exv10w27






Exhibit 10.27




EXECUTION VERSION




      




GUARANTY AND SECURITY AGREEMENT




By




STUDY ISLAND, LLC

as Borrower




and




THE OTHER GRANTORS PARTY HERETO




and




GENERAL ELECTRIC CAPITAL CORPORATION

as Agent




 






Dated as of November 16, 2007




      




 









 






	 	 	 	 	 
	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND INTERPRETATION
	 	 	2	 
	 
	SECTION 1.1. Definitions
	 	 	2	 
	 
	SECTION 1.2. Interpretation
	 	 	9	 
	 
	SECTION 1.3. Resolution of Drafting Ambiguities
	 	 	9	 
	 
	ARTICLE II GRANT OF SECURITY AND SECURED OBLIGATIONS
	 	 	9	 
	 
	SECTION 2.1. Grant of Security Interest
	 	 	9	 
	 
	SECTION 2.2. Filings
	 	 	10	 
	 
	ARTICLE III PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL
	 	 	11	 
	 
	SECTION 3.1. Delivery of Certificated Securities Collateral
	 	 	11	 
	 
	SECTION 3.2. Perfection of Uncertificated Securities Collateral
	 	 	11	 
	 
	SECTION 3.3. Maintenance of Perfected Security Interest
	 	 	11	 
	 
	SECTION 3.4. Other Actions
	 	 	11	 
	 
	SECTION 3.5. Joinder of Additional Guarantors
	 	 	13	 
	 
	SECTION 3.6. Supplements; Further Assurances
	 	 	14	 
	 
	ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	14	 
	 
	SECTION 4.1. Title
	 	 	15	 
	 
	SECTION 4.2. Validity of Security Interest
	 	 	15	 
	 
	SECTION 4.3. Defense of Claims
	 	 	15	 
	 
	SECTION 4.4. Other Financing Statements
	 	 	15	 
	 
	SECTION 4.5. Due Authorization and Issuance
	 	 	15	 
	 
	SECTION 4.6.
Consents, etc.
	 	 	15	 
	 
	SECTION 4.7.
Legal Names, Etc.
	 	 	16	 
	 
	ARTICLE V CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
	 	 	16	 
	 
	SECTION 5.1. Pledge of Additional Securities Collateral
	 	 	16	 
	 
	SECTION 5.2.
Voting Rights; Distributions; etc.
	 	 	16	 
	 
	SECTION 5.3. Certain Agreements of Grantors As Issuers and Holders of Equity Interests
	 	 	17	 
	 
	ARTICLE VI CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL

	 	 	18	 
	 
	SECTION 6.1. Grant of Intellectual Property License
	 	 	18	 
	 
	SECTION 6.2. Protection of Agent’s Security
	 	 	18	 






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	 	 	Page
	SECTION 6.3. After-Acquired Property
	 	 	19	 
	 
	SECTION 6.4. Litigation
	 	 	19	 
	 
	ARTICLE VII CERTAIN PROVISIONS CONCERNING RECEIVABLES
	 	 	20	 
	 
	SECTION 7.1. Records
	 	 	20	 
	 
	SECTION 7.2. Legend
	 	 	20	 
	 
	ARTICLE VIII REMEDIES
	 	 	20	 
	 
	SECTION 8.1. Remedies
	 	 	20	 
	 
	SECTION 8.2. Notice of Sale
	 	 	22	 
	 
	SECTION 8.3. Waiver of Notice and Claims
	 	 	22	 
	 
	SECTION 8.4. Certain Sales of Pledged Collateral
	 	 	23	 
	 
	SECTION 8.5. No Waiver; Cumulative Remedies
	 	 	24	 
	 
	SECTION 8.6. Certain Additional Actions Regarding Intellectual Property
	 	 	24	 
	 
	ARTICLE IX APPLICATION OF PROCEEDS
	 	 	25	 
	 
	SECTION 9.1. Application of Proceeds
	 	 	25	 
	 
	ARTICLE X MISCELLANEOUS
	 	 	25	 
	 
	SECTION 10.1. Concerning Agent
	 	 	25	 
	 
	SECTION 10.2. Agent May Perform; Agent Appointed Attorney-in-Fact
	 	 	26	 
	 
	SECTION 10.3. Continuing Security Interest; Assignment
	 	 	26	 
	 
	SECTION 10.4. Termination; Release
	 	 	27	 
	 
	SECTION 10.5. Modification in Writing
	 	 	27	 
	 
	SECTION 10.6. Notices
	 	 	27	 
	 
	SECTION 10.7. Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial
	 	 	28	 
	 
	SECTION 10.8. Severability of Provisions
	 	 	28	 
	 
	SECTION 10.9. Execution in Counterparts
	 	 	28	 
	 
	SECTION 10.10. Business Days
	 	 	28	 
	 
	SECTION 10.11. No Claims Against Agent
	 	 	28	 
	 
	SECTION 10.12. No Release
	 	 	28	 
	 
	SECTION 10.13. Obligations Absolute
	 	 	29	 






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	EXHIBIT 1

	 	Form of Securities Pledge Amendment
	EXHIBIT 2

	 	Form of Joinder Agreement
	EXHIBIT 3

	 	Form of Copyright Security Agreement
	EXHIBIT 4

	 	Form of Patent Security Agreement
	EXHIBIT 5

	 	Form of Trademark Security Agreement






	 	 	 
	SCHEDULE 1

	 	Pledged Securities
	SCHEDULE 2

	 	Instruments & Tangible Chattel Paper
	SCHEDULE 3

	 	Commercial Tort Claims
	SCHEDULE 4

	 	Filing Locations
	SCHEDULE 5

	 	Legal Name, Etc.
	SCHEDULE 6

	 	Deposit Accounts & Securities Accounts
	SCHEDULE 7(a)

	 	Patents, Trademarks
	SCHEDULE 7(b)

	 	Copyrights






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GUARANTY AND SECURITY AGREEMENT




          This GUARANTY AND SECURITY AGREEMENT dated as of November 16, 2007 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance with the provisions
hereof, this “Agreement”) made by Study Island, LLC (the “Borrower”), and THE GUARANTORS LISTED ON
THE SIGNATURE PAGES HERETO (the “Original Guarantors”) OR FROM TIME TO TIME PARTY HERETO BY
EXECUTION OF A JOINDER AGREEMENT (the “Additional Guarantors,” and together with the
Original Guarantors, the “Guarantors”), as pledgors, assignors and debtors (the Borrower, together
with the Guarantors, in such capacities and together with any successors in such capacities, the
“Grantors,” and each, a “Grantor”), in favor of GENERAL ELECTRIC CAPITAL CORPORATION, in its
capacity as agent pursuant to the Credit Agreement (as hereinafter defined), as pledgee, assignee
and secured party (in such capacities and together with any successors in such capacities, the
“Agent”).




R E C I T A L S:




          A. The Borrower, the Original Guarantors, the Agent and the lending institutions listed
therein (the “Lenders”) have, in connection with the execution and delivery of this Agreement,
entered into that certain Credit Agreement, dated as of the date hereof (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).




          B. Each Grantor (other than the Borrower) has agreed to guaranty the Obligations (as
defined in the Credit Agreement) of the Borrower.




          C. Each Grantor will derive substantial direct and indirect benefits from the making of the
extensions of credit under the Credit Agreement.




          D. It is a condition precedent to the obligation of the Lenders and the L/C Issuers to make
their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors
shall have executed and delivered this Agreement to the Agent.




A G R E E M E N T:




          NOW THEREFORE, in consideration of the foregoing premises and to induce the Lenders, the L/C
Issuers and the Agent to enter into the Credit Agreement and to induce the Lenders and the L/C
Issuers to make their respective extensions of credit to the Borrower thereunder, each Grantor
hereby agrees with the Agent as follows:




ARTICLE I




DEFINITIONS AND INTERPRETATION




          SECTION 1.1. Definitions.




 









 





          (a) Unless otherwise defined herein or in the Credit Agreement, capitalized terms used herein
that are defined in the UCC shall have the meanings assigned to them in the UCC; provided
that in any event, the following terms shall have the meanings assigned to them in the UCC:




          “Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”; “Commodity Account”;
“Commodity Contract”; “Commodity Intermediary”; “Documents”; “Electronic Chattel
Paper”; “Entitlement Order”; “Equipment”; “Financial Asset”; “Goods”; “Inventory”;
“Letter-of-Credit Rights”; “Letters of Credit”; “Payment Intangibles”; “Proceeds”; “Records”;
“Securities Account”; “Securities Intermediary”; “Supporting Obligations”; and
“Tangible Chattel Paper.”




          (b) Terms used but not otherwise defined herein that are defined in the Credit Agreement shall
have the meanings given to them in the Credit Agreement.




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




          “Additional Guarantors” shall have the meaning assigned to such term in the
Preamble hereof.




          “Agent” shall have the meaning assigned to such term in the Preamble hereof.




          “Agreement” shall have the meaning assigned to such term in the Preamble hereof.




          “Borrower” shall have the meaning assigned to such term in the Preamble hereof.




          “Cash Collateral Account” means a deposit account or securities account subject, in
each instance, to a Control Agreement, other than accounts established to cash collateralize L/C
Reimbursement Obligations.




          “Contracts” shall mean, collectively, with respect to each Grantor, the Acquisition Documents,
all sale, service, performance, equipment or property lease contracts, agreements and grants and
all other contracts, agreements or grants (in each case, whether written or oral, or third party or
intercompany), between such Grantor and any third party, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications thereof.




          “Control” shall mean (i) in the case of each Deposit Account, “control,” as such term is
defined in Section 9-104 of the UCC, and (ii) in the case of any Security Entitlement, “control,”
as such term is defined in Section 8-106 of the UCC.




          “Control Agreements” shall mean, collectively, the Deposit Account Control
Agreements and the Securities Account Control Agreements.




          “Copyrights” shall mean, collectively, with respect to each Grantor, all copyrights (whether
statutory or common law, whether established or registered in the United States or any other
country or any political subdivision thereof, whether registered or unregistered and whether




2









 




published or unpublished) and all copyright registrations and applications made by such Grantor, in
each case, whether now owned or hereafter created or acquired by or assigned to such Grantor,
together with any and all (i) rights and privileges arising under applicable law with respect to
such Grantor’s use of such copyrights, (ii) reissues, renewals, continuations and extensions
thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable with respect thereto, including damages and payments for past, present
or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v)
rights to sue for past, present or future infringements thereof.




          “Copyright Security Agreement” shall mean an agreement substantially in the form of Exhibit 3
hereto.




          “Credit
Agreement” shall have the meaning assigned to such term in Recital A hereof.




          “Deposit Accounts” shall mean, collectively, with respect to each Grantor, all
“deposit accounts” as such term is defined in the UCC and all accounts and sub-accounts relating to
any of the foregoing accounts.




          “Deposit Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Agent establishing the Agent’s Control with respect to any Deposit
Account.




          “Distributions” shall mean, collectively, with respect to each Grantor, all dividends,
cash, options, warrants, rights, instruments, distributions, returns of capital or principal,
income, interest, profits and other property, interests (debt or equity) or proceeds, including
as a result of a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to such Grantor in
respect of or in exchange for any or all of the Pledged Securities or Intercompany Notes.




          “Excluded Account” shall mean (i) Deposit Accounts or Securities Accounts which have
been established and are used for the sole purpose of making payroll and withholding tax payments
related thereto and other employee wage and benefit payments to or for the benefit of a Grantor’s
employees and accrued and unpaid employee compensation (including salaries, wages, benefits and
expense reimbursements), (ii) Deposit Accounts or Securities Accounts which have been established
and are used by a Grantor in its capacity as a fiduciary for another Person which is not a Loan
Party, so long as and solely to the extent such Grantor is contractually or otherwise legally
obligated to use amounts on deposit in such accounts only for such payments, (iii) Deposit Accounts
or Securities Accounts containing solely Trust Funds (as defined below) and (iv) disbursement
accounts which are also zero balance accounts. As used herein the term “Trust Funds” means funds
attributable to taxes required by law to be collected or withheld including, without limitation,
taxes owing to any Governmental Authority, sales, use and excise taxes, customs duties, import
duties and independent customs brokers’ charges, and other taxes for which a Grantor may become
liable, together with funds on deposit in Deposit Accounts or Securities Accounts of the type
described in clauses (i) and (ii) above.




