Exhibit 10.2




 





 


 


SECURITY AGREEMENT


 


among


 


DURATEK, INC.,


 


CERTAIN SUBSIDIARIES THEREOF,


 


and


 


CREDIT LYONNAIS NEW YORK BRANCH,


as COLLATERAL AGENT


 












 


Dated as of December 16, 2003


 












 




 





 

















 


SECURITY AGREEMENT


 


SECURITY
AGREEMENT, dated as of December 16, 2003, made by each of the undersigned
assignors (each, an “Assignor” and, together with any other entity that
becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”)
in favor of Credit Lyonnais New York Branch, as Collateral Agent (together with
any successor Collateral Agent, the “Collateral Agent”), for the benefit
of the Secured Creditors (as defined below). 
Certain capitalized terms as used herein are defined in Article IX
hereof.  Except as otherwise defined
herein, all capitalized 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, Duratek,
Inc. (the ”Borrower”), the lenders from time to time party thereto
(the “Lenders”) and Credit Lyonnais New York Branch, as administrative
agent (together with any successor Administrative Agent, the “Administrative
Agent”) (the Lenders, each Issuing Lender, the Administrative Agent and the
Collateral Agent are herein called the “Lender Creditors”), have entered
into a Credit Agreement, dated as of December 16, 2003, providing for the
making of Loans to, and the issuance of and participation in Letters of Credit
for the account of, the Borrower, all as contemplated therein (as used herein,
the term “Credit Agreement” means the Credit Agreement described above
in this paragraph, as the same may be amended, modified, extended, renewed,
replaced, restated, supplemented or refinanced from time to time, and including
any agreement extending the maturity of, or refinancing or restructuring
(including, but not limited to, the inclusion of additional borrowers or
guarantors thereunder or any increase in the amount borrowed) all or any
portion of, the indebtedness under such agreement or any successor agreement,
whether or not with the same agent, trustee, representative, lenders or
holders; provided that, with respect to any agreement providing for the
refinancing or replacement of indebtedness under the Credit Agreement, such
agreement shall only be treated as, or as part of, the Credit Agreement
hereunder if (i) either (A) all obligations under the Credit Agreement being
refinanced or replaced shall be paid in full at the time of such refinancing or
replacement, and all commitments and letters of credit issued pursuant to the
refinanced or replaced Credit Agreement shall have terminated in accordance
with their terms or (B) the Required Lenders shall have consented in writing to
the refinancing or replacement indebtedness being treated as indebtedness
pursuant to the Credit Agreement, and (ii) a notice to the effect that the
refinancing or replacement indebtedness shall be treated as issued under the
Credit Agreement shall be delivered by the Borrower to the Collateral Agent);


 


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


 


WHEREAS, one or
more Lenders or any affiliate thereof (each such Lender or affiliate, even if
the respective Lender subsequently ceases to be a Lender under the Credit


 

















 


Agreement for any reason,
together with such Lender’s or affiliate’s successors and assigns, if any,
collectively, the “Secured Supplemental L/C Creditors” and, together
with the Hedging Creditors, the “Other Creditors”; and the Lender
Creditors, the Hedging Creditors and the Secured Supplemental L/C Creditors are
collectively referred to herein as the “Secured Creditors”) may at any
time and from time to time issue Secured Supplemental Letters of Credit for the
account of the Borrower;


 


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 (i) 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, (ii) to the Hedging Creditors entering into
Interest Rate Protection Agreements and Other Hedging Agreements and (iii) to
the Secured Supplemental L/C Creditors issuing Secured Supplemental Letters of
Credit for the account of the Borrower that each Assignor shall have executed
and delivered to the Collateral Agent this Agreement; and


 


WHEREAS, each
Assignor 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, the entering into by the Borrower and/or
one or more of its Subsidiaries of Interest Rate Protection Agreements or Other
Hedging Agreements and the issuance of Secured Supplemental Letters of Credit
for the account of the Borrower and, accordingly, desires to execute this
Agreement in order to satisfy the condition described in the preceding
paragraph and to induce the Lenders to make Loans to the Borrower and issue, and/or
participate in, Letters of Credit for the account of the Borrower, the Hedging
Creditors to enter into Interest Rate Protection Agreements or Other Hedging
Agreements with the Borrower and/or one or more of its Subsidiaries and the
Secured Supplemental L/C Creditors to issue Secured Supplemental Letters of
Credit for the account of the Borrower;


 


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


 


ARTICLE
I


 


SECURITY
INTERESTS


 


1.1  Grant of Security Interests.  (a)  As security for the prompt and complete
payment and performance when due of all of its Obligations, each Assignor does
hereby assign and transfer unto the Collateral Agent, and does hereby pledge and
grant to the Collateral Agent, for the benefit of the Secured Creditors, a
continuing security interest in all of the right, title and interest of such
Assignor in, to and under all of the following personal property and fixtures
(and all rights therein) of such Assignor, or in which or to which such
Assignor has any rights, in each case whether now existing or hereafter from
time to time acquired:


 


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(i)            each and every Account;


 


(ii)           all cash;


 


(iii)          the Cash Collateral Account and all monies,
securities, Instruments and other investments deposited or required to be
deposited in the Cash Collateral Account;


 


(iv)          all Chattel Paper (including, without
limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);


 


(v)           all Commercial Tort Claims;


 


(vi)          all computer programs of such Assignor and
all intellectual property rights therein and all other proprietary information
of such Assignor, including but not limited to Domain Names and Trade Secret
Rights;


 


(vii)         all Contracts, together with all Contract
Rights arising thereunder;


 


(viii)        all Copyrights;


 


(ix)           all Equipment;


 


(x)            all Deposit Accounts and all other demand,
deposit, time, savings, cash management, passbook and similar accounts
maintained by such Assignor with any Person and all monies, securities,
Instruments and other investments deposited or required to be deposited in any
of the foregoing;


 


(xi)           all Documents;


 


(xii)          all General Intangibles;


 


(xiii)         all Goods;


 


(xiv)        all Instruments;


 


(xv)         all Inventory;


 


(xvi)        all Investment Property;


 


(xvii)       all Letter-of-Credit Rights (whether or not the
respective letter of credit is evidenced by a writing);


 


(xviii)      all Marks, together with the registrations and
right to all renewals thereof, and the goodwill of the business of such
Assignor symbolized by the Marks;


 


(xix)         all Patents;


 


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(xx)          all Permits;


 


(xxi)         all Software and all Software licensing
rights, all writings, plans, specifications and schematics, all engineering
drawings, customer lists, goodwill and licenses, and all recorded data of any
kind or nature, regardless of the medium of recording;


 


(xxii)        all Supporting Obligations; and


 


(xxiii)       all Proceeds and products of any and all of the
foregoing (all of the above, the “Collateral”);


 


provided
that, notwithstanding anything to the contrary contained in this Agreement, the
term “Collateral” as used herein shall not include (x) any Limited Liability
Company Interests (as defined in the Pledge Agreement), Partnership Interests
(as defined in the Pledge Agreement), or Vitritek Interests (as defined in the
Pledge Agreement) unless, and in such case only to the extent that, such
Limited Liability Company Interests, Partnership Interests and/or Vitritek
Interests are included in the definition of “Collateral” as such term is
defined in the Pledge Agreement or (y) any of the Assignors’ rights in any of
the following Patents: U.S. Patent Numbers 5,851,246; 5,656,044; 5,584,255 and
5,425,792 (collectively, the “Subject Patents”), to the extent that (and
only for so long as) any agreement among any Assignor and any other Person with
rights to such Patents prohibits the granting of, or requires the consent of
such other Person in connection with the granting of, a security interest in
such Patents (any such agreement, a “Subject Patent Agreement”).


 


(b)           The
security interest of the Collateral Agent under this Agreement extends to all
Collateral which any Assignor may acquire, or with respect to which any Assignor
may obtain rights,  at any time during
the term of this Agreement.


 


1.2  Power of Attorney.  Each
Assignor hereby constitutes and appoints the Collateral Agent its true and
lawful attorney, irrevocably, with full power after the occurrence of and during
the continuance of an Event of Default (in the name of such Assignor or
otherwise) to act, require, demand, receive, compound and give acquittance for
any and all moneys and claims for moneys due or to become due to such Assignor
under or arising out of the Collateral, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take
any action or institute any proceedings which the Collateral Agent may deem to
be necessary or advisable to protect the interests of the Secured Creditors,
which appointment as attorney is coupled with an interest.


 


ARTICLE
II


 


GENERAL
REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Each Assignor
represents, warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:


 


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2.1  Necessary Filings.  Except
for filings which are necessary to perfect the security interests created
hereunder, which filings (to the extent that this representation or warranty is
made or deemed made after the 10th day following the Initial Borrowing Date)
have been made, all filings, registrations, recordings and other actions
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been accomplished (subject to the time periods specified in
Sections 3.9, 4.6 and 5.6) and the security interest granted to the Collateral
Agent pursuant to this Agreement in and to the Collateral creates a valid and,
together with all such filings, registrations, recordings and other actions, a
perfected security interest therein prior to the rights of all other Persons
therein (other than holders of Permitted Liens) and subject to no other Liens
(other than Permitted Liens) and is entitled to all the rights, priorities and
benefits afforded by the Uniform Commercial Code or other relevant law as
enacted in any relevant jurisdiction to perfected security interests, in each
case to the extent that the Collateral consists of the type of property in
which a security interest may be perfected by possession (other than the
property described in Section 2.9, to the extent that the requirements of the
second sentence of Section 2.9 are not applicable to such property) or control
(within the meaning of the UCC as in effect on the date hereof in the State of
New York), by filing a financing statement under the Uniform Commercial Code as
enacted in any relevant jurisdiction or by a filing of a Grant of Security
Interest in the respective form attached hereto in the United States Patent and
Trademark Office or in the United States Copyright Office.


 


2.2  No Liens.  Such Assignor
is, and as to all Collateral acquired by it from time to time after the date
hereof such Assignor will be, the owner of all Collateral free from any Lien,
security interest, encumbrance or other right, title or interest of any Person
(other than Permitted Liens), and such Assignor shall defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein adverse to the Collateral Agent.


 


2.3  Other Financing Statements.  As
of the date hereof, there is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Collateral (other than
financing statements filed in respect of Permitted Liens), and so long as the
Termination Date has not occurred, such Assignor will not execute or authorize
to be filed in any public office any financing statement (or similar statement
or instrument of registration under the law of any jurisdiction) or statements
relating to the Collateral, except financing statements filed or to be filed in
respect of and covering the security interests granted hereby by such Assignor
or in connection with Permitted Liens.


