Exhibit 10.10


 


PLEDGE AGREEMENT


 


PLEDGE
AGREEMENT, dated as of March 17, 2004 (as amended, restated, modified and/or
supplemented from time to time, this “Agreement”), among each of the
undersigned (each, a “Pledgor” and, together with each other entity which
becomes a party hereto pursuant to Section 25, collectively, the “Pledgors”)
and Bank of America, N.A., as Collateral Agent (together with any successor
Collateral Agent, the “Pledgee”), for the benefit of the Secured
Creditors (as defined below).  Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
(as defined below) shall be used herein as therein defined.


 


W I T N E S S E T
H :


 


WHEREAS,
EnerSys (“Holdings”), EnerSys Capital Inc. (the “Borrower”),
various financial institutions from time to time party thereto (the “Lenders”),
Bank of America, N.A. as Administrative Agent (together with a successor
Administrative Agent, the “Administrative Agent” and, together with the
Lenders, the Collateral Agent, each Letter of Credit Issuer, each other Agent
and the Pledgee, the “Lender Creditors”), Morgan Stanley Senior Funding
Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Documentation
Agent, have entered into a Credit Agreement, dated as of March 17, 2004 providing
for the making of Loans to the Borrower and the issuance of, and participation
in, Letters of Credit for the account of the Borrower as contemplated therein
(as used herein, the term “Credit Agreement” means the Credit Agreement
described above in this paragraph as amended, restated, modified, extended,
renewed, replaced, supplemented, restructured and/or refinanced from time to
time);


 


WHEREAS,
the Borrower and/or one or more of its Subsidiaries may at any time and from
time to time (i) enter into one or more Interest Rate Protection Agreements or
Other Hedging Agreements with one or more Lenders or any affiliate thereof,
(ii) enter into one or more Commodities Agreements with one or more Lenders or
any affiliate thereof and/or (iii) maintain Existing Interest Rate Protection
Agreements with any financial institution (each such Lender, affiliate or
financial institution, even if the respective Lender subsequently ceases to be
a Lender under the Credit Agreement for any reason, together with such Lender’s,
affiliate’s or other financial institution’s successors and assigns, if any,
collectively, the “Other Creditors” and together with the Lender
Creditors, the “Secured Creditors”); 


 


WHEREAS,
pursuant to the Credit Agreement Party Guaranty, each of Holdings and the
Borrower has unconditionally guaranteed to the Secured Creditors the payment
when due of all Relevant Guaranteed Obligations as described therein;


 


WHEREAS,
pursuant to the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly
and severally guaranteed to the Secured Creditors the payment when due of all
Guaranteed Obligations as described therein;


 


WHEREAS,
it is a condition precedent to the making of Loans to the Borrower and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower under the Credit Agreement and to the Other Creditors entering into
and/or maintaining Secured


 

















 


Hedging Agreements that each Pledgor shall have executed and delivered
to the Pledgee this Agreement; and


 


WHEREAS,
each Pledgor will obtain benefits from the incurrence of Loans by the Borrower
and the issuance of and participation in, Letters of Credit for the account of
the Borrower under the Credit Agreement and the entering into by and/or the
maintaining by the Borrower and/or one or more of its Subsidiaries of Secured
Hedging Agreements and, accordingly, desires to execute this Agreement in order
to satisfy the condition precedent described in the preceding paragraph and to
induce the Lenders to make Loans to the Borrower and to issue, and participate
in, Letters of Credit for the account of the Borrower, and to induce the Other
Creditors to enter into and/or maintain Secured Hedging Agreements with the
Borrower and/or one or more of its Subsidiaries;


 


NOW,
THEREFORE, in consideration of the foregoing and other benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged,
each Pledgor hereby makes the following representations and warranties to the
Pledgee for the benefit of the Secured Creditors and hereby covenants and
agrees with the Pledgee for the benefit of the Second Creditors as follows:


 


1.                                       SECURITY
FOR OBLIGATIONS.  This Agreement is made by each Pledgor for the
benefit of the Secured Creditors to secure:


 


(i)                                     the
full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including,
without limitation, principal, premium, interest (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Pledgor or any Subsidiary thereof
at the rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding),
reimbursement obligations under Letters of Credit, fees, costs and indemnities)
of such Pledgor owing to the Lender Creditors, whether now existing or
hereafter incurred under, arising out of, or in connection with, the Credit
Agreement and the other Credit Documents to which such Pledgor is a party
(including, in the case of each Pledgor that is a Guarantor, all such
obligations, liabilities and indebtedness of such Pledgor under its Guaranty)
and the due performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in the Credit Agreement and in such other
Credit Documents (all such obligations, liabilities and indebtedness under this
clause (i), except to the extent consisting of obligations, liabilities or
indebtedness with respect to Secured Hedging Agreements entitled to the
benefits of this Agreement being herein collectively called the “Credit
Document Obligations”);


 


(ii)                                  the
full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including,
without limitation, all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Pledgor or any Subsidiary thereof
at the rate provided for in the respective documentation, whether or not a
claim for


 

















 


post-petition
interest is allowed in any such proceeding) owing by such Pledgor to the Other
Creditors now existing or hereafter incurred under, arising out of or in
connection with any Secured Hedging Agreement, whether such Secured Hedging
Agreement is now in existence or hereinafter arising (including, in the case of
a Pledgor that is a Guarantor, all obligations, liabilities and indebtedness of
such Pledgor under its Guaranty in respect of the Secured Hedging Agreements),
and the due performance and compliance by such Pledgor with all of the terms,
conditions and agreements contained in each such Secured Hedging Agreement (all
such obligations, liabilities and indebtedness under this clause (ii) being
herein collectively called the “Other Obligations”);


 


(iii)                               any
and all sums advanced by the Pledgee in order to preserve the Collateral (as
hereinafter defined) or preserve its security interest in the Collateral;


 


(iv)                              in
the event of any proceeding for the collection or enforcement of any
indebtedness, obligations or liabilities of such Pledgor referred to in clauses
(i) and (ii) above, after an Event of Default shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Pledgee of its rights hereunder, together with reasonable
attorneys’ fees and court costs; 


 


(v)                                 all
amounts paid by any Indemnitees as to which such Indemnitee has the right to
reimbursement under Section 11 of this Agreement; and


 


(vi)                              all
amounts owing to any Agent or any of its affiliates pursuant to any of the
Credit Documents in its capacity as such;


 


all such obligations, liabilities, indebtedness, sums and expenses set
forth in clauses (i) through (vi) of this Section 1 being collectively called
the “Obligations”, it being agreed that the “Obligations” shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.


 


2.                                       DEFINITIONS;
ANNEXES.  (a)  Unless otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as therein defined.  Reference to
singular terms shall include the plural and vice versa.


 


(b)                                 The
following capitalized terms used herein shall have the definitions specified
below:


 


“Administrative
Agent” shall have the meaning set forth in the recitals hereto.


 


“Adverse
Claim” shall have the meaning given such term in Section 8-102(a)(1) of the
UCC.


 


“Agreement”
shall have the meaning set forth in the first paragraph hereof.


 


“Borrower”
shall have the meaning set forth in the recitals hereto.


 

















 


“Certificated
Security” shall have the meaning given such term in Section 8-102(a)(4) of
the UCC.


 


“Clearing
Corporation” shall have the meaning given such term in Section 8-102(a)(5)
of the UCC.


 


“Collateral”
shall have the meaning set forth in Section 3.1 hereof.


 


“Collateral
Accounts” shall mean any and all accounts established and maintained by the
Pledgee in the name of any Pledgor to which Collateral may be credited.


 


“Commodities
Agreement” shall have the meaning provided in the Credit Agreement.


 


“Credit
Agreement” shall have the meaning set forth in the recitals hereto.


 


“Credit
Document Obligations” shall have the meaning set forth in Section 1(i)
hereof.


 


“Domestic
Corporation” shall have the meaning set forth in the definition of “Stock.”


 


“Event
of Default” shall mean any Event of Default under, and as defined in, the
Credit Agreement and shall in any event include, without limitation, any
payment default on any of the Obligations after the expiration of any
applicable grace period.


 


“Excluded
Collateral” shall mean (x) on and after the Accounts Receivable Facility
Transaction Date, any Accounts Receivable Facility Assets for so long as, and
to the extent, same have been sold or transferred pursuant to the Accounts
Receivable Facility Documents, provided that at such time as, and to the
extent that, any such Excluded Collateral is repurchased by or reconveyed to,
an Assignor, such Accounts Receivable Facility Assets shall cease to constitute
Excluded Collateral, (y) Margin Stock owned or held by any Pledgor except to
the extent required to be Pledged pursuant to Section 8.18 of the Credit
Agreement and (z) the capital stock of Yuasa Inc. S.A., EnerSys Europe Ltd. and
YCI Inc. so long as, in the case of EnerSys Europe Ltd. and YCI Inc., the gross
book value of the assets of each entity does not exceed $50,000 at any time.