3









 





          “Excluded Property” shall mean





     (a) any Excluded Accounts;




     (b) all Letter of Credit Rights;

     (c) all leasehold real property;

     (d) all vehicles and other assets subject to certificates of title;




     (e) any interest in joint ventures and non-Wholly Owned Subsidiaries only to the extent and
for so long as the terms of the Organizational Documents (including other applicable agreements
among the investors in any such person) or any Requirement of Law applicable thereto validly
prohibits or requires the consent of any person other than the Grantor and its Affiliates as a
condition to the creation by such Grantor of a security interest in such joint venture or non-Wholly Owned Subsidiary in favor of the Agent and such consent has not been obtained;




     (f) Equity Interests of a Foreign Subsidiary (i) with respect to a Foreign Subsidiary created
or acquired after the Closing Date, only to the extent such Equity Interests of such Foreign
Subsidiary are not required to be pledged to the Agent pursuant to the Credit Agreement or (ii)
with respect to a Foreign Subsidiary existing as of the Closing Date, in excess of 65% of all
outstanding Equity Interests of such Foreign Subsidiary;




     (g) Equity Interests of an Unrestricted Subsidiary only to the extent and for so long as such
Subsidiary remains an Unrestricted Subsidiary;




     (h) any permit, license, lease, contract, agreement or other General Intangible held by
any Grantor or any agreement to which any Grantor is a party, in each case, only to the extent and
for so long as the terms of such permit, license, lease, contract, agreement or other General
Intangible or any Requirement of Law applicable thereto, validly prohibits or requires the consent
(which consent has not been granted) of any person (other than a Grantor) as a condition to the
creation by such Grantor of a security interest in such permit, license, lease, contract, agreement
or other General Intangible in favor of the Agent (after giving effect to Sections 9-406(d),
9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any other
applicable law (including the Bankruptcy Code) or principles of equity);




     (i) any equipment owned by any Grantor on the date hereof or hereafter acquired that is
subject to a Lien securing a Purchase Money Obligation or Capital Lease Obligation permitted to be
incurred pursuant to the provisions of the Credit Agreement if the contract or other agreement in
which such Lien is granted (or the documentation providing for such Purchase Money Obligation or
Capital Lease Obligation) prohibits or requires the consent (which consent has not



4









 






been granted) of any person (other than a Grantor) as a condition to the creation of any
other Lien on such Equipment;




     (j) any property as to which the Agent reasonably determines that the costs
of obtaining a security interest (or perfecting the same) are excessive in relation to
the benefit to the Secured Parties of the security afforded thereby; and




     (k) applications filed in the United States Patent and Trademark Office to
register trademarks or service marks on the basis of any Grantor’s “intent to use” such
trademarks or service marks unless and until the filing of a “Statement of Use” or
“Amendment to Allege Use” has been filed and accepted by the United States Patent and
Trademark Office, whereupon such applications shall be automatically subject to the Lien
granted herein and deemed included in the Pledged Collateral;


provided, however, that Excluded Property shall not include any proceeds, products,
substitutions or replacements of any Excluded Property referred to in clauses (a) through (h)
(unless such proceeds, products, substitutions or replacements would otherwise constitute
Excluded Property referred to in any of the clauses (a) through (h)).




          “First Priority” shall mean, with respect to any Lien purported to be created in any
Collateral pursuant to any Security Document, that such Lien is the most senior Lien to which such
Collateral is subject (subject to Permitted Liens).




          “General Intangibles” shall mean, collectively, with respect to each Grantor, all “general
intangibles,” as such term is defined in the UCC, of such Grantor and, in any event, shall include
(i) all of such Grantor’s rights, title and interest in, to and under all Contracts and insurance
policies (including all rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in respect of any
Contract), (ii) all know-how and warranties relating to any of the Pledged Collateral or the
Mortgaged Property, (iii) any and all other rights, claims, choses-in-action and causes of action
of such Grantor against any other person and the benefits of any and all collateral or other
security given by any other person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral or the Mortgaged Property, (v) all lists
(including, without limitation, panels and panelist lists), books, records, correspondence,
ledgers, printouts, files (whether in printed form or stored electronically), tapes and other
papers or materials containing information relating to any of the Pledged Collateral or any of the
Mortgaged Property, including all customer or tenant lists, identification of suppliers, data,
plans, blueprints, specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing standards, performance
standards, catalogs, research data, computer and automatic machinery software and programs and the
like, field repair data, accounting information pertaining to such Grantor’s operations or any of
the Pledged Collateral or any of the Mortgaged Property and all media in which or on which any of
the information or knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or data, (vi) all
licenses, consents, permits, variances, certifications, authorizations and approvals, however
characterized, now or hereafter acquired or held by such




5









 





Grantor, including building permits, certificates of occupancy, environmental certificates,
industrial permits or licenses and certificates of operation and (vii) all rights to reserves,
deferred payments, deposits, refunds, indemnification of claims and claims for tax or other refunds
against any Governmental Authority.




          “Goodwill” shall mean, collectively, with respect to each Grantor, the goodwill connected with
such Grantor’s business including all goodwill connected with (i) the use of and symbolized by any
Trademark or Intellectual Property License with respect to any Trademark in which such Grantor has
any interest, (ii) all know-how, trade secrets, customer and supplier lists (including, without
limitation, panels and panelist lists), proprietary information, inventions, methods, procedures,
formulae, descriptions, compositions, technical data, drawings, specifications, name plates,
catalogs, confidential information and the right to limit the use or disclosure thereof by any
person, pricing and cost information, business and marketing plans and proposals, consulting
agreements, engineering contracts and such other assets which relate to such goodwill and (iii) all
product lines of such Grantor’s business.




          “Grantor” shall have the meaning assigned to such term in the Preamble hereof.




          “Guaranteed Obligations” shall have the meaning assigned to such term in Section
2.1 hereof.




          “Guarantors” shall have the meaning assigned to such term in the Preamble hereof.




          “Instruments” shall mean, collectively, with respect to each Grantor, all “instruments,” as
such term is defined in Article 9, rather than Article 3, of the UCC, and shall include all
promissory notes, drafts, bills of exchange or acceptances.




          “Intellectual Property Collateral” shall mean, collectively, the Patents,
Trademarks, Copyrights, Intellectual Property Licenses and Goodwill.




          “Intellectual
Property Licenses” shall mean, collectively, with respect to each Grantor, all
written license and distribution agreements with, and covenants not to sue, any other party with
respect to any Patent, Trademark or Copyright or any other patent, trademark or copyright, whether
such Grantor is a licensor or licensee, distributor or distributee under any such license or
distribution agreement, together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and payments now and hereafter
due and/or payable thereunder and with respect thereto including damages and payments for past,
present or future infringements or violations thereof, (iii) rights to sue for past, present and
future infringements or violations thereof and (iv) other rights to use, exploit or practice any or
all of the Patents, Trademarks or Copyrights or any other patent, trademark or copyright.




          “Intercompany Notes” shall mean, with respect to each Grantor, all intercompany notes
existing on the Closing Date and intercompany notes thereafter acquired by such Grantor and all
certificates, instruments or agreements evidencing such intercompany notes, and all assignments,
amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof
to the extent permitted pursuant to the terms hereof.




6









 





          “Investment Property” shall mean all “investment property” as such term is defined in
the UCC, excluding, however, the Securities Collateral and any Excluded Property.




          “Joinder Agreement” shall mean an agreement substantially in the form of Exhibit 2
hereto.




          “Landlord Access Agreement” shall mean an agreement in a form that is reasonably satisfactory
to the Agent executed by a landlord in respect of Pledged Collateral of a Grantor located at any
leased premises.




          “Lenders” shall have the meaning assigned to such term in Recital A hereof.




          “Material Intellectual Property Collateral” shall mean any Intellectual Property Collateral
that is material to the business of the Grantors taken as a whole.




          “Mortgaged Property” shall have the meaning assigned to such term in the
Mortgages.




          “Original Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.




          “Patents” shall mean, collectively, with respect to each Grantor, all patents issued or
assigned to, and all patent applications and registrations made by, such Grantor (whether
established or registered or recorded in the United States or any other country or any political
subdivision thereof), together with any and all (i) rights and privileges arising under applicable
law with respect to such Grantor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future infringements thereof, (v) rights corresponding
thereto throughout the world and (vi) rights to sue for past, present or future infringements
thereof.




          “Patent Security Agreement” shall mean an agreement substantially in the form of
Exhibit 4 hereto.




          “Pledge Amendment” shall have the meaning assigned to such term in Section 6.1 hereof.




          “Pledged Collateral” shall have the meaning assigned to such term in Section 3.1 hereof.




          “Pledged Securities” shall mean, collectively, with respect to each Grantor, (i) all
issued and outstanding Equity Interests of each issuer set forth on Schedule 1 hereto as
being owned by such Grantor and all options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such Grantor (including by issuance),
together with all rights, privileges, authority and powers of such Grantor relating to such Equity
Interests in each such issuer or under any Organizational Document of each such issuer, and the




7









 





certificates, instruments and agreements representing such Equity Interests and any and all
interest of such Grantor in the entries on the books of any financial intermediary pertaining to
such Equity Interests, (ii) all Equity Interests of any issuer, which Equity Interests are
hereafter acquired by such Grantor (including by issuance) and all options, warrants, rights,
agreements and additional Equity Interests of whatever class of any such issuer acquired by such
Grantor (including by issuance), together with all rights, privileges, authority and powers of such
Grantor relating to such Equity Interests or under any Organizational Document of any such issuer,
and the certificates, instruments and agreements representing such Equity Interests and any and all
interest of such Grantor in the entries on the books of any financial intermediary pertaining to
such Equity Interests, from time to time acquired by such Grantor in any manner, and (iii) all
Equity Interests issued in respect of the Equity Interests referred to in clause (i) or (ii) upon
any consolidation or merger of any issuer of such Equity Interests; provided, however, that
Pledged Securities shall not include any Equity Interests which are not required to be pledged
pursuant to Section 4.11(b) of the Credit Agreement or otherwise described in the defined term
“Excluded Property”.




          “Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv)
amounts owed under General Intangibles, (v) amounts owed under Instruments and (vi) all other
rights to payment, whether or not earned by performance, for goods or other property sold, leased,
licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of
how classified under the UCC together with all of Grantors’ rights, if any, in all Supporting
Obligations related thereto and all Records relating thereto.




          “Secured Obligations” shall have the meaning assigned to such term in Section 3.2
hereof.




          “Securities Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Agent establishing the Agent’s Control with respect to any
Securities Account.




          “Securities Collateral” shall mean, collectively, the Pledged Securities,
Intercompany Notes and the Distributions.




          “Trademarks” shall mean, collectively, with respect to each Grantor, all trademarks (including
service marks), slogans, logos, certification marks, trade dress, uniform resource locations
(URL’s), domain names, corporate names and trade names, whether registered or unregistered, owned
by or assigned to such Grantor and all registrations and applications (including intent to use
applications) for the foregoing (whether statutory or common law and whether established or
registered in the United States or any other country or any political subdivision thereof),
together with any and all (i) rights and privileges arising under applicable law with respect to
such Grantor’s use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof
and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due
and/or payable thereunder and with respect thereto, including damages, claims and payments for
past, present or future infringements thereof, (iv) rights corresponding thereto throughout the
world and (v) rights to sue for past, present and future infringements thereof.




8









 





          “Trademark Security Agreement” shall mean an agreement substantially in the form of
Exhibit 5 hereto.




          “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of
New York; provided, however, that, at any time, if by reason of mandatory provisions of
law, any or all of the perfection or priority of the Agent’s and the Secured Parties’ security
interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or priority and for purposes of definitions relating
to such provisions.




          SECTION 1.2. Interpretation. The rules of interpretation specified in the Credit
Agreement (including Section 11.2 thereof) shall be applicable to this Agreement.




          SECTION 1.3. Resolution of Drafting Ambiguities. Each Grantor acknowledges and agrees
that it was represented by counsel in connection with the execution and delivery hereof, that it
and its counsel reviewed and participated in the preparation and negotiation hereof and that any
rule of construction to the effect that ambiguities are to be resolved against the drafting party
(i.e., the Agent) shall not be employed in the interpretation hereof.




ARTICLE II




GUARANTY




          SECTION 2.1. Guaranty.




     To induce the Lenders to make the Loans and the L/C Issuers to Issue Letters of Credit and
each other Secured Party to make credit available to or for the benefit of one or more Credit
Parties, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, the full and punctual payment when due,
whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or
otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether
existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”).
This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.



