pledgor is damaged or destroyed.



          (b) Subject to the rights of such Pledgor under the Loan Documents to dispose of Collateral,
each Pledgor shall, at its own expense, use commercially reasonable efforts to defend title to the
Article 9 Collateral against all persons and to defend the Security Interest of the Administrative
Agent, for the ratable benefit of the Secured Parties, in the Article 9 Collateral and the priority
thereof against any Lien that is not a Permitted Lien.



          (c) Each Pledgor agrees, at its own expense, to execute, acknowledge, deliver and cause to be
duly filed all such further instruments and documents and take all such actions as the
Administrative Agent may from time to time reasonably request to better assure, preserve,



18









 




protect and perfect the Security Interest and the rights and remedies created hereby, including the payment
of any fees and taxes required in connection with the execution and delivery of this Agreement and
the granting of the Security Interest and the filing of any financing statements (including fixture
filings) or other documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Article 9 Collateral that is in excess of $5.0 million shall be or
become evidenced by any promissory note or other instrument, such note or instrument shall be
promptly pledged and delivered to the Administrative Agent, for the ratable benefit of the Secured
Parties, duly endorsed in a manner reasonably satisfactory to the Administrative Agent.




          Without limiting the generality of the foregoing, each Pledgor hereby authorizes the
Administrative Agent, with prompt notice thereof to the Pledgors, to supplement this Agreement by
supplementing Schedule III or adding additional schedules hereto to specifically identify
any asset or item that may constitute material Copyrights, Patents, Trademarks, Copyright Licenses,
Patent Licenses or Trademark Licenses; provided that any Pledgor shall have the right,
exercisable within 30 days after the Borrower has been notified by the Administrative Agent of the
specific identification of such Article 9 Collateral, to advise the Administrative Agent in writing
of any inaccuracy of the representations and warranties made by such Pledgor hereunder with respect
to such Article 9 Collateral. Each Pledgor agrees that it will use its commercially reasonable
efforts to take such action as shall be necessary in order that all representations and warranties
hereunder shall be true and correct with respect to such Article 9 Collateral within 30 days after
the date it has been notified by the Administrative Agent of the specific identification of such
Article 9 Collateral.



          (d) After the occurrence of an Event of Default and during the continuance thereof, the
Administrative Agent shall have the right to verify under reasonable procedures the validity,
amount, quality, quantity, value, condition and status of, or any other matter relating to, the
Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the possession
of any third person, by contacting Account Debtors or the third person possessing such Article 9
Collateral for the purpose of making such a verification. The Administrative Agent shall have the
right to share any information it gains from such inspection or verification with any Secured
Party.



          (e) At its option, the Administrative Agent may discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the
Article 9 Collateral and not a Permitted Lien, and may pay for the maintenance and preservation of
the Article 9 Collateral to the extent any Pledgor fails to do so as required by the Credit
Agreement or this Agreement, and each Pledgor jointly and severally agrees to reimburse the
Administrative Agent on demand for any reasonable payment made or any reasonable expense incurred
by the Administrative Agent pursuant to the foregoing authorization; provided,
however, that nothing in this Section 4.03(e) shall be interpreted as excusing any Pledgor
from the performance of, or imposing any obligation on the Administrative Agent or any Secured
Party to cure or perform, any covenants or other promises of any Pledgor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set
forth herein or in the other Loan Documents.



19









 





          (f) Each Pledgor (rather than the Administrative Agent or any Secured Party) shall remain
liable for the observance and performance of all the conditions and obligations to be observed and
performed by it under each contract, agreement or instrument relating to the Article 9 Collateral
and each Pledgor jointly and severally agrees to indemnify and hold harmless the Administrative
Agent and the Secured Parties from and against any and all liability for such performance.



          (g) None of the Pledgors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Credit Agreement and the other provisions hereof. None of
the Pledgors shall make or permit to be made any transfer of the Article 9 Collateral and each
Pledgor shall remain at all times in possession of the Article 9 Collateral owned by it, except as
permitted by the Credit Agreement and the other provisions hereof.



          (h) None of the Pledgors will, without the Administrative Agent’s prior written consent (which
consent shall not be unreasonably withheld), grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partly, any person liable for the payment thereof
or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business and consistent with
prudent business practices or as otherwise permitted under the Credit Agreement.



          (i) Each Pledgor irrevocably makes, constitutes and appoints the Administrative Agent (and all
officers, employees or agents designated by the Administrative Agent) as such Pledgor’s true and
lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default,
of making, settling and adjusting claims in respect of Article 9 Collateral under policies of
insurance, endorsing the name of such Pledgor on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Pledgor at any time or times shall fail to
obtain or maintain any of the policies of insurance required hereby or under the Credit Agreement
or to pay any premium in whole or part relating thereto, the Administrative Agent may, without
waiving or releasing any obligation or liability of the Pledgors hereunder or any Event of Default,
in its sole discretion, obtain and maintain such policies of insurance and pay such premium and
take any other actions with respect thereto as the Administrative Agent reasonably deems advisable.
All sums disbursed by the Administrative Agent in connection with this Section 4.03(i), including
reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be
payable, upon demand, by the Pledgors to the Administrative Agent and shall be additional
Obligations secured hereby.



          Section 4.04. Other Actions. In order to further ensure the attachment, perfection
and priority of, and the ability of the Administrative Agent to enforce, for the ratable benefit of
the Secured Parties, the Administrative Agent’s security interest in the Article 9 Collateral, each
Pledgor agrees, in each case at such Pledgor’s own expense, to take the following actions with
respect to the following Article 9 Collateral:



20









 





          (a) Instruments and Tangible Chattel Paper. If any Pledgor shall at any time hold or
acquire any Instruments (other than checks received and processed in the ordinary course of
business) or Tangible Chattel Paper evidencing an amount in excess of $5.0 million, such Pledgor
shall forthwith endorse, assign and deliver the same to the Administrative Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the Administrative Agent may
from time to time reasonably request.



          (b) Investment Property. Except to the extent otherwise provided in Article
III, if any Pledgor shall at any time hold or acquire any Certificated Security, such Pledgor
shall forthwith endorse, assign and deliver the same to the Administrative Agent, accompanied by
such instruments of transfer or assignment duly executed in blank as the Administrative Agent may
from time to time reasonably specify. If any security of a domestic issuer now owned or hereafter
acquired by any Pledgor is uncertificated and is issued to such Pledgor or its nominee directly by
the issuer thereof, such Pledgor shall promptly notify the Administrative Agent of such
uncertificated securities and (i) upon the Administrative Agent’s reasonable request or (ii) upon
the occurrence and during the continuance of an Event of Default, such Pledgor shall pursuant to an
agreement in form and substance reasonably satisfactory to the Administrative Agent, either (x)
cause the issuer to agree to comply with instructions from the Administrative Agent as to such
security, without further consent of any Pledgor or such nominee, or (y) cause the issuer to
register the Administrative Agent as the registered owner of such security.