 


“Exempted
Foreign Corporation” shall mean (i) any Foreign Corporation and any limited
liability company organized under the laws of a jurisdiction other than the
United States or any State or Territory thereof that, in any such case, is
treated as a corporation or an association taxable as a corporation for U.S.
Federal income tax purposes and (ii) Cayman Partnership Shareholder #1.


 


“Financial
Asset” shall have the meaning given such term in Section 8-102(a)(9) of the
UCC.


 


“Foreign
Corporation” shall have the meaning set forth in the definition of “Stock.”


 


“Holdings”
shall have the meaning set forth in the first paragraph hereof.


 

















 


“Indemnitees”
shall have the meaning set forth in Section 11 hereof.


 


“Instrument”
shall have the meaning given such term in Section 9-102(a)(47) of the UCC.


 


“Interest
Rate Protection Agreement” shall have the meaning provided in the Credit
Agreement.


 


“Investment
Property” shall have the meaning given such term in Section 9-102(a)(49) of
the UCC.


 


“Lender
Creditors” shall have the meaning set forth in the first paragraph hereof.


 


“Lenders”
shall have the meaning set forth in the Recitals hereto.


 


“Limited
Liability Company Assets” shall mean all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all limited liability company capital and interest in other limited liability
companies), at any time owned by any Pledgor or represented by any Limited
Liability Company Interest.


 


“Limited
Liability Company Interests” shall mean the entire limited liability
company membership interest at any time owned by any Pledgor in any limited
liability company.


 


“Location”
of any Pledgor has the meaning given such term in Section 9-307 of the UCC.


 


“Non-Voting
Stock” shall mean all capital stock which is not Voting Stock.


 


“Notes”
shall mean (x) all intercompany notes at any time issued to each Pledgor and
(y) all other promissory notes from time to time issued to, or held by, each
Pledgor.


 


“Obligations”
shall have the meaning set forth in Section 1 hereof.


 


“Other
Creditors” shall have the meaning set forth in the first paragraph hereof.


 


“Other
Hedging Agreement” shall have the meaning provided in the Credit Agreement.


 


“Other
Obligations” shall have the meaning set forth in Section 1(ii) hereof.


 


“Partnership
Assets” shall mean all assets, whether tangible or intangible and whether
real, personal or mixed (including, without limitation, all partnership capital
and interest in other partnerships), at any time owned or represented by any
Partnership Interest.


 


“Partnership
Interest” shall mean the entire general partnership interest or limited
partnership interest at any time owned by any Pledgor in any general
partnership or limited partnership.


 


“Pledged
Notes” shall mean all Notes at any time pledged or required to be pledged
hereunder.


 

















 


“Pledgee”
shall have the meaning set forth in the first paragraph hereof.


 


“Pledgor”
shall have the meaning set forth in the first paragraph hereof.


 


“Proceeds”
shall have the meaning given such term in Section 9-102(a)(64) of the UCC.


 


“Registered
Organization” shall have the meaning given such term in Section
9-102(a)(70) of the UCC.


 


“Required
Lenders” shall have the meaning given such term in the Credit Agreement. 


 


“Secured
Creditors” shall have the meaning set forth in the first paragraph hereof.


 


“Secured
Debt Agreements” shall have the meaning set forth in Section 5 hereof.


 


“Secured
Hedging Agreements” shall mean and include each Interest Rate Protection
Agreement, each Commodities Agreement and each Other Hedging Agreement entered
into by the Borrower and/or one or more of its Subsidiaries with any Other
Creditor (including each Existing Interest Rate Protection Agreement).


 


“Securities
Account” shall have the meaning given such term in Section 8-501(a) of the
UCC.


 


“Securities
Act” shall mean the Securities Act of 1933, as amended, as in effect from
time to time.


 


“Securities
Intermediary” shall have the meaning given such term in Section 8-102(14)
of the UCC. 


 


“Security”
and “Securities” shall have the meaning given such term in Section
8-102(a)(15) of the UCC and shall in any event also include all Stock and all
Notes.


 


“Security
Entitlement” shall have the meaning given such term in Section 8-102(a)(17)
of the UCC.


 


“Specified
Default” shall have the meaning set forth in Section 5 hereof.


 


“Stock”
shall mean (x) with respect to corporations incorporated under the laws of the
United States or any State or territory thereof or the District of Columbia
(each, a “Domestic Corporation”), all of the issued and outstanding
shares of capital stock of any Domestic 
Corporation at any time owned by any Pledgor and (y) with respect to
corporations not Domestic Corporations (each, a “Foreign Corporation”),
all of the issued and outstanding shares of capital stock of any Foreign
Corporation at any time owned by any Pledgor.


 


“Termination
Date” shall  have the meaning set
forth in Section 19 hereof.


 


“UCC”
shall mean the Uniform Commercial Code as in effect in the State of
New York from time to time; provided that all references herein to
specific sections or


 

















 


subsections of the UCC are references to such sections or subsections,
as the case may be, of the Uniform Commercial Code as in effect in the State of
New York on the date hereof.


 


“Uncertificated
Security” shall have the meaning given such term in Section 8-102(a)(18) of
the UCC.


 


“Voting
Stock” shall  mean all classes of
equity interests of any Foreign Corporation entitled to vote (as used in the
Treasury Regulations under Section 956 under the Code).


 


3.                                       PLEDGE
OF SECURITY INTEREST, ETC.


 


3.1.                              Pledge.  To
secure the Obligations now or hereafter owed or to be performed by such
Pledgor, each Pledgor does hereby grant, pledge and assign to the Pledgee for
the benefit of the Secured Creditors, and does hereby create a continuing
security interest in favor of the Pledgee for the benefit of the Secured
Creditors in, all of the right, title and interest in and to the following,
whether now existing or hereafter from time to time acquired (collectively, the
“Collateral”):


 


(a)                                  each
of the Collateral Accounts, including any and all assets of whatever type or
kind deposited by such Pledgor in such Collateral Account, whether now owned or
hereafter acquired, existing or arising, including, without limitation, all
Financial Assets, Investment Property, moneys, checks, drafts, Instruments,
Securities or interests therein of any type or nature deposited or required by
the Credit Agreement or any other Secured Debt Agreement to be deposited in
such Collateral Account, and all investments and all certificates and other
Instruments (including depository receipts, if any) from time to time
representing or evidencing the same, and all dividends, interest,
distributions, cash and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of the
foregoing; 


 


(b)                                 all
Securities owned or held by such Pledgor from time to time and all options and
warrants owned by such Pledgor from time to time to purchase Securities;


 


(c)                                  all
Limited Liability Company Interests owned by such Pledgor from time to time and
all of its right, title and interest in each limited liability company to which
each such Limited Liability Company Interest relates, whether now existing or
hereafter acquired, including, without limitation, to the fullest extent
permitted under the terms and provisions of the documents and agreements
governing such Limited Liability Company Interests and applicable law:


 


(A)                              all
its capital therein and its interest in all profits, losses, Limited Liability
Company Assets and other distributions to which such Pledgor shall at any time
be entitled in respect of such Limited Liability Company Interests;


 


(B)                                all
other payments due or to become due to such Pledgor in respect of Limited
Liability Company Interests, whether under any limited liability company
agreement or otherwise, whether as contractual obligations, damages, insurance
proceeds or otherwise;


 

















 


(C)                                all
of its claims, rights, powers, privileges, authority, options, security
interests, liens and remedies, if any, under any limited liability company
agreement or operating agreement, or at law or otherwise in respect of such
Limited Liability Company Interests;


 


(D)                               all
present and future claims, if any, of such Pledgor against any such limited
liability company for moneys loaned or advanced, for services rendered or
otherwise;


 


(E)                                 all
of such Pledgor’s rights under any limited liability company agreement or
operating agreement or at law to exercise and enforce every right, power,
remedy, authority, option and privilege of such Pledgor relating to such
Limited Liability Company Interests, including any power to terminate, cancel
or modify any limited liability company agreement or operating agreement, to
execute any instruments and to take any and all other action on behalf of and
in the name of any such Pledgor in respect of such Limited Liability Company
Interests and any such limited liability company, to make determinations, to
exercise any election (including, but not limited to, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or
approval, together with full power and authority to demand, receive, enforce,
collect or receipt for any of the foregoing or for any Limited Liability
Company Asset, to enforce or execute any checks, or other instruments or
orders, to file any claims and to take any action in connection with any of the
foregoing; and


 


(F)                                 all
other property hereafter delivered in substitution for or in addition to any of
the foregoing, all certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;


 


(d)                                 all
Partnership Interests of such Pledgor from time to time and all of its right,
title and interest in each partnership to which each such interest relates,
whether now existing or hereafter acquired, including, without limitation:


