Exhibit 10.5


 


PLEDGE
AND SECURITY AGREEMENT


(Company)


 


THIS SECURITY AGREEMENT (the “Company
Security Agreement”) is made and dated as of November 13, 2003 by and
between DOLLAR FINANCIAL GROUP, INC., a New York corporation (“Company”), and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent (in such capacity, the “Administrative Agent”) for itself
and the Lenders under (and as that term and capitalized terms not otherwise
defined herein are defined in) that certain Amended and Restated Credit
Agreement dated of even date herewith by and among Company, the Parent, the
Administrative Agent, the Documentation Agent, the Syndication Agent and the
Lenders from time to time party thereto (as amended, extended and replaced from
time to time, the “Credit Agreement”).


 


RECITALS


 


A.                                   Pursuant to the
Credit Agreement the Lenders have agreed to extend credit to the Company from
time to time.


 


B.                                     As a condition
precedent to the Lenders’ obligation to extend credit under the Credit
Agreement and as security for the payment and performance of the Obligations,
Company is required to execute and deliver this Company Security Agreement,
which amends and restates in its entirety that certain Amended and Restated
Pledge and Security Agreement dated as of May 31, 2002 by and among the
Company and the Administrative Agent (the “Existing Security Agreement”), and
to pledge and to grant to the Administrative Agent on behalf of itself and the
Lenders (collectively, the “Secured Parties”) and to create a security interest
in certain property of Company, as hereinafter provided.


 


NOW, THEREFORE, in consideration of the above
Recitals and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:


 


AGREEMENT


 


1.                                       Appointment
of Administrative Agent.  Pursuant
to Paragraph 10(a) of the Credit Agreement, each Lender has appointed the
Administrative Agent as its agent hereunder. 
The Administrative Agent shall act as secured party, agent, bailee and
custodian for the exclusive benefit of the Secured Parties with respect to the
Company Collateral (as defined below). 
The Administrative Agent hereby accepts such appointment and agrees that
the Administrative Agent will act with respect to the Company Collateral for
the exclusive benefit of the Secured Parties and is not, and shall not at any
time in the future be, subject with respect to the Company Collateral, in any
manner or to any extent, to the direction or control of the Company except as
expressly permitted hereunder, under the other Loan Documents or as required by
law.  The Administrative Agent shall act
in accordance with this Company Security Agreement and in accordance with any
written instructions properly delivered pursuant hereto.


 


2.                                       Reaffirmation;
Grant of Security Interest.  Company
hereby:  (a) confirms the continuing
first priority and perfection of the pledge and security interest in the
“Borrower


 

















 


Collateral” (as defined in the Existing Security Agreement) granted to
the Administrative Agent under the Existing Security Agreement as to all
Obligations which arose under the Existing Credit Agreement and which have
automatically been deemed Obligations outstanding under the Credit Agreement,
and (b) pledges, assigns and grants to the Administrative Agent, for the pro
rata, pari passu benefit of the Lenders in accordance with the outstanding
Obligations from time to time owing to them respectively, a security interest
in the property described in Paragraph 3 below (collectively and severally, the
“Company Collateral”) to secure payment and performance of the obligations of
Company described in Paragraph 5 below (collectively and severally, the
“Company Obligations”).


 


3.                                       Company
Collateral.  The Company Collateral
shall consist of all right, title and interest of Company in and to the
following:


 


(a)                                  All shares of capital
stock of each now existing and hereafter formed or acquired direct Subsidiary
of Company, now owned and hereafter acquired by Company, together with all new,
substituted and additional securities at any time issued with respect thereto
(collectively and severally, the “Pledged Shares”, with all the Pledged Shares
in existence as of the date hereof being listed and described on Schedule 1
hereto) and all voting or other rights now or hereafter exercisable and all
cash and noncash dividends and all other property now or hereafter receivable
with respect to any of the foregoing; provided, however, that with respect to
each such Subsidiary of Company which is a Foreign Subsidiary, the Pledged
Shares shall include shares which constitute only sixty-five percent (65%) of
the voting capital stock of such Subsidiary;


 


(b)                                 All now existing and
hereafter arising rights of the holder of Pledged Shares with respect thereto,
including, without limitation, all voting rights and all rights to cash and
noncash dividends and other distributions on account thereof;


 


(c)                                  All of Company’s
right, title and interest in and to (but not Company’s obligations under) all
now existing and hereafter arising contracts and agreements to which Company is
party (with any contracts or agreements to which Company is party in effect as
of the date hereof requiring Company or any of its Affiliates to make payments
in excess of $50,000.00 in any calendar year listed on Schedule 2
hereto), in each case as such agreements may be amended, supplemented or
otherwise modified from time to time (such agreements, as so amended,
supplemented or modified, individually, an “Assigned Agreement”, and
collectively, the “Assigned Agreements”), including, without limitation, all
rights of Company to receive moneys due and to become due under or pursuant to
the Assigned Agreements, all rights of Company to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, all claims of Company for damages arising out of or for breach of
or default under the Assigned Agreements, and all rights of Company to
terminate, amend, supplement or modify the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder;  provided, however, that with respect to any such contract
or agreement where the grant of a security interest in Company’s right, title
and interest therein is prohibited by the terms thereof, or would give any
other party the right to terminate its obligations thereunder, or is not
permitted because any necessary consent to such grant has not been obtained,
the Collateral shall include only the rights of


 


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Company to receive moneys due and to become due, if any, under or
pursuant to such contract or agreement;


 


(d)                                 All now existing and
hereafter arising accounts, chattel paper, documents, instruments, letter of
credit rights, commercial tort claims, and general intangibles (as those terms
are defined in the California Uniform Commercial Code as in effect from time to
time) of Company, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights of Company now
or hereafter arising in and to all security agreements, guaranties, leases and
other contracts securing or otherwise relating to any such accounts, chattel
paper, documents, instruments, letter of credit rights, commercial tort claims,
and general intangibles, including each note receivable referred to in Schedule 3
attached hereto (any and all such accounts, chattel paper, documents,
instruments, letter of credit rights, commercial tort claims, and general
intangibles being the “Receivables”, and any and all such security agreements,
guaranties, leases and other contracts being the “Related Contracts”);


 


(e)                                  All inventory of
Company, now owned and hereafter acquired, wherever located, including, without
limitation, all merchandise, goods and other personal property which are held
for sale or lease or leased by Company or to be furnished under a contract of
service, all raw materials, work in process, materials used or consumed in Company’s
business and finished goods, all goods in which Company has an interest in mass
or a joint or other interest or gifts of any kind (including goods in which
Company has an interest or right as consignee), and all goods which are
returned to or repossessed by Company, together with all additions and
accessions thereto and replacements therefor and products thereof and documents
therefor (any and all of the foregoing being the “Inventory”);


 


(f)                                    All equipment of
Company, now owned and hereafter acquired, wherever located, and all parts
thereof and all accessions, additions, attachments, improvements, substitutions
and replacements thereto and therefor, including, without limitation, all
machinery, tools, dies, blueprints, catalogues, computer hardware and software,
furniture, furnishings and fixtures (any and all of the foregoing being the
“Equipment”);


 