          (c) Commercial Tort Claims. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $5.0 million, such Pledgor shall
promptly notify the Administrative Agent thereof in a writing signed by such Pledgor, including a
summary description of such claim, and grant to the Administrative Agent in writing a security
interest therein and in the proceeds thereof, all under the terms and provisions of this Agreement,
with such writing to be in form and substance reasonably satisfactory to the Administrative Agent.



          Section 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral. Except
as permitted by the Credit Agreement: (a) Each Pledgor agrees that it will not knowingly do any
act or omit to do any act (and will exercise commercially reasonable efforts to prevent its
licensees from doing any act or omitting to do any act) whereby any Patent that is material to the
normal conduct of such Pledgor’s business may become prematurely invalidated, abandoned, lapsed or
dedicated to the public, and agrees that it shall take commercially reasonable steps with respect
to any material products covered by any such Patent as necessary and sufficient to establish and
preserve its rights under applicable patent laws.



          (b) Each Pledgor will, and will use its commercially reasonable efforts to cause its licensees
or its sublicensees to, for each material Trademark necessary to the normal conduct of such
Pledgor’s business, (i) maintain such Trademark in full force free from any adjudication of
abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered
under such Trademark, (iii) display such Trademark with notice of federal or foreign registration
or claim of trademark or service mark as required under applicable law and (iv) not knowingly use
or knowingly permit its licensees’ use of such Trademark in violation of any third-party rights.



21









 





          (c) Each Pledgor will, and will use its commercially reasonable efforts to cause its licensees
or its sublicensees to, for each work covered by a material Copyright necessary to the normal
conduct of such Pledgor’s business that it publishes, displays and distributes, use a copyright
notice as necessary and sufficient to establish and preserve its rights under applicable copyright
laws.



          (d) Each Pledgor shall notify the Administrative Agent promptly if it knows that any Patent,
Trademark or Copyright material to the normal conduct of such Pledgor’s business may imminently
become abandoned, lapsed or dedicated to the public, or of any materially adverse determination or
development, excluding office actions and similar determinations or developments in the United
States Patent and Trademark Office, United States Copyright Office, any court or any similar office
of any country, regarding such Pledgor’s ownership of any such material Patent, Trademark or
Copyright or its right to register or to maintain the same.



          (e) Each Pledgor, either itself or through any agent, employee, licensee or designee, shall
(i) inform the Administrative Agent on an annual basis of each application by itself, or through
any agent, employee, licensee or designee, for any Patent with the United States Patent and
Trademark Office and each registration of any Trademark or Copyright with the United States Patent
and Trademark Office, the United States Copyright Office or any comparable office or agency in any
other country filed during the preceding twelve-month period, and (ii) upon the reasonable request
of the Administrative Agent, execute and deliver any and all agreements, instruments, documents and
papers as the Administrative Agent may reasonably request to evidence the Administrative Agent’s
security interest in such Patent, Trademark or Copyright.



          (f) Each Pledgor shall exercise its reasonable business judgment consistent with the practice
in any proceeding before the United States Patent and Trademark Office, the United States Copyright
Office or any comparable office or agency in any other country with respect to maintaining and
pursuing each application relating to any Patent, Trademark and/or Copyright (and obtaining the
relevant grant or registration) material to the normal conduct of such Pledgor’s business and to
maintain (i) each issued Patent and (ii) the registrations of each Trademark and each Copyright
that is material to the normal conduct of such Pledgor’s business, including, when applicable and
necessary in such Pledgor’s reasonable business judgment, timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if
any Pledgor believes necessary in its reasonable business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.



          (g) In the event that any Pledgor knows or has reason to know that any Article 9 Collateral
consisting of a Patent, Trademark or Copyright material to the normal conduct of its business has
been or is about to be materially infringed, misappropriated or diluted by a third party, such
Pledgor shall promptly notify the Administrative Agent and shall, if such Pledgor deems it
necessary in its reasonable business judgment, promptly sue and recover any and all damages, and
take such other actions as are reasonably appropriate under the circumstances.



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ARTICLE V




REMEDIES




          Section 5.01. Remedies Upon Default. Upon the occurrence and during the continuance
of an Event of Default, each Pledgor agrees to deliver each item of Collateral to the
Administrative Agent on demand, and it is agreed that the Administrative Agent shall have the right
to take any of or all the following actions at the same or different times: (a) with respect to
any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such Article 9
Collateral by the applicable Pledgors to the Administrative Agent or to license or sublicense,
whether general, special or otherwise, and whether on an exclusive or a nonexclusive basis, any
such Article 9 Collateral throughout the world on such terms and conditions and in such manner as
the Administrative Agent shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers thereunder cannot be obtained with the use of commercially
reasonable efforts, which each Pledgor hereby agrees to use) and (b) with or without legal process
and with or without prior notice or demand for performance, to take possession of the Article 9
Collateral and without liability for trespass to the applicable Pledgor to enter any premises where
the Article 9 Collateral may be located for the purpose of taking possession of or removing the
Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party
under the applicable Uniform Commercial Code or other applicable law. Without limiting the
generality of the foregoing, each Pledgor agrees that the Administrative Agent shall have the
right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all
or any part of the Collateral at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the Administrative Agent shall
deem appropriate. The Administrative Agent shall be authorized in connection with any sale of a
security (if it deems it advisable to do so) pursuant to the foregoing to restrict the prospective
bidders or purchasers to persons who represent and agree that they are purchasing such security for
their own account, for investment, and not with a view to the distribution or sale thereof. Upon
consummation of any such sale of Collateral pursuant to this Section 5.01, the Administrative Agent
shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives and
releases (to the extent permitted by law) all rights of redemption, stay, valuation and appraisal
that such Pledgor now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.



          The Administrative Agent shall give the applicable Pledgors 10 Business Days’ written notice
(which each Pledgor agrees is reasonable notice within the meaning of Section 9-611 of the New York
UCC or its equivalent in other jurisdictions) of the Administrative Agent’s intention to make any
sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for
such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Administrative Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or the portion thereof, to be sold
may be sold in one lot as



23









 




an entirety or in separate parcels, as the Administrative Agent may (in
its sole and absolute discretion) determine. The Administrative Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so adjourned. In the case of
any sale of all or any part of the Collateral made on credit or for future delivery, the Collateral
so sold may be retained by the Administrative Agent until the sale price is paid by the purchaser
or purchasers thereof, but the Administrative Agent shall not incur any liability in the event that
any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in
the case of any such failure, such Collateral may be sold again upon notice given in accordance
with provisions above. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section 5.01, any Secured Party may bid for or purchase in cash, free (to the
extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of
any Pledgor (all such rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to such Secured Party from any Pledgor as a credit against the
purchase price, and may make payment on account thereof by using any claim then due and payable to
such Secured Party from any Pledgor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such property in
accordance with Section 5.02 hereof without further accountability to any Pledgor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Administrative Agent shall be free to carry out such sale pursuant
to such agreement and no Pledgor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Administrative Agent shall have
entered into such an agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement
and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver.
Any sale pursuant to the provisions of this Section 5.01 shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.