 


2.4  Chief Executive Office, Record Locations.  The
chief executive office of such Assignor is, on the date of this Agreement (or,
if later, on the date that such Assignor becomes a party hereto), located at
the address indicated on Annex A hereto for such Assignor.  During the period of the four calendar
months preceding the date of this Agreement (or, if later, the period of four
calendar months preceding the date that such Assignor becomes a party to this
Agreement), the chief executive office of such Assignor has not been located at
any address other than that indicated on Annex A in accordance with the
immediately preceding sentence, in each case unless each such other address is
also indicated on Annex A hereto for such Assignor.


 


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2.5  Location of Inventory and Equipment.  All
Inventory and Equipment held on the date hereof (or, if later, on the date that
such Assignor becomes a party hereto), or held at any time during the period of
four calendar months prior to the date hereof (or, if later, the period of four
calendar months preceding the date that such Assignor becomes a party to this
Agreement), by each Assignor is located at one of the locations shown on Annex
B hereto for such Assignor.


 


2.6  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 Assignor, the type of
organization of such Assignor, whether or not such Assignor is a Registered
Organization, the jurisdiction of organization of such Assignor, such
Assignor’s Location, the organizational identification number (if any) of such
Assignor, and whether or not such Assignor is a Transmitting Utility, is listed
on Annex C hereto for such Assignor. 
Such Assignor shall not 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) from that
used on Annex C hereto, 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 other than in connection with a merger, dissolution
or liquidation otherwise permitted by the Secured Debt Agreements or (y) such
Assignor 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) such Assignor
shall have given to the Collateral Agent 
not less than 15 days’ prior written notice of each change to the
information listed on Annex C (as adjusted for any subsequent changes thereto
previously made in accordance with this sentence), together with a supplement
to Annex C which shall correct all information contained therein for such
Assignor, and (ii) in connection with the respective such change or changes,
such Assignor 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 such Assignor does not have an organizational identification
number on the date hereof (or, if later, on the date that such Assignor becomes
a party hereto) and later obtains one, such Assignor shall promptly thereafter
notify 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.


 


2.7  Trade Names; Etc.  Such
Assignor has not and does not operate in any jurisdiction under, and in the
preceding five years has not and does not operate in any jurisdiction under,
any trade names, fictitious names or other names except its legal name as
specified in Annex C and such other trade or fictitious names as are listed on
Annex D hereto for such Assignor.  Such
Assignor shall not assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) such Assignor shall have given to the
Collateral Agent not less than 15 days’ written notice of its intention so to
do, clearly describing such new name and the jurisdictions in which such new
name will be used and providing such other information in


 


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connection therewith as
the Collateral Agent may reasonably request and (ii) with respect to such new
name, such Assignor shall have taken all action reasonably requested by the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect.


 


2.8  Certain Significant Transactions.  During
the one year period preceding the date of this Agreement, no Person shall have
merged or consolidated with or into any Assignor, and no Person shall have
liquidated into, or transferred all or substantially all of its assets to, any
Assignor, in each case except as described in Annex E hereto.  With respect to any transactions so
described in Annex E hereto, the respective Assignor shall have furnished to
the Collateral Agent such information with respect to the Person (and the
assets of the Person and locations thereof) which merged with or into or
consolidated with such Assignor, or was liquidated into or transferred all or
substantially all of its assets to such Assignor, and shall have furnished to
the Collateral Agent such UCC lien searches, as may have been reasonably
requested with respect to such Person and its assets, to establish that no
security interest (excluding Permitted Liens) continues perfected on the date
hereof with respect to any Person described above (or the assets transferred to
the respective Assignor by such Person), including without limitation pursuant
to Section 9-316(a)(3) of the UCC.


 


2.9  Non-UCC Property.  Except
as provided in the immediately succeeding sentence, the aggregate fair market
value (as determined by the Assignors in good faith) of all property of the
Assignors of the types described in clauses (1), (2) and (3) of Section
9-311(a) (excluding (to the extent applicable) any Copyrights, Marks, Patents
and Software) of the UCC does not exceed $2,500,000.  If the aggregate value of all such property at any time owned by
all Assignors exceeds $2,500,000, the Assignors shall provide prompt written
notice thereof to the Collateral Agent and, upon the request of the Collateral
Agent, the Assignors shall promptly (and in any event within 30 days) take such
actions (at their own cost and expense) as may be required under the respective
United States, State or other laws referenced in Section 9-311(a) of the UCC to
perfect the security interests granted herein in any Collateral where the
filing of a financing statement does not perfect the security interest in such
property in accordance with the provisions of Section 9-311(a) of the UCC.


 


2.10  As-Extracted Collateral; Timber-to-be-Cut.  On
the date hereof (or, if later, on the date that such Assignor becomes a party
to this Agreement), such Assignor does not own, or expect to acquire, any
property which constitutes, or would constitute, As-Extracted Collateral or
Timber-to-be-Cut.  If at any time after
the date of this Agreement such Assignor owns, acquires or obtains rights to
any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish
the Collateral Agent with prompt written notice thereof (which notice shall
describe in reasonable detail the As-Extracted Collateral and/or
Timber-to-be-Cut and the locations thereof) and shall take all actions as may
be deemed reasonably necessary or desirable by the Collateral Agent to perfect
the security interest of the Collateral Agent therein.


 


2.11  Collateral in the Possession of a Bailee.  If
any Inventory or other Goods are at any time in the possession of a bailee,
such Assignor shall promptly notify the Collateral Agent thereof and, if
requested by the Collateral Agent, shall use its reasonable best efforts to
promptly obtain an acknowledgment from such bailee, in form and substance
reasonably satisfactory to the Collateral Agent, that the bailee holds such
Collateral for the benefit of the


 


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Collateral Agent and
shall act upon the instructions of the Collateral Agent, without the further
consent of such Assignor. The Collateral Agent agrees with such Assignor that
the Collateral Agent shall not give any such instructions unless an Event of
Default has occurred and is continuing or would occur after taking into account
any action by the respective Assignor with respect to any such bailee.


 


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


 


ARTICLE
III


 


SPECIAL
PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;

INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL


 


3.1  Additional Representations and
Warranties.  As of the time when each of its Accounts arises,
each Assignor shall be deemed to have represented and warranted that each such
Account, and all records, papers and documents relating thereto (if any) are
genuine and what they purport to be, and that all papers and documents (if any)
relating thereto (i) will, to the knowledge of such Assignor, represent the
genuine, legal, valid and binding obligation of the account debtor evidencing
indebtedness unpaid and owed by the respective account debtor arising out of
the performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both, (ii) will, to the knowledge of such
Assignor, evidence true and valid obligations, enforceable in accordance with
their respective 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),
and (iii) will be in compliance and will conform in all material respects with
all applicable federal, state and local laws and applicable laws of any
relevant foreign jurisdiction (other than any non-compliance that is not within
the control of the relevant Assignor).


 


3.2  Maintenance of Records.  Each
Assignor will keep and maintain at its own cost and expense accurate records of
its Accounts and Contracts, including, but not limited to, originals of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon, all merchandise returned and
all other dealings therewith, and such Assignor will make the same available on
such Assignor’s premises to the Collateral Agent for inspection, at such
Assignor’s own cost and expense, at any and all reasonable times upon
reasonable prior notice to such Assignor and otherwise in accordance with the
Credit Agreement.  Upon the occurrence
and during the continuance of an Event of Default and at the request of the
Collateral Agent, such Assignor shall, at its own cost and expense, deliver all
tangible evidence of its Accounts and Contract Rights (including, without
limitation, all documents evidencing the Accounts and all Contracts) and such
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Assignor).  Upon the occurrence and during the
continuance of an Event of Default and if the Collateral Agent so directs, such
Assignor shall legend, in form and manner satisfactory to the Collateral Agent,
the Accounts and the Contracts, as well as books, records


 


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and documents (if any) of such
Assignor evidencing or pertaining to such Accounts and Contracts with an
appropriate reference to the fact that such Accounts and Contracts have been
assigned to the Collateral Agent and that the Collateral Agent has a security
interest therein.


 


3.3  Direction to Account Debtors; Contracting
Parties; etc.  Upon the occurrence and during the continuance of
an Event of Default, if the Collateral Agent so directs any Assignor, such
Assignor agrees (x) to cause all payments on account of the Accounts and
Contracts to be made directly to the Cash Collateral Account, (y) that the
Collateral Agent may, at its option, directly notify the obligors with respect
to any Accounts and/or under any Contracts to make payments with respect
thereto as provided in the preceding clause (x), and (z) that the Collateral
Agent may enforce collection of any such Accounts and Contracts and may adjust,
settle or compromise the amount of payment thereof, in the same manner and to
the same extent as such Assignor. 
Without notice to or assent by any Assignor, the Collateral Agent may,
upon the occurrence and during the continuance of an Event of Default, apply
any or all amounts then in, or thereafter deposited in, the Cash Collateral
Account toward the payment of the Obligations in the manner provided in Section
7.4 of this Agreement.  The reasonable
costs and expenses of collection (including reasonable attorneys’ fees),
whether incurred by an Assignor or the Collateral Agent, shall be borne by the
relevant Assignor.  The Collateral Agent
shall deliver a copy of each notice referred to in the preceding clause (y) to
the relevant Assignor, provided that (x) the failure by the Collateral
Agent to so notify such Assignor shall not affect the effectiveness of such
notice or the other rights of the Collateral Agent created by this Section 3.3
and (y) no such notice shall be required if an Event of Default of the type
described in Section 10.05 of the Credit Agreement has occurred and is
continuing.


 


3.4  Modification of Terms; etc.  Except
in accordance with such Assignor’s ordinary course of business and consistent
with reasonable business judgment or as permitted by Section 3.5 hereof, no
Assignor shall rescind or cancel any indebtedness evidenced by any Account or
under any Contract, or modify any material term thereof or make any material
adjustment with respect thereto, or extend or renew the same, or compromise or
settle any material dispute, claim, suit or legal proceeding relating thereto,
or sell any Account or Contract, or interest therein, without the prior written
consent of the Collateral Agent.  Except
as may otherwise be permitted under this Section 3.4 or under Section 3.5
hereof, no Assignor will do anything to impair the rights of the Collateral
Agent in the Accounts or Contracts.