(g)                                 All now existing and
hereafter acquired Intellectual Property Collateral owned by Company or used in
Company’s business; provided, however, that with respect to any
Intellectual Property Collateral where the grant of a security interest in
Company’s right, title and interest therein is prohibited by the terms thereof,
or would give any other party the right to terminate its obligations
thereunder, or is not permitted because any necessary consent to such grant has
not been obtained, the Collateral shall include only the rights of Company to
receive moneys due and to become due, if any, under or pursuant to such
Intellectual Property Collateral;


 


(h)                                 All deposit accounts,
now existing and hereafter arising or established, maintained in Company’s name
with any financial institution, including, without limitation, those accounts
described more particularly on Schedule 4 attached hereto, and any
and all funds at any time held therein and all certificates and instruments, if
any, from time to time representing, evidencing or deposited into such
accounts, and all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the foregoing;


 


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(i)                                     All now existing
and hereafter acquired books, records, writings, data bases, information and
other property relating to, used or useful in connection with, embodying,
incorporating or referring to, any of the foregoing Company Collateral;


 


(j)                                     All other property
of Company (other than any capital stock of any Foreign Subsidiary not pledged
under Paragraph 3(a) above) now or hereafter in the possession, custody
or control of the Administrative Agent, and all property of Company (other than
any capital stock of any Foreign Subsidiary not pledged under Paragraph 3(a)
above) in which the Administrative Agent now has or hereafter acquires a
security interest;


 


(k)                                  All now existing and
hereafter acquired cash and cash equivalents held by Company not otherwise
included in the foregoing Collateral; and


 


(l)                                     All products and
proceeds of the foregoing Company Collateral. 
For purposes of this Company Security Agreement, the term “proceeds”
shall have the meaning provided in the California Uniform Commercial Code as in
effect from time to time, and also includes any voluntary or involuntary
disposition, and all rights to payment, including return premiums, with respect
to any insurance.  Notwithstanding the
foregoing, the Company Collateral shall not include the leasehold interest in
any equipment, nor any equipment acquired under purchase money financing
permitted under the Credit Agreement, if the granting of a security interest
therein would violate the terms of the lease or financing documents.


 


Notwithstanding the foregoing, to the extent that granting the security
interest contemplated hereby in any rights, property or assets of the Company
that are subject to Liens permitted by the Credit Agreement or the other Loan
Documents would violate or result in a breach by Company under, or confer upon
any other party the right to terminate, the documents, instruments or
agreements governing such Liens, so long as such documents, instruments, and
agreements are in effect, the Company Collateral shall include only the rights
of Company to receive moneys due and to become due, if any, under or pursuant
to such contract or agreement.


 


4.                                       Intellectual
Property Collateral.  For purposes
of this Company Security Agreement, the terms set forth below shall have the
following meanings:


 


“Computer Hardware and Software Collateral”
means:


 


(a)           All
of Company’s computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware;


 


(b)                                 All of Company’s
software programs (including both source code, object code and all related
applications and data files), whether now owned, licensed or leased or hereafter
acquired by Company, designed for use on the computers and electronic data
processing hardware described in clause (a) above;


 


(c)                                  All firmware
associated therewith;


 


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(d)                                 All documentation
(including flow charts, logic diagrams, manuals, guides and specifications)
with respect to such hardware, software and firmware described in the preceding
clauses (a) through (c); and


 


(e)                                  All rights with
respect to all of the foregoing, including, without limitation, any and all of
Company’s copyrights, licenses, options, warranties, service contracts, program
services, test rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of the
foregoing.


 


“Copyright Collateral” means all
copyrights and all semi-conductor chip product mask works of Company, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including, without limitation, all of Company’s right,
title and interest in and to all copyrights and mask works registered in the
United States Copyright Office or anywhere else in the world and also
including, without limitation, the copyrights and mask works (if any) referred
to in Schedule 5 attached hereto, and all applications for
registration thereof, whether pending or in preparation, all copyright and mask
work licenses, including, without limitation, each copyright and mask work
license referred to in Schedule 5 attached hereto, the right of Company
to sue for past, present and future infringements of any thereof, all rights of
Company corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing,  including, without limitation, licenses, royalties, income,
payments, claims damages and proceeds of suit.


 


“Intellectual Property Collateral”
means, collectively, the Computer Hardware and Software Collateral, the
Copyright Collateral, the Patent Collateral, the Trademark Collateral and the
Trade Secrets Collateral.


 


“Patent Collateral” means:


 


(a)                                  All of Company’s
letters patent and applications for letters patent throughout the world,
including all of Company’s patent applications in preparation for filing
anywhere in the world and with the United States Patent and Trademark Office
and including, without limitation, each patent and patent appellation referred
to in Schedule 6 attached hereto;


 


(b)                                 All of Company’s
patent licenses, including, without limitation, each patent license referred to
in Schedule 6 attached hereto;


 


(c)                                  All reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations of any of the items described in clauses (a) and (b);
and


 


(d)                                 All proceeds of, and
rights associated with, the foregoing (including license royalties and proceeds
of infringements suits), the right of Company to sue third parties for past,
present or future infringements of any patent or patent application of Company,
including any patent or patent applications referred to in Schedule 6
attached hereto, and for breach of enforcement of any patent license, including
any patent, license referred to in Schedule 6 attached hereto, and
all rights corresponding thereto throughout the world.


 


“Trademark Collateral” means:


 


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(a)                                  All of Company’s
trademarks, trade names, corporate names, business names, fictitious business
names, trade styles, service marks, certification makers, collective marks,
logos, other source of business identifiers, prints and labels on which any of
the foregoing have appeared or appear, designs and general intangibles of a
like nature (all of the foregoing items in this clause (a) being collectively
called a “Trademark”), now existing anywhere in the world or hereafter adopted
or acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any office or agency of the
United States of America or any State thereof or any foreign country,
including, without limitation, those Trademarks (if any) referred to in Schedule 7
attached hereto;


 


(b)                                 All of Company’s
Trademark licenses, including, without limitation, each Trademark license (if
any) referred to in Schedule 7 attached hereto;


 


(c)                                  All reissues,
extensions or renewals of any of the items described in clauses (a) and (b);


 


(d)                                 All of the goodwill of
the business of Company connected with the use of, and symbolized by the items
described in, clauses (a) and (b), and


 


(e)                                  All proceeds of, and
rights of Company associated with, the foregoing, including any claim by
Company against third parties for past, present or future infringement or
dilution of any Trademark, Trademark registration or Trademark license,
including any Trademark, Trademark registration or Trademark license referred
to in Schedule 7 attached hereto, or for any injury to the goodwill
associated with the use of any such Trademark or for breach or enforcement of
any Trademark license.


 


“Trade Secrets Collateral” means
common law and statutory trade secrets and all other confidential or
proprietary or useful information and all know-how obtained by or used in or
contemplated at any time for use in the business of Company (all of the
foregoing being collectively called a “Trade Secret”), whether or not such
Trade Secret has been reduced to a writing or other tangible form including all
documents and things embodying, incorporating or referring in any way to such
Trade Secret, all Trade Secret licenses, including each Trade Secret license
referred to in Schedule 8 attached hereto, and including the right
to sue for and to enjoin and to collect damages for the actual or threatened
misappropriation of any Trade Secret and for the breach or enforcement of any
such Trade Secret license.