          SECTION 2.2. Limitation of Guaranty.




     Any term or provision of this Guaranty or any other Loan Document to the contrary
notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder
shall not exceed the maximum amount for which such Guarantor can be liable without rendering this
Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under
applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title
11 of the United States Code or any applicable provisions of comparable Requirements of Law)
(collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of this Guaranty for
purposes of Fraudulent Transfer Laws shall take into account the right of



9









 




contribution established in Section 2.3 and, for purposes of such analysis, give effect to any
discharge of intercompany debt as a result of any payment made under the Guaranty.




          SECTION 2.3. Contribution.




     To the extent that any Guarantor (other than Holdings) shall be required hereunder to pay any
portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the value actually
received by such Guarantor and its Subsidiaries from the Loans and other Obligations and (b) the
amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of
the Guaranteed Obligations (excluding the amount thereof repaid by the Borrower and Holdings) in
the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears
to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be
reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the
respective net worth of such other Guarantors on such date.



          SECTION 2.4. Authorization; Other Agreements.




     The Secured Parties are hereby authorized, without notice to or demand upon any Guarantor and
without discharging or otherwise affecting the obligations of any Guarantor hereunder and without
incurring any liability hereunder, from time to time, to do each of the following:



          (a) (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change
the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed
Obligation or any Loan Document;




          (b) apply to the Guaranteed Obligations any sums by whomever paid or however
realized to any
Guaranteed Obligation in such order as provided in the Loan Documents;




          (c) refund at any time any payment received by any Secured Party in respect of any Guaranteed
Obligation;




          (d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon,
fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise
alter or release any Pledged Collateral for any Guaranteed Obligation or any other guaranty
therefor in any manner, (ii) receive, take and hold additional Pledged Collateral to secure any
Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or
endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner
with the Borrower and any other Guarantor, maker or endorser of any Guaranteed Obligation or any
part thereof; and




          (e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.




          SECTION 2.5. Guaranty Absolute and Unconditional.




     Each Guarantor hereby waives and agrees not to assert any defense, whether arising in
connection with or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be



10









 




discharged as a result of or otherwise affected by any of the following (which may not be pleaded and
evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each
case except as otherwise agreed in writing by the Agent):




          (a) the invalidity or unenforceability of any obligation of the Borrower or any other
Guarantor under any Loan Document or any other agreement or instrument relating thereto (including
any amendment, consent or waiver thereto), or any security for, or other guaranty of, any
Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or
failure of priority of any security for the Guaranteed Obligations or any part thereof;




          (b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof
from the Borrower or any other Guarantor or other action to enforce the same or (ii) any action to
enforce any Loan Document or any Lien thereunder;




          (c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to
preserve any rights with respect to, any Pledged Collateral;




          (d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement,
liquidation or dissolution by or against the Borrower, any other Guarantor or any of the Borrower’s
other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission
thereunder, including any discharge or disallowance of, or bar or stay against collecting, any
Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;




          (e) any foreclosure, whether or not through judicial sale, and any other sale or other
disposition of any Pledged Collateral or any election following the occurrence of an Event of
Default by any Secured Party to proceed separately against any Pledged Collateral in accordance
with such Secured Party’s rights under any applicable Requirement of Law; or




          (f) any other defense, setoff, counterclaim or any other circumstance that might otherwise
constitute a legal or equitable discharge of the Borrower, any other Guarantor or any of the
Borrower’s other Subsidiaries, in each case other than the payment in full of the Guaranteed
Obligations.




          SECTION 2.6. Waiver.




     Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any
claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements
for any demand or notice hereunder including any of the following: (a) any demand for payment or
performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment,
demand, protest or further notice or other requirements of any kind with respect to any Guaranteed
Obligation (including any accrued but unpaid interest thereon) becoming immediately due and
payable; and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and
any defense arising by reason of any disability or other defense of the Borrower or any other
Guarantor. Each Guarantor further unconditionally and irrevocably agrees not to (x) enforce or
otherwise exercise any right of subrogation or any right of reimbursement or contribution or
similar right against the Borrower or any other Guarantor by reason of any Loan




11











 




Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim
it may have against any other Credit Party or set off any of its obligations to such other Credit
Party against obligations of such Credit Party to such Guarantor. No obligation of any Guarantor
hereunder shall be discharged other than by complete performance.




          SECTION 2.7. Reliance.



     Each Guarantor hereby assumes responsibility for keeping itself informed of the financial
condition of the Borrower, each other Guarantor and any other guarantor, maker or endorser of any
Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of
nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and
each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of
information known to it regarding such condition or any such circumstances. In the event any
Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any
such information to any Guarantor, such Secured Party shall be under no obligation to (a) undertake
any investigation not a part of its regular business routine, (b) disclose any information that
such Secured Party, pursuant to accepted or reasonable commercial finance or banking practices,
wishes to maintain confidential or (c) make any future disclosures of such information or any other
information to any Guarantor.



ARTICLE III




GRANT OF SECURITY INTEREST




          SECTION 3.1. Pledged Collateral. For the purposes of this Agreement, all of the
following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor
now has or at any time in the future may acquire any right, title or interests is collectively
referred to as the “Pledged Collateral”:




     (i) all Accounts;




     (ii) all Equipment, Goods, Inventory and Fixtures;




     (iii) all Documents, Instruments and Chattel Paper;




     (iv) all Securities Collateral;




     (v) all Investment Property;




     (vi) all Intellectual Property Collateral;




     (vii)
the Commercial Tort Claims described on Schedule 3 hereto;




     (viii) all General Intangibles;




     (ix) all Money and all Deposit Accounts;




     (x) all Supporting Obligations;



12









 







     (xi) all books and records relating to the Pledged Collateral; and




     (xii) to the extent not covered by clauses (i) through (xii) of this
sentence, all other personal property of such Grantor, whether tangible or
intangible, and all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and products
of, each of the foregoing, any and all Proceeds of any insurance, indemnity,
warranty or guaranty payable to such Grantor from time to time with respect to any
of the foregoing.



          SECTION
3.2. Grant of Security Interest. Each Grantor, as collateral security for the prompt
and complete payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor (the “Secured
Obligations”), hereby mortgages,
pledges and hypothecates to the Agent for the benefit of the Secured Parties, and grants to the
Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right,
title and interest in, to and under the Pledged Collateral of such
Grantor; provided,
however, notwithstanding the foregoing, no Lien or security interest is hereby granted on any
Excluded Property; provided, further, that if and when any property shall cease to be
Excluded Property, a Lien on and security in such property shall be deemed granted therein.



          SECTION
3.3. Filings. (a) Each Grantor hereby irrevocably authorizes the Agent at any
time and from time to time to file in any relevant jurisdiction any financing statements 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
relating to the Pledged Collateral, including (i) whether such Grantor is an organization, the type
of organization and any organizational identification number issued to such Grantor, (ii) any
financing or continuation statements or other documents without the signature of such Grantor where
permitted by law, including the filing of a financing statement describing the Pledged Collateral
as “all assets now owned or hereafter acquired by the Grantor or in which Grantor otherwise has
rights” and (iii) in the case of a financing statement filed as a fixture filing, a sufficient
description of the real property to which such Pledged Collateral relates. Each Grantor agrees to
provide all information described in the immediately preceding sentence to the Agent promptly upon
the reasonable request by the Agent.



          (b) Each Grantor hereby ratifies its authorization for the Agent to file in any relevant
jurisdiction any financing statements relating to the Pledged Collateral if filed prior to the date
hereof.



          (c) Each Grantor hereby further authorizes the Agent to file filings with the United States
Patent and Trademark Office or United States Copyright Office (or any successor office), including
this Agreement, the Copyright Security Agreement, the Patent Security Agreement and the Trademark
Security Agreement, or other documents for the purpose of perfecting, confirming, continuing,
enforcing or protecting the security interest granted by such Grantor hereunder, without the
signature of such Grantor, and naming such Grantor, as debtor, and the Agent, as secured party.






13









 





ARTICLE IV



PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL



          SECTION
4.1. Delivery of Certificated Securities Collateral. Each Grantor represents
and warrants that all certificates or instruments representing or evidencing the Securities
Collateral in existence on the date hereof have been delivered to the Agent in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank
and that the Agent has a perfected First Priority security interest therein. Each Grantor hereby
agrees that all certificates or instruments representing or evidencing Securities Collateral
acquired by such Grantor after the date hereof shall promptly (but in any event within 10 days (or
such later period acceptable to the Agent in its discretion) after receipt thereof by such Grantor)
be delivered to the Agent on such date. All certificated Securities Collateral shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Agent. The Agent shall have the
right, at any time upon the occurrence and during the continuance of any Event of Default, to
endorse, assign or otherwise transfer to or to register in the name of the Agent or any of its
nominees or endorse for negotiation any or all of the Securities Collateral, without any indication
that such Securities Collateral is subject to the security interest hereunder. In addition, upon
the occurrence and during the continuance of an Event of Default, the Agent shall have the right at
any time to exchange certificates representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.



          SECTION
4.2. Perfection of Uncertificated Securities Collateral. Each Grantor
represents and warrants that the Agent has a perfected First Priority security interest in all
uncertificated Pledged Securities pledged by it hereunder that are in existence on the date hereof.
Each Grantor hereby agrees that if any of the Pledged Securities are at any time not evidenced by
certificates of ownership, then each applicable Grantor shall, to the extent permitted by
applicable law, after the occurrence and during the continuance of any Event of Default, upon
request by the Agent, (A) cause the Organizational Documents of each such issuer that is a
Subsidiary of the Borrower to be amended to provide that such Pledged Securities shall be treated
as “securities” for purposes of the UCC and (B) cause such Pledged Securities to become
certificated and delivered to the Agent in accordance with the
provisions of Section 4.1.



          SECTION
4.3. Maintenance of Perfected Security Interest. Each Grantor agrees that at
the sole cost and expense of the Grantors, such Grantor will maintain the security interest
created by this Agreement in the Pledged Collateral as a perfected First Priority security
interest to the extent required herein subject only to Permitted Liens.



          SECTION
4.4. Other Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Agent to enforce, the Agent’s security interest in the Pledged
Collateral, each Grantor represents and warrants (as to itself) as follows and agrees, in each case
at such Grantor’s own expense, to take the following actions with respect to the following Pledged
Collateral:



14









 






     (a) Instruments and Tangible Chattel Paper. As of the date hereof, no amounts payable
under or in connection with any of the Pledged Collateral in excess of $200,000 are evidenced by
any Instrument or Tangible Chattel Paper other than such Instruments and Tangible Chattel Paper
listed in Schedule 2 hereto. Each Instrument and each item of Tangible Chattel Paper listed
in Schedule 2 hereto has been properly endorsed, assigned and delivered to the Agent,
accompanied by instruments of transfer or assignment duly executed in blank. If any amount then
payable under or in connection with any of the Pledged Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, and such amount, together with all amounts payable evidenced
by any Instrument or Tangible Chattel Paper not previously delivered to the Agent exceeds $200,000
individually or $500,000 in the aggregate for all Grantors, the Grantor acquiring such Instrument
or Tangible Chattel Paper shall promptly (but in any event within 10 days (or such later period
acceptable to the Agent in its discretion) after receipt thereof) endorse, assign and deliver the
same to the Agent, accompanied by such instruments of transfer or assignment duly executed in blank
as the Agent may from time to time specify, on the date of acquisition thereof (or such later
period acceptable to the Agent in its discretion).




     (b) Commercial Tort Claims. As of the date hereof, each Grantor hereby represents and
warrants that it holds no Commercial Tort Claims other than those listed in Schedule 3
hereto. If any Grantor shall at any time hold or acquire a Commercial Tort Claim, such Grantor
shall promptly (but in any event within 10 days (or such later period acceptable to the Agent in
its discretion) after acquisition thereof) notify the Agent on the date of acquisition thereof (or
such later period acceptable to the Agent in its discretion) in writing signed by such Grantor of
the brief details thereof and grant to the Agent in such writing a security interest therein and in
the Proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Agent.