          Section 5.02. Application of Proceeds. The Administrative Agent shall promptly apply
the proceeds, moneys or balances of any collection or sale of Collateral, as well as any Collateral
consisting of cash, as follows: FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent in connection with such collection or sale or otherwise in connection with
this Agreement, any other Loan Document or any of the Obligations, including without limitation all
court costs and the fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Administrative Agent hereunder or under any other Loan Document on behalf of
any Pledgor, any other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Loan Document, and all other fees, indemnities and other
amounts owing or reimbursable to the Administrative Agent under any Loan Document in its capacity
as such; SECOND, to payment of all fees, indemnities and other amounts (other than principal and
interest) payable to the Issuing Bank in capacity as such and of



24









 




any amount required to be paid to
the Issuing Bank by any Revolving Facility Lender pursuant to Section 2.05(e) and (h) of the Credit
Agreement and not paid by such Revolving Facility Lender (which shall be payable to the
Administrative Agent if the Administrative Agent advanced such payment to the Issuing Bank in
anticipation of such payment by such Revolving Facility Lender and otherwise, to the Issuing Bank);
and THIRD, to the payment in full of the Obligations (the amounts so applied to be distributed
among the Secured Parties pro rata in accordance with the respective amounts of the Obligations
owed to them on the date of any such distribution, which in the case of Letters of Credit, shall be
paid by deposit in an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Issuing Bank and the Lenders, an amount in cash in U.S. Dollars
equal to the aggregate Revolving L/C Exposure as of such date plus any accrued and unpaid interest
thereon).




          The Administrative Agent shall have absolute discretion as to the time of application of any
such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral
by the Administrative Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the purchase money by the Administrative Agent or of the
officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative Agent or such officer
or be answerable in any way for the misapplication thereof.



          If, after receipt of any payment which is applied to the payment of all or any part of any
Obligations, an Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any person because such payment or application of proceeds is invalidated, declared
fraudulent, set aside, determined to be void or voidable as a preference, impermissible set-off, or
a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended
to be satisfied shall be revived and continued and this Agreement shall continue in full force as
if such payment or proceeds had not been received by such Agent or such Lender and the Borrower
shall be liable to pay to such Agent and the Lenders, and shall indemnify each Agent and the
Lenders and holds the Agents and the Lenders harmless for the amount of such payment or proceeds
surrendered. The provisions of this paragraph shall be and remain effective notwithstanding any
contrary action which may have been taken by an Agent or any Lender in reliance upon such payment
or application of proceeds, and any such contrary action so taken shall be without prejudice to the
Agents’ and the Lenders’ rights under this Agreement and shall be deemed to have been conditioned
upon such payment or application of proceeds having become final and irrevocable. The provisions
of this paragraph shall survive the termination of this Agreement.



          Section 5.03. Securities Act, Etc. In view of the position of the Pledgors in
relation to the Pledged Collateral, or because of other current or future circumstances, a question
may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar federal
statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as
from time to time in effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor understands that
compliance with the Federal Securities Laws might very strictly limit the course of conduct of the
Administrative Agent if the Administrative Agent were to attempt to dispose of all or any part of
the Pledged Collateral, and might also limit the extent to which or the manner in which



25









 




any
subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Administrative Agent in any attempt to
dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state
securities laws or similar laws analogous in purpose or effect. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Administrative Agent, in its sole
and absolute discretion, (a) may proceed to make such a sale whether or not a registration
statement for the purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws or, to the extent applicable, Blue Sky or other state
securities laws and (b) may approach and negotiate with a single potential purchaser to effect such
sale. Each Pledgor acknowledges and agrees that any such sale might result in prices and other
terms less favorable to the seller than if such sale were a public sale without such restrictions.
In the event of any such sale, the Administrative Agent shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral at a price that the Administrative Agent, in
its sole and absolute discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have been realized if the
sale were deferred until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.03 will apply notwithstanding the existence of a
public or private market upon which the quotations or sales prices may exceed substantially the
price at which the Administrative Agent sells.




ARTICLE VI




INDEMNITY, SUBROGATION AND SUBORDINATION




          Section 6.01. Indemnity. In addition to all such rights of indemnity and subrogation
as the Guarantors may have under applicable law (but subject to Section 6.03 hereof), the Borrower
agrees that (a) in the event a payment shall be made by any Guarantor under this Agreement in
respect of any Obligation of the Borrower, the Borrower shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of the person to whom such payment shall have been made to the extent
of such payment and (b) in the event any assets of any Guarantor shall be sold pursuant to this
Agreement or any other Security Document to satisfy in whole or in part an Obligation of the
Borrower, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book
value or the fair market value of the assets so sold.



          Section 6.02. Contribution and Subrogation. Each Guarantor (other than Holdings) (a
“Contributing Guarantor”) agrees (subject to Section 6.03 hereof) that, in the event a payment
shall be made by any other Guarantor (other than Holdings) hereunder in respect of any Obligation
or assets of any other Guarantor (other than Holdings and the Borrower) shall be sold pursuant to
any Security Document to satisfy any Obligation owed to any Secured Party and such other Guarantor
(the “Claiming Guarantor”) shall not have been fully indemnified by the Borrower as provided in
Section 6.01 hereof, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount
equal to the amount of such payment or the greater of the book value or the fair market value of
such assets, as applicable, in each case multiplied by a fraction of which the numerator shall be
the net worth of such Contributing Guarantor on the date hereof



26









 




and the denominator shall be the
aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 7.16 hereof, the date of the supplement hereto executed
and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 6.02 shall be subrogated to the rights of such Claiming
Guarantor under Section 6.01 hereof to the extent of such payment.




          Section 6.03. Subordination;Subrogation. (a) (a) Each Guarantor hereby subordinates
any and all debts, liabilities, receivables, advances and other Obligations owed to such Guarantor
by each other Loan Party of whatever nature at any time outstanding (the “Subordinated
Obligations”) to the Obligations to the extent and in the manner hereinafter set forth in this
Section 6.03:




     (i) Prohibited Payments, Etc . Except during the continuance of an Event of
Default, each Guarantor may receive payments, receivables or advances from any other Loan
Party on account of the Subordinated Obligations. After the occurrence and during the
continuance of any Event of Default, however, unless the Required Lenders otherwise agree,
no Guarantor shall demand, accept or take any action to collect any payment on account of
the Subordinated Obligations until the Obligations have been paid in full in cash.