 


(A)                              all
its capital therein and its interest in all profits, losses, Partnership Assets
and other distributions to which such Pledgor shall at any time be entitled in
respect of such Partnership Interests;


 


(B)                                all
other payments due or to become due to such Pledgor in respect of Partnership
Interests, whether under any partnership agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;


 


(C)                                all
of its claims, rights, powers, privileges, authority, options, security
interests, liens and remedies, if any, under any partnership agreement or
operating agreement, or at law or otherwise in respect of such Partnership
Interests;


 


(D)                               all
present and future claims, if any, of such Pledgor against any such partnership
for moneys loaned or advanced, for services rendered or otherwise;


 

















 


(E)                                 all
of such Pledgor’s rights under any partnership agreement or operating agreement
or at law to exercise and enforce every right, power, remedy, authority, option
and privilege of such Pledgor relating to such Partnership Interests, including
any power to terminate, cancel or modify any partnership agreement or operating
agreement, to execute any instruments and to take any and all other action on
behalf of and in the name of any such Pledgor in respect of such Partnership
Interests and any such partnership, to make determinations, to exercise any
election (including, but not limited to, election of remedies) or option or to
give or receive any notice, consent, amendment, waiver or approval, together with
full power and authority to demand, receive, enforce, collect or receipt for
any of the foregoing or for any Partnership Asset, to enforce or execute any
checks, or other instruments or orders, to file any claims and to take any
action in connection with any of the foregoing; and


 


(F)                                 all
other property hereafter delivered in substitution for or in addition to any of
the foregoing, all certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof;


 


(G)                                all
Financial Assets and Investment Property of such Pledgor from time to time;


 


(H)                               all
Security Entitlements of such Pledgor from time to time in any and all of the
foregoing; and


 


(I)                                    all
Proceeds of any and all of the foregoing;


 


provided that (x) no Pledgor shall
be required at any time to pledge hereunder, and the pledge granted hereunder
shall not be deemed to extend to, more than 65% of the total combined voting
power of all classes of Voting Stock of any Exempted Foreign Corporation and
(y) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting
Stock of each Exempted Foreign Corporation at any time and from time to time
acquired by such Pledgor, which Non-Voting Stock shall not be subject to the
limitations described in clause (x). 
Notwithstanding anything to the contrary contained herein, (I) the
Collateral shall at no time include any items which would at such time
constitute Excluded Collateral, and (II) the relative rights and remedies of
the Pledgee shall be subject to and governed by the terms of the Intercreditor
Agreement at any time the Intercreditor Agreement is in effect.  In the event of any inconsistency between
the terms hereof and the Intercreditor Agreement, the Intercreditor Agreement
shall control at any time the Intercreditor Agreement is in effect.


 


3.2.                              Procedures.  (a)  To
the extent that any Pledgor at any time or from time to time owns, acquires or
obtains any right, title or interest in any Collateral, such Collateral shall
automatically (and without the taking of any action by the respective Pledgor)
be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto,
such Pledgor shall (to the extent provided below) take the following actions as
set forth below (as promptly as practicable and, in any event, within 10 days
after it obtains such Collateral) for the benefit of the Pledgee and the
Secured Creditors:


 

















 


(i)                                     with
respect to a Certificated Security (other than a Certificated Security credited
on the books of a Clearing Corporation or Securities Intermediary), such
Pledgor shall physically deliver such Certificated Security to the Pledgee,
endorsed to the Pledgee or endorsed in blank;


 


(ii)                                  with
respect to an Uncertificated Security (other than an Uncertificated Security
credited on the books of a Clearing Corporation or Securities Intermediary),
such Pledgor shall cause the issuer of such Uncertificated Security to duly
authorize and execute, and deliver to the Pledgee, an agreement for the benefit
of the Pledgee and the other Secured Creditors substantially in the form of
Annex G hereto (appropriately completed to the satisfaction of the Pledgee and
with such modifications, if any, as shall be satisfactory to the Pledgee)
pursuant to which such issuer agrees to comply with any and all instructions
originated by the Pledgee without further consent by the registered owner and not
to comply with instructions regarding such Uncertificated Security (and any
Partnership Interests and Limited Liability Company Interests issued by such
issuer) originated by any other Person other than a court of competent
jurisdiction;


 


(iii)                               with
respect to a Certificated Security, Uncertificated Security, Partnership
Interest or Limited Liability Company Interest credited on the books of a
Clearing Corporation or Securities Intermediary (including a Federal Reserve
Bank, Participants Trust Company or The Depository Trust Company), the
respective Pledgor shall promptly notify the Pledgee thereof and shall promptly
take all actions (x) required (i) to comply with the applicable rules of such
Clearing Corporation or Securities Intermediary and (ii) to perfect the
security interest of the Pledgee under applicable law (including, in any event,
under Sections 9-314(a), (b), and (c), 9-106 and 8-106(d) of the UCC) and (y)
as the Pledgee deems necessary or desirable to effect the foregoing; 


 


(iv)                              with
respect to a Partnership Interest or a Limited Liability Company Interest
(other than a Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation or Securities Intermediary),
(1) if such Partnership Interest or Limited Liability Company Interest is
represented by a certificate and is a Security for purposes of the UCC, the
procedure set forth in Section 3.2(a)(i), and (2) if such Partnership Interest
or Limited Liability Company Interest is not represented by a certificate and
is a Security for purposes of the UCC, the procedure set forth in Section
3.2(a)(ii);


 


(v)                                 with
respect to any Note, physical delivery of such Note to the Pledgee, endorsed to
the Pledgee or endorsed in blank (except that any Note with a face amount of
less than $500,000 shall not be required to be delivered, so long as not more
than $2,500,000 in aggregate principal amount of Notes are excluded pursuant to
the delivery requirements of this clause (v) as a result of such $500,000
limitation); and


 


(vi)                              with
respect to cash proceeds from any of the Collateral, prompt deposit of such
cash in a “Subject Deposit Account” (as such term is defined in


 

















 


the Security
Agreement) or, if an Event of Default shall have occurred and be continuing, a
Collateral Account.


 


(b)                                 In
addition to the actions required to be taken pursuant to preceding Section
3.2(a), each Pledgor shall take the following additional actions with respect
to the Securities and Collateral:


 


(i)  with respect to all Collateral of such Pledgor
of which the Pledgee may obtain “control” thereof within the meaning of Section
8-106 of the UCC (or under any provision of the UCC as same may be amended or
supplemented from time to time, or under the laws of any relevant State other
than the State of New York), the respective Pledgor shall take all actions
as may be requested from time to time by the Pledgee so that “control” of such
Collateral is obtained and at all times held by the Pledgee; and 


 


(ii)  each Pledgor shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under the
Uniform Commercial Code as in effect in the various relevant States, in form
covering all Collateral hereunder (with such form to be satisfactory to the
Pledgee), to be filed in the relevant filing offices so that at all times the
Pledgee has a security interest in all Investment Property and other Collateral
which is perfected by the filing of such financing statements (in each case to
the maximum extent perfection by filing may be obtained under the laws of the
relevant States, including, without limitation, Section 9-312(a) of the UCC).


 


3.3.                              Subsequently
Acquired Collateral.  If any Pledgor shall acquire (by purchase,
stock dividend, distribution or otherwise) any additional Collateral at any
time or from time to time after the date hereof, such Collateral shall
automatically (and without any further action being required to be taken) be
subject to the pledge and security interests created pursuant to Section 3.1
and, furthermore, such Pledgor will promptly thereafter take (or cause to be
taken) all action with respect to such Collateral in accordance with the
procedures set forth in Section 3.2, and will promptly thereafter deliver to
the Pledgee (i) a certificate executed by a principal executive officer of such
Pledgor describing such Collateral and certifying that the same has been duly
pledged in favor of the Pledgee (for the benefit of the Secured Creditors)
hereunder and (ii) supplements to Annexes A through F hereto as are necessary
to cause such annexes to be complete and accurate at such time.  Without limiting the foregoing, each Pledgor
shall be required to pledge hereunder any shares of stock of any Exempted
Foreign Corporation at any time and from time to time after the date hereof
acquired by such Pledgor, provided that (x) no Pledgor shall be required
at any time to pledge hereunder more than 65% of the total combined voting
power of all classes of Voting Stock of any Exempted Foreign Corporation, and
(y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting
Stock of any Exempted Foreign Corporation at any time and from time to time
acquired by such Pledgor. 
Notwithstanding the foregoing, except as otherwise required by Section
8.18 of the Credit Agreement,  no
Pledgor shall be required to Pledge hereunder any Margin Stock owed by such
Pledgor.


 


3.4.                              Transfer
Taxes.  Each pledge of Collateral
under Section 3.1 or Section 3.3 shall be accompanied by any transfer tax
stamps required in connection with the pledge of such Collateral.