 


5.                                       Company
Obligations.  The Company
Obligations secured by this Company Security Agreement shall consist of all
Obligations of Company under the Credit Agreement and each other Loan Document
to which Company is party, whether now existing or hereafter arising, voluntary
or involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from
time to time decreased or extinguished and later increased, created or
incurred.


 


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6.                                       Indemnification.  Company shall indemnify the Administrative
Agent and its agents, officers and employees and hold the Administrative Agent
and its agents, officers and employees harmless from and against any and all
claims, losses, liabilities, penalties, actions, suits, judgments, costs,
expenses and/or damages (including, without limitation, reasonable and
documented attorneys’ fees and disbursements and special or consequential
damages) of any kind whatsoever which may at any time be imposed on, assessed
against or incurred by the Administrative Agent or its agents, officers and
employees:  (1) in any way relating
to or arising out of the Loan Documents to which Company is party or any
documents contemplated by or referred to therein to which Company is party or
the transactions contemplated thereby or any action taken or omitted to be
taken by the Administrative Agent or its agents, officers and employees with
respect to the foregoing; or (2) in any manner resulting from any action
taken or omitted to be taken by the Administrative Agent or its agents, officers
and employees with respect to the Company Collateral in accordance with written
instructions given pursuant to the terms and provisions of this Company
Security Agreement; provided, however, that under no circumstance shall Company
be liable for any portion of any amount described in clause (1) or (2) above
arising out of or resulting from the gross negligence or willful misconduct of
the Administrative Agent.  The
indemnification obligations of Company under this Paragraph 6 shall
survive termination of this Company Security Agreement and payment in full of
the Obligations.  Attorneys’ fees and
disbursements incurred in enforcing, or on appeal from, a judgment pursuant
hereto shall be recoverable separately from and in addition to any other amount
included in such judgment, and this clause is intended to be severable from the
other provisions of this Company Security Agreement and to survive and not be
merged into such judgment.


 


7.                                       Company
Remains Liable.  Anything herein to
the contrary notwithstanding,


 


(a)                                  Company shall remain
liable under the contracts and agreements included in the Company Collateral to
the extent set forth therein, and shall perform all of its duties and
obligations under such contracts and agreements to the same extent as if this
Company Security Agreement had not been executed;


 


(b)                                 The exercise by the
Administrative Agent of any of its rights hereunder shall  not release Company from any of Company’s
duties or obligations under any such contracts or agreements included in the Company
Collateral; and


 


(c)                                  Neither the
Administrative Agent nor any Lender shall have any obligation or liability
under any such contracts or agreements included in the Company Collateral by
reason of this Company Security Agreement, nor shall the Administrative Agent
or any Lender be obligated to perform any of the obligations or duties of
Company thereunder or to take action to collect or enforce any claims for
payment assigned hereunder.


 


8.                                       Duties and
Obligations of Company.


 


(a)                                  Company shall defend at
its own costs:


 


(i)                                     Its rights in the
Company Collateral, and


 


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(ii)                                  The
security interests of the Administrative Agent in and to the Company Collateral
pursuant to this Company Security Agreement as a valid, perfected lien upon the
Company Collateral.  Company covenants
and agrees that it will have title to and right to pledge any other property at
any time hereafter pledged to the Administrative Agent as Company Collateral
under this Company Security Agreement.


 


(b)                                 Company will promptly
notify the Administrative Agent of any attachment or other legal process levied
against any of the Company Collateral and any information received by Company
relating to the Company Collateral which could reasonably be expected to have a
material adverse effect on the value of the Company Collateral or the rights
and remedies of the Administrative Agent with respect thereto.


 


9.                                       Representations
and Warranties of Company.   Company
hereby represents and warrants to the Secured Parties as follows:


 


(a)                                  Location of
Company Collateral, etc..  All of
the Equipment, Inventory and lock boxes of Company are located at the places
specified in Schedule 9 hereto. 
None of the Equipment and Inventory of Company has, within the four months
preceding the date of this Company Security Agreement, been located at any
place other than the places specified in Schedule 9 hereto.  The jurisdiction in which the Company was
organized, its place(s) of business, the chief executive office of Company, and
the office(s) where Company keeps its books and records (including, without
limitation, those concerning the Receivables) and all original copies of its
Assigned Agreements are located as set forth on Schedule 9
hereto.  All payments due or to become
due under or in connection with any Assigned Agreement shall be made directly
to Company and shall be forthwith deposited by such Company into an account of
Company listed on Schedule 4 hereto.  In the event any Receivables and rights to payment under Assigned
Agreements are evidenced by a promissory note or other instrument, the same
have been delivered to the Administrative Agent upon request or as otherwise
required pursuant to the Loan Documents. 
Except for the trade names listed on Schedule 7 hereto,
Company has not used any other trade names. 
Company has not been known by any legal name different from the one set
forth on the signature page hereto, nor has Company been the subject of any
merger or corporate reorganization (other than the merger pursuant to the
Acquisition Agreement).  If Company is a
party to any Federal, state or local government contract, Company shall duly
comply with the terms of the Federal Assignment of Claims Act, to the extent
required to perfect the first priority security interest in favor of the
Administrative Agent.


 


(b)                                 Ownership, No
Liens, etc.  Company owns the
Company Collateral free and clear of any Lien, except for the security interest
created by this Company Security Agreement and except as permitted by the Credit
Agreement or the other Loan Documents. 
No effective financing statement or other instrument similar in effect
covering all or any part of the Company Collateral is on file in any recording
office, except such as may have been filed in favor of the Administrative Agent
relating to this Company Security Agreement and except as permitted by the
Credit Agreement or the other Loan Documents.


 


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(c)                                  Possession and
Control.  Company has exclusive
possession and control of all of its Equipment and Inventory.


 


(d)                                 Intellectual
Property Collateral.  With respect
to any Intellectual Property Collateral the loss, impairment or infringement of
which is reasonably likely to result in a Material Adverse Effect: (i) such Intellectual
Property Collateral is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part; (ii) such Intellectual Property Collateral
is valid and enforceable; (iii) Company has made all necessary filings and
recordations to protect its interest in such Intellectual Property Collateral,
including, without limitation, recordations of all of its interests in the
Patent Collateral and Trademark Collateral in the United States Patent and
Trademark Office and in corresponding offices throughout the world and its
claims to the Copyright Collateral in the United States Copyright Office and in
corresponding offices throughout the world; (iv) Company is the owner of or has
the right to use as used in its business such Intellectual Property Collateral,
and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third party; and (v)
Company has performed and will continue to perform all acts and has paid and
will continue to pay all required fees and taxes to maintain each and every
item of Intellectual Property Collateral in full force and effect throughout
the world, as applicable.  Company owns
directly or is entitled to use by license or otherwise, all patents, Trademarks,
Trade Secrets, copyrights, mask works, licenses, technology, know-how,
processes and rights with respect to any of the foregoing used in, necessary
for or of importance to the conduct of Company’s business in any material
respect.


 


(e)                                  Validity, etc.  This Company Security Agreement creates a
valid first priority security interest in the Company Collateral, subject only
to Liens permitted by the Credit Agreement or the other Loan Documents,
securing the payment of the Company Obligations, and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been duly taken.