     (c) Deposit Accounts. As of the date hereof, no Grantor has any Deposit Accounts other
than the accounts listed in Schedule 6, and no Grantor shall hereafter establish and maintain any
Deposit Account unless it shall have given the Agent 30 days’ prior written notice of it intention
to establish such new Deposit Account. Each Grantor shall enter into a Deposit Account Control
Agreement with respect to each such Deposit Account (other than an Excluded Account) within 90 days
of the Closing Date with respect to such Deposit Accounts set forth on Schedule 6 or the
date of establishing a new Deposit Account (or such later dates acceptable to the Agent in its
discretion); provided, that a Control Agreement shall not be required with respect to a
Deposit Account with respect to which the average daily balance for 10 consecutive Business Days is
less than $100,000 and, together with all such Deposit Accounts, does not exceed $200,000. The
Agent agrees with each Grantor that the Agent shall not give any instructions directing the
disposition of funds from time to time credited to any Deposit Account or withhold any withdrawal
rights from such Grantor with respect to funds from time to time credited to any Deposit Account
unless an Event of Default has occurred and is continuing. Notwithstanding anything to the contrary
contained herein, the Agent, on behalf of the Secured Parties, acknowledges that the Deposit
Accounts subject to Deposit Account Control Agreements may contain from time to time Trust Funds,
which by law, a Grantor



15









 







is required to collect and remit from time to time but which, pending such remittance, may be
contained or held in such Deposit Accounts. Upon any exercise of Control by the Agent, the Agent
agrees to notify Borrower of such exercise (which notice may be by delivery of a copy of the notice
of exclusive or sole control). Upon receipt of such notice, Borrower shall send written notice of
the type and amount of any Trust Funds contained or held in such Deposit Account, the dates upon
which such Trust Funds are required by law or agreement to be remitted to any third Person and
contact information regarding such third Persons in sufficient detail for the Collateral to remit
such Trust Funds to them. After receipt of such notice by the Agent and within two Business Days of
the dates required by law for disbursement thereof, the Agent shall remit the applicable amount of
the Trust Funds to the to the appropriate Person or, at its sole option, to the applicable Grantor
for remittance to such Persons by such Grantor.




     (d)
Securities Accounts. As of the date hereof, no Grantor has any Securities Accounts other
than those listed in Schedule 6, and no Grantor shall hereafter establish and maintain any
Securities Account unless it shall have given the Agent 30 days’ prior written notice of it
intention to establish such new Securities Account. Each Grantor shall enter into a Securities
Account Control Agreement with respect to each such Securities Account (other than an Excluded
Account) within 90 days of the Closing Date with respect to such Securities Accounts set forth on
Schedule 6 or the date of establishing a new Securities Account (or such later dates
acceptable to the Agent in its discretion); provided, that a Control Agreement shall not be
required with respect to a Securities Account with respect to which the average daily balance for
10 consecutive Business Days is less than $100,000 and, together with all such Securities Accounts,
does not exceed $200,000. The Agent agrees with each Grantor that the Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of uncertificated securities or
Securities Intermediary, and shall not withhold its consent to the exercise of any withdrawal or
dealing rights by such Grantor, unless an Event of Default has occurred and is continuing.
Notwithstanding anything to the contrary contained herein, the Agent, on behalf of the Secured
Parties, acknowledges that the Securities Accounts subject to Securities Account Control Agreements
may contain from time to time Trust Funds, which by law, a Grantor is required to collect and remit
from time to time but which, pending such remittance, may be contained or held in such Securities
Accounts. Upon any exercise of Control by the Agent, the Agent agrees to notify Borrower of such
exercise (which notice may be by delivery of a copy of the notice of exclusive or sole control).
Upon receipt of such notice, Borrower shall send written notice of the type and amount of any Trust
Funds contained or held in such Securities Account, the dates upon which such Trust Funds are
required by law or agreement to be remitted to any third Person and contact information regarding
such third Persons in sufficient detail for the Collateral to remit such Trust Funds to them. After
receipt of such notice by the Agent and within two Business Days of the dates required by law for
disbursement thereof, the Agent shall remit the applicable amount of the Trust Funds to the to the
appropriate Person or, at its sole option, to the applicable Grantor for remittance to such Persons
by such Grantor.




     (e)
Landlord Access Agreements. If requested by the Agent, each Grantor shall use
commercially reasonable efforts to obtain a Landlord Access Agreement from



16









 







all landlords who from time to time have possession of Pledged Collateral located in the
United States in the ordinary course of such Grantor’s business with a value in excess of
$200,000.




     (f)
Electronic Chattel Paper and Transferable Records. If any amount in
excess of $200,000 payable under or in connection with any Pledged Collateral owned by a
Grantor shall be or become evidenced by Electronic Chattel Paper, upon the request of the
Agent, such Grantor shall take all steps necessary to grant the Agent control of all such
Electronic Chattel Paper for the purposes of Section 9-105 of the UCC (or any similar
section under any equivalent UCC) and all “transferable records” as defined in each
of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and
National Commerce Act.



          SECTION
4.5. Joinder of Additional Guarantors. The Grantors shall cause each
Subsidiary of the Borrower which, from time to time, after the date hereof shall be required to
pledge any assets to the Agent for the benefit of the Secured Parties pursuant to the provisions of
the Credit Agreement, to execute and deliver to the Agent within the time period required by the
Credit Agreement, a Joinder Agreement substantially in the form of
Exhibit 2 hereto and, upon such
execution and delivery, such Subsidiary shall constitute a “Guarantor” and a “Grantor” for all
purposes hereunder with the same force and effect as if originally named as a Guarantor and Grantor
herein. The execution and delivery of such Joinder Agreement shall not require the consent of any
Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor and Grantor as a party to this
Agreement.



          SECTION
4.6. Supplements; Further Assurances. Each Grantor shall take such further
actions, and execute and/or deliver to the Agent such additional financing statements, amendments,
assignments, agreements, supplements, powers and instruments, as the Agent may in its reasonable
judgment deem necessary or appropriate in order to create, perfect, preserve and protect the
security interest in the Pledged Collateral as provided herein and the rights and interests granted
to the Agent hereunder, to carry into effect the purposes hereof or better to assure and confirm
the validity, enforceability and priority of the Agent’s security interest in the Pledged
Collateral or permit the Agent to exercise and enforce its rights, powers and remedies hereunder
with respect to any Pledged Collateral, including the filing of financing statements, continuation
statements and other documents (including this Agreement) under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security interest created
hereby and the execution and delivery of Control Agreements, all in form reasonably satisfactory to
the Agent and in such offices (including the United States Patent and Trademark Office and the
United States Copyright Office) wherever required by law to perfect, continue and maintain the
validity, enforceability and priority of the security interest in the Pledged Collateral as
provided herein and to preserve the other rights and interests granted to the Agent hereunder, as
against third parties, with respect to the Pledged Collateral. Without limiting the generality of
the foregoing, each Grantor shall make, execute, endorse, acknowledge, file, refile and/or deliver
to the Agent from time to time upon reasonable request by the Agent such lists, schedules,
descriptions and designations of the Pledged Collateral, copies of warehouse receipts, receipts in
the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements,



17









 







additional security agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments as the Agent shall reasonably
request. If an Event of Default has occurred and is continuing, the Agent may institute and
maintain, in its own name or in the name of any Grantor, such suits and proceedings as the Agent
may be advised by counsel shall be necessary or expedient to prevent any impairment of the security
interest in or the perfection thereof in the Pledged Collateral. All of the foregoing shall be at
the sole cost and expense of the Grantors. Notwithstanding the foregoing, in no event shall any
filing other than a filing in the United States, any state thereof and the District of Columbia,
and any other action under the laws of any jurisdiction other than the United States, any state
thereof and the District of Columbia be required hereunder.



ARTICLE V




REPRESENTATIONS, WARRANTIES AND COVENANTS






          Each Grantor represents, warrants and covenants as follows:



          SECTION
5.1. Title.  Except for the security interest granted to the Agent for the
ratable benefit of the Secured Parties pursuant to this Agreement and Permitted Liens, such Grantor
owns and has rights and, as to Pledged Collateral acquired by it from time to time after the date
hereof, will own and have rights in each item of Pledged Collateral pledged by it hereunder, free
and clear of any and all Liens or claims of others. In addition, no Liens or claims exist on the
Securities Collateral, other than as permitted by Section 5.2 of the Credit Agreement.



          SECTION
5.2. Validity of Security Interest. The security interest in and Lien on the
Pledged Collateral granted to the Agent for the benefit of the Secured Parties hereunder
constitutes (a) a legal and valid security interest in all the Pledged Collateral securing the
payment and performance of the Secured Obligations, and (b) subject to the filings in the offices
described in Schedule 4 hereto, a perfected security interest in all the Pledged Collateral to the
extent a security interest in such Pledged Collateral may be perfected by such filings. The
security interest and Lien granted to the Agent for the benefit of the Secured Parties pursuant to
this Agreement in and on the Pledged Collateral will at all times constitute a perfected First
Priority, continuing security interest therein, prior to all other Liens on the Pledged Collateral
except for Permitted Liens.



          SECTION
5.3. Defense of Claims. Subject to Section 4.5 of the Credit
Agreement, each Grantor shall, at its own cost and expense, defend title to the Pledged Collateral
pledged by it hereunder and the security interest therein and Lien thereon granted to the Agent and
the priority thereof against all claims and demands of all persons, at its own cost and expense, at
any time claiming any interest therein adverse to the Agent or any other Secured Party other than
Permitted Liens.



          SECTION
5.4. Other Financing Statements. It has not filed, nor authorized any third
party to file, any valid or effective financing statement (or similar statement, instrument of
registration or public notice under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Pledged Collateral, except such as have been filed in favor of the
Agent pursuant to this Agreement or in favor of any holder of a Permitted Lien with respect to



18









 







such Permitted Lien or financing statements or public notices relating to the termination
statements to be filed on or around the Closing Date. No Grantor shall execute or authorize to be
filed in any public office any financing statement (or similar statement, instrument of
registration or public notice under the law of any jurisdiction) relating to any Pledged
Collateral, except financing statements and other statements and instruments filed or to be filed
in respect of and covering the security interests granted by such Grantor to the holder of the
Permitted Liens.



          SECTION 5.5.
Due Authorization and Issuance. Schedule 1 sets forth as of the date
hereof all Equity Interests owned by each Grantor required to be pledged hereunder and all of the
Pledged Securities existing on the date hereof have been, and to the extent any Pledged Securities
are hereafter issued, such Pledged Securities will be, upon such issuance, duly authorized, validly
issued and fully paid and non-assessable to the extent applicable. There is no amount or other
obligation owing by any Grantor to any issuer of the Pledged Securities in exchange for or in
connection with the issuance of the Pledged Securities or any Grantor’s status as a partner or a
member of any issuer of the Pledged Securities.



          SECTION
5.6. Consents, etc. After the occurrence and during the continuations of an
Event of Default, in the event that the Agent desires to exercise any remedies, voting or
consensual rights or attorney-in-fact powers set forth in this Agreement and determines it
necessary to obtain any approvals or consents of any Governmental Authority or any other person
therefor, then, upon the reasonable request of the Agent, such Grantor agrees to use its
commercially reasonable efforts to assist and aid the Agent to obtain as soon as practicable any
necessary approvals or consents for the exercise of any such remedies, rights and powers.



          SECTION
5.7. Legal Names, Etc. Schedule 5 correctly sets forth as of the Closing Date
(i) the exact legal name of each Grantor, as such name appears in its respective certificate or
articles of incorporation or formation, (ii) the jurisdiction of organization of each Grantor,
(iii) the Chief Executive Office of each Grantor, (iv) the organizational identification number, if
any, issued by the jurisdiction of organization of each Grantor, (v) the identity or type of
organization of each Grantor, and (vi) the Federal Taxpayer Identification Number, if any, of each
Grantor.



          SECTION
5.8. Commodity Contracts. No Grantor shall have any Commodity Contract
unless subject to an agreement in a form that is reasonably satisfactory to the Agent
establishing the Agent’s Control with respect to such Commodities Account.



          SECTION
5.9. Special Collateral. None of the Collateral is or is proceeds or products
of farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.



          SECTION 5.10.
 Intellectual Property. Attached hereto as Schedule 7(a) is a
schedule setting forth as of the Closing Date all of each Grantor’s United States issued or applied
for Patents, registered or applied for Trademarks (each as defined herein) registered with the
United States Patent and Trademark Office, and all other issued or applied for Patents, registered
or applied for Trademarks, including the name of the owner and the registration or application
number of each such issued or applied for Patent and such registered or applied for Trademark owned
by each Grantor. Attached hereto as Schedule 7(b) is a schedule setting forth as of the



19









 







Closing Date all of each Grantor’s United States registered or applied for Copyrights (as defined
herein), and all other registered or applied for Copyrights, including the name of the owner and
the registration or application number of each such registered or applied for Copyright owned by
each Grantor.