 

















 


3.5.                              Certain
Representations and Warranties Regarding the Collateral.  Each Pledgor represents and warrants that on
the date hereof: (i) each Subsidiary of such Pledgor, and the direct ownership
thereof, is listed in Annex A hereto; (ii) the Stock (and any warrant or
options to purchase Stock) held by such Pledgor consists of the number and type
of shares of the Stock (and any warrants or options to purchase Stock) of the
corporations as described in Annex B hereto; (iii) such Stock referenced in
clause (ii) of this paragraph constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Annex B
hereto; (iv) the Notes held by such Pledgor consist of the promissory notes
described in Annex C hereto where such Pledgor is listed as the lender; (v) the
Limited Liability Company Interests held by such Pledgor consist of the number
and type of interests of the Persons described in Annex D hereto; (vi) each
such Limited Liability Company Interest referenced in clause (v) of this
paragraph constitutes that percentage of the issued and outstanding equity
interest of the issuing Person as set forth in Annex D hereto; (vii) the
Partnership Interests held by such Pledgor consist of the number and type of
interests of the Persons described in Annex E hereto; (viii) each such
Partnership Interest referenced in clause (vii) of this paragraph constitutes
that percentage or portion of the entire partnership interest of the Partnership
as set forth in Annex E hereto; (ix) the exact address of each chief executive
office of such Pledgor is listed on Annex F hereto; (x) the Pledgor has
complied with the respective procedure set forth in Section 3.2(a) with respect
to each item of Collateral described in Annexes A through F hereto; and (xi) on
the date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited
Liability Company Interests or Partnership Interests.


 


4.                                       APPOINTMENT
OF SUB-AGENTS; ENDORSEMENTS, ETC.  The Pledgee shall have the
right to appoint one or more sub-agents for the purpose of retaining physical
possession of the Collateral, which may be held (in the discretion of the
Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or
in favor of the Pledgee or any nominee or nominees of the Pledgee or a
sub-agent appointed by the Pledgee.


 


5.                                       VOTING,
ETC., WHILE NO EVENT OF DEFAULT OR SPECIFIED DEFAULT.  Unless and
until there shall have occurred and be continuing any Event of Default under
the Credit Agreement or a Default under Section 10.01 or 10.05 of the Credit
Agreement (each such Default, a “Specified Default”), each Pledgor shall
be entitled to exercise all voting rights attaching to any and all Collateral
owned by it, and to give consents, waivers or ratifications in respect thereof,
provided that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate, result in breach of
any covenant contained in, or be inconsistent with, any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Secured
Hedging Agreement (collectively, the “Secured Debt Agreements”), or
which would have the effect of impairing the value of the Collateral or any
part thereof or the position or interests of the Pledgee or any other Secured
Creditor therein.  All such rights of a
Pledgor to vote and to give consents, waivers and ratifications shall cease in
case an Event of Default shall occur and be continuing and Section 7 hereof
shall become applicable.


 


6.                                       DIVIDENDS
AND OTHER DISTRIBUTIONS.  Unless and until an Event of Default
shall have occurred and be continuing, all cash dividends, cash distributions,
cash Proceeds and other cash amounts payable in respect of the Collateral shall
be paid to the respective Pledgor. 
Subject to Section 3.2 hereof, the Pledgee shall be entitled to receive
directly, and to retain as part of the Collateral:


 

















 


(i)                                     all
other or additional stock, notes, certificates, limited liability company
interests, partnership interests, instruments or other securities or property
(including, but not limited to, cash dividends other than as set forth above)
paid or distributed by way of dividend or otherwise in respect of the
Collateral;


 


(ii)                                  all
other or additional stock, notes, certificates, limited liability company
interests, partnership interests, instruments or other securities or property
(including, but not limited to, cash) paid or distributed in respect of the
Collateral by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and


 


(iii)                               all
other or additional stock, notes, certificates, limited liability company
interests, partnership interests, instruments or other securities or property
(including, but not limited to, cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation or similar corporate reorganization.


 


Nothing contained in this Section 6 shall limit or restrict in any way
the Pledgee’s right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. 
All dividends, distributions or other payments which are received by the
respective Pledgor contrary to the provisions of this Section 6 or Section 7
shall be received in trust for the benefit of the Pledgee, shall be segregated
from other property or funds of such Pledgor and shall be forthwith paid over
to the Pledgee as Collateral in the same form as so received (with any necessary
endorsement).


 


7.                                       REMEDIES
IN CASE OF AN EVENT OF DEFAULT OR SPECIFIED DEFAULT.  In the
event an Event of Default shall have occurred and be continuing, the Pledgee
shall be entitled to exercise all of the rights, powers and remedies (whether
vested in it by this Agreement or by any other Secured Debt Agreement or by
law) for the protection and enforcement of its rights in respect of the
Collateral, including, without limitation, all the rights and remedies of a
secured party upon default under the UCC and the Pledgee shall be entitled,
without limitation, to exercise any or all of the following rights, which each
Pledgor hereby agrees to be commercially reasonable:


 


(i)                                     to
receive all amounts payable in respect of the Collateral otherwise payable under
Section 6 to such Pledgor;


 


(ii)                                  to
transfer all or any part of the Collateral into the Pledgee’s name or the name
of its nominee or nominees;


 


(iii)                               to
accelerate any Pledged Note which may be accelerated in accordance with its
terms, and take any other lawful action to collect upon any Pledged Note
(including, without limitation, to make any demand for payment thereon);


 


(iv)                              to
vote all or any part of the Collateral (whether or not transferred into the
name of the Pledgee) and give all consents, waivers and ratifications in
respect of the Collateral and otherwise act with respect thereto as though it
were the outright owner thereof (each Pledgor hereby irrevocably constituting
and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with
full power of substitution to do so); provided that prior to taking the actions
described in this clause (iv), the Pledgee shall give such Pledgor at least 5
days notice of its intention to do so unless there shall have


 

















 


occurred and be continuing
any Default or Event of Default under Section 10.05 of the Credit Agreement, in
which case no such notice to such Pledgor shall be required; 


 


(v)                                 at
any time or from time to time to sell, assign and deliver, or grant options to
purchase, all or any part of the Collateral, or any interest therein, at any
public or private sale, without demand of performance, advertisement or notice
of intention to sell or of the time or place of sale or adjournment thereof or
to redeem or otherwise (all of which are hereby waived by each Pledgor), for
cash, on credit or for other property, for immediate or future delivery without
any assumption of credit risk, and for such price or prices and on such terms
as the Pledgee in its absolute discretion may determine; provided that
at least 10 days’ notice of the time and place of any such sale shall be given
to such Pledgor.  The Pledgee shall not
be obligated to make such sale of Collateral regardless of whether any such
notice of sale has theretofore been given. 
Each purchaser at any such sale shall hold the property so sold
absolutely free from any claim or right on the part of each Pledgor, and each
Pledgor hereby waives and releases to the fullest extent permitted by law any
right or equity of redemption with respect to the Collateral, whether before or
after sale hereunder, all rights, if any, of marshalling the Collateral and any
other security for the Obligations or otherwise, and all rights, if any, of
stay and/or appraisal which it now has or may at any time in the future have
under rule of law or statute now existing or hereafter enacted.  At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of all Secured Creditors (or certain of
them) may bid for and purchase (by bidding in Obligations or otherwise) all or
any part of the Collateral so sold free from any such right or equity of
redemption.  Neither the Pledgee nor any
other Secured Creditor shall be liable for failure to collect or realize upon
any or all of the Collateral or for any delay in so doing nor shall any of them
be under any obligation to take any action whatsoever with regard thereto; and


 


(vi)                              to
set-off any and all Collateral against any and all Obligations, and to withdraw
any and all cash or other Collateral from any and all Collateral Accounts and
to apply such cash and other Collateral to the payment of any and all
Obligations.


 


(b)                                 If
there shall have occurred and be continuing a Specified Default, then and in
every such case but subject to the terms of the Intercreditor Agreement, the
Pledgee shall be entitled to vote (and exercise all rights and powers in
respect of voting) all or any part of the Collateral, (whether or not
transferred into the name of the Pledgee), and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof (each Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of such Pledgor, with full power of substitution to do so).