 


(f)                                    Pledged Shares.   Company is (or, in the case of
after-acquired Pledged Shares, at the time Company acquires rights therein,
will be) the record and beneficial owner of, and has good and marketable title
to the Pledged Shares.  The Pledged
Shares constitute (or, in the case of after-acquired Pledged Shares, at the
time Company acquires rights therein, will constitute) one hundred percent
(100%) of the issued and outstanding shares of capital stock of all direct
domestic Subsidiaries of Company and no less than sixty five percent (65%) of
the issued and outstanding capital stock of the direct Foreign Subsidiaries, if
any, of the Company, which Subsidiaries are accurately and completely listed on
Schedule 1 attached hereto, and there are no outstanding options,
warrants or other agreements with respect to such Pledged Shares except as
provided in the Loan Documents.  The
Pledged Shares owned by the Company on the date hereof have been validly issued
and are fully paid and nonassessable.


 


10.                                 Certain Covenants.  Company covenants and agrees that, so long
as any portion of the Company Obligations shall remain unpaid or any Lender
shall have any obligation to extend credit under the Credit Agreement, Company
will, unless the Administrative Agent shall otherwise consent in writing,
perform the following obligations:


 


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(a)                                  As to the Assigned
Agreements.  Company shall, at its
expense, (i) perform and observe all the terms and provisions of the Assigned
Agreements to be performed or observed by it, maintain the Assigned Agreements
pledged or assigned by it hereunder in full force and effect, enforce such Assigned
Agreements in accordance with their terms and take all such action to such end
as may be from time to time reasonably requested by the Administrative Agent
except where failure to so act is not reasonably likely to result in a Material
Adverse Effect; and (ii) furnish to the Administrative Agent promptly upon
receipt thereof copies of all notices, request and other documents received by
Company under or pursuant to the Assigned Agreements which are likely to have a
material adverse effect on Company’s rights under any such Assigned Agreement,
and from time to time (A) furnish to the Administrative Agent such information
and reports regarding the Company Collateral pledged or assigned by it
hereunder as the Administrative Agent may reasonably request and (B) upon
reasonable request of the Administrative Agent make to each other party to any
Assigned Agreement such demand and requests for information and reports or for
action as Company is entitled to make thereunder.  In addition, if such action is reasonably likely to result in a
Material Adverse Effect, Company shall not: (i) cancel or terminate any
Assigned Agreement or consent to or accept any cancellation or termination
thereof; (ii) give any consent, waiver or approval under any Assigned Agreement;
(iii) waive any default under or breach of any Assigned Agreement; (iv) amend
or otherwise modify any Assigned Agreement involving aggregate consideration of
$100,000.00 or more; or (v) take any other action in connection with any
Assigned Agreement.  Company agrees, and
has effectively so instructed each other party to each Assigned Agreement
pledged or assigned by it hereunder, that all payments due or to become due
under or in connection with such Assigned Agreement shall be made directly to
Company and Company agrees that all payments shall be forthwith deposited by
Company into a deposit account of Company listed on Schedule 4
hereto.


 


(b)                                 As to Equipment and
Inventory.  Company hereby agrees
that it shall: (i) keep all the Equipment and Inventory (other than Inventory
sold in the ordinary course of business) at the places therefore specified in
Paragraph 9(a) above or, upon 30 days’ prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Paragraph 9 (including Paragraph
9(f)) shall be true and correct, and all action required pursuant to the first
sentence of Paragraph 10(h) below shall have been taken with respect to the
Equipment and Inventory; (ii) except to the extent that the failure to do so
would not reasonably be expected to have a Material Adverse Effect, cause the
Equipment to be maintained and preserved in the same condition, repair and
working as when new, ordinary wear and tear excepted, and in accordance with
any manufacturer’s manual; and forthwith, or in the case of any loss or damage
to any of the Equipment, as quickly as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements, and other
improvements in connection therewith which are necessary or desirable to such
end; and promptly furnish to the Administrative Agent a statement respecting
any loss or damage to any of the Equipment; and (iii) promptly pay when due all
property and other taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Equipment and Inventory, except to the extent the
validity thereof is being contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set aside.


 


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(c)                                  As to Receivables.  Company shall keep its place(s) of business
and its chief executive office and the office(s) where it keeps its books and
records (including those concerning the Receivables) and all original copies of
its Assigned Agreements located, in each case, at its address specified in
Paragraph 9(a) above, or, upon 30 days’ prior written notice to the
Administrative Agent, at such other locations in a jurisdiction where all
actions required by the first sentence of Paragraph 10(h) shall have been taken
with respect to the Receivables and the Assigned Agreements; not change its
name except upon 30 days’ prior written notice to the Administrative Agent;
hold and preserve such records and chattel paper; and permit representatives of
the Administrative Agent at any time during normal business hours upon
reasonable notice to inspect and make abstracts from such records and chattel paper.  Until such time as the Administrative Agent
shall notify Company that an Event of Default has occurred and is continuing
Company shall, in accordance with its customary business practices, continue to
collect, at its own expense, all amounts due or to become due to it under the
Receivables; provided, however, that the Administrative Agent shall have the
right, at any time after notice to Company from the Administrative Agent that
an Event of Default has occurred and is continuing, to notify the account
debtors or obligors under any Receivables of the assignment of such Receivables
to the Administrative Agent and to direct such account debtors or obligors to
make payment of all amounts due or to become due to Company thereunder directly
to the Administrative Agent and, upon such notification and at the expense of
Company, to enforce collection of any such Receivables, and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same
extent as Company might have done. After delivery to Company of the notice from
the Administrative Agent referred to above: (i) all amounts and proceeds
(including Instruments) received by Company in respect of any Receivables shall
be received in trust for the benefit of the Administrative Agent hereunder,
shall be segregated from other funds of Company, and shall be forthwith paid
over to the Administrative Agent in the same form as so received (with any
necessary endorsements) to be held as cash collateral and applied as provided
by this Company Security Agreement; and (ii) Company shall not, without the
consent of the Administrative Agent, adjust, settle, or compromise the amount
or payment of any Receivable, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.  After the occurrence and during the
continuance of an Event of Default, and at other times with the consent of
Company (not to be unreasonably withheld), (A) the Administrative Agent may in
its own name or in the name of others communicate with account debtors in order
to verify with them to the Administrative Agent’s satisfaction the existence,
amount and terms of any Receivables and (B) the Administrative Agent shall have
the right, at Company’s expense, to make test verifications of the Receivables
in any manner and through any medium that it considers advisable, and Company
agrees to furnish all such assistance.