 


3.5  Collection.  Each Assignor
shall endeavor in accordance with reasonable business practices to cause to be
collected from the account debtor named in each of its Accounts or obligor
under any Contract, as and when due (including, without limitation, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Account or Contract, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Account or under such Contract.  Except
as otherwise directed by the Collateral Agent after the occurrence and during
the continuation of an Event of Default, any Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Accounts and
Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which such Assignor finds
appropriate in accordance with reasonable business judgment and (ii) a
refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which


 


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such Assignor finds appropriate
in accordance with reasonable business judgment.  The reasonable costs and expenses (including, without limitation,
reasonable attorneys’ fees) of collection, whether incurred by an Assignor or
the Collateral Agent, shall be borne by the relevant Assignor.


 


3.6  Instruments.  If any
Assignor owns or acquires any Instrument in excess of $250,000 constituting
Collateral (other than checks and other payment instruments received and
collected in the ordinary course of business), such Assignor will within 10
Business Days notify the Collateral Agent thereof, and upon request by the
Collateral Agent will promptly deliver such Instrument to the Collateral Agent
appropriately endorsed to the order of the Collateral Agent.


 


3.7  Assignors Remain Liable Under Accounts.  Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Accounts to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to such Accounts.  Neither the Collateral Agent nor any other
Secured Creditor shall have any obligation or liability under any Account (or
any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any other Secured Creditor
of any payment relating to such Account pursuant hereto, nor shall the
Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any Account
(or any agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by them or
as to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.


 


3.8  Assignors Remain Liable Under Contracts.  Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Contracts to observe and perform all of the conditions and
obligations to be observed and performed by them thereunder, all in accordance
with and pursuant to the terms and provisions of each Contract.  Neither the Collateral Agent nor any other
Secured Creditor shall have any obligation or liability under any Contract by
reason of or arising out of this Agreement or the receipt by the Collateral
Agent or any other Secured Creditor of any payment relating to such Contract
pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor
be obligated in any manner to perform any of the obligations of any Assignor
under or pursuant to any Contract, to make any payment, to make any inquiry as
to the nature or the sufficiency of any performance by any party under any
Contract, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been assigned
to them or to which they may be entitled at any time or times.


 


3.9  Deposit Accounts; Etc.  (a)  No Assignor maintains, or at any time after
the date of this Agreement shall establish or maintain, any demand, time,
savings, passbook or similar account, except for such accounts maintained with
a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined
in accordance with Section 9-304 of the UCC) is within a State of the United
States or the District of Colombia.  Annex F hereto accurately sets
forth for each Assignor, as of the date of this Agreement (or, if later, on the
date that such


 


10

















 


Assignor becomes a party to
this Agreement), each Deposit Account maintained by such Assignor (including a
description thereof and the respective account number), the name of the
respective bank with which such Deposit Account is maintained, and the
jurisdiction of the respective bank with respect to such Deposit Account.  For each Deposit Account (other than (x) the
Cash Collateral Account, (y) any other Deposit Account maintained with the
Collateral Agent or (z) any other Deposit Accounts maintained by any Assignor,
so long as the aggregate balance in all such Deposit Accounts excluded pursuant
to this clause (z) does not exceed $1,000,000 at any time), the respective
Assignor shall cause the bank with which the Deposit Account is maintained to
execute and deliver to the Collateral Agent on the Initial Borrowing Date or,
if later, within 30 days (or such longer period of time as is acceptable to the
Administrative Agent, in its sole discretion) of the time of the establishment
of the respective Deposit Account, a (I) “control agreement” in substantially
the form of Annex G hereto (appropriately completed), with such changes thereto
as may be acceptable to the Collateral Agent or (II) such other “control
agreement” in form and substance satisfactory to the Collateral Agent.  If any bank with which a Deposit Account is
maintained refuses to, or does not, enter into such a “control agreement”, then
the respective Assignor shall promptly (and in any event within 30 days after
the date of this Agreement or, if later, 30 days after the establishment of
such account) close the respective Deposit Account and transfer all balances
therein to the Cash Collateral Account or another Deposit Account meeting the
requirements of this Section 3.9.  If
any bank with which a Deposit Account is maintained refuses to subordinate all
its claims with respect to such Deposit Account to the Collateral Agent’s
security interest therein on terms satisfactory to the Collateral Agent, then
the Collateral Agent, at its option, may (x) require that such Deposit Account
be terminated in accordance with the immediately preceding sentence or (y)
agree to a “control agreement” without such subordination, provided that in
such event the Collateral Agent may at any time, at its option, subsequently
require that such Deposit Account be terminated (within 30 days (or such longer
time as is acceptable to the Collateral Agent in its sole discretion) after
notice from the Collateral Agent) in accordance with the requirements of the
immediately preceding sentence. The Collateral Agent agrees that it shall not
give a “Notice of Exclusive Control” (as defined in Annex G) or a similar
notice, in each case, with respect to any Deposit Account, unless an Event of
Default has occurred and is continuing.


 


(b)           After
the date of this Agreement, no Assignor shall establish any new demand, time,
savings, passbook or similar account, except for Deposit Accounts established
and maintained with banks and meeting the requirements of preceding clause
(a).  Following the establishment of any
such Deposit Account after the date of this Agreement, the appropriate “control
agreement” shall be entered into in accordance with the requirements of
preceding clause (a) and the respective Assignor shall furnish to the
Collateral Agent a supplement to Annex F hereto containing the relevant
information with respect to the respective Deposit Account and the bank with
which same is established.


 


(c)           Notwithstanding
anything to the contrary contained in this Section 3.9, no later than six
months following the Initial Borrowing Date (or such longer time as may be
acceptable to the Collateral Agent in its sole discretion) the Borrower shall
cause (x) all Wachovia Deposit Accounts to be closed or (y) the Wachovia
Control Agreement to be terminated and (I) a new “control agreement” (or an
amendment to the Wachovia Control Agreement) to be entered into with respect to
the Wachovia Deposit Accounts in accordance


 


11

















 


with the requirements of
preceding clause (a) and otherwise on terms and conditions satisfactory to the
Collateral Agent or (II) such other actions as shall be reasonably acceptable
to the Collateral Agent to be taken with respect to the Wachovia Deposit
Accounts.


 


3.10  Letter-of-Credit
Rights.  If any Assignor is at any time a beneficiary under a
letter of credit with a stated amount of $250,000 or more, such Assignor shall
promptly notify the Collateral Agent thereof and, at the request of the
Collateral Agent, such Assignor shall, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, use its reasonable
best efforts to (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to the Collateral Agent of the proceeds of
any drawing under such letter of credit or (ii) arrange for the Collateral
Agent to become the transferee beneficiary of such letter of credit, with the
Collateral Agent agreeing, in each case, that after the occurrence and during
the continuance of an Event of Default the proceeds of any drawing under the
letter of credit are to be applied as provided in this Agreement.


 


3.11  Commercial
Tort Claims.  All Commercial Tort Claims of each Assignor in
existence on the date of this Agreement are described in Annex H hereto.  If any Assignor shall at any time after the
date of this Agreement acquire a Commercial Tort Claim in an amount (taking the
greater of the aggregate claimed damages thereunder or the reasonably estimated
value thereof) of $250,000 or more, such Assignor shall promptly notify the
Collateral Agent thereof in a writing signed by such Assignor and describing
the details thereof and shall grant to the Collateral Agent in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.


 


3.12  Chattel Paper.  Upon the
request of the Collateral Agent made at any time or from time to time, each
Assignor shall promptly furnish to the Collateral Agent a list of all
Electronic Chattel Paper held or owned by such Assignor.  Furthermore, if requested by the Collateral
Agent, each Assignor shall promptly take all actions which are reasonably
requested by the Collateral Agent so that the Collateral Agent has “control” of
all Electronic Chattel Paper in accordance with the requirements of Section
9-105 of the UCC.  Each Assignor will
promptly (and in any event within 10 days) following any request by the
Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral
Agent.


 


3.13  Further
Actions.  Each Assignor will, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, certificates, reports and other
assurances or instruments and take such further steps, including any and all
actions as may be necessary or required under the Federal Assignment of Claims
Act, relating to its Accounts, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.


 


12

















 


ARTICLE IV


 


SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES


 


4.1  Additional
Representations and Warranties.  Each Assignor represents and
warrants that it is the true and lawful owner of or otherwise has the right to
use the registered Marks and Domain Names listed in Annex I hereto for such
Assignor and that said listed Marks and Domain Names include all United States
marks and applications for United States marks registered in the United States
Patent and Trademark Office and all Domain Names that such Assignor owns or
uses in connection with its business as of the date hereof.  Each Assignor represents and warrants that
it owns, is licensed to use or otherwise has the right to use, all Marks and
Domain Names that it uses.  Each
Assignor further warrants that it has no knowledge of any third party claim
received by it that any aspect of such Assignor’s present or contemplated
business operations infringes or will infringe any trademark, service mark or
trade name of any other Person other than as could not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.  Each Assignor represents and
warrants that it is the true and lawful owner of or otherwise has the right to
use all U.S. trademark registrations and applications and Domain Name registrations
listed in Annex I hereto and that said registrations are valid, subsisting,
have not been canceled and that such Assignor is not aware of any third-party
claim that any of said registrations is invalid or unenforceable, and is not
aware that there is any reason that any of said registrations is invalid or
unenforceable, and is not aware that there is any reason that any of said
applications will not mature into registrations.  Each Assignor hereby grants to the Collateral Agent an absolute
power of attorney to sign, upon the occurrence and during the continuance of an
Event of Default and in connection with the exercise of remedies hereunder, any
document which may be required by the United States Patent and Trademark Office
or similar registrar in order to effect an absolute assignment of all right,
title and interest in each Mark and/or Domain Name, and record the same.


 


4.2  Licenses and Assignments.  Except
as otherwise permitted by the Secured Debt Agreements, each Assignor hereby
agrees not to divest itself of any right under any Mark or Domain Name absent
prior written approval of the Collateral Agent.


 


4.3  Infringements.  Each
Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent
in writing of the name and address of, and to furnish such pertinent
information that may be available with respect to, any party who such Assignor
believes is, or may be, infringing or diluting or otherwise violating any of
such Assignor’s rights in and to any Mark or Domain Name in any manner that
could reasonably be expected to have a Material Adverse Effect, or with respect
to any party claiming, in writing or to the knowledge of any senior or
executive officer of any Assignor, that such Assignor’s use of any Mark or
Domain Name material to such Assignor’s business violates in any material
respect any property right of that party. 
Each Assignor further agrees to prosecute diligently in accordance with
its reasonable business practices any Person infringing any of its Marks or
Domain Names in any manner that could reasonably be expected to have a Material
Adverse Effect.