 


8.                                       REMEDIES,
ETC., CUMULATIVE.  Each right, power and remedy of the Pledgee
provided for in this Agreement or any other Secured Debt Agreement, or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or
remedy.  The exercise or beginning of
the exercise by the Pledgee or any other Secured Creditor of any one or more of
the rights, powers or remedies provided for in this Agreement or any other
Secured Debt Agreement or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee or any other Secured Creditor of all such other rights, powers or
remedies, and no failure or delay on the part of the Pledgee or any other


 

















 


Secured Creditor to exercise any such right, power or remedy shall
operate as a waiver thereof.  Unless
otherwise required by the Credit Documents, no notice to or demand on any
Pledgor in any case shall entitle such Pledgor to any other or further notice
or demand in similar other circumstances or constitute a waiver of any of the
rights of the Pledgee or any other Secured Creditor to any other or further
action in any circumstances without demand or notice.  The Secured Creditors agree that this Agreement may be enforced
only by the action of the Pledgee, acting upon the instructions of the Required
Lenders (or, after the date on which all Credit Document Obligations have been
paid in full, the holders of at least a majority of the outstanding Other
Obligations) and that no other Secured Creditor shall have any right
individually to seek to enforce or to enforce this Agreement or to realize upon
the security to be granted hereby, it being understood and agreed that such
rights and remedies may be exercised by the Pledgee or the holders of at least
a majority of the outstanding Other Obligations, as the case may be, for the
benefit of the Secured Creditors upon the terms of this Agreement and the other
Credit Documents.


 


9.                                       APPLICATION
OF PROCEEDS.  (a)  All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to the terms of
this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied to the payment of the Obligations in the manner
provided in the Security Agreement.


 


(b)  It is understood and agreed that the
Pledgors shall remain jointly and severally liable to the extent of any
deficiency between the amount of proceeds of the Collateral hereunder and the
aggregate amount of the Obligations.


 


10.                                 PURCHASERS
OF COLLATERAL.  Upon any sale of the
Collateral by the Pledgee hereunder (whether by virtue of the power of sale
herein granted, pursuant to judicial process or otherwise), the receipt of the
Pledgee or the officer making such sale of the purchase money paid as
consideration pursuant to such sale shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Pledgee or such officer or be answerable in any
way for the misapplication or nonapplication thereof.


 


11.                                 INDEMNITY.  Each Pledgor jointly and severally agrees
(i) to indemnify, reimburse and hold harmless the Pledgee and each other
Secured Creditor and their respective successors, assigns, employees, agents
and affiliates (individually an “Indemnitee”, and collectively, the “Indemnitees”)
from and against any and all obligations, damages, injuries, penalties, claims,
demands, losses, judgments and liabilities (including, without limitation,
liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse
each Indemnitee for all reasonable costs, expenses and disbursements, including
reasonable attorneys’ fees and expenses, in each case arising out of or
resulting from this Agreement or the exercise by any Indemnitee of any right or
remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding
any obligations, damages, injuries, penalties, claims, demands, losses,
judgments and liabilities (including, without limitation, liabilities for
penalties) or expenses of whatsoever kind or nature to the extent incurred or
arising by reason of gross negligence or willful misconduct of such Indemnitee
(as determined by a court of competent jurisdiction in a final and
non-appealable decision)).  In no event
shall the Pledgee hereunder be liable, in the absence of gross negligence or
willful misconduct on its part (as determined by a court of competent
jurisdiction in a final and non-appealable decision), for any matter or thing
in connection with this Agreement other than to account for monies or other
property actually


 

















 


received by it in accordance with the terms hereof.  If and to the extent that the obligations of
any Pledgor under this Section 11 are unenforceable for any reason, such
Pledgor hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law. The
indemnity obligations of each Pledgor contained in this Section 11 shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, the termination of all Secured Hedging
Agreements and Letters of Credit, and the payment of all other Obligations and
notwithstanding the discharge thereof.


 


12.                                 FURTHER
ASSURANCES; POWER OF ATTORNEY.  (a)  Each Pledgor
agrees that it will join with the Pledgee in executing and, at such Pledgor’s
own expense, file and refile under the UCC or other applicable law such
financing statements, continuation statements and other documents in such
offices as the Pledgee (acting on its own or on the instructions of the
Required Lenders) may reasonably deem necessary or appropriate and wherever
required or permitted by law in order to perfect and preserve the Pledgee’s
security interest in the Collateral hereunder and hereby authorizes the Pledgee
to file financing statements and amendments thereto relative to all or any part
of the Collateral (including, without limitation, financing statements which
list the Collateral specifically and/or “all assets” as collateral) without the
signature of such Pledgor where permitted by law, and agrees to do such further
acts and things and to execute and deliver to the Pledgee such additional
conveyances, assignments, agreements and instruments as the Pledgee may
reasonably require or deem advisable to carry into effect the purposes of this
Agreement or to further assure and confirm unto the Pledgee its rights, powers
and remedies hereunder or thereunder.


 


(b)  Each Pledgor hereby appoints the Pledgee
such Pledgor’s attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor or otherwise, from time to time
after the occurrence and during the continuance of an Event of Default, in the
Pledgee’s discretion to take any action and to execute any instrument which the
Pledgee may deem necessary or advisable to accomplish the purposes of this
Agreement.


 


13.                                 THE
PLEDGEE AS FIRST-LIEN COLLATERAL AGENT.  The Pledgee will hold in
accordance with this Agreement all items of the Collateral at any time received
under this Agreement.  It is expressly
understood, acknowledged and agreed by each Secured Creditor that by accepting
the benefits of this Agreement each such Secured Creditor acknowledges and
agrees that the obligations of the Pledgee as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise
under this Agreement, are only those expressly set forth in this
Agreement.  The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 12 of the
Credit Agreement.


 


14.                                 TRANSFER
BY THE PLEDGORS.  No Pledgor will sell or otherwise dispose of,
grant any option with respect to, or mortgage, pledge or otherwise encumber any
of the Collateral or any interest therein (except in accordance with the terms
of this Agreement and the other Secured Debt Agreements).


 


15.                                 REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE PLEDGORS.  (a)  Each
Pledgor represents, warrants and covenants that:


 


(i)                                     it
is the legal, beneficial and record owner of, and has good and marketable title
to, all Collateral consisting of one or more Securities, Partnership


 

















 


Interests and Limited Liability Company Interests and
that it has sufficient interest in all Collateral in which a security interest
is purported to be created hereunder for such security interest to attach
(subject, in each case, to no pledge, lien, mortgage, hypothecation, security
interest, charge, option, Adverse Claim or other encumbrance whatsoever, except
the liens and security interests created by this Agreement); 


 


(ii)                                  it
has full power, authority and legal right to pledge all the Collateral pledged
by it pursuant to this Agreement; 


 


(iii)                               this
Agreement has been duly authorized, executed and delivered by such Pledgor and
constitutes a legal, valid and binding obligation of such Pledgor enforceable
against such Pledgor in accordance with its terms, except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law); 


 


(iv)                              except
to the extent already obtained or made (or, in the case of the filing of UCC-1
Financing Statements, as will be made within 10 days of the Initial Borrowing
Date), no consent of any other party (including, without limitation, any
stockholder, member, partner or creditor of such Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by such Pledgor in
connection with (a) the execution, delivery or performance of this Agreement,
(b) the validity or enforceability of this Agreement (except as set forth in
clause (iii) above), (c) the perfection or enforceability of the Pledgee’s
security interest in the Collateral or (d) except for compliance with or as may
be required by applicable securities laws, the exercise by such Pledgee of any
of its rights or remedies provided herein; 


 


(v)                                 neither
the execution, delivery and performance by such Pledgor of this Agreement nor
compliance by such Pledgor with the terms and provisions hereof, nor the
consummation of the transactions contemplated herein, will contravene any
material provision of any material applicable law, statute, rule or regulation
or any order, judgment, writ, injunction, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, applicable to such
Pledgor, or violate any provision of the certificate of incorporation, by-laws,
operating agreement, certificate of partnership, partnership agreement,
certificate of limited liability company or limited liability company agreement
of such Pledgor or any of its Subsidiaries or of any securities issued by such
Pledgor or any of its Subsidiaries, nor, except as specifically described on
Schedule XII of the Credit Agreement will it in any material respect conflict
or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions, or constitute a default under or, (other
than pursuant to this Agreement) result in the creation or imposition of (or
the obligation to create or impose) any lien or encumbrance (other than the
Liens created by the Security Documents) upon any of the property or assets of
such Pledgor or any of its Subsidiaries pursuant to the terms of any mortgage,
deed of trust, indenture, lease, loan agreement, credit agreement or any other
material contract, agreement, instrument or undertaking to which such Pledgor
or any of its Subsidiaries is a party or by which it or any of its assets are
bound or to which it may be subject (including, without limitation, the
Existing Indebtedness Agreements); 


 

















 


(vi)                              all
of the Collateral (consisting of Securities, Limited Liability Company
Interests or Partnership Interests) has been duly and validly issued, is fully
paid and non-assessable and is subject to no options to purchase or similar
rights;


 


(vii)                           each of
the Pledged Notes constitutes, or when executed by the obligor thereof will
constitute, the legal, valid and binding obligation of such obligor,
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law);  


 


(viii)                        the
pledge, collateral assignment and delivery to the Pledgee of the Collateral
consisting of Certificated Securities and Pledged Notes pursuant to this
Agreement creates a valid and perfected first priority security interest in
such Securities, and the proceeds thereof, subject to no prior Lien or encumbrance
or to any agreement purporting to grant to any third party a Lien or
encumbrance on the property or assets of such Pledgor which would include the
Securities and the Pledgee is entitled to all the rights, priorities and
benefits afforded by the UCC or other relevant law as enacted in any relevant
jurisdiction to perfect security interests in respect of such Collateral; and


 


(ix)                                “control”
(as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over
all Collateral consisting of Securities (including Notes which are Securities)
with respect to which such “control” may be obtained pursuant to Section 8-106
of the UCC.