     (ii) Prior Payment of Guaranteed Obligations . In any proceeding under the U.S.
Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership
or similar law relating to any other Loan Party, each Guarantor agrees that the Secured
Parties shall be entitled to receive payment in full in cash of all Obligations (including
all interest and expenses accruing after the commencement of a proceeding under any U.S.
Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership
or similar law, whether or not constituting an allowed claim in such proceeding
(Post-Petition Interest)) before such Guarantor receives payment of any Subordinated
Obligations.




     (iii) Turn-Over . After the occurrence and during the continuance of any Event
of Default, each Guarantor shall, if the Administrative Agent so requests, collect, enforce
and receive payments on account of the Subordinated Obligations as trustee for the Secured
Parties and deliver such payments to the Administrative Agent on account of the Obligations
(including all Post-Petition Interest), together with any necessary endorsements or other
instruments of transfer, but without reducing or affecting in any manner the liability of
such Guarantor under the other provisions of this Agreement.




     (iv) Administrative Agent Authorization . After the occurrence and during the
continuance of any Event of Default, the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name of each Guarantor,
to collect and enforce, and to submit claims in respect of, the Subordinated Obligations and
to apply any amounts received thereon to the Obligations (including any and all
Post-Petition Interest), and (ii) to require each Guarantor (A) to collect and enforce, and
to submit claims in respect of, the Subordinated Obligations and (B) to pay



27









 






any amounts received on such obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post-Petition Interest).



          (b) Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights
that it may now have or hereafter acquire against the Borrower, any other Loan Party or any other
insider guarantor that arise from the existence, payment, performance or enforcement of such
Guarantor’s Obligations under or in respect of the guarantee set forth in Article II or any other
Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or remedy of any Secured
Party against the Borrower, any other Loan Party or any other insider guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the Borrower, any other Loan
Party or any other insider guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Obligations and all other amounts payable under the guarantee set forth
in Article II shall have been paid in full in cash, all Letters of Credit and all Swap Agreements
secured hereunder shall have expired or been terminated or cash collateralized (pursuant to
arrangements reasonably satisfactory to the Administrative Agent and the Issuing Bank) and the
Commitments shall have expired, terminated or shall have been cash collateralized (pursuant to
arrangements reasonably satisfactory to the Administrative Agent and the Issuing Bank). If any
amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any
time prior to the latest of (a) the payment in full in cash of the Obligations and all other
amounts payable under the guarantee set forth in Article II and (b) the latest date of expiration
or termination or cash collateralization of all Letters of Credit and all Swap Agreements secured
hereunder and termination or expiration of all Commitments, such amount shall be received and held
in trust for the benefit of the Secured Parties, shall be segregated from other property and funds
of such Guarantor and shall forthwith be paid or delivered to the Administrative Agent in the same
form as so received (with any necessary endorsement or assignment) to be credited and applied to
the Obligations and all other amounts payable under the guarantee set forth in Article II, whether
matured or unmatured, in accordance with the terms of the Loan Documents, or to be held as
Collateral for any Obligations or other amounts payable under such guarantee thereafter arising. If
(i) any Guarantor shall make payment to any Secured Party of all or any part of the Obligations,
(ii) all of the Obligations and all other amounts payable under the guarantee set forth in Article
II shall have been paid in full in cash, (iii) the Term Facility Maturity Date shall have occurred
and (iv) all Letters of Credit and all Swap Agreements secured hereunder shall have expired or been
terminated, the Administrative Agent will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations resulting from such payment made by such Guarantor pursuant to such guarantee.




28












 





ARTICLE VII




MISCELLANEOUS




          Section 7.01. Notices. All communications and notices hereunder shall (except as
otherwise permitted herein) be in writing and given as provided in Section 9.01 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Loan Party shall be given to
it in care of the Borrower, with such notice to be given as provided in Section 9.01 of the Credit
Agreement.



          Section 7.02. Security Interest Absolute. All rights of the Administrative Agent
hereunder, the Security Interest in the Article 9 Collateral, the security interest in the Pledged
Collateral and all obligations of each Pledgor hereunder shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or waiver of or any
consent to any departure from the Credit Agreement, any other Loan Document or any other agreement
or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Pledgor in respect of the Obligations or
this Agreement (other than a defense of payment or performance).



          Section 7.03. Limitation By Law. All rights, remedies and powers provided in this
Agreement may be exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Agreement are intended to be subject to
all applicable mandatory provisions of law that may be controlling and to be limited to the extent
necessary so that they shall not render this Agreement invalid, unenforceable, in whole or in part,
or not entitled to be recorded, registered or filed under the provisions of any applicable law.



          Section 7.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any party to this Agreement when a counterpart hereof executed on behalf of such
party shall have been delivered to the Administrative Agent and a counterpart hereof shall have
been executed on behalf of the Administrative Agent, and thereafter shall be binding upon such
party and the Administrative Agent and their respective permitted successors and assigns, and shall
inure to the benefit of such party, the Administrative Agent and the other Secured Parties and
their respective permitted successors and assigns, except that no party shall have the right to
assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral
(and any such assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with
respect to each party and may be amended, modified, supplemented, waived or released with respect
to any party without the approval of any other party and without affecting the obligations of any
other party hereunder.



29









 





          Section 7.05. Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted successors and
assigns of such party; and all covenants, promises and agreements by or on behalf of any Pledgor or
the Administrative Agent that are contained in this Agreement shall bind and inure to the benefit
of their respective permitted successors and assigns; provided that no Pledgor may assign, transfer
or delegate any of its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent. The Administrative Agent hereunder shall at all times be the same
person that is the Administrative Agent under the Credit Agreement. Written notice of resignation
by the Administrative Agent pursuant to the Credit Agreement shall also constitute notice of
resignation as the Administrative Agent under this Agreement. Upon the acceptance of any
appointment as the Administrative Agent under the Credit Agreement by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Administrative Agent pursuant hereto.



          Section 7.06. Administrative Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Administrative Agent shall be entitled to reimbursement of its
expenses incurred hereunder as provided in Section 9.05 of the Credit Agreement.



          (b) Without limitation of its indemnification obligations under the other Loan Documents, each
Pledgor jointly and severally agrees to indemnify the Administrative Agent and the other
Indemnitees (as defined in Section 9.05 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, (i) the execution, delivery or performance
of this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto and thereto of their respective obligations
thereunder or the consummation of the Transactions and other transactions contemplated hereby, (ii)
the use of proceeds of the Loans or the use of any Letter of Credit or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, or to the Collateral, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such Indemnitee.



          (c) Any such amounts payable as provided hereunder shall be additional Obligations secured
hereby and by the other Security Documents. The provisions of this Section 7.06 shall remain
operative and in full force and effect regardless of the termination of this Agreement or any other
Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the Administrative Agent or
any other Secured Party. All amounts due under this Section 7.06 shall be payable on written
demand therefor.