 


4.4  Preservation of Marks and Domain Names.  Each
Assignor agrees to use its Marks and Domain Names which are material to such
Assignor’s business in interstate commerce during the time in which this
Agreement is in effect and to take all such other actions


 


13

















 


as are reasonably necessary to
preserve such Marks as trademarks or service marks under the laws of the United
States (other than any such Marks which are no longer used or useful in its
business or operations).


 


4.5  Maintenance of Registration.  Each
Assignor shall, at its own expense, diligently process all documents reasonably
required to maintain all Mark and/or Domain Name registrations, including but
not limited to affidavits of use and applications for renewals of registration
in the United States Patent and Trademark Office for all of its material
registered Marks, and shall pay all fees and disbursements in connection
therewith and shall not abandon any such filing of affidavit of use or any such
application of renewal prior to the exhaustion of all administrative and
judicial remedies without prior written consent of the Collateral Agent (other
than with respect to registrations and applications deemed by such Assignor in
its reasonable business judgment to be no longer prudent to pursue).


 


4.6  Future Registered Marks and Domain Names.  If
any Mark registration is issued hereafter to any Assignor as a result of any
application now or hereafter pending before the United States Patent and
Trademark Office or any Domain Name is registered by Assignor, within 30 days
of receipt of such certificate or similar indicia of ownership, such Assignor
shall deliver to the Collateral Agent a copy of such registration certificate
or similar indicia of ownership, and a grant of a security interest in such
Mark and/or Domain Name, to the Collateral Agent and at the expense of such
Assignor, confirming the grant of a security interest in such Mark and/or
Domain Name to the Collateral Agent hereunder, the form of such security to be
substantially in the form of Annex L hereto or in such other form as may be
reasonably satisfactory to the Collateral Agent.


 


4.7  Remedies.  If an Event of
Default shall occur and be continuing, the Collateral Agent may, by written
notice to the relevant Assignor, take any or all of the following actions:  (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and Domain Names,
together with all trademark rights and rights of protection to the same, vested
in the Collateral Agent for the benefit of the Secured Creditors, in which
event such rights, title and interest shall immediately vest, in the Collateral
Agent for the benefit of the Secured Creditors, and the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 4.1 hereof
to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency or registrar; (ii) take and use or sell
the Marks or Domain Names and the goodwill of such Assignor’s business
symbolized by the Marks or Domain Names and the right to carry on the business
and use the assets of such Assignor in connection with which the Marks or
Domain Names have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks or Domain Names
in any manner whatsoever, directly or indirectly, and such Assignor shall
execute such further documents that the Collateral Agent may reasonably request
to further confirm this and to transfer ownership of the Marks or Domain Names
and registrations and any pending trademark applications in the United States
Patent and Trademark Office or applicable Domain Name registrar to the Collateral
Agent.


 


14

















 


ARTICLE V


 


SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS


 


5.1  Additional Representations and
Warranties.  Each Assignor represents and warrants that it is the
true and lawful owner of all rights in (i) all Trade Secret Rights, (ii) the
Patents listed in Annex J hereto for such Assignor and that said Patents
include all the United States patents and applications for United States
patents that such Assignor owns as of the date hereof and (iii) the Copyrights
listed in Annex K hereto for such Assignor and that said Copyrights include all
the United States copyrights registered with the United States Copyright Office
and applications to United States copyrights that such Assignor owns as of the
date hereof.  Each Assignor further
warrants that it has no knowledge of any third party claim that any aspect of
such Assignor’s present or contemplated business operations infringes or will
infringe any patent of any other Person or such Assignor has misappropriated
any trade secret or proprietary information which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.  Each Assignor hereby grants to
the Collateral Agent an absolute power of attorney to sign, upon the occurrence
and during the continuance of any Event of Default and in connection with the
exercise of remedies hereunder, any document which may be required by the
United States Patent and Trademark Office or the United States Copyright Office
in order to effect an absolute assignment of all right, title and interest in
each Patent or Copyright, and to record the same.


 


5.2  Licenses and Assignments.  Except
as otherwise permitted by the Secured Debt Agreements, each Assignor hereby
agrees not to divest itself of any right under any Patent or Copyright absent
prior written approval of the Collateral Agent.


 


5.3  Infringements.  Each
Assignor agrees, promptly upon learning thereof, to furnish the Collateral
Agent in writing with all pertinent information available to such Assignor with
respect to any infringement, contributing infringement or active inducement to
infringe or other violation of such Assignor’s rights in any Patent or
Copyright or to any claim, in writing or to the knowledge of any senior or
executive officer of any Assignor, that the practice of any Patent or use of
any Copyright violates any property right of a third party, or with respect to
any misappropriation of any Trade Secret Right or any claim, in writing or to
the knowledge of any senior or executive officer of any Assignor, that practice
of any Trade Secret Right violates any property right of a third party, in each
case, in any manner which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.  Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, to diligently prosecute, in
accordance with its reasonable business judgment, any Person infringing any of
its Patents or Copyrights or any Person misappropriating any of its Trade
Secret Rights, in each case to the extent that such infringement or
misappropriation, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.


 


5.4  Maintenance of Patents or Copyrights.  At
its own expense, each Assignor shall make timely payment of all post-issuance
fees required to maintain in force its rights under each of its Patent or
Copyright registrations, absent prior written consent of the Collateral Agent
(other than any such Patent or Copyright registrations which are no longer used
or are deemed by


 


15

















 


such Assignor in its reasonable
business judgment to no longer be useful in its business or operations).


 


5.5  Prosecution of Patent or Copyright
Applications.  At its own expense, each Assignor shall diligently
prosecute all material applications for (i) United States Patents listed in
Annex J hereto and (ii) Copyrights listed on Annex K hereto, in each case
for such Assignor and shall not abandon any such application prior to
exhaustion of all administrative and judicial remedies (other than applications
that are deemed by such Assignor in its reasonable business judgment to no
longer be necessary in the conduct of the Assignor’s business), absent written
consent of the Collateral Agent.


 


5.6  Other Patents and Copyrights.  Within
30 days of the acquisition or issuance of a United States Patent, registration
of a Copyright, or acquisition of a registered Copyright, or of filing of an
application for a United States Patent or Copyright, the relevant Assignor
shall deliver to the Collateral Agent a copy of said Copyright or Patent, or
certificate or registration of, or application therefor, as the case may be,
with a grant of a security interest as to such Patent or Copyright, as the case
may be, to the Collateral Agent and at the expense of such Assignor, confirming
the grant of a security interest, the form of such grant of a security interest
to be substantially in the form of Annex M or N hereto, as appropriate, or in
such other form as may be reasonably satisfactory to the Collateral Agent.


 


5.7  Remedies.  If an Event of
Default shall occur and be continuing, the Collateral Agent may, by written
notice to the relevant Assignor, take any or all of the following actions:  (i) declare the entire right, title, and
interest of such Assignor in each of the Patents and Copyrights vested in the
Collateral Agent for the benefit of the Secured Creditors, in which event such
right, title, and interest shall immediately vest in the Collateral Agent for
the benefit of the Secured Creditors, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 5.1 hereof
to execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such further
documents as the Collateral Agent may reasonably request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.


 


5.8  Subject Patents.  Each Assignor covenants and agrees to use
its reasonable best efforts to provide to the Administrative Agent, within 30
days of the Initial Borrowing Date (or such later date as is acceptable to the
Collateral Agent in its sole discretion), copies of any Subject Patent
Agreements, provided, however, that if no Subject Patent Agreements are
produced within 30 days of the Initial Borrowing Date, the Borrower or such
other applicable Assignor shall take all actions required pursuant to the terms
of this Agreement with respect to Patents in existence on the Initial Borrowing
Date to perfect the Secured Creditors’ security interest in such Assignor’s
rights to such Subject Patent.


 


16

















 


ARTICLE VI


 


PROVISIONS CONCERNING ALL COLLATERAL


 


6.1  Protection of Collateral
Agent’s Security.  Except as otherwise permitted by the Secured
Debt Agreements, each Assignor will do nothing to impair the rights of the
Collateral Agent in the Collateral. 
Each Assignor will at all times maintain insurance, at such Assignor’s
own expense to the extent and in the manner provided in the Secured Debt
Agreements.  Except to the extent otherwise
permitted to be retained by such Assignor or applied by such Assignor pursuant
to the terms of the Secured Debt Agreements, the Collateral Agent shall, at the
time any proceeds of such insurance are distributed to the Secured Creditors,
apply such proceeds in accordance with Section 7.4 hereof.  Each Assignor assumes all liability and
responsibility in connection with the Collateral acquired by it and the
liability of such Assignor to pay the Obligations shall in no way be affected
or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.


 


6.2  Warehouse Receipts
Non-Negotiable.  To the extent practicable, each Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt
is issued with respect to any of its Inventory, such Assignor shall request
that such warehouse receipt or receipt in the nature thereof shall not be
“negotiable” (as such term is used in Section 7-104 of the Uniform Commercial
Code as in effect in any relevant jurisdiction or under other relevant law).


 


6.3  Additional Information.  Each
Assignor will, at its own expense, from time to time upon the reasonable
request of the Collateral Agent, promptly (and in any event within 10 days
after its receipt of the respective request) furnish to the Collateral Agent
such information with respect to the Collateral (including the identity of the
Collateral or such components thereof as may have been requested by the
Collateral Agent, the value and location of such Collateral, etc.) as may be
reasonably requested by the Collateral Agent. 
Without limiting the forgoing, each Assignor agrees that it shall
promptly (and in any event within 10 days after its receipt of the respective
request) furnish to the Collateral Agent such updated Annexes hereto as may
from time to time be reasonably requested by the Collateral Agent.


 


6.4  Further Actions.  Each
Assignor will, at its own expense and upon the reasonable request of the
Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to
the Collateral Agent from time to time such lists, descriptions and
designations of its Collateral, warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements,
transfer endorsements, certificates, reports and other assurances or
instruments and take such further steps relating to the Collateral and other
property or rights covered by the security interest hereby granted, which the
Collateral Agent deems reasonably appropriate or advisable to perfect, preserve
or protect its security interest in the Collateral, provided that any
such actions taken to perfect, preserve or protect the security interest in the
Collateral pursuant to the laws of a Foreign Jurisdiction shall only required
to the extent such actions are practicable (in accordance with the requirements
of local law and taking into account such cost and practicality


 


17

















 


considerations as may be
reasonably agreed by the Collateral Agent, based on the advice of local
counsel).