 


(b)  Each
Pledgor covenants and agrees that it will defend the Pledgee’s right, title and
security interest in and to the Securities and the proceeds thereof against the
claims and demands of all persons whomsoever; and each Pledgor covenants and
agrees that it will have like title to and right to pledge any other property
at any time hereafter pledged to the Pledgee as Collateral hereunder and will
likewise defend the right thereto and security interest therein of the Pledgee
and the other Secured Creditors.


 


(c)  Each
Pledgor covenants and agrees that it will take no action which would violate
any of the terms of any Secured Debt Agreement.


 


16.                                 LEGAL
NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A
TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL
IDENTIFICATION NUMBERS; CHANGES THERETO; ETC.  The exact legal name of each Pledgor, the type of organization of
such Pledgor, whether or not such Pledgor is a Registered Organization, the
jurisdiction of organization of such Pledgor, such Pledgor’s Location, the
organizational identification number (if any) of each Pledgor, and whether or
not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for
such Pledgor.  No Pledgor shall change
its legal name, its type of organization, its status as a Registered
Organization (in the case of a Registered Organization), its status as a
Transmitting Utility or as a Person which is not a Transmitting Utility, as the
case may be, its jurisdiction of organization, its Location, or its
organizational identification number (if any), except that any such changes
shall be permitted (so long as not in violation of the applicable requirements
of the Secured Debt Agreements and so long as same do not involve (x) a
Registered Organization ceasing to constitute same or (y) any Pledgor changing
its jurisdiction


 

















 


of organization or Location from the United States or a State thereof
to a jurisdiction of organization or Location, as the case may be, outside the
United States or a State thereof) if (i) it shall have given to the Collateral
Agent not less than 15 days’ prior written notice of each change to the
information listed on Annex A (as adjusted for any subsequent changes thereto
previously made in accordance with this sentence), together with a supplement
to Annex A which shall correct all information contained therein for such Pledgor,
and (ii) in connection with the respective such change or changes, it shall
have taken all action reasonably requested by the Collateral Agent to maintain
the security interests of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.  In addition, to the extent that any Pledgor
does not have an organizational identification number on the date hereof and
later obtains one, such Pledgor shall promptly thereafter deliver a notification
to the Collateral Agent of such organizational identification number and shall
take all actions reasonably satisfactory to the Collateral Agent to the extent
necessary to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby fully perfected and in full force and
effect.


 


17.                                 PLEDGORS’
OBLIGATIONS ABSOLUTE, ETC.  The obligations of each Pledgor under
this Agreement shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever (other than termination of this Agreement pursuant to Section 19
hereof), including, without limitation: 


 


(i)                                     any
renewal, extension, amendment or modification of, or addition or supplement to
or deletion from any Secured Debt Agreement (other than this Agreement in
accordance with its terms), or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; 


 


(ii)                                  any
waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument or this Agreement (other than a
waiver, consent or extension with respect to this Agreement in accordance with
its terms);


 


(iii)                               any
furnishing of any additional security to the Pledgee or its assignee or any
acceptance thereof or any release of any security by the Pledgee or its
assignee; 


 


(iv)                              any
limitation on any party’s liability or obligations under any such instrument or
agreement or any invalidity or unenforceability, in whole or in part, of any
such instrument or agreement or any term thereof; or 


 


(v)                                 any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to any Pledgor or any Subsidiary
of any Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.


 


18.                                 REGISTRATION,
ETC.  (a)  If an Event of Default shall have occurred
and be continuing and any Pledgor shall have received from the Pledgee a
written request or requests that such Pledgor cause any registration, qualification
or compliance under any federal or state securities law or laws to be effected
with respect to all or any part of the Collateral


 

















 


consisting of Securities, Limited Liability Company Interests or
Partnership Interests, such Pledgor as soon as practicable and at its expense
will use its best efforts to cause such registration to be effected (and be
kept effective) and will use its best 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 Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests, including, without limitation, registration under the Securities Act
of 1933, as then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other governmental requirements; provided,
that the Pledgee shall furnish to such Pledgor such information regarding the
Pledgee as such Pledgor may request in writing and as shall be required in
connection with any such registration, qualification or compliance.  Each Pledgor will cause the Pledgee to be
kept reasonably advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof,
will furnish to the Pledgee such number of prospectuses, offering circulars and
other documents incident thereto as the Pledgee from time to time may
reasonably request, and will indemnify, to the extent permitted by law, the
Pledgee and all other Secured Creditors participating in the distribution of
such Collateral consisting of Securities, Limited Liability Company Interests
or Partnership Interests 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, except insofar as the same may have been caused by an untrue
statement or omission based upon information furnished in writing to such
Pledgor by the Pledgee expressly for use therein. 


 


(b)  If at any time when the Pledgee shall
determine to exercise its right to sell all or any part of the Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests pursuant to Section 7, and such Collateral or the part thereof to be
sold shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as then in effect, the Pledgee may, in its sole and
absolute discretion, sell such Collateral or part thereof by private sale in
such manner and under such circumstances as the Pledgee may deem necessary or
advisable in order that such sale may legally be effected without such
registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion: (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Collateral or part thereof shall have been filed under such
Securities Act; (ii) may approach and negotiate with a single possible
purchaser to effect such sale; and (iii) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of
such Collateral or part thereof.  In the
event of any such sale, the Pledgee shall incur no responsibility or liability
for selling all or any part of the Collateral at a price which the Pledgee, in
its sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher
price might be realized if the sale were deferred until the registration as
aforesaid.


 


19.                                 TERMINATION;
RELEASE.  (a)  On the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of the respective
Pledgor, will execute and deliver to such Pledgor a 


 

















 


proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement (including, without limitation, UCC termination
statements and instruments of satisfaction, discharge and/or reconveyance), and
will duly assign, transfer and deliver to such Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement, together with any moneys at the
time held by the Pledgee or any of its sub-agents hereunder and, with respect
to any Collateral consisting of an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation), a
Partnership Interest or a Limited Liability Company Interest, a termination of
the agreement relating thereto executed and delivered by the issuer of such
Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective
partnership or limited liability company pursuant to Section 3.2(a)(iv).  As used in this Agreement, “Termination
Date” shall mean the date upon which the Total Commitments and all Secured
Hedging Agreements have been terminated, no Letter of Credit or Note is
outstanding (and all Loans have been paid in full), all Letters of Credit have
been terminated, and all other Obligations (provided for in the Credit
Documents for which no claim has been made), other than indemnitees have been
paid in full.


 


(b)  In
the event that any part of the Collateral is sold or otherwise disposed of (to
a Person other than a Credit Party) (x) at any time prior to the time at which
all Credit Document Obligations have been paid in full and all Commitments and
Letters of Credit under the Credit Agreement have been terminated, in
connection with a sale or disposition permitted by Section 9.02 of the Credit
Agreement or is otherwise released at the direction of the Required Lenders (or
all the Lenders if required by Section 13.01 of the Credit Agreement) or (y) at
any time thereafter, to the extent permitted by the other Secured Debt
Agreements, and in the case of clauses (x) and (y), the proceeds of such sale
or disposition (or from such release) are applied in accordance with the terms
of the Credit Agreement or such other Secured Debt Agreement, as the case may
be, to the extent required to be so applied, the Pledgee, at the request and
expense of such Pledgor, will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
possession of the Pledgee and has not theretofore been released pursuant to
this Agreement and to the extent requested by such Pledgor, deliver UCC
termination statements and instruments of satisfaction, discharge and/or
reconveyance.


 


(c)  At
any time that any Pledgor desires that Collateral be released as provided in
the foregoing Section 19(a) or (b), it shall deliver to the Pledgee a
certificate signed by a principal executive officer of such Pledgor stating
that the release of the respective Collateral is permitted pursuant to Section
19(a) or (b).  If reasonably requested
by the Pledgee (although the Pledgee shall have no obligation to make any such
request), the relevant Pledgor shall furnish appropriate legal opinions (from
counsel reasonably acceptable to the Pledgee) to the effect set forth in the
immediately preceding sentence.  The
Pledgee shall have no liability whatsoever to any Secured Creditor as the
result of any release of Collateral by it as permitted by this Section 19.