          Section 7.07. Administrative Agent Appointed Attorney-in-Fact. Each Pledgor hereby
appoints the Administrative Agent the attorney-in-fact of such Pledgor for the purpose of



30









 







carrying out the provisions of this Agreement and taking any action and executing any
instrument that the Administrative Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. The Administrative Agent
shall have the right, upon the occurrence and during the continuance of an Event of Default, with
full power of substitution either in the Administrative Agent’s name or in the name of such
Pledgor, (a) to receive, endorse, assign or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to
demand, collect, receive payment of, give receipt for and give discharges and releases of all or
any of the Collateral, (c) to ask for, demand, sue for, collect, receive and give acquittance for
any and all moneys due or to become due under and by virtue of any Collateral, (d) to sign the name
of any Pledgor on any invoice or bill of lading relating to any of the Collateral, (e) to send
verifications of Accounts to any Account Debtor, (f) to commence and prosecute any and all suits,
actions or proceedings at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in respect of any
Collateral, (g) to settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and
to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and
completely as though the Administrative Agent were the absolute owner of the Collateral for all
purposes; provided that nothing herein contained shall be construed as requiring or obligating the
Administrative Agent to make any commitment or to make any inquiry as to the nature or sufficiency
of any payment received by the Administrative Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the moneys due or to
become due in respect thereof or any property covered thereby. The Administrative Agent and the
other Secured Parties shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their officers, directors,
employees or agents shall be responsible to any Pledgor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.



          Section 7.08. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.



          Section 7.09. Waivers; Amendment. (a) No failure or delay by the Administrative
Agent, any Issuing Bank or any Lender in exercising any right, power or remedy hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or remedy, or any abandonment or discontinuance of steps to enforce such a
right, power or remedy, preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights, powers and remedies of the Administrative Agent, any Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights, powers or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this Section 7.09, and
then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given. Without



31









 







limiting the generality of the foregoing, the making of a Loan or the issuance of a Letter of
Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether
the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such
Default or Event of Default at the time. No notice or demand on any Loan Party in any case shall
entitle any Loan Party to any other or further notice or demand in similar or other circumstances.



          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the
Loan Party or Loan Parties with respect to which such waiver, amendment or modification is to
apply, subject to any consent required in accordance with Section 9.08 of the Credit Agreement.



          Section 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.



          Section 7.11. Severability. In the event any one or more of the provisions contained
in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining provisions contained herein
and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of the invalid, illegal
or unenforceable provisions.



          Section 7.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section 7.04 hereof.
Delivery of an executed counterpart to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed original.



          Section 7.13. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.



          Section 7.14. Jurisdiction; Consent to Service of Process. (a) Each party to this
Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the United States of



32









 







America sitting in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such federal court. Each
of the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that the Administrative
Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating
to this Agreement or any other Loan Document against any Pledgor, or its properties, in the courts
of any jurisdiction.



          (b) Each party to this Agreement hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.



          Section 7.15. Termination or Release. (a) This Agreement, the guarantees made
herein, the pledges made herein, the Security Interest and all other security interests granted
hereby shall terminate when all the Loan Document Obligations (other than contingent or
unliquidated obligations or liabilities not then due) have been paid in full in cash or immediately
available funds and the Lenders have no further commitment to lend under the Credit Agreement, the
Revolving L/C Exposure has been reduced to zero (or cash collateralized or supported by
back-to-back letter of credit in form and substance and from an issuing bank satisfactory to the
Administrative Agent and the Issuing Bank) and each Issuing Bank has no further obligations to
issue Letters of Credit under the Credit Agreement.



          (b) A Subsidiary Loan Party shall automatically be released from its obligations hereunder and
the security interests in the Collateral of such Subsidiary Loan Party shall be automatically
released upon the consummation of any transaction permitted by the Credit Agreement as a result of
which such Subsidiary Loan Party ceases to be a Subsidiary of the Borrower or otherwise ceases to
be a Guarantor; provided that such portion of the Lenders as shall be required by the terms
of the Credit Agreement to have consented to such transaction (to the extent such consent is
required by the Credit Agreement) shall have consented thereto and the terms of such consent did
not provide otherwise.



          (c) Upon any sale or other transfer by any Pledgor of any Collateral that is permitted under
the Credit Agreement to any person that is not a Pledgor, or upon the effectiveness of any written
consent to the release of the security interest granted hereby in any Collateral pursuant to
Section 9.08 of the Credit Agreement, the security interest in such Collateral shall be
automatically released.



          (d) Upon the transfer by any Loan Party of Equity Interests in a “first tier” Foreign
Subsidiary or “first tier” Qualified CFC Holding Company to a “first tier” Foreign Subsidiary or
“first tier” Qualified CFC Holding Company in accordance with Section 6.05(d) of



33









 







the Credit Agreement, the pledge of Equity Interests so transferred shall be automatically
released.



          (e) In connection with any termination or release pursuant to paragraph (a), (b), (c) and (d)
of this Section 7.15, the Administrative Agent shall execute and deliver to any Pledgor, at such
Pledgor’s expense, all documents that such Pledgor shall reasonably request to evidence such
termination or release (including, without limitation, UCC termination statements) and will duly
assign and transfer to such Pledgor such of the Pledged Collateral that may be in the possession of
the Administrative Agent and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement; provided that the Administrative Agent shall not be required to
take any action under this Section 7.15(e) unless such Pledgor shall have delivered to the
Administrative Agent together with such request, which may be incorporated into such request, (i) a
reasonably detailed description of the Collateral, which in any event shall be sufficient to effect
the appropriate termination or release without affecting any other Collateral, and (ii) a
certificate of a Responsible Officer of the Borrower or such Pledgor certifying that the
transaction giving rise to such termination or release is permitted by the Credit Agreement and was
consummated in compliance with the Loan Documents. Any execution and delivery of documents
pursuant to this Section 7.15 shall be without recourse to or warranty by the Administrative Agent.



          Section 7.16. Additional Subsidiaries. Upon execution and delivery by the
Administrative Agent and any Subsidiary that is required to become a party hereto by Section 5.10
of the Credit Agreement of an instrument in the form of Exhibit I hereto, such Subsidiary shall
become a Subsidiary Loan Party hereunder with the same force and effect as if originally named as a
Subsidiary Loan Party herein. The execution and delivery of any such instrument shall not require
the consent of any other party to this Agreement. The rights and obligations of each party to this
Agreement shall remain in full force and effect notwithstanding the addition of any new party to
this Agreement.



          Section 7.17. Right of Set-off. If an Event of Default shall have occurred and be
continuing, each Lender and each Issuing Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other indebtedness at any time
owing by such Lender or such Issuing Bank to or for the credit or the account of any party to this
Agreement against any of and all the obligations of such party now or hereafter existing under this
Agreement owed to such Lender or such Issuing Bank, irrespective of whether or not such Lender or
such Issuing Bank shall have made any demand under this Agreement and although such obligations may
be unmatured. The rights of each Lender under this Section 7.17 are in addition to other rights
and remedies (including other rights of set-off) that such Lender or such Issuing Bank may
have. 