 


(d)                                 As to Collateral.  Until such time as the Administrative Agent
shall notify Company of the revocation of such power and authority, which
notice may be given by the Administrative Agent at any time if an Event of
Default has occurred and is continuing, Company (i) will, at its own expense,
endeavor to collect, as and when due in accordance with its customary practices,
all amounts due with respect to any of the Company Collateral, including the
taking of such action with respect to such collection as the Administrative
Agent may reasonably request or, in the absence of such request, as Company may
deem advisable, and (ii) may grant, in the ordinary course of business, to any
party obligated on any of  the Company


 


11

















 


Collateral, any rebate, refund or allowance to which such party may be
lawfully entitled, may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Company Collateral and
may extend or otherwise modify any Receivable. The Administrative Agent,
however, may, at any time, after an Event of Default has occurred and is
continuing, notify any parties obligated on any of the Company Collateral to
make payment to the Administrative Agent of any amounts due or to become due
thereunder and enforce collection of any of the Company Collateral by suit or
otherwise and surrender, release, or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby. Upon request
of the Administrative Agent, Company will, at its own expense, notify any
parties obligated on any of the Company Collateral to make payment to the
Administrative Agent of any amounts due or to become due thereunder.  After an Event of Default has occurred and
is continuing, the Administrative Agent is authorized to endorse, in the name
of Company, any item, howsoever received by the Administrative Agent,
representing any payment on or other proceeds of any of the Company Collateral.


 


(e)                                  As to Intellectual
Property Collateral.  Company shall
not, unless Company shall either (i) reasonably and in good faith determine
(and notice of such determination shall have been delivered to the
Administrative Agent) that any of the Patent Collateral is of negligible
economic value to Company, or (ii) have a valid business purpose to do
otherwise, do any act, or omit to do any act, whereby any of the Patent
Collateral may lapse or become abandoned or dedicated to the public or
unenforceable.  Company shall not, and
Company shall not permit any of its licensees to, unless Company shall either
(i) reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Administrative Agent) that any of the
Trademark Collateral is of negligible economic value to Company, or (ii) have a
valid business purpose to do otherwise, (A) fail to continue to use any of the
Trademark Collateral in order to maintain all of the Trademark Collateral in
full force free from any claim of abandonment for non-use, (B) fail to maintain
as in the past the quality of products and services offered under all of the
Trademark Collateral, (C) fail to employ all of the Trademark Collateral
registered with any Federal or state or foreign authority with an appropriate
notice of such registration, (D) adopt or use any other Trademark which is
confusingly similar or a colorable imitation of any of the Trademark
Collateral, (E) use any of the Trademark Collateral registered with any Federal
or state or foreign authority except for the uses for which registration or
application for registration of all of the Trademark Collateral has been made,
and (F) do or permit any act or knowingly omit to do any act whereby any of the
Trademark Collateral may lapse or become invalid or unenforceable.  Company shall not, unless Company shall
either reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Administrative Agent) that any of the
Copyright Collateral or any of the Trade Secrets Collateral is of negligible
economic value to Company, or have a valid business purpose to do otherwise, do
or permit any act or knowingly omit to do any act whereby any of the Copyright
Collateral or any of the Trade Secrets Collateral may lapse or become invalid
or unenforceable or placed in the public domain except upon expiration of the
end of an unrenewable term of a registration thereof.  Company shall notify the Administrative Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any material item of the Intellectual Property Collateral may become abandoned
or dedicated to the public or placed in the public domain or invalid or
unenforceable, or of any adverse


 


12

















 


determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any foreign counterpart
thereof or any court) regarding Company’s ownership of any of the Intellectual
Property Collateral, its right to register the same or to keep and maintain and
enforce the same.  In no event shall
Company or any of its agents, employees, designees or licensees file an
application for the registration of any Intellectual Property Collateral with
the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Administrative Agent, and
upon request of the Administrative Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent’s security interest in
such Intellectual Property Collateral and the goodwill and general intangibles
of Company relating thereto or represented thereby.  Company shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue any application (and to
obtain the relevant registration) filed with respect to, and to maintain any
registration of, the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment of fees
and taxes (except to the extent that dedication, abandonment or invalidation
thereof is a result of either (i) a reasonable and good faith determination by
Company that the same is of negligible economic value to Company or (ii) a
valid business purpose.  Company shall,
contemporaneously herewith or from time to time hereafter, in each case as the
Administrative Agent shall request, execute and deliver to the Administrative
Agent such supplemental agreements for filing in the United Stated Patent and
Trademark Office or United States Copyright Office, as applicable, as the
Administrative Agent may require and shall execute and deliver to the
Administrative Agent any other document required to acknowledge or register or
perfect the Administrative Agent’s interest in any part of the Intellectual Property
Collateral.


 


(f)                                    Insurance.  Company will maintain or cause to be
maintained insurance of the type, in the amounts and with such insurance
companies as required under the Credit Agreement. If an Event of Default has
occurred and is continuing, all proceeds of all insurance maintained by Company
and covering the Company Collateral shall be paid to the Administrative Agent
for application to the payment in full of all outstanding Company Obligations.


 


(g)                                 Transfers and Other
Liens.  Company shall not: (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of any of the
Company Collateral, except Inventory in the ordinary course of business or as
permitted by the Credit Agreement; or create or suffer to exist any Lien or
other charge or encumbrance upon or with respect to any of the Company
Collateral to secure Indebtedness of any Person or entity, except for the
security interest created by this Company Security Agreement and except as
permitted by the Credit Agreement or the other Loan Documents.


 


(h)                                 Further Assurances,
etc.  Company agrees that, from time
to time at its own expense, Company will promptly execute and deliver all
further instruments and documents,


 


13

















 


and take all further action, that may be necessary or desirable, or
that the Administrative Agent may reasonably request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to any Company Collateral.  Without limiting the generality of the
foregoing, Company will: (i) mark conspicuously each chattel paper included in
the Receivables, and, at the request of the Administrative Agent after and
during the continuance of an Event of Default, each Related Contract, each
Assigned Agreement, and each of the Company’s records pertaining to the Company
Collateral with a legend, in form and substance satisfactory to the Administrative
Agent, indicating that such document, chattel paper, Related Contract, Assigned
Agreement or Company Collateral is subject to the security interest granted
hereby; (ii) if any Receivable shall be evidenced by a promissory note or other
instrument, negotiable document or chattel paper, upon the request of the
Administrative Agent, deliver and pledge to the Administrative Agent hereunder
such promissory note, instrument, negotiable document or chattel paper duly
endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent;
(iii) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices (including, without limitation,
any assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. 3727, any successor or amended version thereof or any
regulation promulgated under or pursuant to any version thereof), as may be
necessary or desirable, or as the Administrative Agent may request, in order to
perfect and preserve the security interests and other rights granted or
purported to be granted to the Administrative Agent hereby; (iv) furnish to the
Administrative Agent, from time to time as the Administrative Agent may
reasonably request, statements and schedules further identifying and describing
the Company Collateral and such other reports in connection with the Company
Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.  With respect to the
foregoing and the grant of the security interest hereunder, Company hereby
authorizes the Administrative Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Company Collateral, without the signature of Company where permitted by
law. A carbon, photographic or other reproduction of this Company Security
Agreement or any financing statement covering the Company Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.  Company will furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Company Collateral pledged or assigned by it
hereunder and such other reports in connection with such Company Collateral as
the Administrative Agent may reasonably request, all in reasonable detail.  Company hereby covenants and agrees that it
will deliver to the Administrative Agent a supplement to Schedule 2
to this Agreement promptly upon entering into any additional Assigned
Agreement, and each such supplement shall thereupon become for all purposes a
part of such Schedule 2. 
Company hereby covenants and agrees that, upon the reasonable request of
the Administrative Agent, it will open and maintain lockbox accounts with banks
that enter into letter agreements standard and customary in financings of this
type with Company and the Administrative Agent.


 


(i)                                     General
Covenants.  Without limiting any of
the foregoing covenants, Company agrees (a) unless Company shall either (i)
reasonably and in good faith determine (and notice of such determination shall
have been delivered to the Administrative Agent) that any of the Company
Collateral is of negligible economic value to Company, or (ii) have a valid


 


14

















 


business purpose to do otherwise, to do all acts that may be necessary
to maintain, preserve and protect the Company Collateral; (b) not to use or
permit any Company Collateral to be used unlawfully or in material violation of
any provision of the Credit Agreement, this Company Security Agreement, or any
applicable statute, regulation or ordinance or any policy of insurance covering
the Company Collateral; (c) to pay promptly when due all taxes, assessments,
charges, encumbrances and liens now or hereafter imposed upon or affecting any
Company Collateral except those that are contested in good faith and for which
appropriate reserves have been established; (d) upon the request of the
Administrative Agent, to procure, execute and deliver from time to time any
endorsements, assignments, financing statements and other writings deemed
necessary or appropriate by the Administrative Agent to perfect, maintain and
protect its security interest hereunder and the priority thereof; (e) to appear
in and defend any action or proceeding which may affect its title to or the
Administrative Agent’s interest in any material part of the Company Collateral;
(f) to keep separate, accurate and complete records of the Company Collateral
and to provide the Administrative Agent with such records and such other
reports and information relating to the Company Collateral as the
Administrative Agent may reasonably request from time to time; (g) not to
surrender or lose possession of (other than to the Administrative Agent or the
“Bailee” acting under and as defined in the Bank Group/Senior Noteholder
Intercreditor Agreement), sell, encumber, lease, rent, or otherwise dispose of
or transfer any Company Collateral or right or interest therein except as
herein provided or as permitted under the Credit Agreement or the other Loan
Documents, and, to keep the Company Collateral free of all levies and security
interests or other liens or charges except as permitted under the Credit
Agreement or the other Loan Documents; and (h) to account fully for and
promptly deliver to the Administrative Agent upon the request of the
Administrative Agent, in the form received, all securities and instruments,
including, without limitation, stock certificates, constituting Company
Collateral hereunder and appropriate stock transfer powers endorsed in blank or
to the Administrative Agent and all proceeds of the Company Collateral received
in the form of instruments or securities, endorsed to the Administrative Agent
as appropriate, and until so delivered all such proceeds shall be held by
Company in trust for the Secured Parties, separate from all other property of
Company and identified as the property of the Secured Parties.


 


11.                                 Authorized Action
by the Administrative Agent. 
Company hereby irrevocably appoints the Administrative Agent as its
attorney-in-fact to do (but the Administrative Agent shall not be obligated to
and shall incur no liability to Company or any third party for failure so to
do), at any time and from time to time following the occurrence of  an Event of Default which has not been
expressly waived pursuant to the Credit Agreement, any act which Company is
obligated by this Company Security Agreement to do, and to exercise such rights
and powers as Company might exercise with respect to the Company Collateral,
including, without limitation, the right to (a) collect by legal proceedings or
otherwise and endorse, receive and receipt for all dividends, interest,
payments, proceeds and other sums and property now or hereafter payable on or
on account of the Company Collateral; (b) enter into any extension,
reorganization, deposit, merger, consolidation or other agreement pertaining
to, or deposit, surrender, accept, hold or apply other property in exchange for
the Company Collateral; (c) insure, process and preserve the Company
Collateral; (d) transfer the Company Collateral to its own or its nominee’s
name; and (e) make any compromise or settlement, and take any action it deems
advisable, with respect to the Company Collateral.  Company agrees to reimburse the Administrative Agent upon demand
for any costs and expenses, including, without limitation, attorneys’ fees, the
Administrative Agent may incur while acting as Company’s attorney-in-fact
hereunder, all of


 


15

















 


which costs and expenses are included in the Obligations secured
hereby.  It is further agreed and
understood between the parties hereto that such care as the Administrative
Agent gives to the safekeeping of its own property of like kind shall
constitute reasonable care of the Company Collateral when in the Administrative
Agent’s possession; provided, however, that the Administrative Agent shall not
be required to make any presentment, demand or protest, or give any notice and
need not take any action to preserve any rights against any prior party or any
other person in connection with the Obligations or with respect to the Company
Collateral.


 


12.                                 Administration of
the Pledged Shares.  In addition to
any provisions of this  Company Security
Agreement which govern the administration of the Company Collateral generally,
the following provisions shall govern the administration of the Pledged Shares:


 


(a)                                  Until there shall
have occurred and be continuing an Event of Default, Company shall be entitled
to vote or consent with respect to the Pledged Shares in any manner not
inconsistent with this Company Security Agreement or any document or instrument
delivered or to be delivered pursuant to or in connection with any thereof and
to receive all dividends paid with respect to the Pledged Shares.  If there shall have occurred and be
continuing an Event of Default and the Administrative Agent shall have notified
Company that the Administrative Agent desires to exercise its proxy rights with
respect to all or a portion of the Pledged Shares, Company hereby grants to the
Administrative Agent an irrevocable proxy for the Pledged Shares pursuant to
which proxy the Administrative Agent shall be entitled to vote or consent, in
its discretion, and in such event Company agrees to deliver to the
Administrative Agent such further evidence of the grant of such proxy as the
Administrative Agent may request.


 


(b)                                 In the event that at
any time or from time to time after the date hereof, Company, as record and
beneficial owner of the Pledged Shares, shall receive or shall become entitled
to receive, any dividend or any other distribution whether in securities or
property by way of stock split, spin-off, split-up or reclassification,
combination of shares or the like, or in case of any reorganization,
consolidation or merger, and Company, as record and beneficial owner of the
Pledged Shares, shall thereby be entitled to receive securities or property in
respect of such Pledged Shares, then and in each such case, Company shall
deliver to the Administrative Agent and the Administrative Agent shall be
entitled to receive and retain all such securities or property as part of the
Pledged Shares as security for the payment and performance of the Company
Obligations; provided, however, that until there shall have occurred and be
continuing an Event of Default, Company shall be entitled to retain any cash
dividends paid on account of the Pledged Shares.


 


(c)                                  Upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent is
authorized to sell the Pledged Shares and, at any such sale of any of the
Pledged Shares, if it deems it advisable to do so, to restrict the prospective
bidders or purchasers to persons or entities who (1) will represent and agree
that they are purchasing for their own account, for investment, and not with a
view to the distribution or sale of any of the Pledged Shares; and (2) satisfy
the offeree and purchaser requirements for a valid private placement
transaction under Section 4(2) of the Securities Act of 1933, as amended
(the “Act”), and under Securities and Exchange Commission Release Nos. 33-6383;
34-18524; 35-22407; 39-700; IC-12264; AS-306, or under any similar statute,
rule or regulation (whether domestic or foreign). Company agrees that
disposition of the Pledged Shares pursuant to any private sale


 


16

















 


made as provided above may be at prices and on other terms less
favorable than if the Pledged Shares were sold at public sale, and that the
Administrative Agent has no obligation to delay the sale of any Pledged Shares
for public sale under the Act.  Company
agrees that a private sale or sales made under the foregoing circumstances
shall be deemed to have been made in a commercially reasonable manner.  In the event that the Administrative Agent
elects to sell the Pledged Shares, or part of them, and there is a public
market for the Pledged Shares, in a public sale Company shall use its
reasonable best efforts to register and qualify the Pledged Shares, or
applicable part thereof, under the Act and all state Blue Sky or securities
laws required by the proposed terms of sale and all expenses thereof shall be
payable by Company, including, but not limited to, all costs of (i)
registration or qualification of, under the Act or any state Blue Sky or
securities laws or pursuant to any applicable rule or regulation issued
pursuant thereto, any Pledged Shares, and (ii) sale of such Pledged Shares,
including, but not limited to, brokers’ or underwriters’ commissions, fees or
discounts, accounting and legal fees, costs of printing and other expenses of
transfer and sale.


 


(d)                                 If any consent,
approval or authorization of any state, municipal or other governmental
department, agency or authority should be necessary to effectuate any sale or
other disposition of the Pledged Shares, or any part thereof, Company will
execute such applications and other instruments as may be required in
connection with securing any such consent, approval or authorization, and will
otherwise use its reasonable best efforts to secure the same.


 


(e)                                  Nothing contained in
this Paragraph 12 shall be deemed to limit the other obligations of Company
contained in the Credit Agreement or this Company Security Agreement and the
rights of the Administrative Agent and the other Secured Parties hereunder or
thereunder.


 


13.                                 Default and
Remedies.  Company shall be deemed
in default under this  Company Security
Agreement upon the occurrence of an “Event of Default” under (and as the term
“Event of Default” is defined in) the Credit Agreement.  Upon the occurrence of any Event of Default
which has not been expressly waived pursuant to the Credit Agreement, the
Administrative Agent shall at the request and direction of the Lenders (which
request and direction must be in writing if so requested by the Administrative
Agent), without notice to or demand on Company, and in addition to all rights
and remedies available to the Secured Parties, at law or in equity or
otherwise, (a) foreclose or otherwise enforce the Administrative Agent’s
security interest for the benefit of the Secured Parties in the Company
Collateral in any manner permitted by law or provided for in this  Company Security Agreement; (b) sell or
otherwise dispose of the Company Collateral or any part thereof at one or more
public or private sales at any place or places, including, without limitation,
any broker’s board or securities exchange, whether or not such Company
Collateral is present at the place of sale, for cash or credit or future
delivery on such terms and in such manner as the Administrative Agent may
determine; (c) require Company to assemble the Company Collateral and/or books
and records relating thereto and make such available to the Administrative
Agent at a place to be designated by the Administrative Agent; (d) recover from
Company all costs and expenses, including, without limitation, attorneys’ fees,
incurred or paid by the Administrative Agent in exercising any right, power or
remedy provided by this  Company
Security Agreement or by law; (e) enter into property where any Company
Collateral or books and records relating thereto are located and take
possession thereof with or without judicial process; and (f) prior to the
disposition of the Company Collateral, prepare it for disposition in any manner
and to the extent the Administrative Agent deems appropriate.


 


17

















 


Company shall be given ten (10) days’ prior notice of the time and
place of any public sale or of the time after which any private sale or other
intended disposition is to be made, which notice Company hereby agrees shall be
deemed reasonable notice thereof. Upon any sale or other disposition pursuant
to this  Company Security Agreement, the
Administrative Agent shall have the right to deliver, assign and transfer to
the purchaser thereof the Company Collateral or portion thereof and transfer to
the purchaser thereof the Company Collateral or portion thereof so sold or
disposed of.  Each purchaser at any such
sale or other disposition (including any Secured Party) shall hold the Company
Collateral free from any claim or right of pledge of whatever kind, including any
equity or right of redemption of Company and Company specifically waives (to
the extent permitted by law) all rights of redemption, stay or appraisal which
it has or may have under any rule of law or statute now existing or hereafter
adopted.


 


14.                                 Waiver of Hearing.  Company expressly waives any constitutional
or other right to a judicial hearing prior to the time the Administrative Agent
takes possession or disposes of the Company Collateral upon the occurrence of
an Event of Default as provided in Paragraph 13 hereof.


 


15.                                 Cumulative Rights.  The rights, powers and remedies of the
Administrative Agent and any of the Secured Parties under this Company Security
Agreement shall be in addition to all rights, powers and remedies given to the
Administrative Agent and any of the Secured Parties by virtue of any statute or
rule of law, the Credit Agreement or any other agreement, all of which rights,
powers and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the Administrative Agent’s and any of the
Secured Parties’ security interest in the Company Collateral.


 


16.                                 Waiver.  Any forbearance or failure or delay by the
Administrative Agent in exercising any right, power or remedy shall not
preclude the further exercise thereof, and every right, power or remedy of the
Administrative Agent or any of the Secured Parties shall continue in full force
and effect until such right, power or remedy is specifically waived in a
writing executed by the Administrative Agent or such other Secured Party, as
applicable. Company waives any right to require any Secured Party to proceed
against any person or to exhaust any Company Collateral or to pursue any remedy
in such Secured Party’s power.


 


17.                                 Setoff.  Company agrees that each Secured Party may
exercise its rights of setoff with respect to the Obligations in the same
manner as if the Obligations were unsecured.


 


18.                                 Miscellaneous
Provisions.  The representations and
warranties, covenants and agreements set forth in the Credit Agreement are
incorporated in this Company Security Agreement by this reference.


 


19.                                 ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS COMPANY SECURITY AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE
CENTRAL DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS COMPANY
SECURITY AGREEMENT, EACH OF COMPANY AND THE ADMINISTRATIVE AGENT CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS.  EACH OF COMPANY AND THE


 


18

















 


ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS COMPANY SECURITY
AGREEMENT.  EACH OF COMPANY AND THE
ADMINISTRATIVE AGENT WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.


 


20.                                 EACH OF COMPANY AND
THE ADMINISTRATIVE AGENT WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS COMPANY
SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE.  EACH OF COMPANY AND THE
ADMINISTRATIVE AGENT AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. 
WITHOUT LIMITING THE FOREGOING, EACH OF COMPANY AND THE ADMINISTRATIVE
AGENT FURTHER AGREES THAT ITS  RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS COMPANY SECURITY AGREEMENT OR ANY
PROVISION HEREOF.  THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS COMPANY SECURITY AGREEMENT.


 


21.                                 Financing
Statements.  Company hereby
acknowledges and agrees that the Administrative Agent, in connection with the
filing of any UCC financing statements necessary to perfect or maintain the
perfection of its lien in the Company Collateral on behalf of the Secured
Parties hereunder, may utilize a general description of the Company Collateral,
such as “all now owned and hereafter acquired personal property of
Company.”  Notwithstanding the
foregoing, the Administrative Agent agrees to execute and deliver to Company
(at no cost or expense to the Administrative Agent or Secured Parties),
promptly upon the request of Company, such documents, instruments and
agreements, including, without limitation, terminations and amendments to UCC
financing statements, as Company may reasonably request to evidence the
terminations and releases provided for by the Credit Agreement or to accurately
describe the Company Collateral.


 


[Signature page following]


 


19

















 


IN WITNESS WHEREOF, this Company Security
Agreement is executed as of the day and year first above written.


 


	
   

  	
  DOLLAR FINANCIAL GROUP,
  INC.,

  
	
   

  	
  a New York corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald Gayhardt

  	
   

  
	
   

  	
  Donald Gayhardt, President
  and

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL
  ASSOCIATION,

  a national banking association, as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alex Y. Kim

  	
   

  
	
   

  	
  Alex Y. Kim, Vice
  President

  



 


20

















 


SCHEDULES
AND EXHIBITS


 


	
  Schedule 1

  	
  Pledged Shares

  
	
   

  	
   

  
	
  Schedule 2

  	
  Assigned Agreements

  
	
   

  	
   

  
	
  Schedule 3

  	
  Notes Receivable

  
	
   

  	
   

  
	
  Schedule 4

  	
  Deposit Accounts

  
	
   

  	
   

  
	
  Schedule 5

  	
  Copyrights and Copyright Licenses

  
	
   

  	
   

  
	
  Schedule 6

  	
  Patents and Patent Licenses

  
	
   

  	
   

  
	
  Schedule 7

  	
  Trademarks and Trademark Licenses

  
	
   

  	
   

  
	
  Schedule 8

  	
  Trade Secret Licenses

  
	
   

  	
   

  
	
  Schedule 9

  	
  Jurisdiction of Organization, Locations of
  Equipment, Inventory, Lockboxes, Places of Business, Chief Executive Office,
  Books and Records, and Assigned Agreements

  



 

















 


Schedule 1


 


Pledged Shares


 


	
  Name of
  Subsidiary

  	
   

  	
  Number of

  Shares

  	
   

  	
  Type of Stock

  	
   

  	
  Certificate No.

  
	
  Any Kind Check Cashing Centers, Inc.

  	
   

  	
  100,000

  	
   

  	
  Common

  	
   

  	
  29

  
	
  Check Mart of Louisiana, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Check Mart of New Mexico, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Check Mart of Pennsylvania, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Check Mart of Texas, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Check Mart of Wisconsin, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  DFG International, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  DFG World, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  2

  
	
  Dollar Financial Insurance Corp.(1)

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  3

  
	
  Financial Exchange Company of Ohio, Inc.

  	
   

  	
  500

  	
   

  	
  Common

  	
   

  	
  4

  
	
  Financial Exchange Company of Pennsylvania,
  Inc.

  	
   

  	
  1,000

  	
   

  	
  Common

  	
   

  	
  4

  
	
  Financial Exchange Company of Pittsburgh,
  Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Financial Exchange Company of Virginia,
  Inc.

  	
   

  	
  1,000

  	
   

  	
  Common

  	
   

  	
  2

  
	
  Loan Mart of Oklahoma, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Monetary Management Corporation of
  Pennsylvania, Inc.

  	
   

  	
  10

  	
   

  	
  Common

  	
   

  	
  2

  
	
  Monetary Management of California, Inc.

  	
   

  	
  1,000

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Monetary Management of Maryland, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Monetary Management of New York, Inc.

  	
   

  	
  1,000

  	
   

  	
  Common

  	
   

  	
  2

  
	
  Money Mart Express, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  1

  
	
  Moneymart, Inc. (f/ka L.M.S. Development
  Corporation)

  	
   

  	
  10

  	
  (2)

  	
  Common

  	
   

  	
  A-1

  
	
  Pacific Ring Enterprises, Inc.

  	
   

  	
  666

  	
   

  	
  Common

  	
   

  	
  A-1

  
	
  QTV Holdings, Inc.

  	
   

  	
  100

  	
   

  	
  Common

  	
   

  	
  2

  



 












(1) In process of dissolution


(2) The outstanding stock certificate represents 1,000 shares in LMS
Development Corporation (“LMS”), but when LMS was merged with and into
Moneymart, Inc. (“Moneymart”) on January 9, 2001, each share of LMS was
converted into 1/100 share of Moneymart. 
No new certificate representing 10 shares in Moneymart, Inc. was issued.


 

















 


Schedule 5


 


Copyrights and Copyright Licenses


 


The
Company is the owner of the following federally registered copyright:


 


Dollar Financial Group, Inc.                                               TX-5-134-391


 

















 


Schedule 6


 


Patents and Patent Licenses


 


None


 

















 


Schedule 7


 


Trademarks and Trademark Licenses


 


The
Company is the owner of the following federally registered trademarks:


 


	
  Properties

  	
   

  	
  Registration
  Number

  	
   

  	
  Registration
  Date

  
	
  FE Financial Exchange Company and Design

  	
   

  	
  1,474,471

  	
   

  	
  01/26/88 (Renewed 08/94)

  
	
  QWICASH and design

  	
   

  	
  1,667,837

  	
   

  	
  12/10/91 (Renewed 04/24/01)

  
	
  QWICASH

  	
   

  	
  1,666,938

  	
   

  	
  12/03/91 (Renewed 02/13/97)

  
	
  Check Mart

  	
   

  	
  1,409,831

  	
   

  	
  09/16/86 (Renewed 03/18/92)

  
	
  Cash ‘Til Payday

  	
   

  	
  1,987,764

  	
   

  	
  07/16/96 (Renewed 09/11/01)

  (Supplemental register)

  
	
  Cash ‘Til Payday

  	
   

  	
  2,606,704

  	
   

  	
  08/13/02 (Principal register)

  
	
  AnyKind Check Cashing Centers and design

  	
   

  	
  1,880,058

  	
   

  	
  02/21/95 (Renewed 08/24/00)

  
	
  Circular ANY KIND design

  	
   

  	
  1,885,277

  	
   

  	
  03/21/95 (Renewed 08/16/00)

  
	
  Any Kind

  	
   

  	
  1,792,920

  	
   

  	
  09/14/93 (Renewed 03/06/99)

  
	
  Almost A Banc

  	
   

  	
  1,840,868

  	
   

  	
  06/21/94 (Renewed 12/11/00)

  
	
  Loan Mart

  	
   

  	
  2,192,247

  	
   

  	
  09/29/98 (Renewed 09/30/03)

  
	
  Money Mart

  	
   

  	
  2,244,158

  	
   

  	
  05/11/99

  
	
  Money Mart Express

  	
   

  	
  2,700,559

  	
   

  	
  03/25/03

  
	
  Money Saver RX Health Card

  	
   

  	
  2,413,903

  	
   

  	
  12/19/00

  



 

















 


Schedule 8


 


Trade Secret Licenses


 


None


 

















 


Schedule 9


 


Jurisdiction of Organization, Locations of
Equipment, Inventory, Lockboxes, Places of

Business, Chief Executive Office, Books and Records, and Assigned Agreements


 


Jurisdiction
of Organization


 


New York


 


Chief
Executive Office


 


1436 Lancaster Avenue, Suite 210


Berwyn, Pennsylvania 19312


 


Locations
of Book and Records


 


1436 Lancaster Avenue, Suite 210


Berwyn, Pennsylvania 19312


 


Places
of Business


 


1436 Lancaster Avenue, Suite 210


Berwyn, Pennsylvania 19312


 


Locations
of Equipment, Inventory, Lockboxes, and Assigned Agreements


 


1436 Lancaster Avenue, Suite 210


Berwyn, Pennsylvania 19312