 


6.5  Financing Statements.  Each
Assignor agrees to deliver to the Collateral Agent such financing statements,
in form reasonably acceptable to the Collateral Agent, as the Collateral Agent
may from time to time reasonably request or as are reasonably necessary or
desirable in the opinion of the Collateral Agent to establish and maintain a
valid, enforceable, perfected security interest in the Collateral as provided
herein and the other rights and security contemplated hereby.  Each Assignor will pay any applicable filing
fees, recordation taxes and related expenses relating to its Collateral.  Each Assignor hereby authorizes the
Collateral Agent to file any such financing statements without the signature of
such Assignor where permitted by law (and such authorization includes describing
the Collateral as “all assets” of such Assignor).


 


ARTICLE VII


 


REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT


 


7.1  Remedies; Obtaining the Collateral Upon
Default.  Each Assignor agrees that, if any Event of Default
shall have occurred and be continuing, then and in every such case, the Collateral
Agent, in addition to any rights now or hereafter existing under applicable law
and under the other provisions of this Agreement, shall have all rights as a
secured creditor under any UCC, and such additional rights and remedies to
which a secured creditor is entitled under the laws in effect in all relevant
jurisdictions and may:


 


(i)            personally, or by agents or attorneys,
immediately take possession of the Collateral or any part thereof, from such
Assignor or any other Person who then has possession of any part thereof with
or without notice or process of law, and for that purpose may enter upon such
Assignor’s premises where any of the Collateral is located and remove the same
and use in connection with such removal any and all services, supplies, aids
and other facilities of such Assignor;


 


(ii)           instruct the obligor or obligors on any
agreement, instrument or other obligation (including, without limitation, the
Accounts and the Contracts) constituting the Collateral to make any payment
required by the terms of such agreement, instrument or other obligation
directly to the Collateral Agent and may exercise any and all remedies of such
Assignor in respect of such Collateral;


 


(iii)          instruct all banks which have entered into a
control agreement with the Collateral Agent to transfer all monies, securities
and instruments held by such depositary bank to the Cash Collateral Account;


 


(iv)          sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof in accordance with Section 7.2
hereof, or direct such Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take possession
of the proceeds of any such sale or liquidation;


 


18

















 


(v)           take possession of the Collateral or any
part thereof, by directing such Assignor in writing to deliver the same to the
Collateral Agent at any reasonable place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:


 


(x)            forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to the
Collateral Agent;


 


(y)           store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by the
Collateral Agent as provided in Section 7.2 hereof; and


 


(z)            while the Collateral shall be so stored and kept,
provide such security and maintenance services as shall be reasonably necessary
to protect the same and to preserve and maintain it in good condition;


 


(vi)          license or sublicense, whether on an
exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights
included in the Collateral for such term and on such conditions and in such
manner as the Collateral Agent shall in its sole judgment determine;


 


(vii)         apply any monies constituting Collateral or
proceeds thereof in accordance with the provisions of Section 7.4 hereof; and


 


(viii)        take any other action as specified in clauses
(1) through (5), inclusive, of Section 9-607 of the UCC;


 


it being understood that each
Assignor’s obligation so to deliver the Collateral is of the essence of this
Agreement and that, accordingly, upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to a decree requiring
specific performance by such Assignor of said obligation.  By accepting the benefits of this Agreement
and each other Security Document, the Secured Creditors expressly acknowledge
and agree that this Agreement and each other Security Document may be enforced
only by the action of the Collateral Agent acting upon the instructions of the
Required Secured Creditors 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 Collateral Agent for the
benefit of the Secured Creditors upon the terms of this Agreement and the other
Security Documents.


 


7.2  Remedies; Disposition of the Collateral.  If
any Event of Default shall have occurred and be continuing, then any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable.  Any of the
Collateral may be sold, leased or


 


19

















 


otherwise disposed of, in the
condition in which the same existed when taken by the Collateral Agent or after
any overhaul or repair at the expense of the relevant Assignor which the
Collateral Agent shall determine to be commercially reasonable.  Any such sale, lease or other disposition
may be effected by means of a public disposition or private disposition,
effected in accordance with the applicable requirements (in each case if and to
the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such
other mandatory requirements of applicable law as may apply to the respective
disposition.  The Collateral Agent may,
without notice or publication, adjourn any public or private disposition or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for the disposition, and such disposition may be made at any
time or place to which the disposition may be so adjourned.  To the extent permitted by any such requirement
of law, the Collateral Agent may bid for and become the purchaser (and may pay
all or any portion of the purchase price by crediting Obligations against the
purchase price) of the Collateral or any item thereof, offered for disposition
in accordance with this Section 7.2 without accountability to the relevant
Assignor.  If, under applicable law, the
Collateral Agent shall be permitted to make disposition of the Collateral
within a period of time which does not permit the giving of notice to the relevant
Assignor as hereinabove specified, the Collateral Agent need give such Assignor
only such notice of disposition as shall be required by  such applicable law.  Each Assignor agrees to do or cause to be
done all such other acts and things as may be reasonably necessary to make such
disposition or dispositions of all or any portion of the Collateral valid and
binding and in compliance with any and all applicable laws, regulations,
orders, writs, injunctions, decrees or awards of any and all courts, arbitrators
or governmental instrumentalities, domestic or foreign, having jurisdiction
over any such sale or sales, all at such Assignor’s expense.


 


7.3  Waiver of Claims.  Except
as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S
DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND
ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each
Assignor hereby further waives, to the extent permitted by law:


 


(i)            all damages occasioned by such taking of
possession or any such disposition except any damages which are the direct
result of the Collateral Agent’s gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision);


 


(ii)           all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement of the
Collateral Agent’s rights hereunder; and


 


(iii)          all rights of redemption, appraisement,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this Agreement
or the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or they now
or hereafter lawfully may, hereby waives the benefit of all such laws.


 


20

















 


Any sale of,
or the grant of options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and thereto,
and shall be a perpetual bar both at law and in equity against such Assignor
and against any and all Persons claiming or attempting to claim the Collateral
so sold, optioned or realized upon, or any part thereof, from, through and
under such Assignor.


 


7.4  Application of Proceeds.  (a)  All moneys collected by the Collateral Agent
(or, to the extent the Pledge Agreement or any other Security Document requires
proceeds of collateral under such other Security Document to be applied in
accordance with the provisions of this Agreement, the Pledgee or collateral
agent under such other Security Document) upon any sale or other disposition of
the Collateral, together with all other moneys received by the Collateral Agent
hereunder, shall be applied as follows:


 


(i)            first, to the payment of all amounts
owing the Collateral Agent of the type described in clauses (iv), (v) and (vi)
of the definition of “Obligations”;


 


(ii)           second, to the extent proceeds remain
after the application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, with each Secured Creditor receiving an
amount equal to its outstanding Primary Obligations or, if the proceeds are insufficient
to pay in full all such Primary Obligations, its Pro Rata Share of the amount
remaining to be distributed;


 


(iii)          third, to the extent proceeds remain
after the application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor
receiving an amount equal to its outstanding Secondary Obligations or, if the
proceeds are insufficient to pay in full all such Secondary Obligations, its
Pro Rata Share of the amount remaining to be distributed; and


 


(iv)          fourth, to the extent proceeds remain
after the application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to Section
10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully
entitled to receive such surplus.


 


(b)           For
purposes of this Agreement, (x) “Pro Rata Share” shall mean, when
calculating a Secured Creditor’s portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which
is the then unpaid amount of such Secured Creditor’s Primary Obligations or
Secondary Obligations, as the case may be, and the denominator of which is the
then outstanding amount of all Primary Obligations or Secondary Obligations, as
the case may be, (y) “Primary Obligations” shall mean (i) in the case of
the Credit Document Obligations, all principal of, premium, fees and interest
on, all Loans, all Unpaid Drawings (including interest thereon), the Stated
Amount of all outstanding Letters of Credit and all Fees, (ii) in the case of
the Hedging Obligations, all amounts due under each Interest Rate Protection
Agreement and each Other Hedging Agreement with a Hedging Creditor (other than
indemnities, fees (including, without limitation, attorneys’ fees) and similar


 


21

















 


obligations and liabilities)
and (iii) in the case of the Secured Supplemental L/C Obligations, the stated
amount of, and all other amounts (including unpaid drawings, interest thereon
and regularly accruing fees and expenses) due under or in respect of, each
Secured Supplemental Letter of Credit (other than indemnities, other fees
(including, without limitation, attorneys’ fees) and similar obligations and
liabilities) and (z) “Secondary Obligations” shall mean all Obligations
other than Primary Obligations.


 


(c)           When
payments to Secured Creditors are based upon their respective Pro Rata Shares,
the amounts received by such Secured Creditors hereunder shall be applied (for
purposes of making determinations under this Section 7.4 only) (i) first, to
their Primary Obligations and (ii) second, to their  Secondary Obligations.  If
any payment to any Secured Creditor of its Pro Rata Share of any distribution
would result in overpayment to such Secured Creditor, such excess amount shall
instead be distributed in respect of the unpaid Primary Obligations or  Secondary Obligations, as the case may be,
of the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full to receive an amount equal to such excess amount multiplied by a fraction
the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator
of which is the unpaid Primary Obligations or 
Secondary Obligations, as the case may be, of all Secured Creditors entitled
to such distribution.


 


(d)           Each
of the Secured Creditors, by their acceptance of the benefits hereof and of the
other Security Documents, agrees and acknowledges that if the Lender Creditors
or the Secured Supplemental L/C Creditors receive a distribution on account of
undrawn amounts with respect to (x) Letters of Credit issued under the Credit
Agreement (which shall only occur after all outstanding Revolving Loans under
the Credit Agreement and Unpaid Drawings have been paid in full) or (y) Secured
Supplemental Letters of Credit, as the case may be, such amounts shall be paid
to the Administrative Agent under the Credit Agreement and held by it, for the
equal and ratable benefit of the Lender Creditors and Secured Supplemental L/C
Creditors, as cash security for the repayment of Obligations owing to the
Lender Creditors and Secured Supplemental L/C Creditors as such.  If any amounts are held as cash security
pursuant to the immediately preceding sentence, then upon the termination of
all outstanding Letters of Credit under the Credit Agreement and all
outstanding Secured Supplemental Letters of Credit, and after the application
of all such cash security to the repayment of (x) all Obligations owing to the
Lender Creditors after giving effect to the termination of all such Letters of
Credit and (y) all Obligations owing to the Secured Supplemental L/C Creditors
after giving effect to the termination of all such Secured Supplemental Letters
of Credit, if there remains any excess cash, such excess cash shall be returned
by the Administrative Agent to the Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.