[Signature Page Follows]




34









 








          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.



	 	 	 	 	 
	 	BAUBLE HOLDINGS CORP.

 	 
	 	By:  	/s/ Peter P. Copses
 	 
	 	 	Name:  	Peter P. Copses 	 
	 	 	Title:  	President 	 
	 
	 	BAUBLE ACQUISITION SUB, INC.

 	 
	 	By:  	/s/ Peter P. Copses
 	 
	 	 	Name:  	Peter P. Copses  	 
	 	 	Title:  	President 	 
	 
	 	AFTERTHOUGHTS MERCHANDISING CORP.

CLAIRE’S BOUTIQUES, INC.

SASSY DOO!, INC.

CLAIRE’S PUERTO RICO CORP.

CBI DISTRIBUTING CORP.

CLAIRE’S CANADA CORP.

BMS DISTRIBUTING CORP.

 	 
	 	By:  	/s/ Rebecca Orand
 	 
	 	 	Name:  	Rebecca Orand 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

as Administrative Agent

 	 
	 	By:  	/s/ Robert Hetu
 	 
	 	 	Name:  	Robert Hetu 	 
	 	 	Title:  	Managing Director 	 
	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH,

as Administrative Agent

 	 
	 	By:  	/s/ Denise Alvarez
 	 
	 	 	Name:  	Denise Alvarez 	 
	 	 	Title:  	Associate 	 



35









 






	 	 	 	 	 



Schedules to Guarantee and Collateral Agreement




36









 








SCHEDULE I




SUBSIDIARY PARTIES




Claire’s Stores, Inc.

Bauble Acquisition Sub, Inc.

Sassy Doo!, Inc.

Claire’s Puerto Rico Corp.

CBI Distributing Corp.

Claire’s Boutiques, Inc.

Claire’s Canada Corp.

Afterthoughts Merchandising Corp.

BMS Distributing Corp.





37












 





SCHEDULE II

Pledged Securities of the New Subsidiary




EQUITY INTERESTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Number of
	 	 	 	 	 	 	 	 	 	 	Shares or
	 	 	 	 	Certificate	 	Class of	 	Other
	Name of Owner	 	Name of Issuer	 	Number	 	Stock	 	Interests
	Claire’s Stores,
Inc.

	 	Sassy Doo!,
Inc.
	 	 	R-1	 	 	Common
	 	 	100	 
	Claire’s Stores,
Inc.

	 	Claire’s Puerto
Rico Corp.
	 	 	001	 	 	Common
	 	 	10	 
	Claire’s Stores,
Inc

	 	CBI
Distributing
Corp.
	 	 	1	 	 	Common
	 	 	100	 
	Claire’s Boutiques,
Inc.

	 	CBI
Distributing
Corp.
	 	 	2	 	 	Common
	 	 	80	 
	Claire’s Stores,
Inc.

	 	Claire’s
Boutiques, Inc.
	 	 	1	 	 	Common
	 	 	100	 
	Claire’s Stores,
Inc.

	 	Claire’s Canada
Corp.
	 	 	R-1	 	 	Common
	 	 	100	 
	Claire’s Stores,
Inc.

	 	Afterthoughts
Merchandising
Corp.
	 	 	R-1	 	 	Common
	 	 	100	 
	Claire’s Canada
Corp.

	 	Claire’s Stores
Canada Corp.
	 	 	C-4	 	 	Common
	 	 	6,500,065	 
	Claire’s Canada
Corp.

	 	CSC Limited
Partnership
	 	GPU-1
	 	GPU
	 	 	6.5	 
	Claire’s Stores,
Inc.

	 	CSC Limited
Partnership
	 	LPU-1
	 	LPU
	 	 	58.5	 
	CBI Distributing
Corp.

	 	BMS Distributing
Corp.
	 	 	01	 	 	Common
	 	 	1,000	 
	Claire’s Stores,
Inc.	 	Claire’s Holding
GmbH	 	Uncertificated
	Claire’s Stores,
Inc.	 	Claire’s Nippon,
Ltd.	 	Uncertificated
	Bauble Holdings
Corp.

	 	Bauble
Acquisition Sub,
Inc.
	 	 	1	 	 	Common
	 	 	100	 






38









 






DEBT SECURITIES




None.




39









 





SCHEDULE III




PATENTS, TRADEMARKS AND COPYRIGHTS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Reg. No.	 	Reg. Date	 	 	 	 
	Trademark	 	(App. No.)	 	(App. Date)	 	Owner	 	Status
	9-ON

	 	 	2,521,546	 	 	12/25/2001
	 	Claire’s Boutiques, Inc.
	 	Registered
	ACCESSORY PLACE

	 	 	1,427,959	 	 	2/3/1987
	 	Claire’s Boutiques, Inc.
	 	Registered
	ACCESSORY PLACE

(Stylized Letters)

	 	 	1,502,133	 	 	8/30/1998
	 	Claire’s Boutiques, Inc.
	 	Registered
	ACCESSORY PLACE

(Stylized Letters)

	 	 	1,502,681	 	 	8/30/1998
	 	Claire’s Boutiques, Inc.
	 	Registered
	AFTER THOUGHTS

	 	 	1,883,162	 	 	3/7/1995
	 	CBI Distributing Corp.
	 	Registered
	AFTERTHOUGHTS

	 	 	1,343,617	 	 	6/19/1985
	 	CBI Distributing Corp.
	 	Registered
	BEE WHO YOU 

WANNA BE

	 	 	2,888,867	 	 	9/28/2004
	 	CBI Distributing Corp.
	 	Registered
	BOTTLED ENERGY

	 	 	2,576,419	 	 	6/4/2004
	 	CBI Distributing Corp.
	 	Registered
	CARIMAR

	 	 	1,600,052	 	 	6/5/1990
	 	CSL, Inc.
	 	Registered
	CLAIRE

	 	 	2,813,344	 	 	2/10/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,863	 	 	12/7/2004
	 	CSL, Inc.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,864	 	 	12/7/2004
	 	CSL, Inc.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,865	 	 	12/7/2004
	 	CSL, Inc.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,866	 	 	12/7/2004
	 	CSL, Inc.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,867	 	 	12/7/2004
	 	CSL, Inc.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,868	 	 	12/7/2004
	 	CSL, Inc.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,992,613	 	 	9/6/05
	 	CSL, Inc.
	 	Registered
	CLAIRE’S

	 	 	2,908,861	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,925,470	 	 	2/8/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,900,024	 	 	11/2/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,967,212	 	 	7/12/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,919,171	 	 	1/18/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,908,860	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,908,859	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,996,103	 	 	9/13/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,908,858	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,908,857	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,951,866	 	 	5/17/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	2,974,652	 	 	7/19/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	(78-589,527)
	 	 (3/17/2005)
	 	CBI Distributing Corp.
	 	Pending
	CLAIRE’S