ARTICLE VI




CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL




          SECTION
6.1. Pledge of Additional Securities Collateral. Each Grantor shall, upon
obtaining any Pledged Securities or Intercompany Notes of any person, accept the same in trust for
the benefit of the Agent and promptly (but in any event within 10 days (or such later period
acceptable to the Agent in its discretion) after receipt thereof) deliver to the Agent on such date
(or such later period acceptable to the Agent in its discretion) a pledge amendment, duly executed
by such Grantor, in substantially the form of Exhibit 1
hereto (each, a “Pledge Amendment”), and
the certificates and other documents required under Section 4.1 and Section 4.2
hereof in respect of the additional Pledged Securities or Intercompany Notes which are to be
pledged pursuant to this Agreement, and confirming the attachment of the Lien hereby created on and
in respect of such additional Pledged Securities or Intercompany Notes. Each Grantor hereby
authorizes the Agent to attach each Pledge Amendment to this Agreement and agrees that all Pledged
Securities or Intercompany Notes listed on any Pledge Amendment delivered to the Agent shall for
all purposes hereunder be considered Pledged Collateral.



          SECTION
6.2. Voting Rights; Distributions; etc.



          (a) So long as no Event of Default shall have occurred and be continuing:




     (i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Securities Collateral or any part thereof
for any purpose not inconsistent with the terms hereof or any other Loan Document.




     (ii) Each Grantor shall be entitled to receive and retain, and to utilize
free and clear of the Lien hereof, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Credit
Agreement; provided, however, that any and all such Distributions consisting of rights or interests
in the form of securities shall be forthwith delivered to the Agent to hold as
Pledged Collateral and shall, if received by any Grantor, be received in trust for
the benefit of the Agent, be segregated from the other property or funds of such
Grantor and be promptly (but in any event within 5 Business Days (or such later
period acceptable to the Agent in its discretion) after receipt thereof) delivered
to the Agent as Pledged Collateral in the same form as so received (with any
necessary endorsement).



          (b) So long as no Event of Default shall have occurred and be continuing, the Agent shall be
deemed without further action or formality to have granted to each Grantor all necessary consents
relating to voting rights and shall, if necessary, upon written request of any



20









 







Grantor and at the sole cost and expense of the Grantors, from time to time execute and deliver (or
cause to be executed and delivered) to such Grantor all such instruments as such Grantor may
reasonably request in order to permit such Grantor to exercise the voting and other rights which it
is entitled to exercise pursuant to Section 6.2(a)(i) hereof and to receive the
Distributions which it is authorized to receive and retain pursuant
to Section 6.2(a)(ii) hereof.


          (c) Upon the occurrence and during the continuance of any Event of Default and notice by the
Agent to such Grantor of the Agent’s intent to exercise such rights:




     (i) All rights of each Grantor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to Section
6.2(a)(i) hereof shall immediately cease, and all such rights shall thereupon
become vested in the Agent, which shall thereupon have the sole right to exercise
such voting and other consensual rights.




     (ii) All rights of each Grantor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to
Section 6.2(a)(ii)
hereof shall immediately cease and all such rights shall thereupon become vested in
the Agent, which shall thereupon have the sole right to receive and hold as Pledged
Collateral such Distributions.



          (d) If an Event of Default has occurred and is continuing, each Grantor shall, at its sole
cost and expense, from time to time execute and deliver to the Agent appropriate instruments as the
Agent may reasonably request in order to permit the Agent to exercise the voting and other rights
which it may be entitled to exercise pursuant to Section 6.2(c)(i) hereof and to receive
all Distributions which it may be entitled to receive under Section 6.2(c)(ii) hereof.



          (e) All
Distributions which are received by any Grantor contrary to the
provisions of Section 6.2(c)(ii) hereof shall be received in trust for the benefit of the Agent, shall be segregated from
other funds of such Grantor and shall immediately be paid over to the Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement).



          (f) Each Grantor hereby expressly irrevocably authorizes and instructs, without any further
instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such
Grantor to (i) comply with any instruction received by it from the Agent in writing that states
that an Event of Default is continuing and is otherwise in accordance with the terms of this
Agreement and each Grantor agrees that such issuer shall be fully protected from Liabilities to
such Grantor in so complying and (ii) if an Event of Default is continuing, unless otherwise
expressly permitted hereby or the Credit Agreement, pay any dividend or make any other payment with
respect to the Pledged Collateral directly to the Agent.



          SECTION
6.3. Defaults, etc. Each Grantor represents, warrants and covenants as
follows:



          (a) Such Grantor is not in default in the payment of any portion of any mandatory capital
contribution, if any, required to be made under any agreement to which such Grantor is a party
relating to the Pledged Securities pledged by it, and such Grantor is not in violation of




21












 




any other provisions of any such agreement to which such Grantor is a party, or otherwise in
default or violation thereunder, except as could not reasonably be expected to have a Material
Adverse Effect.




          (b) No Securities Collateral pledged by such Grantor is subject to any defense, offset
or counterclaim, nor have any of the foregoing been asserted or alleged against such Grantor in
writing by any person with respect thereto, except as could not reasonably be expected to have a
Material Adverse Effect and as of the Closing Date, there are no certificates or instruments, which
evidence any Pledged Securities of such Grantor (other than the certificates representing such
Pledged Securities that have been delivered to the Agent).




          SECTION 6.4. Certain Agreements of Grantors As Issuers and Holders of Equity
Interests.




          (a) In the case of each Grantor which is an issuer of Securities Collateral, such
Grantor agrees to be bound by the terms of this Agreement relating to the Securities
Collateral
issued by it and will comply with such terms insofar as such terms are applicable to it.




          (b) In the case of each Grantor which is a partner, shareholder or member, as
the case may be, in a partnership, limited liability company or other entity, such Grantor
hereby
consents to the extent required by the applicable Organizational Document to the pledge by
each
other Grantor, pursuant to the terms hereof, of the Pledged Securities in such partnership,
limited
liability company or other entity and, upon the occurrence and during the continuance of an
Event of Default, to the transfer of such Pledged Securities to the Agent or its nominee and
to the
substitution of the Agent or its nominee as a substituted partner, shareholder or member in
such
partnership, limited liability company or other entity with all the rights, powers and duties
of a
general partner, limited partner, shareholder or member, as the case may be.




ARTICLE VII




CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL




          SECTION
7.1. Grant of Intellectual Property License. For the purpose of enabling the
Agent, during the continuance of an Event of Default, to exercise rights and remedies under
Article IX hereof at such time as the Agent shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose, each Grantor hereby grants to the Agent, to the
extent assignable, an irrevocable, non-exclusive license to use, assign, license or sublicense any
of the Intellectual Property Collateral now owned or hereafter acquired by such Grantor, wherever
the same may be located. Such license shall include access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for the compilation or
printout hereof.




          SECTION 7.2. Protection of Agent’s Security. On a continuing basis, each Grantor
shall, at its sole cost and expense, (i) promptly (and in any event within 5 Business Days (or such
later period acceptable to the Agent in its discretion) thereof) following its becoming aware
thereof, notify the Agent of any adverse determination in any proceeding or the institution




22









 




of any adverse proceeding in any federal, state or local court or administrative body or in the
United States Patent and Trademark Office or the United States Copyright Office regarding any
Material Intellectual Property Collateral, such Grantor’s right to register such Material
Intellectual Property Collateral or its right to keep and maintain such registration in full force
and effect, (ii) maintain all Material Intellectual Property Collateral as presently used and
operated, (iii) not permit to lapse or become abandoned any Material Intellectual Property
Collateral, and not settle or compromise any pending or future litigation or administrative
proceeding with respect to any such Material Intellectual Property Collateral, in either case
except as shall be consistent with its commercially reasonable business judgment, (iv) upon such
Grantor obtaining knowledge thereof, promptly (and in any event within 5 Business Days (or such
later period acceptable to the Agent in its discretion) thereof) notify the Collateral Agent in
writing of any event which may be reasonably expected to materially and adversely affect the value
or utility of any Material Intellectual Property Collateral or the rights and remedies of the
Collateral Agent in relation thereto including a levy or threat of levy or any legal process
against any Material Intellectual Property Collateral, (v) not license any Intellectual Property
Collateral other than licenses entered into by such Grantor in, or incidental to, the ordinary
course of business, or amend or permit the amendment of any of the licenses other than amendments
entered into by such Grantor in, or incident to, the ordinary course of business, (vi) diligently
keep adequate records respecting Material Intellectual Property Collateral and (vii) furnish to the
Collateral Agent from time to time upon the Collateral Agent’s reasonable request therefor
reasonably detailed statements and amended schedules further identifying and describing the
Material Intellectual Property Collateral and such other materials evidencing or reports pertaining
to any Material Intellectual Property Collateral as the Collateral Agent may from time to time
reasonably request.




          SECTION 7.3. After-Acquired Property. If any Grantor shall at any time after the date
hereof (i) obtain any rights to any additional Intellectual Property Collateral or (ii) become
entitled to the benefit of any additional Intellectual Property Collateral or any renewal or
extension thereof, including any reissue, division, continuation, or continuation-in-part of any
Intellectual Property Collateral, or any improvement on any Intellectual Property Collateral, the
provisions hereof shall automatically apply thereto and any such item enumerated in the preceding
clause (i) or (ii) shall automatically constitute Intellectual Property Collateral as if such would
have constituted Intellectual Property Collateral at the time of execution hereof and be subject to
the Lien and security interest created by this Agreement without further action by any party. Each
Grantor shall promptly (and in any event within 10 days (or such later period acceptable to the
Agent in its discretion) thereof) provide to the Agent written notice of any of the foregoing and
confirm the attachment of the Lien and security interest created by this Agreement to any rights
described in clauses (i) and (ii) above by execution of an instrument in form reasonably acceptable
to the Agent and the filing of any instruments or statements as shall be reasonably necessary to
create, preserve, protect or perfect the Agent’s security interest in such Intellectual Property
Collateral.




          SECTION 7.4. Litigation. Unless there shall occur and be continuing any Event of
Default, each Grantor shall have the right to commence and prosecute in its own name, as the party
in interest, for its own benefit and at the sole cost and expense of the Grantors, such
applications for protection of the Intellectual Property Collateral and suits, proceedings or other
actions to prevent the infringement, counterfeiting, unfair competition, dilution, diminution in




23









 




value or other damage as are necessary to protect the Intellectual Property Collateral. Upon the
occurrence and during the continuance of any Event of Default, the Agent shall have the right but
shall in no way be obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Grantor, the Agent or the Secured Parties to
enforce the Intellectual Property Collateral and any license thereunder. In the event of such suit,
each Grantor shall, at the reasonable request of the Agent, do any and all lawful acts and execute
any and all documents requested by the Agent in aid of such enforcement and the Grantors shall
promptly reimburse and indemnify the Agent for all costs and expenses incurred by the Agent in the
exercise of its rights under this Section 7.4 in accordance with the provisions of the
Credit Agreement. In the event that the Agent shall elect not to bring suit to enforce the
Intellectual Property Collateral, each Grantor agrees, at the reasonable request of the Agent, to
take all commercially reasonable actions necessary, whether by suit, proceeding or other action, to
prevent the infringement, counterfeiting, unfair competition, dilution, diminution in value of or
other damage to any of the Intellectual Property Collateral by any person; provided,
however, such Grantor may, in its sole discretion, forfeit, abandon, dedicate to the public, cease
maintenance of or otherwise discontinue the exercise of ownership and control of any Intellectual
Property Collateral that it determines is no longer useful or necessary to its business.




ARTICLE VIII




CERTAIN PROVISIONS CONCERNING RECEIVABLES




          SECTION 8.1. Records. Each Grantor shall, at such Grantor’s sole cost and expense,
upon the Agent’s demand made at any time after the occurrence and during the continuance of any
Event of Default, deliver all tangible evidence of Receivables, including all documents evidencing
Receivables and any books and records relating thereto to the Agent or to its representatives
(copies of which evidence and books and records may be retained by such Grantor). Upon the
occurrence and during the continuance of any Event of Default, the Agent may transfer a full and
complete copy of any Grantor’s books, records, credit information, reports, memoranda and all other
writings relating to the Receivables to and for the use by any person that has acquired or is
contemplating acquisition of an interest in the Receivables or the Agent’s security interest
therein without the consent of any Grantor.