 


(e)           All
payments required to be made hereunder shall be made (x) if to the  Lender Creditors, to the Administrative
Agent for the account of the Lender Creditors, and (y) if to any Other
Creditor, to the trustee, paying agent or other similar representative (each, a
“Representative”) for such Other Creditor or, in the absence of such a
Representative, directly to the relevant Other Creditor.


 


(f)            For
purposes of applying payments received in accordance with this Section 7.4, the
Collateral Agent shall be entitled to rely upon (i) the Administrative Agent
and


 


22

















 


(ii) the Representative or, in
the absence of such a Representative, upon the Other Creditors for a
determination (which the Administrative Agent, each Representative and the
Other Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Primary Obligations and Secondary
Obligations owed to the Lender Creditors or the Other Creditors, as the case
may be.  Unless it has received written
notice from a Lender Creditor or an Other Creditor to the contrary, the
Administrative Agent and each Representative, in furnishing information
pursuant to the preceding sentence, and the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has written notice from an Other Creditor to the
contrary, the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Interest Rate Protection Agreements or Other Hedging Agreements
are in existence.


 


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


 


7.5  Remedies Cumulative.  Each
and every right, power and remedy hereby specifically given to the Collateral
Agent shall be in addition to every other right, power and remedy specifically
given to the Collateral Agent under this Agreement, the other Secured Debt
Agreements or now or hereafter existing at law, in equity or by statute and
each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the Collateral
Agent.  All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of the exercise
of one shall not be deemed a waiver of the right to exercise any other or
others.  No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any of the Obligations shall impair any such right,
power or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence thereof.  No
notice to or demand on any Assignor in any case shall entitle it to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Collateral Agent to any other or further
action in any circumstances without notice or demand.  In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys’ fees, and the amounts thereof shall be included in such
judgment.


 


7.6  Discontinuance of Proceedings.  In case the Collateral Agent shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.


 


23

















 


ARTICLE VIII


 


INDEMNITY


 


8.1  Indemnity.  (a)  Each
Assignor jointly and severally agrees to indemnify, reimburse and hold the
Collateral Agent, each other Secured Creditor and their respective successors,
assigns, employees, affiliates and agents (hereinafter in this Section 8.1
referred to individually as “Indemnitee,” and collectively as “Indemnitees”)
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys’ fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
“expenses”) of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of
this Agreement, any other Secured Debt Agreement or any other document executed
in connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture,
ownership, ordering, purchase, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition, or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for losses, damages or liabilities to the
extent caused by the gross negligence or willful misconduct of such Indemnitee
(as determined by a court of competent jurisdiction in a final and
non-appealable decision).  Each Assignor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claim, demand, action, suit or
judgment, the relevant Assignor shall assume full responsibility for the
defense thereof.  Each Indemnitee agrees
to use its best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.


 


(b)           Without
limiting the application of Section 8.1(a) hereof and subject to Section
8.03(c) of the Credit Agreement, each Assignor agrees, jointly and severally,
to pay or reimburse the Collateral Agent for any and all reasonable fees, costs
and expenses of whatever kind or nature incurred in connection with the creation,
preservation or protection of the Collateral Agent’s Liens on, and security
interest in, the Collateral, including, without limitation, all fees and taxes
in connection with the recording or filing of instruments and documents in
public offices, payment or discharge of any taxes or Liens upon or in respect
of the Collateral, premiums for insurance with respect to the Collateral and
all other fees, costs and expenses in connection with protecting, maintaining
or preserving the Collateral and the Collateral Agent’s interest therein,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.


 


(c)           Without
limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees,
jointly and severally, to pay, indemnify and hold each Indemnitee harmless from
and against any loss, costs, damages and expenses which such Indemnitee may
suffer,


 


24

















 


expend or incur in consequence
of or growing out of any misrepresentation by any Assignor in this Agreement,
any other Secured Debt Agreement or in any writing contemplated by or made or
delivered pursuant to or in connection with this Agreement or any other Secured
Debt Agreement.


 


(d)           If
and to the extent that the obligations of any Assignor under this Section 8.1
are unenforceable for any reason, such Assignor hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law.


 


8.2  Indemnity Obligations Secured by
Collateral; Survival.  Any amounts paid by any Indemnitee as to
which such Indemnitee has the right to reimbursement shall constitute
Obligations secured by the Collateral. 
The indemnity obligations of each Assignor contained in this Article
VIII shall continue in full force and effect notwithstanding the full payment
of all of the other Obligations and notwithstanding the full payment of all the
Notes issued, and Loans made, under the Credit Agreement, the termination of
all Letters of Credit issued under the Credit Agreement, the termination of all
Interest Rate Protection Agreements and Other Hedging Agreements entered into
with the Hedging Creditors, the termination of all Secured Supplemental Letters
of Credit issued by a Secured Supplemental L/C Creditor and the payment of all
other Obligations and notwithstanding the discharge thereof and the occurrence
of the Termination Date.


 


ARTICLE IX


 


DEFINITIONS


 


The following
terms shall have the meanings herein specified.  Such definitions shall be equally applicable to the singular and
plural forms of the terms defined.


 


“Account”
shall mean any “account” as such term is defined in the Uniform Commercial Code
as in effect on the date hereof in the State of New York, and in any event
shall include but shall not be limited to, all rights to payment of any
monetary obligation, whether or not earned by performance, (i) for property
that has been or is to be sold, leased, licensed, assigned or otherwise
disposed of, (ii) for services rendered or to be rendered, (iii) for a policy
of insurance issued or to be issued, (iv) for a secondary obligation incurred
or to be incurred, (v) for energy provided or to be provided, (vi) for the use
or hire of a vessel under a charter or other contract, (vii) arising out of the
use of a credit or charge card or information contained on or for use with the
card, or (viii) as winnings in a lottery or other game of chance operated or
sponsored by a State, governmental unit of a State, or person licensed or
authorized to operate the game by a State or governmental unit of a State.  Without limiting the foregoing, the term
“account” shall include all Health-Care-Insurance Receivables.


 


“Administrative
Agent” shall have the meaning provided in the recitals of this Agreement.


 


“Agreement”
shall mean this Security Agreement as the same may be amended, modified,
restated and/or supplemented from time to time in accordance with its terms.


 


25

















 


“As-Extracted
Collateral” shall mean “as-extracted collateral” as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.


 


“Assignor”
shall have the meaning provided in the first paragraph of this Agreement.


 


“Borrower”
shall have the meaning provided in the recitals of this Agreement.


 


“Cash
Collateral Account” shall mean a non-interest bearing cash collateral
account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Creditors.


 


“Chattel Paper”
shall mean “chattel paper” as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.  Without limiting the foregoing, the term
“Chattel Paper” shall in any event include all Tangible Chattel Paper and all
Electronic Chattel Paper.


 


“Class”
shall have the meaning provided in Section 10.2 of this Agreement.


 


“Collateral”
shall have the meaning provided in Section 1.1(a) of this Agreement.


 


“Collateral
Agent” shall have the meaning provided in the first paragraph of this
Agreement.


 


“Commercial
Tort Claims” shall mean “commercial tort claims” as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.


 


“Contract
Rights” shall mean all rights of any Assignor under each Contract,
including, without limitation, (i) any and all rights to receive and demand
payments under any or all Contracts, (ii) any and all rights to receive and compel
performance under any or all Contracts and (iii) any and all other rights,
interests and claims now existing or in the future arising in connection with
any or all Contracts.


 


“Contracts”
shall mean all contracts between any Assignor and one or more additional
parties (including, without limitation, any Interest Rate Protection
Agreements, Other Hedging Agreements, licensing agreements and any partnership
agreements, joint venture agree­ments and limited liability company
agreements).


 


“Copyrights”
shall mean any United States or foreign copyright now or hereafter owned by any
Assignor, including any registrations of any copyrights, in the United States
Copyright Office or any foreign equivalent office, as well as any application
for a copyright registration now or hereafter made with the United States
Copyright Office or any foreign equivalent office by any Assignor.


 


“Credit
Agreement” shall have the meaning provided in the recitals of this
Agreement.


 


26

















 


“Credit
Document Obligations” shall have the meaning provided in the definition of
“Obligations” in this Article IX.


 


“Credit
Document Obligations Termination Date” shall mean the first date after the
Effective Date upon which all Credit Document Obligations have been paid in
full and all Commitments and Letters of Credit under the Credit Agreement have
been terminated and no further Commitments may be provided thereunder.


 


“Credit
Documents” shall have the meaning provided in the Credit Agreement and
shall include any documentation from time to time executed and delivered in
connection with any amendment, modification, extension, renewal, replacement,
restatement, supplementation, refinancing or restructuring of the Credit
Agreement, as set forth in the recitals to this Agreement.


 


“Deposit
Accounts” shall mean all “deposit accounts” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.


 


“Documents”
shall mean “documents” as such term is defined in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.


 


“Domain Names”
shall mean all Internet domain names and associated URL addresses in or to
which any Assignor now or hereafter has any right, title or interest.


 


“Electronic
Chattel Paper” shall mean “electronic chattel paper” as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.


 


“Equipment”
shall mean any “equipment” as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York, and in any
event, shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures and vehicles now or hereafter owned by any Assignor and
any and all additions, substitutions and replacements of any of the foregoing
and all accessions thereto, wherever located, together with all attachments,
com­ponents, parts, equipment and accessories installed thereon or affixed
thereto.


 


“Event of
Default” shall mean any Event of Default under, and as defined in any
Secured Debt 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.


 


“Foreign
Jurisdiction” shall mean any jurisdiction that is not located in the United
States of any State thereof.


 


“General
Intangibles” shall mean “general intangibles” as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.


 


“Goods”
shall mean “goods” as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York.


 


27

















 


“Health-Care-Insurance
Receivable” shall mean any “health-care-insurance receivable” as such term
is defined in the Uniform Commercial Code as in effect on the date hereof in
the State of New York.


 


“Hedging
Creditors” shall have the meaning provided in the recitals of this Agree­ment.


 


“Hedging
Obligations” shall have the meaning provided in the definition of “Obliga­tions”
in this Article IX.


 


“Indemnitee”
shall have the meaning provided in Section 8.1(a) of this Agreement.


 


“Instrument”
shall mean “instruments” as such term is defined in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.