	 	 	2,978,984	 	 	7/26/2005
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	3,190,840	 	 	1/2/2006
	 	CBI Distributing Corp.
	 	Registered







40











 





	 	 	 	 	 	 	 	 	 	 	 
	 	 	Reg. No.	 	Reg. Date	 	 	 	 
	Trademark	 	(App. No.)	 	(App. Date)	 	Owner	 	Status
	CLAIRE’S

	 	 	3,190,839	 	 	1/2/2007
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	1,929,317	 	 	10/24/1995
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S

	 	 	1,891,172	 	 	4/25/1995
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S(Stylized
Letters)

	 	 	1,925,359	 	 	10/10/1995
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S (Stylized
Letters)

	 	 	1,890,335	 	 	4/18/1995
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S
ACCESSORIES

	 	 	2,294,937	 	 	7/28/1997
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S
ACCESSORIES

	 	 	1,956,047	 	 	2/13/1996
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S
ACCESSORIES

	 	 	1,946,557	 	 	1/9/1996
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S and Design

	 	 	2,623,039	 	 	9/24/2002
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S BOUTIQUES
and Design

	 	 	1,514,045	 	 	11/22/1988
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S CLUB

	 	 	2,908,862	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S CLUB

	 	(78-557,873)
	 	(2/1/2005)
	 	CBI Distributing Corp.
	 	Pending   
	CLAIRE’S CLUB

	 	(78-557,856)
	 	(2/1/2005)
	 	CBI Distributing Corp.
	 	Pending   
	CLAIRE’S CLUB

	 	(78-554,003)
	 	(1/26/2005)
	 	CBI Distributing Corp.
	 	Pending   
	CLAIRE’S CLUB

	 	 	2,908,191	 	 	12/7/2004
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S ETC.

	 	 	2,065,959	 	 	5/27/1997
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S ETC.
(Stylized Letters)

	 	 	2,064,149	 	 	5/20/1997
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S FOLLY

	 	 	2,424,626	 	 	1/30/2001
	 	CBI Distributing Corp.
	 	Registered
	CLAIRE’S GARDEN
FILLED WAX CANDLE


and Design

	 	 	2,856,777	 	 	6/22/2004
	 	 	 	Registered
	CLAIRE’S TREASURES

	 	(78-442,351)
	 	6/28/2004
	 	CBI Distributing Corp.
	 	Pending   
	D LUX

	 	 	2,611,306	 	 	8/27/2002
	 	Claire’s Boutiques, Inc.
	 	Registered
	D LUX

	 	 	2,435,990	 	 	3/13/2001
	 	Claire’s Boutiques, Inc.
	 	Registered
	DARA MICHELLE
and Design

	 	 	1,483,331	 	 	4/6/1988
	 	Claire’s Boutiques, Inc.
	 	Registered
	DESIGN ONLY

	 	(78-718,197)
	 	(9/22/2005)
	 	CBI Distributing Corp.
	 	Pending   
	DRIVING DIVA

	 	 	2,657,124	 	 	12/3/2002
	 	CBI Distributing Corp.
	 	Registered
	HANDY HANDBAG 

HOLDER

	 	 	2,645,328	 	 	11/5/2002
	 	CBI Distributing Corp.
	 	Registered
	ICING BY CLAIRE’S

	 	 	3,050,863	 	 	1/24/2006
	 	CBI Distributing Corp.
	 	Registered
	ICING ICE

	 	(78-861,879)
	 	(4/14/2006)
	 	CBI Distributing Corp.
	 	Pending   
	JUST NIKKI

	 	 	2,507,329	 	 	11/13/2001
	 	CSL, Inc.
	 	Registered






41









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	Reg. No.	 	Reg. Date	 	 	 	 
	Trademark	 	(App. No.)	 	(App. Date)	 	Owner	 	Status
	LOOP IT

	 	 	2,580,796	 	 	6/18/2002
	 	CBI Distributing Corp.
	 	Registered
	MAGIKAL 

TRINKETS

	 	 	2,768,698	 	 	9/30/2003
	 	Claire’s Boutiques, Inc.
	 	Registered
	PRINCESS MINTS

	 	 	2,583,525	 	 	6/18/2002
	 	CBI Distributing Corp.
	 	Registered
	PRINCIE

	 	 	2,517,987	 	 	12/11/2001
	 	CSL, Inc.
	 	Registered
	PRINCIE

	 	 	2,517,986	 	 	12/11/2001
	 	CSL, Inc.
	 	Registered
	SENSITIVE 

SOLUTIONS

	 	 	1,951,435	 	 	1/23/1996
	 	CBI Distributing Corp.
	 	Registered
	STICK SNAPPY

	 	 	2,486,550	 	 	9/11/2001
	 	Claire’s Boutiques, Inc.
	 	Registered
	THE ICING

	 	 	2,762,642	 	 	9/9/2003
	 	CBI Distributing Corp.
	 	Registered
	THE ICING

	 	 	1,466,727	 	 	11/24/1987
	 	CBI Distributing Corp.
	 	Registered
	THE ICING
ACCESSORIES and
Design

	 	 	2,234,841	 	 	3/23/1999
	 	CBI Distributing Corp.
	 	Registered
	TOPKAPI

	 	 	1,425,700	 	 	1/20/1987
	 	Claire’s Boutiques, Inc.
	 	Registered
	TWIST ‘N CLIP

	 	(77-060,053)
	 	(12/8/2006)
	 	CBI Distributing Corp.
	 	Pending   
	VELVET PIXIES

	 	 	2,507,719	 	 	11/13/2001
	 	Claire’s Boutiques, Inc.
	 	Registered
	WHERE GETTING
READY IS HALF THE
FUN

	 	 	2,664,513	 	 	12/17/2002
	 	CSL, Inc.
	 	Registered
	WHERE THROWING A
PARTY IS ALL THE
FUN

	 	 	3,136,920	 	 	8/29/2006
	 	CBI Distributing Corp.
	 	Registered
	WIPE OUT

	 	(78-630,648)
	 	(5/16/2005)
	 	CBI Distributing Corp.
	 	Pending   
	ZITZ BEGON!

	 	 	2,602,133	 	 	7/30/2002
	 	Claire’s Boutiques, Inc.
	 	Registered






42









 






SCHEDULE IV




FILING JURISDICTIONS




	 	 	 
	Grantor	 	Jurisdiction
	Claire’s Stores, Inc.

	 	Florida
	 
	 	 
	Bauble Holdings Corp.

	 	Delaware
	 
	 	 
	Bauble Acquisition Sub, Inc.

	 	Florida
	 
	 	 
	Sassy Doo!, Inc.

	 	Delaware
	 
	 	 
	Claire’s Puerto Rico Corp.

	 	Delaware
	 
	 	 
	CBI Distributing Corp.

	 	Delaware
	 
	 	 
	Claire’s Boutiques, Inc.

	 	Colorado
	 
	 	 
	Claire’s Canada Corp.

	 	Delaware
	 
	 	 
	Afterthoughts Merchandising Corp.

	 	Delaware
	 
	 	 
	BMS Distributing Corp.

	 	Delaware






43









 






SCHEDULE V




COMMERCIAL TORT CLAIMS




None.




44









 








SCHEDULE VI




MATTERS RELATING TO ACCOUNTS AND INVENTORY




None.




45









 








Exhibit I to Guarantee and Collateral Agreement




46









 








Exhibit I

to Guarantee and

Collateral Agreement




          SUPPLEMENT NO.                      dated as of                      (this “Supplement”), to the Guarantee
and Collateral Agreement dated as of May 29, 2007 (the “Guarantee and Collateral
Agreement”), among BAUBLE HOLDINGS CORP., a Delaware corporation (“Holdings”), BAUBLE
ACQUISITION SUB, INC., a Florida corporation (the “Borrower”) each Subsidiary Loan Party
and CREDIT SUISSE, as administrative agent and collateral agent (in such capacities, the
“Administrative Agent”) for the Secured Parties (as defined in the Guarantee and Collateral
Agreement).



     A. Reference is made to the Credit Agreement dated as of May 29, 2007 (as amended, restated,
supplemented, waived or otherwise modified from time to time, the “Credit Agreement”),
among Holdings, the Borrower, the LENDERS party thereto from time to time, CREDIT SUISSE, as
Administrative Agent, BEAR STEARNS CORPORATE LENDING INC. and MIZUHO CORPORATE BANK, LTD., as
co-syndication agents, and LEHMAN COMMERCIAL PAPER INC. and LASALLE BANK NATIONAL ASSOCIATION, as
co-documentation agents.



     B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Guarantee and Collateral Agreement.



     C. The Pledgors have entered into the Guarantee and Collateral Agreement in order to induce
the Lenders to make Loans and each Issuing Bank to issue Letters of Credit. Section 7.16 of the
Guarantee and Collateral Agreement provides that additional Subsidiaries may become Subsidiary
Parties under the Guarantee and Collateral Agreement by execution and delivery of an instrument in
the form of this Supplement. The undersigned Subsidiary (the “New Subsidiary”) is
executing this Supplement in accordance with the requirements of the Credit Agreement to become a
Subsidiary Loan Party under the Guarantee and Collateral Agreement in order to induce the Lenders
to make additional Loans and each Issuing Bank to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.



          Accordingly, the Administrative Agent and the New Subsidiary agree as follows:



          SECTION 1. In accordance with Section 7.16 of the Guarantee and Collateral Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Loan Party, a Guarantor and a Pledgor under
the Guarantee and Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Loan Party, a Guarantor and a Pledgor, and the New Subsidiary hereby (a)
agrees to all the terms and provisions of the Guarantee and Collateral Agreement applicable to it
as a Subsidiary Loan Party, a Guarantor and a Pledgor thereunder and (b) represents and warrants
that the representations and warranties made by it as a Guarantor and a Pledgor thereunder are true
and correct, in all material respects, on and as of the date hereof. In furtherance of the
foregoing, the New Subsidiary, as security for the payment and performance in full of the
Obligations (as defined in the Guarantee and Collateral Agreement),



47









 







does hereby create and grant to the Administrative Agent, for the ratable benefit of the
Secured Parties, a security interest in and Lien on all the New Subsidiary’s right, title and
interest in and to the Collateral (as defined in the Guarantee and Collateral Agreement) of the New
Subsidiary. Each reference to a “Subsidiary Loan Party,” a “Guarantor,” or a “Pledgor” in the
Guarantee and Collateral Agreement shall be deemed to include the New Subsidiary. The Guarantee
and Collateral Agreement is hereby incorporated herein by reference.



          SECTION 2. The New Subsidiary represents and warrants to the Administrative Agent and the
other Secured Parties that this Supplement has been duly authorized, executed and delivered by it
and constitutes its legal, valid and binding obligation, enforceable against it in accordance with
its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors’ rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) implied covenants of good faith and fair dealing.



          SECTION 3. This Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute but one contract.
This Supplement shall become effective when (a) the Administrative Agent shall have received a
counterpart of this Supplement that bears the signature of the New Subsidiary and (b) the
Administrative Agent has executed a counterpart hereof.



          SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of all the Pledged Securities of
the New Subsidiary as of the date hereof, (b) set forth on Schedule II attached hereto is a
true and correct schedule of all of the Patents, Trademarks and Copyrights of the New Subsidiary as
of the date hereof, (c) set forth on Schedule III attached hereto is a true and correct
schedule of all Commercial Tort Claims of the New Subsidiary individually in excess of $5.0 million
as of the date hereof and (d) set forth under its signature hereto, is the true and correct legal
name of the New Subsidiary, its jurisdiction of formation and the location of its chief executive
office.



          SECTION 5. Except as expressly supplemented hereby, the Guarantee and Collateral Agreement
shall remain in full force and effect.



          SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.



          SECTION 7. In the event any one or more of the provisions contained in this Supplement should
be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein and in the Guarantee and Collateral Agreement shall
not in any way be affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.



48









 





          SECTION 8. All communications and notices hereunder shall be in writing and given as provided
in Section 7.01 of the Guarantee and Collateral Agreement.



          SECTION 9. The New Subsidiary agrees to reimburse the Administrative Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the reasonable fees,
disbursements and other charges of counsel for the Administrative Agent.



          IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly executed this
Supplement to the Guarantee and Collateral Agreement as of the day and year first above written.



	 	 	 	 	 
	 	[Name of New Subsidiary]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	
 	 
	 
	 	Legal Name:






Jurisdiction of Formation:






Location of Chief Executive Office:






CREDIT SUISSE,


as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




49












 





Schedule I

to Supplement No.                      to the

Guarantee and

Collateral Agreement




Pledged Securities of the New Subsidiary




EQUITY INTERESTS




	 	 	 	 	 	 	 
	Number of Issuer	 	 	 	Number and Class of	 	Percentage of
	Certificate	 	Registered Owner	 	Equity Interest	 	Equity Interests
	 

	 	 
	 	 
	 	 





DEBT SECURITIES




	 	 	 	 	 	 	 
	Issuer	 	Principal Amount	 	Date of Note	 	Maturity Date
	 

	 	 
	 	 
	 	 





50









 





Schedule II

to Supplement No.                      to the

Guarantee and

Collateral Agreement




PATENTS, TRADEMARKS AND COPYRIGHTS




51









 








Schedule III

to Supplement No.                      to the

Guarantee and

Collateral Agreement




COMMERCIAL TORT CLAIMS





52