          SECTION 8.2. Legend. After the occurrence and during the continuation of an Event of Default,
each Grantor shall legend, at the request of the Agent and in form and manner satisfactory to the
Agent, the Receivables and the other books, records and documents of such Grantor evidencing or
pertaining to the Receivables with an appropriate reference to the fact that the Receivables have
been assigned to the Agent for the benefit of the Secured Parties and that the Agent has a security
interest therein.




ARTICLE IX




REMEDIES




          SECTION 9.1. Remedies. Upon the occurrence and during the continuance of any Event of
Default, the Agent may from time to time exercise in respect of the Pledged




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Collateral, in addition to the other rights and remedies provided for herein or otherwise available
to it, the following remedies:





     (i) Personally, or by agents or attorneys, immediately take possession
of the Pledged Collateral or any part thereof, from any Grantor or any other person
who then has possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon any Grantor’s premises where any of the
Pledged Collateral is located, remove such Pledged Collateral, remain present at
such premises to receive copies of all communications and remittances relating to
the Pledged Collateral and use in connection with such removal and possession any
and all services, supplies, aids and other facilities of any Grantor;




     (ii) Demand, sue for, collect or receive any money or property at any
time payable or receivable in respect of the Pledged Collateral including
instructing the obligor or obligors on any agreement, instrument or other obligation
constituting part of the Pledged Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the Agent, and
in connection with any of the foregoing, compromise, settle, extend the time for
payment and make other modifications with respect thereto; provided,
however, that in the event that any such payments are made directly to any
Grantor, prior to receipt by any such obligor of such instruction, such Grantor
shall segregate all amounts received pursuant thereto in trust for the benefit of
the Agent and shall promptly (but in no event later than one (1) Business Day after
receipt thereof) pay such amounts to the Agent;




     (iii) Sell, assign, grant a license to use or otherwise liquidate, or
direct any Grantor to sell, assign, grant a license to use or otherwise liquidate,
any and all investments made in whole or in part with the Pledged Collateral or any
part thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation;




     (iv) Take possession of the Pledged Collateral or any part thereof, by
directing any Grantor in writing to deliver the same to the Agent at any reasonable
place or places so designated by the Agent, in which event such Grantor shall at its
own expense: (A) forthwith cause the same to be moved to the place or places
designated by the Agent and therewith delivered to the Agent, (B) store and keep any
Pledged Collateral so delivered to the Agent at such place or places pending further
action by the Agent and (C) while the Pledged Collateral shall be so stored and
kept, provide such security and maintenance services as shall be reasonably
necessary to protect the same and to preserve and maintain them in good condition.
Each Grantor’s obligation to deliver the Pledged Collateral as contemplated in this
Section 9.1(iv) is of the essence hereof. Upon application to a court of
equity having jurisdiction, the Agent shall be entitled to a decree requiring
specific performance by any Grantor of such obligation;



25









 






     (v) Withdraw all moneys, instruments, securities and other property in
any bank, financial securities, deposit or other account of any Grantor constituting
Pledged Collateral for application to the Secured Obligations as provided in
Section 1.19 of the Credit Agreement;




     (vi) Retain and apply the Distributions to the Secured Obligations as
provided in Section 1.19 of the Credit Agreement;




     (vii) Exercise any and all rights as beneficial and legal owner of the
Pledged Collateral, including perfecting assignment of and exercising any and all
voting, consensual and other rights and powers with respect to any Pledged
Collateral; and




     (viii) Exercise all the rights and remedies of a secured party on default
under the UCC, and the Agent may also in its sole discretion, without notice except
as specified in Section 9.2 hereof, sell, assign or grant a license to use
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker’s board or at any of the Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Agent may deem commercially reasonable. The Agent
or any other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of the Pledged Collateral or any part
thereof at any such sale and shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold, assigned or licensed at such sale, to use and apply any of
the Secured Obligations owed to such person as a credit on account of the purchase
price of the Pledged Collateral or any part thereof payable by such person at such
sale. Each purchaser, assignee, licensee or recipient at any such sale shall acquire
the property sold, assigned or licensed absolutely free from any claim or right on
the part of any Grantor, and each Grantor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now existing
or hereafter enacted. The Agent shall not be obligated to make any sale of the
Pledged Collateral or any part thereof regardless of notice of sale having been
given. The Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Grantor hereby waives, to the fullest extent permitted by law, any claims against
the Agent arising by reason of the fact that the price at which the Pledged
Collateral or any part thereof may have been sold, assigned or licensed at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Agent accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.



          SECTION 9.2. Notice of Sale. Each Grantor acknowledges and agrees that, to the extent
notice of sale or other disposition of the Pledged Collateral or any part thereof shall be required
by law, ten (10) days’ prior notice to such Grantor of the time and place of any public




26









 




sale or of the time after which any private sale or other intended disposition is to take place
shall be commercially reasonable notification of such matters. No notification need be given to any
Grantor if it has signed, after the occurrence of an Event of Default, a statement renouncing or
modifying any right to notification of sale or other intended disposition.




          SECTION 9.3. Waiver of Notice and Claims. Each Grantor hereby waives, to the fullest
extent permitted by applicable law, notice or judicial hearing in connection with the Agent’s
taking possession or the Agent’s disposition of the Pledged Collateral or any part thereof,
including any and all prior notice and hearing for any prejudgment remedy or remedies and any such
right which such Grantor would otherwise have under law, and each Grantor hereby further waives, to
the fullest extent permitted by applicable law: (i) all damages occasioned by such taking of
possession, except to the extent arising from the Agent’s gross negligence or willful misconduct,
(ii) all other requirements as to the time, place and terms of sale or other requirements with
respect to the enforcement of the Agent’s rights hereunder and (iii) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force under any applicable
law. Any sale of, or the grant of options to purchase, or any other realization upon, any Pledged
Collateral shall operate to divest all right, title, interest, claim and demand, either at law or
in equity, of the applicable Grantor therein and thereto.




          SECTION 9.4. Certain Sales of Pledged Collateral.




          (a) Each Grantor recognizes that, by reason of certain prohibitions contained
in law, rules, regulations or orders of any Governmental Authority, the Agent may be
compelled,
with respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to
those
who meet the requirements of such Governmental Authority. Each Grantor acknowledges that
any such sales may be at prices and on terms less favorable to the Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such circumstances,
agrees
that any such restricted sale shall be deemed to have been made in a commercially reasonable
manner and that, except as may be required by applicable law, the Agent shall have no
obligation
to engage in public sales.




          (b) Each Grantor recognizes that, by reason of certain prohibitions contained
in the Securities Act, and applicable state securities laws, the Agent may be compelled, with
respect to any sale of all or any part of the Securities Collateral and Investment Property,
to limit
purchasers to persons who will agree, among other things, to acquire such Securities
Collateral
or Investment Property for their own account, for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges that any such private sales may be
at
prices and on terms less favorable to the Agent than those obtainable through a public sale
without such restrictions (including a public offering made pursuant to a registration
statement
under the Securities Act), and, notwithstanding such circumstances, agrees that any such
private
sale shall be deemed to have been made in a commercially reasonable manner and that the Agent
shall have no obligation to engage in public sales and no obligation to delay the sale of any
Securities Collateral or Investment Property for the period of time necessary to permit the
issuer
thereof to register it for a form of public sale requiring registration under the Securities
Act or
under applicable state securities laws, even if such issuer would agree to do so.




27









 





          (c) Notwithstanding the foregoing, each Grantor shall, upon the occurrence
and during the continuance of any Event of Default, at the reasonable request of the Agent,
for
the benefit of the Agent, cause any registration, qualification under or compliance with any
Federal or state securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of the Grantors.
Each Grantor will use its commercially reasonable efforts to cause such registration to be
effected (and be kept effective) and will use its commercially reasonable efforts to cause
such
qualification and compliance to be effected (and be kept effective) as may be so requested and
as
would permit or facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and appropriate
compliance
with all other requirements of any Governmental Authority. Each Grantor shall use its
commercially reasonable efforts to cause the Agent to be kept advised in writing as to the
progress of each such registration, qualification or compliance and as to the completion
thereof,
shall furnish to the Agent such number of prospectuses, offering circulars or other documents
incident thereto as the Agent from time to time may request, and shall indemnify and shall
cause
the issuer of the Securities Collateral to indemnify the Agent and all others participating in
the
distribution of such Securities Collateral against all claims, losses, damages and liabilities
caused
by any untrue statement (or alleged untrue statement) of a material fact contained therein (or
in
any related registration statement, notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration statement, notification or the
like) a
material fact required to be stated therein or necessary to make the statements therein not
misleading.




          (d) If the Agent determines to exercise its right to sell any or all of the
Securities Collateral or Investment Property, upon written request, the applicable Grantor
shall
from time to time furnish to the Agent all such information as the Agent may request in order
to
determine the number of securities included in the Securities Collateral or Investment
Property
which may be sold by the Agent as exempt transactions under the Securities Act and the rules
of
the Securities and Exchange Commission thereunder, as the same are from time to time in
effect.




          (e) Each Grantor further agrees that a breach of any of the covenants
contained in this Section 9.4 will cause irreparable injury to the Agent and the other
Secured
Parties, that the Agent and the other Secured Parties have no adequate remedy at law in
respect
of such breach and, as a consequence, that each and every covenant contained in this
Section 9.4
shall be specifically enforceable against such Grantor, and such Grantor hereby waives and
agrees not to assert any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred and is continuing.




          SECTION 9.5. No Waiver; Cumulative Remedies.




          (a) No failure on the part of the Agent to exercise, no course of dealing with respect
to, and no delay on the part of the Agent in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any such right, power,
privilege or remedy hereunder preclude any other or further exercise thereof or the exercise of any
other right, power, privilege or remedy; nor shall the Agent be required to look first to, enforce
or exhaust any other security, collateral or guaranties. All rights and remedies




28









 




herein provided are cumulative and are not exclusive of any rights or remedies provided by law or
otherwise available.




          (b) In the event that the Agent shall have instituted any proceeding to enforce any
right, power, privilege or remedy under this Agreement or any other Loan Document by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any
reason, then and in every such case, the Grantors, the Agent and each other Secured Party shall be
restored to their respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies, privileges and powers of the Agent and the other Secured
Parties shall continue as if no such proceeding had been instituted.




          SECTION 9.6. Certain Additional Actions Regarding Intellectual Property. If any Event
of Default shall have occurred and be continuing, upon the written demand of the Agent, each
Grantor shall execute and deliver to the Agent an assignment or assignments of the registered
Patents, Trademarks and/or Copyrights and Goodwill and such other documents as are necessary or
appropriate to carry out the intent and purposes hereof. Within 5 Business Days of written notice
thereafter from the Agent, each Grantor shall make available to the Agent, to the extent within
such Grantor’s power and authority, such personnel in such Grantor’s employ on the date of the
Event of Default as the Agent may reasonably designate to permit such Grantor to continue, directly
or indirectly, to produce, advertise and sell the products and services sold by such Grantor under
the issued and registered Patents, Trademarks and/or Copyrights, and such persons shall be
available to perform their prior functions on the Agent’s behalf.




ARTICLE X




APPLICATION OF PROCEEDS




          SECTION 10.1. Application of Proceeds. The proceeds received by the Agent in respect
of any sale of, collection from or other realization upon all or any part of the Pledged Collateral
pursuant to the exercise by the Agent of its remedies shall be applied, together with any other
sums then held by the Agent pursuant to this Agreement, in accordance with the Credit Agreement.




ARTICLE XI




MISCELLANEOUS




          SECTION 11.1. Concerning Agent.




          (a) The Agent has been appointed as collateral agent pursuant to the Credit Agreement.
The actions of the Agent hereunder are subject to the provisions of the Credit Agreement. The Agent
shall have the right hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the release or
substitution of the Pledged Collateral), in accordance with this Agreement and the Credit
Agreement. The Agent may employ agents and attorneys-in-fact in connection herewith and shall not
be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith except for any gross negligence or willful misconduct. The Agent




29









 




may resign and a successor Agent may be appointed in the manner provided in the Credit Agreement.
Upon the acceptance of any appointment as the Agent by a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of
the retiring Agent under this Agreement, and the retiring Agent shall thereupon be discharged from
its duties and obligations under this Agreement. After any retiring Agent’s resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was the Agent.