 


“Inventory”
shall mean merchandise, inventory and goods, and all additions, substi­tutions
and replacements thereof and all accessions thereto, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manu­facturing, processing, packaging or
shipping same, in all stages of production from raw materials through work in
process to finished goods, and all products and proceeds of whatever sort and
wherever located any portion thereof which may be returned, rejected, reclaimed
or repossessed by the Collateral Agent from any Assignor’s customers, and shall
specifically include all “inventory” as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.


 


“Investment
Property” shall mean “investment property” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.


 


“Lender
Creditors” shall have the meaning provided in the recitals of this
Agreement.


 


“Lenders”
shall have the meaning provided in the recitals of this Agreement.


 


“Letter-of-Credit
Rights” shall mean “letter-of-credit rights” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.


 


“Location”
of any Assignor, shall mean such Assignor’s “location” as determined pursuant
to Section 9-307 of the UCC.


 


“Marks”
shall mean all right, title and interest in and to any trademarks, service
marks and trade names now held or hereafter acquired by any Assignor, including
any registration or application for registration of any trademarks and service
marks now held or hereafter acquired by any Assignor, which are registered or
filed in the United States Patent and Trademark Office or the equivalent
thereof in any state of the United States or any equivalent foreign office or
agency, as well as any unregistered trademarks and service marks used by an


 


28

















 


Assignor and any trade
dress including logos, designs, fictitious business names and other business
identifiers used by any Assignor.


 


“Material
Adverse Effect” shall mean a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.


 


“Obligations”
shall mean and include, as to any Assignor, all of the following:


 


(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 Assignor 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 (contingent or otherwise) under
Letters of Credit, fees, costs and indemnities) of such Assignor 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 Assignor is a party (including, without limitation, in
the case of each Assignor that is a Subsidiary Guarantor, all such obligations,
liabilities and indebt­ed­ness of such Assignor under the Subsidiaries
Guaranty) and the due per­formance and compliance by such Assignor 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 Interest Rate
Protection Agreements, Other Hedging Agreements or Secured Supplemental Letters
of Credit, 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
Assignor 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 Assignor to the Hedging Creditors now existing or
hereafter incurred under, arising out of or in connection with each Interest
Rate Protection Agreement and Other Hedging Agreement, whether such Interest
Rate Protection Agreement or Other Hedging Agreement is now in existence or
hereinafter arising (including, without limitation, in the case of an Assignor
that is a Subsidiary Guarantor, all obligations, liabilities and indebtedness
of such Assignor under the Subsidiaries Guaranty in respect of the Interest
Rate Protection Agreements and Other Hedging Agreements), and the due
performance and compliance by such Assignor with all of the terms, conditions
and agreements contained in each such Interest Rate Protection Agreement and
Other Hedging Agreement (all such obligations, liabilities and indebtedness
under this clause (ii) being herein collectively called the “Hedging
Obligations”);


 


29

















 


(iii)          the full and prompt payment when due (whether
at stated maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation, reimbursement
obligations (contingent or otherwise), 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 Assignor 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), fees and indemnities) owing by
such Assignor to the Secured Supplemental L/C Creditors now existing or
hereafter incurred under, arising out of or in connection with each Secured
Supplemental Letter of Credit and each reimbursement agreement (or similar
agreement) in respect thereof, whether such Secured Supplemental Letter of
Credit and each reimbursement agreement (or similar agreement) in respect
thereof is now in existence or hereinafter arising (including, without
limitation, in the case of an Assignor that is a Subsidiary Guarantor, all
obligations, liabilities and indebtedness of such Assignor under the
Subsidiaries Guaranty in respect of the Secured Supplemental Letters of
Credit), and the due performance and compliance by such Assignor with all of
the terms, conditions and agreements contained in each such Secured
Supplemental Letter of Credit and each reimbursement agreement (or similar
agreement) in respect thereof (all such obligations, liabilities and
indebtedness under this clause (iii) being herein collectively called the “Secured
Supplemental L/C Obligations”).


 


(iv)          any and all sums advanced by the Collateral
Agent in order to preserve its security interest in the Collateral;


 


(v)           in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
such Assignor referred to in clauses (i), (ii) and (iii) of this definition,
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 Collateral Agent of its rights hereunder, together with reasonable
attorneys’ fees and court costs; and


 


(vi)          all amounts paid by any Indemnitee as to
which such Indemnitee has the right to reim­burse­ment under Section 8.1 of
this Agreement;


 


it being acknowledged and
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.  Notwithstanding anything to the contrary contained above in this
definition, obligations, liabilities and indebtedness which would otherwise
constitute Obligations pursuant to clause (iii) of this definition above shall
not constitute Obligations for purposes of (or be secured pursuant to) this
Agreement if same were incurred (or guaranteed) in violation of the provisions
of the Credit Agreement.


 


“Other
Creditors” shall have the meaning provided in the recitals of this
Agreement.


 


30

















 


“Other
Obligations” shall mean, collectively, the Hedging Obligations and the
Secured Supplemental L/C Obligations.


 


“Patents”
shall mean any patent in or to which any Assignor now or hereafter has any
right, title or interest therein, and any divisions, continuations (including,
but not limited to, continuations-in-parts) and improvements thereof, as well
as any application for a patent now or hereafter made by any Assignor.


 


“Permits”
shall mean, to the extent permitted to be assigned by the terms thereof or by
applicable law, all licenses, permits, rights, orders, variances, franchises or
authorizations of or from any governmental authority or agency.


 


“Primary
Obligations” shall have the meaning provided in Section 7.4(b) of this
Agreement.


 


“Pro Rata Share”
shall have the meaning provided in Section 7.4(b) of this Agreement.


 


“Proceeds”
shall mean all “proceeds” as such term is defined in the Uniform Commercial
Code as in effect in the State of New York on the date hereof and, in any
event, shall also include, but not be limited to, (i) any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to the Collateral Agent
or any Assignor from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable to any
Assignor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any person acting under color of gov­ernmental
authority) and (iii) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.


 


“Registered
Organization” shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York.


 


“Representative”
shall have the meaning provided in Section 7.4(e) of this Agreement.


 


“Required
Secured Creditors” shall mean (i) at any time prior to the Credit Document
Obligations Termination Date, the Required Lenders (or, to the extent provided
in Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any
time on and after the Credit Document Obligations Termination Date, the holders
of a majority of the Other Obligations.


 


“Requisite
Creditors” shall have the meaning provided in Section 10.2 of this
Agreement.


 


“Secondary
Obligations” shall have the meaning provided in Section 7.4(b) of this
Agreement.


 


“Secured
Creditors” shall have the meaning provided in the recitals of this
Agreement.


 


31

















 


“Secured Debt
Agreements” shall mean and include (w) this Agreement, (x) the other Credit
Documents, (y) the Interest Rate Protection Agreements and Other Hedging
Agreements entered into with any Hedging Creditor and (z) the Secured
Supplemental Letters of Credit issued by any Secured Supplemental L/C Creditor
and each related reimbursement agreement (or similar agreement).


 


“Secured
Supplemental L/C Creditors” shall have the meaning provided in the recitals
of this Agreement.


 


“Secured
Supplemental L/C Obligations” shall have the meaning provided in the
definition of “Obligations” in this Article IX.


 


“Secured
Supplemental Letters of Credit” shall mean each Supplemental Letter of
Credit designated by the Borrower to be secured by this Agreement and the other
Security Documents and entitled to the benefits of the Subsidiaries Guaranty,
but only to the extent (A) that such Supplemental Letter of Credit is permitted
to be incurred pursuant to the Credit Agreement and (B) the Borrower shall,
notwithstanding the foregoing, have delivered to the Collateral Agent at the
time of the issuance of such Supplemental Letter of Credit a certificate signed
by the Chief Financial Officer or the Treasurer of the Borrower certifying that
such Supplemental Letter of Credit shall constitute a “Secured Supplemental
Letter of Credit” and that the conditions set forth in preceding clause (A)
shall have been satisfied, such certificate to constitute conclusive evidence,
binding for all purposes, that such obligations are secured as provided in this
Agreement and the other Credit Documents; provided that, notwithstanding
the foregoing, the aggregate stated amount of all Supplemental Letters of
Credit (and all drawings thereunder) secured hereunder and entitled to the
benefits of the other Credit Documents as Secured Supplemental Letters of
Credit shall not exceed $10,000,000 at any one time outstanding.


 


“Software”
shall mean “software” as such term is defined in the Uniform Commercial Code as
in effect on the date hereof in the State of New York.


 


“Subject Patent”
shall have the meaning provided in Section 1.1(a) of this Agreement.


 


“Subject Patent
Agreement” shall have the meaning provided in Section 1.1(a) of this
Agreement.


 


“Supplemental
Letter of Credit” shall have the meaning provided in the Credit Agreement.


 


“Supporting
Obligations” shall mean any “supporting obligation” as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor, or in which any Assignor has
any rights, and, in any event, shall include, but shall not be limited to all
of such Assignor’s rights in any Letter-of-Credit Right or secondary obligation
that supports the payment or performance of, and all security for, any Account,
Chattel Paper, Document, General Intangible, Instrument or Investment Property.


 


32

















 


“Tangible
Chattel Paper” shall mean “tangible chattel paper” as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.


 


“Termination
Date” shall have the meaning provided in Section 10.8(a) of this Agreement.


 


“Timber-to-be-Cut”
shall mean “timber-to-be-cut” as such term is used in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.


 


“Trade Secrets”
shall mean any secretly held existing engineering or other data, information,
production procedures and other know-how relating to the design manufacture,
assembly, installation, use, operation, marketing, sale and/or servicing of any
products or business of an Assignor worldwide whether written or not.


 


“Trade Secret
Rights” shall mean the rights of an Assignor in any Trade Secret it holds.


 


“Transmitting
Utility” shall have the meaning given such term in Section 9-102(a)(80) of
the UCC.


 


“UCC” shall
mean the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.


 


“Wachovia
Control Agreement” shall mean the Deposit Account Control Agreement (With
Future Notification) among Wachovia Bank, National Association, certain
Assignors and the Collateral Agent, dated December 16, 2003 (as the same may be
amended, restated, modified and/or supplemented from time to time).


 


“Wachovia
Deposit Accounts” shall mean the Deposit Accounts subject to the Wachovia
Control Agreement at any time.