 


20.                                 NOTICES,
ETC.  All notices and other communications hereunder shall be in
writing and shall be delivered or mailed by first class mail, postage prepaid,
addressed:


 


(i)                                     if
to any Pledgor, at its address set forth opposite its signature below;


 

















 


(ii)                                  if
to the Pledgee, at:


 


Bank of America, N.A., as
First-Lien Collateral Agent

Mailcode CA5-701-05-19

1455 Market Street, 5th Floor

San Francisco, CA 94103

Telephone: (415) 436-3495

Facsimile:  (415) 503-5006

Attention:  Charles Graber


 


with a
copy to:


 


Bank of America, N.A., as
First-Lien Collateral Agent

Mailcode NC1-007-13-06

100 N. Tryon Street, 13th Floor

Charlotte, NC 28255

Telephone: (704) 388-6415

Facsimile:  (704) 409-0564

Attention:  Laura Clark


 


(iii)                               if
to any Lender (other than the Pledgee), at such address as such Lender shall
have specified in the Credit Agreement;


 


(iv)                              if
to any Other Creditor, at such address as such Other Creditor shall have
specified in writing to the Borrower and the Pledgee;


 


or at such address as shall have been furnished in writing by any
Person described above to the party required to give notice hereunder.


 


21.                                 PLEDGEE
NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER.  (a)  Nothing herein shall be
construed to make the Pledgee or any other Secured Creditor liable as a member
of any limited liability company or partnership and neither the Pledgee nor any
other Secured Creditor by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall have any of the duties,
obligations or liabilities of a member of any limited liability company or
partnership.  The parties hereto
expressly agree that, unless the Pledgee shall become the absolute owner of
Collateral consisting of a Limited Liability Company Interest or Partnership
Interest pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Pledgee, any other Secured Creditor
and/or any Pledgor.


 


(b)                                 Except
as provided in the last sentence of paragraph (a) of this Section 21, the
Pledgee, by accepting this Agreement, did not intend to become a member of any
limited liability company or partnership or otherwise be deemed to be a
co-venturer with respect to any Pledgor or any limited liability company or
partnership either before or after an Event of Default shall have
occurred.  The Pledgee shall have only
those powers set forth herein and the Secured Creditors shall assume none of
the duties, obligations or liabilities of a member of any limited liability
company or partnership or any Pledgor except as provided in the last sentence
of paragraph (a) of this Section 21.


 

















 


(c)                                  The
Pledgee and the other Secured Creditors shall not be obligated to perform or
discharge any obligation of any Pledgor as a result of the pledge hereby
effected.


 


(d)                                 The
acceptance by the Pledgee of this Agreement, with all the rights, powers,
privileges and authority so created, shall not at any time or in any event
obligate the Pledgee or any other Secured Creditor to appear in or defend any
action or proceeding relating to the Collateral to which it is not a party, or
to take any action hereunder or thereunder, or to expend any money or incur any
expenses or perform or discharge any obligation, duty or liability under the
Collateral.


 


22.                                 WAIVER;
AMENDMENT.  Except as contemplated
by Sections 19 and 28 hereof, none of the terms and conditions of this
Agreement may be changed, waived, discharged or terminated in any manner
whatsoever unless such change, waiver, discharge or termination is in writing
duly signed by each Pledgor directly and adversely affected thereby and the
Collateral Agent(with the consent of (x) the Required Lenders (or, to the
extent required by Section 13.01 of the Credit Agreement, all of the Lenders)
at all times prior to the time at which all Credit Document Obligations (other
than those arising from indemnities for which no request has been made) have
been paid in full and all Commitments and Letters of Credit under the Credit
Agreement have been terminated or (y) the holders of at least a majority of the
outstanding Other Obligations at all times after the time at which all Credit
Document Obligations (other than those arising from indemnities for which no
request has been made) have been paid in full and all Commitments and Letters
of Credit under the Credit Agreement have been terminated, provided that
any change, waiver, modification or variance affecting the rights and benefits
of a single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Secured Creditors.  For the purpose of this Agreement, the term
“Class” shall mean each class of Secured Creditors, i.e., whether (x)
the Lender Creditors as holders of the Credit Document Obligations or  (y) the Other Creditors as holders of the
Other Obligations.  For the purpose of
this Agreement, the term “Requisite Creditors” of any Class shall mean each of
(x) with respect to each of the Credit Document Obligations, the Required
Lenders and (y) with respect to the Other Obligations, the holders of more than
50% of all obligations outstanding from time to time under the Secured Hedging
Agreements.


 


23.                                 MISCELLANEOUS.  This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect, subject to release and/or
termination as set forth in Section 19, (ii) be binding upon each Pledgor, its
successors and assigns; provided, however, that no Pledgor shall
assign any of its rights or obligations hereunder without the prior written
consent of the Pledgee (with the prior written consent of the Required Lenders
or to the extent required by Section 13.01 of the Credit Agreement, all of the
Lenders), and (iii) inure, together with the rights and remedies of the Pledgee
hereunder, to the benefit of the Pledgee, the other Secured Parties and their
respective successors, transferees and assigns. 
The headings of the several sections and subsections in this
Agreement are for purposes of reference only and shall not limit or define the
meaning hereof.  This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.  In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement which shall
remain binding on all parties hereto. 
All agreements, statements, representations and warranties made by each
Pledgor herein or in any certificate or other instrument delivered by such
Pledgor or on its behalf under this Agreement


 

















 


shall be considered to have been relied upon by the Secured Creditors
and shall survive the execution and delivery of this Agreement and the other
Secured Debt Agreements regardless of any investigation made by the Secured
Creditors or on their behalf.


 


24.                                 GOVERNING
LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.   
(A)  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE
WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF
THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH
PLEDGOR.  EACH PLEDGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PLEDGOR AT ITS
ADDRESS FOR NOTICES AS PROVIDED IN SECTION 20 ABOVE, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. 
EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT
THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
PLEDGEE UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY PLEDGOR IN ANY OTHER JURISDICTION.


 


(B)                                EACH
PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.


 

















 


(C)                                EACH
OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.


 


25.                                 ADDITIONAL
PLEDGORS.  It is understood and agreed that any Subsidiary of the
Borrower that is required to become a party to this Agreement after the date
hereof pursuant to the requirements of the Credit Agreement shall automatically
become a Pledgor hereunder by (x) executing a counterpart hereof and/or a
Subsidiary assumption agreement, in each case in form and substance
satisfactory to the Pledgee, (y) delivering supplements to Annexes A through F
hereto as are necessary to cause such Annexes to be complete and accurate with
respect to such additional Pledgor on such date and (z) taking all actions as
specified in Section 3 of this Agreement as would have been taken by such
Pledgor had it been an original party to this Agreement, in each case with all
documents required above to be delivered to the Pledgee and with all documents
and actions required to be taken above to be taken to the reasonable satisfaction
of the Pledgee.


 


26.                                 RECOURSE.  This Agreement is made with full recourse to
the Pledgors and pursuant to and upon all the representations, warranties,
covenants and agreements on the part of the Pledgors contained herein and in
the other Secured Debt Agreements and otherwise in writing in connection
herewith or therewith.


 


27.                                 FRAUDULENT
CONVEYANCE; ETC.  It is the desire
and intent of each Pledgor and the Secured Creditors that this Agreement shall
be enforced against each Pledgor to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought.  Notwithstanding anything to the
contrary contained herein, in furtherance of the foregoing, it is noted that
the obligations of each Pledgor constituting a Subsidiary Guarantor have been
limited as, and to the extent, provided in Section 27 of the Subsidiaries
Guaranty.  


 


28.                                 RELEASE
OF PLEDGORS.  If at any time all of
the Equity Interests of any Pledgor owned by the Borrower or any of its Subsidiaries
are sold (to a Person other than a Credit Party) in a transaction permitted
pursuant to the Credit Agreement (and which does not violate the terms of any
other Secured Debt Agreement then in effect), then, such Pledgor shall be
released as a Pledgor pursuant to this Agreement without any further action
hereunder (it being understood that the sale of all of the equity interests in
any Person that owns, directly or indirectly, all of the equity interests in
any Pledgor shall be deemed to be a sale of all of the equity interests in such
Pledgor for purposes of this Section), and the Pledgee is authorized and
directed to execute and deliver such instruments of release as are reasonably
satisfactory to it.  At any time that
the Borrower desires that a Pledgor be released from this Agreement as provided
in this Section 28, the Borrower shall deliver to the Pledgee a certificate
signed by a principal executive officer of the Borrower stating that the
release of such Pledgor is permitted pursuant to this Section 28.  If requested by Pledgee (although the
Pledgee shall have no obligation to make any such request), the Borrower shall
furnish legal opinions (from counsel acceptable to the Pledgee) to the effect
set forth in the immediately preceding sentence.  The Pledgee shall have no liability whatsoever to any other
Secured Creditor as a result of the release of any Pledgor by it in accordance
with, or which it believes to be in accordance with, this Section 28.