          (b) The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if such Pledged
Collateral is
accorded treatment substantially equivalent to that which the Agent, in its individual
capacity,
accords its own property consisting of similar instruments or interests, it being understood
that
neither the Agent nor any of the Secured Parties shall have responsibility for (i)
ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders or other
matters
relating to any Securities Collateral, whether or not the Agent or any other Secured Party has
or
is deemed to have knowledge of such matters or (ii) taking any necessary steps to preserve
rights
against any person with respect to any Pledged Collateral.




          (c) The Agent shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person, and, with respect to all
matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected
by it.




          (d) The Agent may rely on advice of counsel as to whether any or all UCC
financing statements of the Grantors need to be amended as a result of any of the changes
described in Section 4.13 of the Credit Agreement. If any Grantor fails to provide
information to
the Agent about such changes on a timely basis, the Agent shall not be liable or responsible
to
any party for any failure to maintain a perfected security interest in such Grantor’s property
constituting Pledged Collateral, for which the Agent needed to have information relating to
such
changes. The Agent shall have no duty to inquire about such changes if any Grantor does not
inform the Agent of such changes, the parties acknowledging and agreeing that it would not be
feasible or practical for the Agent to search for information on such changes if such
information
is not provided by any Grantor.




          SECTION 11.2. Agent May Perform; Agent Appointed Attorney-in-Fact. If any Grantor
shall fail to perform any covenants contained in this Agreement (including such Grantor’s covenants
to (i) pay the premiums in respect of all required insurance policies hereunder, (ii) unless being
contested in accordance with the terms of the Credit Agreement, pay and discharge any taxes,
assessments and special assessments, levies, fees and governmental charges imposed upon or assessed
against, and landlords’, carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s,
suppliers’ and warehousemen’s Liens and other claims arising by operation of law against, all or
any portion of the Pledged Collateral, (iii) make repairs, (iv) unless being contested in
accordance with the terms of the Credit Agreement, discharge Liens or (v) pay or perform any
obligations of such Grantor under any Pledged Collateral) the Agent may (but shall not be obligated
to) do the same or cause it to be done or remedy any such breach, and may expend funds for such
purpose; provided, however, that the




30









 




Agent shall in no event be bound to inquire into the validity of any tax, Lien, imposition or other
obligation which such Grantor fails to pay or perform as and when required hereby and which such
Grantor does not contest in accordance with the provisions of the Credit Agreement. Any and all
amounts so expended by the Agent shall be paid by the Grantors in accordance with the provisions of
the Credit Agreement. Neither the provisions of this Section 11.2 nor any action taken by the Agent
pursuant to the provisions of this Section 11.2 shall prevent any such failure to observe
any covenant contained in this Agreement from constituting an Event of Default. Each Grantor hereby
appoints the Agent its attorney-in-fact, with full power and authority in the place and stead of
such Grantor and in the name of such Grantor, or otherwise, from time to time in the Agent’s
discretion, after the occurrence and during the continuance of an Event of Default, to take any
action and to execute any instrument consistent with the terms of the Credit Agreement, this
Agreement and the other Security Documents which the Agent may deem necessary or advisable to
accomplish the purposes hereof (but the Agent shall not be obligated to and shall have no liability
to such Grantor or any third party for failure to so do or take action). The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment shall be irrevocable
for the term hereof. Each Grantor hereby ratifies all that such attorney shall lawfully do or cause
to be done by virtue hereof.




          SECTION
11.3. Continuing Security Interest; Assignment. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) be binding upon the Grantors,
their respective successors and assigns and (ii) inure, together with the rights and remedies of
the Agent hereunder, to the benefit of the Agent and the other Secured Parties and each of their
respective successors, transferees and assigns. No other persons (including any other creditor of
any Grantor) shall have any interest herein or any right or benefit with respect hereto. Without
limiting the generality of the foregoing clause (ii), any Secured Party may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other person, and such other
person shall thereupon become vested with all the benefits in respect thereof granted to such
Secured Party, herein or otherwise, subject however, to the provisions of the Credit Agreement and,
in the case of a Secured Party that is a party to a Secured Rate Contract, such Secured Rate
Contract.




          SECTION 11.4. Reinstatement. Each Grantor agrees that, if any payment made by any
Grantor or other Person and applied to the Secured Obligations is at any time annulled, avoided,
set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required
to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any
Secured Party to such Grantor, its estate, trustee, receiver or any other party, including any
Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing such liability shall
be and remain in full force and effect, as fully as if such payment had never been made. If, prior
to any of the foregoing, (a) any Lien or other Collateral securing such Grantor’s liability
hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of
the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other
Collateral or provision shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such
obligation or the amount of such payment.





31











 





          SECTION 11.5. Release of Collateral.




          (a) At the time provided in subsection 8.10(b)(iii) of the Credit Agreement, the Pledged
Collateral shall be released from the Lien created hereby and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance of any act by any
party, and all rights to the Pledged Collateral shall revert to the Credit Parties. Each Grantor
is hereby authorized to file UCC amendments at such time evidencing the termination of the Liens so
released. At the request of any Grantor following any such termination, the Agent shall deliver to
such Grantor any Pledged Collateral of such Grantor held by the Agent hereunder and execute and
deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such
termination.




          (b) If the Agent shall be directed or permitted pursuant to subsection 8.10(b) of the Credit
Agreement to release any Lien or any Pledged Collateral, such Pledged Collateral shall be released
from the Lien created hereby to the extent provided under, and subject to the terms and conditions
set forth in, such subsection. In connection therewith, the Agent, at the request of any Grantor,
shall execute and deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such release.




          (c) At the time provided in subsection 8.10(b) of the Credit Agreement and at the request of
the Borrower, a Grantor shall be released from its obligations hereunder in the event that all the
Equity Interest of such Grantor shall be sold to any Person that is not an Affiliate of Holdings,
the Borrower and the Subsidiaries of the Borrower in a transaction permitted by the Loan Documents.




          SECTION 11.6. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any departure by any Grantor
therefrom, shall be effective unless the same shall be made in accordance with the terms of the
Credit Agreement and unless in writing and signed by the Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and any consent to any
departure by any Grantor from the terms of any provision hereof in each case shall be effective
only in the specific instance and for the specific purpose for which made or given. Except where
notice is specifically required by this Agreement or any other document evidencing the Secured
Obligations, no notice to or demand on any Grantor in any case shall entitle any Grantor to any
other or further notice or demand in similar or other circumstances.




          SECTION 11.7. Notices. Unless otherwise provided herein or in the Credit Agreement,
any notice or other communication herein required or permitted to be given shall be given in the
manner and become effective as set forth in the Credit Agreement, as to any Grantor, addressed to
it at the address of the Borrower set forth in the Credit Agreement and as to the Agent, addressed
to it at the address set forth in the Credit Agreement, or in each case at such other address as
shall be designated by such party in a written notice to the other party complying as to delivery
with the terms of this Section 11.7.




32









 








          SECTION 11.8. Governing Law, Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial. Sections 9.18 and 9.19 of the Credit Agreement are incorporated herein, mutatis
mutandis, as if a part hereof.




          SECTION 11.9. Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without invalidating the remaining
provisions hereof or affecting the validity, legality or enforceability of such provision in any
other jurisdiction.




          SECTION 11.10. Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute one and the same
agreement.




          SECTION 11.11. Business Days. In the event any time period or any date provided in
this Agreement ends or falls on a day other than a Business Day, then such time period shall be
deemed to end and such date shall be deemed to fall on the next succeeding Business Day, and
performance herein may be made on such Business Day, with the same force and effect as if made on
such other day.




          SECTION
11.12. No Claims Against Agent. Nothing contained in this Agreement shall constitute
any consent or request by the Agent, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the Pledged Collateral
or any part thereof, nor as giving any Grantor any right, power or authority to contract for or
permit the performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against the Agent in respect
thereof or any claim that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.




          SECTION 11.13. No Release. Nothing set forth in this Agreement or any other Loan
Document, nor the exercise by the Agent of any of the rights or remedies hereunder, shall relieve
any Grantor from the performance of any term, covenant, condition or agreement on such Grantor’s
part to be performed or observed under or in respect of any of the Pledged Collateral or from any
liability to any person under or in respect of any of the Pledged Collateral or shall impose any
obligation on the Agent or any other Secured Party to perform or observe any such term, covenant,
condition or agreement on such Grantor’s part to be so performed or observed or shall impose any
liability on the Agent or any other Secured Party for any act or omission on the part of such
Grantor relating thereto or for any breach of any representation or warranty on the part of such
Grantor contained in this Agreement, the Credit Agreement or the other Loan Documents, or under or
in respect of the Pledged Collateral or made in connection herewith or therewith. Anything herein
to the contrary notwithstanding, neither the Agent nor any other Secured Party shall have any
obligation or liability under any contracts, agreements and other documents included in the Pledged
Collateral by reason of this Agreement, nor shall the Agent or any other Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any such contract, agreement or other





33









 







document included in the Pledged Collateral hereunder. The obligations of each Grantor contained in
this Section 10.12 shall survive the termination hereof and the discharge of such Grantor’s other
obligations under this Agreement, the Credit Agreement and the other Loan Documents.




          SECTION 11.14. Obligations Absolute. All obligations of each Grantor hereunder shall
be absolute and unconditional irrespective of:





     (i) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any other Grantor;




     (ii) any lack of validity or enforceability of the Credit Agreement, any Secured Rate
Contract or any other Loan Document, or any other agreement or instrument relating thereto;




     (iii) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any Secured Rate Contract or any other Loan Document or any
other agreement or instrument relating thereto;




     (iv) any pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any guarantee, for all or any of
the Secured Obligations;




     (v) any exercise, non-exercise or waiver of any right, remedy, power or privilege under
or in respect hereof, the Credit Agreement, any Secured Rate Contract or any other Loan Document
except as specifically set forth in a waiver granted pursuant to the
provisions of Section 11.6
hereof; or




     (vi) any other circumstances which might otherwise constitute a defense available to, or
a discharge of, any Grantor.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




[SIGNATURE PAGES FOLLOW]




34









 





     In Witness Whereof, each Grantor and the Agent have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the date first above written.



	 	 	 	 	 
	 	STUDY ISLAND, LLC

 	 
	 	By:  	/s/ James B. Walburg
 	 
	 	 	Name:  	James B. Walburg 	 
	 	 	Title:  	SVP-CFO 	 
	 
	 	STUDY ISLAND HOLDINGS, LLC

 	 
	 	By:  	/s/ James B. Walburg
 	 
	 	 	Name: James B. Walburg 	 
	 	 	Title:  	SVP-CFO 	 
	 



[Signature Page to the Guaranty and Security Agreement]









 









 











	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION,

          as Agent

 	 
	 	By:  	/s/ Brian Y. Guffin
 	 
	 	 	Name:  	Brian Y. Guffin 	 
	 	 	Title:  	Duly Authorized Signatory 	 
	 



[Signature Page to the Guaranty and Security Agreement]





 









 








EXHIBIT 1




[Form of]




SECURITIES PLEDGE AMENDMENT




          This Securities Pledge Amendment, dated as of [         ], is delivered
pursuant to Section 6.1 of that certain Guaranty and Security Agreement (as amended,
amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such
terms in the Security Agreement), dated as of [                                        ], 2007, made by STUDY
ISLAND, LLC, the Guarantors party thereto and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent for
the Secured Parties referred to therein. The undersigned hereby agrees that this Securities Pledge
Amendment may be attached to the Security Agreement and that the Pledged Securities listed on this
Securities Pledge Amendment shall be deemed to be and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.




PLEDGED SECURITIES




	 	 	 	 	 	 	 	 	 	 	 
	ISSUER
	 	CLASS

OF STOCK

OR

INTERESTS
	 	PAR

VALUE
	 	CERTIFICATE

NO(S).
	 	NUMBER OF

SHARES

OR

INTERESTS
	 	PERCENTAGE OF

ALL ISSUED CAPITAL

OR OTHER EQUITY

INTERESTS OF ISSUER









	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	INTERCOMPANY NOTES
	 	 	PRINCIPAL	 	DATE OF	 	INTEREST	 	MATURITY
	ISSUER	 	AMOUNT	 	ISSUANCE	 	RATE	 	DATE
	 	 	 	 	 	 	 	 	 















 





	 	 	 	 	 
	 	[                                      ],

as Grantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	AGREED TO AND ACCEPTED:



GENERAL ELECTRIC CAPITAL CORPORATION,

          as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 














 





EXHIBIT 2




[Form of]




JOINDER AGREEMENT




[Name of New Grantor]

[Address of New Grantor]




[Date]




                                        




                                        




                                        




                                        




Ladies and Gentlemen:




          Reference is made to the Guarantor and Security Agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement;” capitalized
terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of [                                        ], 2007, made by
STUDY ISLAND, LLC (the “Borrower”), the Guarantors party thereto and GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent for the Secured Parties referred to therein.




          This Joinder Agreement supplements the Security Agreement and is delivered by the undersigned,
[            
] (the “New Grantor”), pursuant to Section 4.5 of the Security
Agreement. The New Grantor hereby agrees to be bound as a Guarantor and as a Grantor party to the
Security Agreement by all of the terms, covenants and conditions set forth in the Security
Agreement to the same extent that it would have been bound if it had been a signatory to the
Security Agreement on the date of the Security Agreement. The New Grantor also hereby agrees to be
bound as a party by all of the terms, covenants and conditions applicable to it set forth in
Articles III, IV, V and VI of the Credit Agreement to the same extent that it would have
been bound if it had been a signatory to the Credit Agreement on the execution date of the Credit
Agreement. Without limiting the generality of the foregoing, the New Grantor hereby grants and
pledges to the Agent, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, a Lien on and security interest in, all of its right, title and interest in, to and
under the Pledged Collateral and expressly assumes all obligations and liabilities of a Guarantor
and Grantor thereunder. The New Grantor hereby makes each of the representations and warranties
with respect to it and agrees to each of the covenants applicable to the Grantors contained in the
Security Agreement and Article III of the Credit Agreement.




          Annexed hereto are supplements to each of the schedules to the Security Agreement and the
Credit Agreement, as applicable, with respect to the New Grantor. Such supplements shall be deemed
to be part of the Security Agreement or the Credit Agreement, as applicable.














 





          This Joinder Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.




          THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.














 








          In
Witness Whereof, the New Grantor has caused this Joinder Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.




	 	 	 	 	 
	 	[NEW GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	AGREED TO AND ACCEPTED:



GENERAL ELECTRIC CAPITAL CORPORATION,

           as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Schedules to be attached]

















 





EXHIBIT 3




[Form of]




Copyright Security Agreement




          Copyright Security Agreement, dated as of [               ], by STUDY
ISLAND, LLC, and [                    ] (individually, a “Grantor”, and, collectively, the
“Grantors”), in favor of GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as Agent
pursuant to the Credit Agreement (in such capacity, the “Agent”).




W i t n e s s e t h:




          Whereas, the Grantors are party to a Guaranty and Security Agreement dated as of November 16,
2007 (the “Security Agreement”) in favor of the Agent pursuant to which the Grantors are
required to execute and deliver this Copyright Security Agreement;




          Now, Therefore, in consideration of the premises and to induce the Agent, for the benefit of
the Secured Parties, to enter into the Credit Agreement, the Grantors hereby agree with the
Agent as follows:




          SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the Security Agreement.




          SECTION 2. Grant of Security Interest in Copyright Collateral. Each Grantor hereby
pledges and grants to the Agent for the benefit of the Secured Parties a lien on and security
interest in and to all of its right, title and interest in, to and under all the following
Pledged Collateral of such Grantor:




          (a) Copyrights of such Grantor listed on Schedule I attached hereto; and




          (b) all Proceeds of any and all of the foregoing (other than Excluded Property).




          SECTION 3. Security Agreement. The security interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security interest granted to
the Agent pursuant to the Security Agreement and Grantors hereby acknowledge and affirm that
the rights and remedies of the Agent with respect to the security interest in the Copyrights
made and granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth herein. In the
event that any provision of this Copyright Security Agreement is deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall control.




          SECTION 4. Termination. Upon the payment in full of the Obligations and termination
of the Security Agreement, the Agent shall execute, acknowledge, and deliver to the Grantors
an instrument in writing in recordable form releasing the collateral pledge, grant,
assignment, lien and security interest in the Copyrights under this Copyright Security
Agreement.




 









 








          In
Witness Whereof, each Grantor has caused this Copyright Security Agreement to be executed
and delivered by its duly authorized offer as of the date first set forth above.




	 	 	 	 	 
	 	Very truly yours,





STUDY ISLAND, LLC 

[OTHER GRANTORS]1

 	 
	 	By:  	 	 
	 	 	Name:  	      	 
	 	 	Title:  	      	 
	 



	 	 	 	 	 
	 	AGREED TO AND ACCEPTED:



GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	1	 	This document needs only to be executed by the Borrower and/or any Guarantor which owns a pledged
Copyright.






 









 








SCHEDULE I

to

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS




Copyright Registrations:




	 	 	 	 	 
	 	 	REGISTRATION	 	 
	OWNER	 	NUMBER	 	TITLE
	 
	 	 	 	 





Copyright Applications:




	 	 	 
	OWNER	 	TITLE
	 
	 	 





 









 






          SECTION 5. Counterparts. This Copyright Security Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Copyright Security Agreement by signing and delivering one or
more counterparts.




[signature page follows]





 









 







EXHIBIT 4




[Form
of]




Patent Security Agreement




          Patent Security Agreement, dated as of [                ], by STUDY ISLAND,
LLC, and [                    ] (individually, a “Grantor”, and, collectively, the “Grantors”), in favor of
GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as Agent pursuant to the Credit
Agreement (in such capacity, the “Agent”).




W
i t n e s s e t h:




          Whereas, the Grantors are party to a Guaranty and Security Agreement dated as of November 16,
2007 (the “Security Agreement”) in favor of the Agent pursuant to which the Grantors are
required to execute and deliver this Patent Security Agreement;




          Now, Therefore, in consideration of the premises and to induce the Agent, for the benefit of
the Secured Parties, to enter into the Credit Agreement, the Grantors hereby agree with the
Agent as follows:




          SECTION
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the Security Agreement.




          SECTION
2. Grant of Security Interest in Patent Collateral. Each Grantor hereby
pledges and grants to the Agent for the benefit of the Secured Parties a lien on and security
interest in and to all of its right, title and interest in, to and under all the following
Pledged Collateral of such Grantor:




          (a) Patents
of such Grantor listed on Schedule I attached hereto; and




          (b) all Proceeds of any and all of the foregoing (other than Excluded Property).




          SECTION 3. Security Agreement. The security interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interest granted to the
Agent pursuant to the Security Agreement and Grantors hereby acknowledge and affirm that the
rights and remedies of the Agent with respect to the security interest in the Patents made
and granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth herein. In the
event that any provision of this Patent Security Agreement is deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall control.




          SECTION 4. Termination. Upon the payment in full of the Obligations and termination
of the Security Agreement, the Agent shall execute, acknowledge, and deliver to the Grantors
an instrument in writing in recordable form releasing the collateral pledge, grant,
assignment, lien and security interest in the Patents under this Patent Security Agreement.




 









 








          SECTION 5. Counterparts. This Patent Security Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any party hereto
may execute this Patent Security Agreement by signing and delivering one or more
counterparts.




[signature page follows]




 









 








          In Witness Whereof, each Grantor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized offer as of the date first set forth above.




	 	 	 	 	 
	 	Very truly yours,





STUDY ISLAND, LLC

[OTHER GRANTORS]2

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	AGREED TO AND ACCEPTED:



GENERAL ELECTRIC CAPITAL CORPORATION,

          as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	2	 	This document needs only to be executed by the Borrower and/or any Guarantor which owns a pledged
Patent.






 









 








SCHEDULE I

to

PATENT SECURITY AGREEMENT

PATENT REGISTRATIONS AND PATENT APPLICATIONS




Patent Registrations:




	 	 	 	 	 
	 	 	REGISTRATION	 	 
	OWNER	 	NUMBER	 	NAME
	 
	 	 	 	 





Patent
Applications:




	 	 	 	 	 
	 	 	APPLICATION	 	 
	OWNER	 	NUMBER	 	NAME
	 
	 	 	 	 






 











 





EXHIBIT 5




[Form of]




Trademark Security Agreement




          Trademark Security Agreement, dated as of [          ], by STUDY ISLAND,
LLC, and [          ] (individually, a “Grantor”, and, collectively, the “Grantors”), in favor of
GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as agent pursuant to the Credit Agreement (in
such capacity, the “Agent”).




W i t n e s s e t h:




          Whereas, the Grantors are party to a Guaranty and Security Agreement dated as of November 16,
2007 (the “Security Agreement”) in favor of the Agent pursuant to which the Grantors are
required to execute and deliver this Trademark Security Agreement;




          Now, Therefore, in consideration of the premises and to induce the Agent, for the benefit of
the Secured Parties, to enter into the Credit Agreement, the Grantors hereby agree with the Agent
as follows:




          SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the Security Agreement.




          SECTION 2. Grant of Security Interest in Trademark Collateral. Each Grantor hereby
pledges and grants to the Agent for the benefit of the Secured Parties a lien on and security
interest in and to all of its right, title and interest in, to and under all the following Pledged
Collateral of such Grantor:




          (a) Trademarks of such Grantor listed on Schedule I attached hereto;




          (b) all Goodwill associated with such Trademarks; and




          (c) all Proceeds of any and all of the foregoing (other than Excluded Property).




          SECTION 3. Security Agreement. The security interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security interest granted to the
Agent pursuant to the Security Agreement and Grantors hereby acknowledge and affirm that the rights
and remedies of the Agent with respect to the security interest in the Trademarks made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. In the event that any provision of
this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions
of the Security Agreement shall control.




          SECTION 4. Termination. Upon the payment in full of the Obligations and termination
of the Security Agreement, the Agent shall execute, acknowledge, and deliver to the Grantors an
instrument in writing in recordable form releasing the collateral pledge, grant,



 









 






assignment, lien and security interest in the Trademarks under this Trademark Security
Agreement.




          SECTION 5. Counterparts. This Trademark Security Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same instrument, and any party
hereto may execute this Trademark Security Agreement by signing and delivering one or more
counterparts.




[signature page follows]




 









 








          In Witness Whereof, each Grantor has caused this Trademark Security Agreement to be executed
and delivered by its duly authorized offer as of the date first set forth above.




	 	 	 	 	 
	 	Very truly yours,


STUDY ISLAND, LLC

[OTHER GRANTORS]3

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	AGREED TO AND ACCEPTED:


GENERAL ELECTRIC CAPITAL CORPORATION,
          as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	3	 	This document needs only to be executed by the Borrower
and/or any Guarantor which owns a pledged Trademark.






 











 





SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS




Trademark Registrations:




	 	 	 	 	 
	 	 	REGISTRATION	 	 
	OWNER	 	NUMBER	 	NAME
	 

	 	 
	 	 





Trademark Applications:




	 	 	 	 	 
	 	 	APPLICATION	 	 
	OWNER	 	NUMBER	 	NAME
	 

	 	 
	 	 





 









 






Schedule 1




Pledged Securities




	 	 	 	 	 
	Pledgor	 	Issuer	 	No. Pledged
	Study Island Holdings, LLC

	 	Study Island, LLC
	 	100% of Membership interests






 









 






Schedule 2




Instruments & Tangible Chattel Paper




None.




2









 





Schedule 3




Commercial Tort Claims




None.





3











 





Schedule 4




Filing Locations




	 	 	 
	Grantor	 	Filing Location
	Study Island Holdings, LLC

	 	Office of the Secretary of State, Delaware
	Study Island, LLC

	 	Office of the Secretary of State, Delaware






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Schedule 5




Legal Name, Etc.




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Federal
	Exact legal	 	 	 	 	 	Organizational	 	Taxpayer
	name of each	 	Jurisdiction of	 	Chief Executive	 	identification	 	Identification
	Grantor	 	organization	 	Office	 	number, if any	 	Number, if any
	Study Island, LLC
	 	Delaware	 	Dallas, TX	 	4262556 	 	20-8086794 
	Study Island
Holdings, LLC
	 	Delaware	 	Dallas, TX	 	4272699 	 	20-8086802 






5









 






Schedule 6




Deposit Accounts & Securities Accounts




Compass Bank

Dallas, TX

Study Island, LLC

A/C # 23354748 (Checking Account — Active)




Compass Bank

Dallas, TX

Study Island, LLC

A/C # 20773022 (Money Market Account — Active)




Goldman Sachs

Chicago, IL

Study Island, LLC

A/C # 1885044250 (Money Market Account — Active)





6