 


ARTICLE X


 


MISCELLANEOUS


 


10.1  Notices.  Except as
otherwise specified herein, all notices, requests, demands or other
communications to or upon the respective parties hereto shall be sent or
delivered by mail, telegraph, telex, telecopy, cable or courier service and all
such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by courier, be effective when deposited in the
mails, delivered to the telegraph com­pany, cable company or over­night
courier, as the case may be, or sent by telex or telecopier, except that
notices and communications to the Collateral Agent or any Assignor shall not be
effective until received by the Collateral Agent or such Assignor, as the case
may be.  All notices and other
communications shall be in writing and addressed as follows:


 


33

















 


	
  (a)

  	
  if
  to any Assignor, c/o:

  
	
   

  
	
   

  	
  Duratek, Inc.

  
	
   

  	
  10100 Old Columbia Road

  
	
   

  	
  Columbia, MD 21046

  
	
   

  	
  Attention: Craig T.
  Bartlett

  
	
   

  	
  Telephone No.:  (410) 312-5100

  
	
   

  	
  Telecopier No.:  (410) 290-9112

  
	
   

  	
   

  
	
  (b)

  	
  if
  to the Collateral Agent, at:

  
	
   

  
	
   

  	
  Credit Lyonnais New
  York Branch

  
	
   

  	
  1301 Avenue of the
  Americas

  
	
   

  	
  New York, New York
  10019

  
	
   

  	
  Attention:  Mark Koneval

  
	
   

  	
  Telephone No.:  (212) 261-7867

  
	
   

  	
  Telecopier No.:  (212) 261-3375

  
				



 


(c)           if to any Lender
Creditor (other than the Collateral Agent), at such address as such Lender
Creditor shall have specified in the Credit Agreement;


 


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


 


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


 


10.2  Waiver; Amendment.  Except
as provided in Sections 10.8 and 10.12 hereof, none of the terms and conditions
of this Agreement or any other Security Document may be changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed by
each Assignor directly affected thereby (it being understood that the addition
or release of any Assignor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Assignor other than the Assignor so
added or released) and the Collateral Agent (with the written consent of the
Required Secured Creditors); provided, however, that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class of Secured Creditors (and not all Secured Creditors in a like or similar
manner) also shall require the written consent of the Requisite Creditors of
such affected Class.  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, (y) the Hedging Creditors as holders of the
Hedging Obligations or (z) the Secured Supplemental L/C Creditors as holders of
the Secured Supplemental L/C Obligations. 
For the purpose of this Agreement, the term “Requisite Creditors”
of any Class shall mean each of (x) with respect to the Credit Document
Obligations, the Required Lenders (or, to the extent provided in Section 13.12
of the Credit Agreement, each of the Lenders), (y) with respect to the Hedging
Obligations, the holders of at least a majority of all Hedging Obligations
outstanding from time to time and (z) with respect to the Secured Supplemental
L/C Obligations, the holders of at least a majority of all Secured Supplemental
L/C Obligations outstanding from time to time.


 


34

















 


10.3  Obligations Absolute.  The
obligations of each Assignor hereunder shall remain in full force and effect
without regard to, and shall not be impaired by, (a) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like of such Assignor; (b) any exercise or non-exercise, or any waiver
of, any right, remedy, power or privilege under or in respect of this Agreement
or any other Secured Debt Agreement; or (c) any amendment to or modification of
any Secured Debt Agreement or any security for any of the Obligations; whether
or not such Assignor shall have notice or knowledge of any of the foregoing.


 


10.4  Successors and Assigns.  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 10.8, (ii) be binding upon each Assignor,
its successors and assigns; provided, however, that no Assignor
shall assign any of its rights or obligations hereunder without the prior
written consent of the Collateral Agent (with the prior written consent of the
Required Secured Creditors), and (iii) inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent, the other Secured Creditors and their respective permitted successors,
transferees and assigns. All agreements, statements, representations and
warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor 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.


 


10.5  Headings Descriptive.  The
headings of the several sections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.


 


10.6  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 ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH ASSIGNOR, 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 JURISDICTION OVER SUCH ASSIGNOR.  EACH ASSIGNOR 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 


 


35

















 


REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR NOTICES AS
PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING.  EACH ASSIGNOR 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 COLLATERAL AGENT 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 ASSIGNOR IN ANY OTHER JURISDICTION.


 


(b)           EACH
ASSIGNOR 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.


 


10.7  Assignor’s Duties.  It is
expressly agreed, anything herein contained to the contrary notwithstanding,
that each Assignor shall remain liable to perform all of the obligations, if
any, assumed by it with respect to the Collateral and the Collateral Agent
shall not have any obli­gations or liabilities with respect to any Collateral
by reason of or arising out of this Agreement, nor shall the Collateral Agent
be required or obligated in any manner to perform or fulfill any of the
obligations of any Assignor under or with respect to any Collateral.


 


10.8  Termination; Release.  (a)  After the Termination Date, this Agreement
shall terminate (provided that all indemnities set forth herein including,
without limitation in Section 8.1 hereof, shall survive such termination) and
the Collateral Agent, at the request and expense of the respective Assignor,
will promptly execute and deliver to such Assignor a proper instrument or
instruments (including Uniform Commercial Code termination statements on form
UCC-3) acknowledging the satisfaction and termination of this Agreement, and
will duly assign, trans­fer and deliver to such Assignor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Collateral Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement.  As used in this Agreement, “Termination
Date” shall mean the date upon which the Total Commitment under the Credit
Agreement has been terminated and all Interest Rate Protection Agreements and
Other Hedging Agreements entered into with any Hedging Creditor have been
terminated, no


 


36

















 


Note under the Credit
Agreement is outstanding and all Loans thereunder have been repaid in full, all
Letters of Credit issued under the Credit Agreement have been terminated, all
Secured Supplemental Letters of Credit have been terminated and all Obligations
then due and payable 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) in connection with a sale or disposition
permitted by the Secured Debt Agreements, and 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 Collateral Agent, at the request
and expense of such Assignor, will duly release from the security interest
created hereby (and will execute and deliver such documentation, including
termination or partial release statements and the like in connec­tion
therewith) and assign, transfer and deliver to such Assignor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or otherwise disposed of, or released, and as may
be in the possession of the Collateral Agent (or any of its sub-agents
hereunder) and has not theretofore been released pursuant to this
Agreement.  Furthermore, upon the
release of any Subsidiary Guarantor from the Subsidiaries Guaranty in
accordance with the provisions thereof, such Assignor (and the Collateral at
such time assigned by the respective Assignor pursuant hereto) shall be
released from  this Agreement.


 


(c)           At
any time that an Assignor desires that the Collateral Agent take any action to
acknowledge or give effect to any release of Collateral pursuant to the
foregoing Section 10.8(a) or (b), such Assignor shall deliver to the Collateral
Agent a certificate signed by a principal executive officer of such Assignor
stating that the release of the respective Collateral is permitted pursuant to
such Section 10.8(a) or (b).  At any
time that the Borrower or the respective Assignor desires that a Subsidiary of
the Borrower which has been released from the Subsidiaries Guaranty be released
hereunder as provided in the last sentence of Section 10.8(b), it shall deliver
to the Collateral Agent a certificate signed by a principal executive officer
of the Borrower and the respective Assignor stating that the release of the
respective Assignor (and its Collateral) is permitted pursuant to such Section
10.8(b). If reasonably requested by the Collateral Agent (although the
Collateral Agent shall have not obligation to make such request), the relevant
Assignor shall furnish appropriate legal opinions (from counsel, reasonably
acceptable to the Collateral Agent) to the effect set forth in this Section
10.8(c).


 


(d)           The
Collateral Agent shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance with
(or which the Collateral Agent in the absence of gross negligence and willful
misconduct believes to be in accordance with) this Section 10.8.


 


10.9  Counterparts.  This
Agreement may be executed in any number of counter­parts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.  A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.


 


37

















 


10.10  Severability.  Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


10.11  The Collateral Agent and the other
Secured Creditors.  The Collateral Agent will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement.  It is expressly understood
and agreed that the obligations of the Collateral Agent 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 Collateral Agent shall
act hereunder on the terms and condi­tions set forth herein and in Annex O
hereto, the terms of which shall be deemed incorporated herein by reference as
fully as if same were set forth herein in their entirety.


 


10.12  Additional Assignors.  It
is understood and agreed that any Subsidiary Guarantor that desires to become
an Assignor hereunder, or is required to execute a counterpart of this
Agreement after the date hereof pursuant to the requirements of the Credit
Agreement or any other Secured Debt Agreement, shall become an Assignor
hereunder by executing a counterpart hereof and delivering same to the
Collateral Agent (or by executing a Joinder Agreement substantially in the form
of Exhibit M to the Credit Agreement), (y) delivering supplements to Annexes A
through F, inclusive, and H through K, inclusive, hereto as are necessary to
cause such Annexes to be complete and accurate with respect to such additional
Assignor on such date and (z) taking all actions as specified in this Agreement
as would have been taken by such Assignor had it been an original party to this
Agreement, in each case with all documents required above to be delivered to
the Collateral Agent and with all documents and actions required above to be
taken to the reasonable satisfaction of the Collateral Agent.


 


[Remainder
of this page intentionally left blank; signature page follows]


 


38

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above written.


 


 


	
   

  	
  DURATEK,
  INC., as an Assignor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig T. Bartlett

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Craig T. Bartlett

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Finance,

  
	
   

  	
   

  	
   

  	
  Treasurer
  & Assistant Secretary

  
	
   

  	
   

  
	
   

  	
  GTSD SUB,
  INC.,

  
	
   

  	
  DURATEK
  FEDERAL SERVICES, INC.,

  
	
   

  	
  DURATEK
  SERVICES, INC.,

  
	
   

  	
  GTSD SUB
  III, INC.,

  
	
   

  	
  GTSD SUB V,
  INC.,

  
	
   

  	
  HITTMAN
  TRANSPORT SERVICES, INC.,

  
	
   

  	
  INFOTEK,
  INC.,

  
	
   

  	
  DURATEK
  FEDERAL SERVICES OF HANFORD, INC.,

  
	
   

  	
  GTSD SUB IV,
  INC.,

  
	
   

  	
  CHEM-NUCLEAR
  SYSTEMS, L.L.C.

  
	
   

  	
  as Assignors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig
  T. Bartlett

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Craig T. Bartlett  

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President & Treasurer

  
									



 

















 


	
  Accepted and
  Agreed to:

  
	
   

  
	
  CREDIT
  LYONNAIS NEW YORK BRANCH,

  
	
  as
  Collateral Agent

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mischa Zabotin

  	
   

  
	
   

  	
  Name:

  	
  Mischa Zabotin

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Gary
  Teaman

  	
   

  
	
   

  	
  Name:

  	
  Gary Teaman

  
	
   

  	
  Title:

  	
  Managing
  Director