 

















 


IN
WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be
executed  by  their elected officers duly authorized as of the date first above
written.


 


	
  2366 Bernville Road

  	
  ENERSYS,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  ENERSYS CAPITAL INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  ENERSYS DELAWARE INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  ESFINCO, INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


	
  2366 Bernville Road

  	
  ESRMCO, INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  HAWKER ENERGY PRODUCTS INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  HAWKER POWER SYSTEMS, INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  POWERSAFE STANDBY BATTERIES INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  2366 Bernville Road

  	
  HAWKER POWERSOURCE, INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


	
  2366 Bernville Road

  	
  NEW PACIFICO REALTY, INC.,

  
	
  Reading, PA, 19605

  	
  as a Pledgor

  
	
  Telephone: 
  (610) 208-1991

  	
   

  
	
  Facsimile: 
  (610) 208-1671

  	
   

  
	
  Attention: Michael T. Philion

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


	
  Accepted and Agreed to:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,

  	
   

  
	
  as First Lien Collateral Agent and Pledgee

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 

















 


SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION

(AND WHETHER A REGISTERED ORGANIZATION AND/OR

A TRANSMITTING UTILITY), JURISDICTION OF ORGANIZATION, 

LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS


 




	
  Exact
  Legal

  Name of Each

  Pledgor

  	
   

  	
  Registered

  Organization?

  (Yes/No)

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Pledgor’s

  Location (for 

  purposes of NY

  UCC

  § 9-307)

  	
   

  	
  Pledgor’s

  Organization

  Identification

  Number (or, if it

  has none, so

  indicate)

  	
   

  	
  Transmitting

  Utility?

  (Yes/No)

  






 


 

















 


LIST OF STOCK


 


 

















 


LIST OF NOTES


 


 

















 


LIST OF LIMITED LIABILITY
COMPANY INTERESTS


 


 

















 


LIST OF PARTNERSHIP
INTERESTS


 


 

















 


LIST OF CHIEF EXECUTIVE
OFFICES


 


 

















 


Form of Agreement
Regarding Uncertificated Securities, Limited Liability

Company Interests and Partnership Interests


 


AGREEMENT
(as amended, modified or supplemented from time to time, this “Agreement”),
dated as of                ,            , among each of the undersigned
pledgors (each a “Pledgor” and, collectively, the “Pledgors”),                     , not in its individual
capacity but solely as Collateral Agent (the “Pledgee” or “First-Lien
Collateral Agent”), and                 
, as the issuer of the Uncertificated Securities, Limited Liability
Company Interests and/or Partnership Interests (each as defined below) (the “Issuer”).


 


W I T N E S S E T H :


 


WHEREAS,
each Pledgor and the Pledgee are entering into a Pledge Agreement, dated as of
March 17, 2004 (as amended, amended and restated, modified or supplemented from
time to time, the “Pledge Agreement”), under which, among other things,
in order to secure the payment of the Obligations (as defined in the Pledge
Agreement), each Pledgor will pledge to the Pledgee for the benefit of the
Secured Creditors (as defined in the Pledge Agreement), and grant a security
interest in favor of the Pledgee for the benefit of the Secured Creditors in,
all of the right, title and interest of such Pledgor in and to any and all (1)
“uncertificated securities” (as defined in Section 8-102(a)(18) of the Uniform
Commercial Code, as adopted in the State of New York) (“Uncertificated
Securities”), (2) Partnership Interests (as defined in the Pledge
Agreement) and (3) Limited Liability Company Interests (as defined in the
Pledge Agreement), in each case issued from time to time by the Issuer, whether
now existing or hereafter from time to time acquired by such Pledgor (with all of
such Uncertificated Securities, Partnership Interests and Limited Liability
Company Interests being herein collectively called the “Issuer Pledged
Interests”); and


 


WHEREAS,
each Pledgor desires the Issuer to enter into this Agreement in order to perfect
the security interest of the Pledgee under the Pledge Agreement in the Issuer
Pledged Interests, to vest in the Pledgee control of the Issuer Pledge
Interests and to provide for the rights of the parties under this Agreement;


 


NOW
THEREFORE, in consideration of the premises and the mutual promises and
agreements contained herein, and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:


 


1.  Each Pledgor hereby irrevocably authorizes
and directs the Issuer, and the Issuer hereby agrees, to comply with any and
all instructions and orders originated by the Pledgee (and its successors and
assigns) regarding any and all of the Issuer Pledged Interests without the
further consent by the registered owner (including the respective Pledgor), and
not to comply with any instructions or orders regarding any or all of the
Issuer Pledged Interests originated by any person or entity other than the
Pledgee (and its successors and assigns) or a court of competent jurisdiction.


 


2.  The Issuer hereby certifies that (i) no
notice of any security interest, lien or other encumbrance or claim affecting
the Issuer Pledged Interests (other than the security interest


 

















 


of the Pledgee) has been received by it, and (ii) the security interest
of the Pledgee in the Issuer Pledged Interests has been registered in the books
and records of the Issuer.


 


3.  The Issuer hereby represents and warrants
that (i) the pledge by the Pledgors of, and the granting by the Pledgors of a
security interest in, the Issuer Pledged Interests to the Pledgee, for the
benefit of the Secured Creditors, does not violate the charter, by-laws,
partnership agreement, membership agreement or any other agreement governing
the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged
Interests are fully paid and nonassessable.


 


4.  All notices, statements of accounts,
reports, prospectuses, financial statements and other communications to be sent
to any Pledgor by the Issuer in respect of the Issuer will also be sent to the
Pledgee at the following address:


 


Bank of America, N.A., as
First-Lien Collateral Agent and Pledgee

Mailcode CA5-701-05-19


1455 Market Street, 5th
Floor


San Francisco, CA 94103


Telephone: (415) 436-3495


Facsimile:  (415) 503-5006


Attention:  Charles Graber


 


with a
copy to:


 


Bank of America, N.A., as
First-Lien Collateral Agent and Pledgee


Mailcode NC1-007-13-06


100 N. Tryon Street, 13th
Floor


Charlotte, NC 28255


Telephone: (704) 388-6415


Facsimile:  (704) 409-0564


Attention:  Laura Clark


 


5.  Until the Pledgee shall have delivered
written notice to the Issuer that all of the Obligations have been paid in full
and this Agreement is terminated, the Issuer will send any and all redemptions,
distributions, interest or other payments in respect of the Issuer Pledged
Interests from the Issuer for the account of the Pledgor only by wire transfers
to the following address:


 


 


	
   

  
	
   

  
	
   

  
	
   

  
	
  [Account Information]

  	
   

  
	
  ABA No.:

  	
   

  
	
  Account in the Name of:

  	
   

  
	
  Account No.:

  	
   

  
	
   

  
					



6.  Except as expressly provided otherwise in
Sections 4 and 5, all notices, instructions, orders and communications
hereunder shall be sent or delivered by mail, telex,


 

















 


telecopy or overnight courier service and all such notices and
communications shall, when mailed, telexed, telecopied or sent by overnight
courier, be effective when deposited in the mails or delivered to the overnight
courier, prepaid and properly addressed for delivery on such or the next
Business Day, or sent by telex or telecopier, except that notices and
communications to the Pledgee shall not be effective until received by the
Pledgee.  All notices and other
communications shall be in writing and addressed as follows:


 


(a)                                  if
to any Pledgor, at:


 


(b)                                 if
to the Pledgee, at the address given in Section 4 hereof:


 


 (c)                               if to the Issuer, at:


 


 


 


	
   

  
	
   

  
	
   

  
	
   

  
	
  Attention:

  	
   

  
	
  Telephone No.:

  	
   

  
	
  Telecopier No.:

  	
   

  
	
   

  
			



 


or at such other address
as shall have been furnished in writing by any Person described above to the
party required to give notice hereunder. 
As used in this Section 6, “Business Day” means any day other
than a Saturday, Sunday, or other day in which banks in New York are authorized
to remain closed.


 


7.  This Agreement shall be binding upon the
successors and assigns of each Pledgor and the Issuer and shall inure to the
benefit of and be enforceable by the Pledgee and its successors and
assigns.  This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall constitute one instrument. 
In the event that any provision of this Agreement shall prove to be
invalid or unenforceable, such provision shall be deemed to be severable from
the other provisions of this Agreement which shall remain binding on all
parties hereto.  None of the terms and
conditions of this Agreement may be changed, waived, modified or varied in any
manner whatsoever except in writing signed by the Pledgee, the Issuer and any
Pledgor which at such time owns any Issuer Pledged Interests.


 


8.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its principles of conflict of laws.


 

















 


IN
WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.


 


	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Pledgor

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  not in its individual
  capacity but solely as

  Collateral Agentand Pledgee

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as the Issuer

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: