**Exhibit10.2**

 

AMENDED AND RESTATED

DOMESTIC SECURITY AGREEMENT

 

THIS AMENDEDAND RESTATED DOMESTIC SECURITY AGREEMENT (as amended and modified from time totime, this “Domestic Security Agreement”) dated as of February 24, 2006is by and among the parties identified as “Grantors” on the signature pageshereto and such other parties as may become Grantors hereunder after the datehereof (individually a “Grantor”, and collectively the “Grantors”)and Bank of America, N.A. as administrative agent (in such capacity, the “AdministrativeAgent”) for the holders of the Secured Obligations referenced below andamends and restates that certain Domestic Security Agreement, dated as ofAugust 23, 2004, as amended and modified from time to time prior to the datehereof, among the grantors from time to time party thereto and Bank of America,N.A., as administrative agent.

 

W I T N E S S E T H

 

WHEREAS, pursuant to thatcertain Amended and Restated Credit Agreement dated as of February 24, 2006 (asamended, modified, supplemented and extended from time to time, the “CreditAgreement”) among GFI Group, Inc., a Delaware corporation (“GFI”),GFI Holdings Limited (the “Foreign Borrower”; together with GFI, the “Borrowers”),the Guarantors from time to time party thereto, the Lenders from time to timeparty thereto and Bank of America, N.A., as Administrative Agent and L/CIssuer, the Lenders have agreed to provide an amended and restated creditfacility to replace and refinance that certain Credit Agreement dated as ofAugust 23, 2004, as amended and modified, supplemented or extended from time totime prior to the date hereof, among the Borrowers, the guarantors from time totime party thereto, the lenders from time to time party thereto and Bank ofAmerica, N.A., as administrative agent; and

 

WHEREAS, this DomesticSecurity Agreement is required under the terms of the Credit Agreement.

 

NOW,THEREFORE, in consideration of these premises and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the parties hereto agree as follows:

 

1.             Definitions.

 

(a)           Capitalizedterms used and not otherwise defined herein shall have the meanings provided inthe Credit Agreement.

 

(b)           Thefollowing terms shall have the meanings assigned thereto in the UniformCommercial Code in effect in the State of New York on the date hereof:  Accession, Account, As-Extracted Collateral,Chattel Paper, Commercial Tort Claim, Consumer Goods, Deposit Account,Document, Equipment, Farm Products, Fixtures, General Intangible, Goods,Instrument, Inventory, Investment Property, Letter-of-Credit Right,Manufactured Home, Proceeds, Software, Standing Timber, Supporting Obligationand Tangible Chattel Paper.

 

(c)           Asused herein, the following terms shall have the meanings set forth below:

 

“Collateral” has the meaning provided inSection 2 hereof.

 

“Copyright License” means any writtenagreement, naming any Grantor as licensor, granting any right under anyCopyright.

 

“Copyrights” means (a) all copyrights registered in the United States or any othercountry in all Works, now existing or hereafter created or acquired, allregistrations and recordings thereof, and all applications in connectiontherewith, including, without limitation, registrations, recordings and

 

----

 

applicationsin the United States Copyright Office or in any similar office or agency of theUnited States, any state thereof or any other country or political subdivisionthereof, or otherwise, and (b) allrenewals thereof.

 

“Patent License” means any agreement, whetherwritten or oral, providing for the grant by or to a Grantor of any right tomanufacture, use or sell any invention covered by a Patent.

 

“Patents” means (a) all letters patent of the United States or any other country andall reissues and extensions thereof, and (b)all applications for letters patent of the United States or any other countryand all divisions, continuations and continuations-in-part thereof.

 

“SecuredObligations” means, without duplication, (i) all of the obligations of theLoan Parties to the Lenders (including any L/C Issuer) and the AdministrativeAgent, under the Credit Agreement or any other Loan Document (including, butnot limited to, any interest accruing after the commencement of a proceeding byor against any Loan Party under any Debtor Relief Laws, regardless of whethersuch interest is an allowed claim under such proceeding), whether now existingor hereafter arising, due or to become due, direct or indirect, absolute orcontingent, howsoever evidenced, created, held or acquired, whether primary,secondary, direct, contingent, or joint and several, as such obligations may beamended, modified, increased, extended, renewed or replaced from time to time,(ii) all of the obligations owing by the Loan Parties under any Swap Contractbetween any Loan Party and any Lender or Affiliate of a Lender, whether now existingor hereafter arising, (iii) all of the obligations owing by the Loan Partiesunder any Treasury Management Agreement between any Loan Party and any Lenderor Affiliate of a Lender, whether now existing or hereafter arising, and (iv)all costs and expenses incurred in connection with enforcement and collectionof the obligations described in the foregoing clauses (i), (ii) and (iii), includingAttorney Costs.

 

“Trademark License” means any agreement,written or oral, providing for the grant by or to a Grantor of any right to useany Trademark.

 

“Trademarks” means (a) all trademarks, trade names, corporate names, company names,business names, fictitious business names, trade styles, service marks, logosand other source or business identifiers, and the goodwill associatedtherewith, now existing or hereafter adopted or acquired, all registrations andrecordings thereof, and all applications in connection therewith, whether inthe United States Patent and Trademark Office or in any similar office oragency of the United States, any state thereof or any other country or anypolitical subdivision thereof, or otherwise and (b) all renewals thereof.

 

“UCC” means the Uniform Commercial Code.

 

“Work” means any work that is subject tocopyright protection pursuant to Title 17 of the United States Code.

 

2.             Grantof Security Interest in the Collateral. To secure the prompt payment andperformance in full when due, whether by lapse of time, acceleration, mandatoryprepayment or otherwise, of the Secured Obligations, each Grantor hereby grantsto the Administrative Agent, for the benefit of the holders of the SecuredObligations, a continuing security interest in, any and all right, title andinterest of such Grantor in and to all of the following, whether now owned orexisting or owned, acquired, or arising hereafter (collectively, the “Collateral”):

 

(a)           all Accounts (excluding, for theavoidance of doubt, customer accounts that are not accounts of such Grantor);

 

2

----

 

(b)           all cash and currency;

 

(c)           all Chattel Paper;

 

(d)           those Commercial Tort Claimsidentified on Schedule 2(d) attached hereto;

 

(e)           all Copyrights;

 

(f)            all Copyright Licenses;

 

(g)           all Deposit Accounts;

 

(h)           all Documents;

 

(i)            all Equipment;

 

(j)            all Fixtures;

 

(k)           all General Intangibles;

 

(l)            all Goods;

 

(m)          all Instruments;

 

(n)           all Inventory;

 

(o)           all Investment Property;

 

(p)           all Letter-of-Credit Rights;

 

(q)           all Patents;

 

(r)            all Patent Licenses;

 

(s)           all Software;

 

(t)            all Supporting Obligations;

 

(u)           all Trademarks;

 

(v)           all Trademark Licenses; and

 

(w)          to the extent not otherwise included,all Accessions and all Proceeds of any and all of the foregoing.

 

Notwithstanding anything to the contrary containedherein, the security interests granted under this Domestic Security Agreementshall not extend to (i) any permit, lease, license, contract or otherinstrument of a Grantor if the grant of a security interest in such permit,lease, license, contract or other instrument (including, without limitation,any purchase agreement and any assets subject to a purchase money securityinterest in respect thereof) in the manner contemplated by this DomesticSecurity Agreement, under the terms thereof or under applicable law, isprohibited and would result

 

3

----

 

in thetermination thereof or give the other parties thereto the right to terminate,accelerate or otherwise alter such Grantor’s rights, titles and intereststhereunder (including upon the giving of notice or the lapse of time or both); providedthat any such limitation on the security interests granted hereunder shall onlyapply to the extent that (A) after reasonable efforts, consent from therelevant party or parties has not been obtained and (B) any such prohibitioncould not be rendered ineffective pursuant to the UCC or any other applicablelaw (including Debtor Relief Laws) or principles of equity, (ii) any Capital Stockin any Subsidiary and (iii) any Pledged Collateral (as defined in the DomesticPledge Agreement).

 

TheGrantors and the Administrative Agent, on behalf of the holders of the SecuredObligations, hereby acknowledge and agree that the security interest createdhereby in the Collateral (i) constitutes continuing collateral security for allof the Secured Obligations, whether now existing or hereafter arising and (ii)is not and shall not be construed as an assignment of any Copyrights, CopyrightLicenses, Patents, Patent Licenses, Trademarks or Trademark Licenses.

 

3.             ProvisionsRelating to Accounts.

 

(a)           Anythingherein to the contrary notwithstanding, each of the Grantors shall remainliable under each of the Accounts to observe and perform all the conditions andobligations to be observed and performed by it thereunder, all in accordancewith the terms of any agreement giving rise to each such Account. Neither theAdministrative Agent nor any holder of the Secured Obligations shall have anyobligation or liability under any Account (or any agreement giving risethereto) by reason of or arising out of this Domestic Security Agreement or thereceipt by the Administrative Agent or any holder of the Secured Obligations ofany payment relating to such Account pursuant hereto, nor shall theAdministrative Agent or any holder of the Secured Obligations be obligated inany manner to perform any of the obligations of a Grantor under or pursuant toany Account (or any agreement giving rise thereto), to make any payment, tomake any inquiry as to the nature or the sufficiency of any payment received byit 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 takeany action to enforce any performance or to collect the payment of any amountsthat may have been assigned to it or to which it may be entitled at any time ortimes.

 

(b)           Atany time after the occurrence and during the continuation of an Event ofDefault, (i) the Administrative Agent shall have the right, but not theobligation, to make test verifications of the Accounts in any manner andthrough any medium that it reasonably considers advisable, and the Grantorsshall furnish all such assistance and information as the Administrative Agentmay reasonably require in connection with such test verifications and (ii) theAdministrative Agent in its own name or in the name of others may communicatewith account debtors on the Accounts to verify with them to the AdministrativeAgent’s satisfaction the existence, amount and terms of any Accounts.

 

4.             Representationsand Warranties. Each Grantor hereby represents and warrants to theAdministrative Agent, for the benefit of the holders of the SecuredObligations, that so long as any of the Secured Obligations remains outstandingand until all of the commitments relating thereto have been terminated:

 

(a)           Legal Name. As of the datehereof:

 

(i)            Each Grantor’s exact legal name,taxpayer identification number, organization identification number, and stateof formation are (and for the prior five years have been) as set forth on Schedule4(a) attached hereto.

 

4

----

 

(ii)           Other than as set forth on Schedule4(a) attached hereto, no Grantor has been party to a merger, consolidationor other change in structure or used any tradename in the prior five years.

 

(b)           Ownership. Each Grantor is thelegal and beneficial owner of its Collateral and has the right to pledge, sell,assign or transfer the same.

 

(c)           Security Interest/Priority. ThisDomestic Security Agreement creates a valid security interest in favor of theAdministrative Agent, for the benefit of the holders of the SecuredObligations, in the Collateral of such Grantor and, when properly perfected byfiling, shall constitute a valid perfected security interest in suchCollateral, to the extent such security interest can be perfected by filingunder the UCC, free and clear of all Liens except for Permitted Liens.

 

(d)           Types of Collateral. None ofthe Collateral consists of, or is the Accessions or the Proceeds of,As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes, orStanding Timber.

 

(e)           Accounts. With respect to theAccounts of the Grantors reflected as accounts receivable on the consolidatedbalance sheet of GFI and its Subsidiaries most recently delivered to theAdministrative Agent pursuant to the Credit Agreement, (i) each Account of theGrantors and the papers and documents relating thereto are genuine and in allmaterial respects what they purport to be, (ii) each Account arises out of(A) a bona fide sale of goods sold and delivered by such Grantor (or is in theprocess of being delivered) or (B) services theretofore actually rendered bysuch Grantor to, the account debtor named therein, (iii) any Account of aGrantor evidenced by any Instrument or Chattel Paper has, to the extentrequested by the Administrative Agent, been endorsed over and delivered to, orsubmitted to the control of, the Administrative Agent and (iv) no surety bondwas required or given in connection with any Account of a Grantor or thecontracts or purchase orders out of which they arose.

 

(f)            Inventory. No Inventory of aGrantor is held by any Person other than a Grantor pursuant to consignment,sale or return, sale on approval or similar arrangement.

 

(g)           Copyrights, Patents and Trademarks.

 

(i)            Schedule6.17 to the Credit Agreement includes all Copyrights, Patents, Trademarksand material Copyright Licenses, Patent Licenses and Trademark Licenses ownedby any Grantor in its own name, or to which any Grantor is a party, as of thedate hereof.

 

(ii)           Toeach Grantor’s knowledge, each material Copyright, Patent and Trademark of suchGrantor is valid, subsisting, unexpired, enforceable and has not beenabandoned.

 

(iii)          Exceptas set forth in Schedule 6.17 to the Credit Agreement, none of thematerial Copyrights, Patents and Trademarks of any Grantor is the subject ofany licensing or franchise agreement, as of the date hereof.

 

(iv)          Toeach Grantor’s knowledge, no holding, decision or judgment has been rendered byany Governmental Authority that would limit, cancel or question the validity ofany material Copyright, Patent or Trademark of any Grantor.

 

5

----

 

(v)           Noaction or proceeding is pending seeking to limit, cancel or question thevalidity of any material Copyright, Patent or Trademark of any Grantor, or thatcould be expected to have a material adverse effect on the value of anymaterial Copyright, Patent or Trademark of any Grantor.

 

(vi)          Allapplications pertaining to the material Copyrights, Patents and Trademarks ofeach Grantor have been duly and properly filed, and all registrations orletters pertaining to such Copyrights, Patents and Trademarks have been dulyand properly filed and issued, and all of such Copyrights, Patents andTrademarks are valid and enforceable.

 

(vii)         NoGrantor has made any assignment or agreement in conflict with the securityinterest in the Copyrights, Patents or Trademarks of any Grantor hereunder.

 

(h)           CommercialTort Claims. Such Grantor has no commercial tort claims other than (i) thoselisted on Schedule 2(d), or (ii) as to which the actions required by Section5(k) have been taken.

 

5.             Covenants.Each Grantor covenants that, so long as any of the Secured Obligations remainsoutstanding and until all of the commitments relating thereto have beenterminated, such Grantor shall:

 

(a)           Other Liens. Defend theCollateral against the claims and demands of all other parties claiming aninterest therein other than Permitted Liens.

 

(b)           Instruments/Tangible ChattelPaper/Documents. If any amount payable under or in connection with any ofthe Collateral shall be or become evidenced by any Instrument or TangibleChattel Paper, or if any property constituting Collateral shall be stored orshipped subject to a Document, (i) ensure that such Instrument, TangibleChattel Paper or Document is either in the possession of such Grantor at alltimes or, if requested by the Administrative Agent, is immediately delivered tothe Administrative Agent, duly endorsed in a manner reasonably satisfactory tothe Administrative Agent and (ii) ensure that any Collateral consisting of anInstrument or Tangible Chattel Paper is marked with a legend acceptable to theAdministrative Agent indicating the Administrative Agent’s security interest insuch Instrument or Tangible Chattel Paper.

 

(c)           Change in Structure, Location orType. Not, without providing ten days prior written notice to theAdministrative Agent (i) change its name or state of formation, (ii) be partyto a merger, consolidation or other change in structure or (iii) use anytradename other than as set forth on Schedule 4(a) attached hereto.

 

(d)           Perfection of Security Interest.Execute and deliver to the Administrative Agent such agreements, assignments orinstruments (including affidavits, notices, reaffirmations and amendments andrestatements of existing documents, as the Administrative Agent may reasonablyrequest) and do all such other things as the Administrative Agent mayreasonably deem necessary, appropriate or convenient (i) to assure to theAdministrative Agent the effectiveness, perfection and priority of its securityinterests hereunder, including (A) such instruments as the Administrative Agentmay from time to time reasonably request in order to perfect and maintain thesecurity interests granted hereunder in accordance with the UCC, (B) withregard to Copyrights registered in the United States, a Notice of Grant ofSecurity Interest in Copyrights for filing with the United States CopyrightOffice in the form of Exhibit 5(d)(i) attached hereto, (C) with regardto Patents registered in the United States, a Notice of Grant of SecurityInterest in Patents for filing with the United States Patent and TrademarkOffice in the form of Exhibit 5(d)(ii) attached hereto and (D) withregard to Trademarks registered with the United States Patent and TrademarkOffice and all applications for Trademarks filed with the United States Patentand Trademark Office, a Notice of

 

6

----

 

Grantof Security Interest in Trademarks for filing with the United States Patent andTrademark Office in the form of Exhibit 5(d)(iii) attached hereto, (ii)to consummate the transactions contemplated hereby and (iii) to otherwiseprotect and assure the Administrative Agent of its rights and interestshereunder. To that end, each Grantor authorizes the Administrative Agent tofile one or more financing statements (with collateral descriptions broader,including without limitation “all assets” and/or “all personal property”collateral descriptions, and/or less specific than the description of theCollateral contained herein) disclosing the Administrative Agent’s securityinterest in any or all of the Collateral of such Grantor without such Grantor’ssignature thereon (provided that no such description shall be deemed to modifythe description of Collateral in Section 2), and further each Grantor alsohereby irrevocably makes, constitutes and appoints the Administrative Agent,its nominee or any other Person whom the Administrative Agent may designate, assuch Grantor’s attorney-in-fact with full power and for the limited purpose tosign in the name of such Grantor any such financing statements (includingrenewal statements), amendments and supplements, notices or any similardocuments that in the Administrative Agent’s sole discretion would benecessary, appropriate or convenient in order to perfect and maintainperfection of the security interests granted hereunder, such power, beingcoupled with an interest, being and remaining irrevocable so long as theSecured Obligations remain unpaid and until the commitments relating theretoshall have been terminated. Each Grantor hereby agrees that a carbon,photographic or other reproduction of this Domestic Security Agreement or anysuch financing statement is sufficient for filing as a financing statement bythe Administrative Agent without notice thereof to such Grantor wherever the AdministrativeAgent may in its sole discretion desire to file the same. In the event for anyreason the law of any jurisdiction other than New York becomes or is applicableto the Collateral of any Grantor or any part thereof, or to any of the SecuredObligations, such Grantor agrees to execute and deliver all such instrumentsand to do all such other things as the Administrative Agent in its solediscretion reasonably deems necessary, appropriate or convenient to preserve,protect and enforce the security interests of the Administrative Agent underthe law of such other jurisdiction (and, if a Grantor shall fail to do sopromptly upon the request of the Administrative Agent, then the AdministrativeAgent may execute any and all such requested documents on behalf of suchGrantor pursuant to the power of attorney granted hereinabove). If anyCollateral is in the possession or control of a Grantor’s agents and theAdministrative Agent so requests, such Grantor agrees to notify such agents inwriting of the Administrative Agent’s security interest therein and, upon theAdministrative Agent’s request, instruct them to hold all such Collateral forthe account of the holders of the Secured Obligations, subject to theAdministrative Agent’s instructions. Each Grantor agrees to mark its books andrecords to reflect the security interest of the Administrative Agent in theCollateral.

 

(e)           Control. Execute and deliverall agreements, assignments, instruments or other documents as theAdministrative Agent shall reasonably request for the purpose of obtaining andmaintaining control within the meaning of the UCC with respect to anyCollateral consisting of Deposit Accounts, Investment Property,Letter-of-Credit Rights and Electronic Chattel Paper.

 

(f)            Collateral held by Warehouseman,Bailee, etc. If any Collateral is at any time in the possession or controlof a warehouseman, bailee, agent or processor of such Grantor, (i) notify theAdministrative Agent of such possession or control, (ii) notify such Person ofthe Administrative Agent’s security interest in such Collateral, (iii) instructsuch Person to hold all such Collateral for the Administrative Agent’s accountand subject to the Administrative Agent’s instructions and (iv) usecommercially reasonable efforts to obtain an acknowledgment from such Personthat it is holding such Collateral for the benefit of the Administrative Agent.

 

(g)           Treatment of Accounts. Notgrant or extend the time for payment of any Account, or compromise or settleany Account for less than the full amount thereof, or release any Person orproperty, in whole or in part, from payment thereof, or allow any credit ordiscount thereon, in each

 

7

----

 

caseother than as normal and customary in the ordinary course of a Grantor’sbusiness or as required by law.

 

(h)           Covenants Relating to Copyrights.

 

(i)            Not do any act or knowingly omit todo any act whereby any material Copyright may become invalidated and (A) not doany act, or knowingly omit to do any act, whereby any material Copyright maybecome injected into the public domain; (B) notify the Administrative Agentimmediately if it knows that any material Copyright may become injected intothe public domain or of any materially adverse determination or development(including, without limitation, the institution of, or any such determinationor development in, any court or tribunal in the United States or any othercountry) regarding a Grantor’s ownership of any such material Copyright or itsvalidity; (C) take all necessary steps as it shall deem appropriate under thecircumstances, to maintain and pursue each application (and to obtain therelevant registration) of each material Copyright owned by a Grantor and tomaintain each registration of each material Copyright owned by a Grantorincluding, without limitation, filing of applications for renewal wherenecessary; and (D) promptly notify the Administrative Agent of any infringementof any material Copyright of a Grantor of which it becomes aware and take suchactions as it shall reasonably deem appropriate under the circumstances toprotect such Copyright, including, where appropriate, the bringing of suit forinfringement, seeking injunctive relief and seeking to recover any and alldamages for such infringement.

 

(ii)           Not make any assignment or agreementin conflict with the security interest in the Copyrights of each Grantorhereunder (other than in connection with a Permitted Lien or as otherwiseprovided in the Credit Agreement).

 

(i)            Covenants Relating to Patents andTrademarks.

 

(i)            (A) Continue to use each materialTrademark on each and every trademark class of goods applicable to its currentline as reflected in its current catalogs, brochures and price lists in orderto maintain such Trademark in full force free from any claim of abandonment fornon-use, (B) maintain as in the past the quality of products and servicesoffered under such Trademark, (C) employ such Trademark with the appropriatenotice of registration, if applicable, (D) not adopt or use any mark that isconfusingly similar or a colorable imitation of such Trademark unless theAdministrative Agent, for the ratable benefit of the holders of the SecuredObligations, shall obtain a perfected security interest in such mark pursuantto this Domestic Security Agreement, and (E) not (and not permit any licenseeor sublicensee thereof to) do any act or knowingly omit to do any act wherebyany such Trademark may become invalidated.

 

(ii)           Not do any act, or omit to do anyact, whereby any material Patent may become abandoned or dedicated.

 

(iii)          Notify the Administrative Agent andthe holders of the Secured Obligations immediately if it knows that anyapplication or registration relating to any material Patent or Trademark maybecome abandoned or dedicated, or of any materially adverse determination ordevelopment (including, without limitation, the institution of, or any suchdetermination or development in, any proceeding in the United States Patent andTrademark Office or any court or tribunal in any country) regarding a Grantor’sownership of any material Patent or Trademark or its right to register the sameor to keep and maintain the same.

 

8

----

 

(iv)          Whenever a Grantor, either by itselfor through an agent, employee, licensee or designee, shall file an applicationfor the registration of any Patent or Trademark with the United States Patentand Trademark Office or any similar office or agency in any other country orany political subdivision thereof, such Grantor shall report such filing to theAdministrative Agent within five Business Days after the last day of the fiscalquarter in which such filing occurs. Upon request of the Administrative Agent,a Grantor shall execute and deliver any and all agreements, instruments,documents and papers as the Administrative Agent may reasonably request toevidence the security interest of the Administrative Agent and the holders ofthe Secured Obligations in any material Patent or Trademark and the goodwilland general intangibles of a Grantor relating thereto or represented thereby.

 

(v)           Take all reasonable and necessarysteps, including, without limitation, in any proceeding before the UnitedStates Patent and Trademark Office, or any similar office or agency in anyother country or any political subdivision thereof, to maintain and pursue eachapplication (and to obtain the relevant registration) and to maintain eachregistration of each material Patent and Trademark, including, withoutlimitation, filing of applications for renewal, affidavits of use andaffidavits of incontestability.

 

(vi)          Promptly notify the AdministrativeAgent and the holders of the Secured Obligations after it learns that anymaterial Patent or Trademark included in the Collateral is infringed,misappropriated or diluted by a third party and promptly sue for infringement,misappropriation or dilution, to seek injunctive relief where appropriate andto recover any and all damages for such infringement, misappropriation ordilution, or to take such other actions as it shall reasonably deem appropriateunder the circumstances to protect such Patent or Trademark.

 

(vii)         Not make any assignment or agreement inconflict with the security interest in the Patents or Trademarks of eachGrantor hereunder (other than in connection with a Permitted Lien or asotherwise provided in the Credit Agreement).

 

(j)            Insurance. Insure, repair andreplace the Collateral of such Grantor as set forth in (and to the extentrequired by) the Credit Agreement. All insurance proceeds shall be subject tothe security interest of the Administrative Agent hereunder.

 

(k)           Commercial Tort Claims.

 

(i)            Promptly notify the AdministrativeAgent in writing of the initiation of any Commercial Tort Claim before anyGovernmental Authority by or in favor of such Grantor or any of itsSubsidiaries reasonably expected by GFI to result in an award in excess of $1,000,000.

 

(ii)           Execute and deliver such statements,documents and notices and do and cause to be done all such things as the AdministrativeAgent may reasonably deem necessary, appropriate or convenient, or as arerequired by law, to create, perfect and maintain the Administrative Agent’ssecurity interest in any Commercial Tort Claim.

 

6.             Advancesby Administrative Agent. On failure of any Grantor to perform any of thecovenants and agreements contained herein, the Administrative Agent may, at itssole option and in its sole discretion, upon notice to the Grantors, performthe same and in so doing may expend such sums as the Administrative Agent mayreasonably deem advisable in the performance thereof, including, withoutlimitation, the payment of any insurance premiums, the payment of any taxes, apayment to obtain a release

 

9

----

 

of a Lien or potential Lien (other than a Permitted Lien), expendituresmade in defending against any adverse claim and all other expenditures that theAdministrative Agent may make for the protection of the security hereof or thatmay be compelled to make by operation of law. All such sums and amounts soexpended shall be repayable by the Grantors on a joint and several basis(subject to Section 23 hereof) promptly upon timely notice thereof and demandtherefor, shall constitute additional Secured Obligations and shall bearinterest from the date said amounts are expended at the Default Rate. No suchperformance of any covenant or agreement by the Administrative Agent on behalfof any Grantor, and no such advance or expenditure therefor, shall relieve theGrantors of any default under the terms of this Domestic Security Agreement,the other Loan Documents or any other documents relating to the SecuredObligations. The Administrative Agent may make any payment hereby authorized inaccordance with any bill, statement or estimate procured from the appropriatepublic office or holder of the claim to be discharged without inquiry into theaccuracy of such bill, statement or estimate or into the validity of any taxassessment, sale, forfeiture, tax lien, title or claim except to the extentsuch payment is being contested in good faith by a Grantor in appropriateproceedings and against which adequate reserves are being maintained inaccordance with GAAP.

 

7.             Remedies.

 

(a)           GeneralRemedies. Upon the occurrence of an Event of Default and during thecontinuation thereof, the Administrative Agent shall have, in addition to therights and remedies provided herein, in the Loan Documents, in any otherdocuments relating to the Secured Obligations, or by law (including, without limitation,levy of attachment and garnishment), the rights and remedies of a secured partyunder the UCC of the jurisdiction applicable to the affected Collateral and,further, the Administrative Agent may, with or without judicial process or theaid and assistance of others, (i) enter on any premises on which any of theCollateral may be located and, without resistance or interference by theGrantors, take possession of the Collateral, (ii)  dispose of any Collateral on any suchpremises, (iii) require the Grantors to assemble and make available to theAdministrative Agent at the expense of the Grantors any Collateral at any placeand time designated by the Administrative Agent that is reasonably convenientto both parties, (iv) remove any Collateral from any such premises for thepurpose of effecting sale or other disposition thereof, and/or (v) withoutdemand and without advertisement, notice, hearing or process of law, all ofwhich each of the Grantors hereby waives to the fullest extent permitted by law,at any place and time or times, sell and deliver any or all Collateral held byor for it at public or private sale, by one or more contracts, in one or moreparcels, for cash, upon credit or otherwise, at such prices and upon such termsas the Administrative Agent deems advisable, in its sole discretion (subject toany and all mandatory legal requirements). Each of the Grantors acknowledgesthat any private sale referenced above may be at prices and on terms lessfavorable to the seller than the prices and terms that might have been obtainedat a public sale and agrees that such private sale shall be deemed to have beenmade in a commercially reasonable manner. Neither the Administrative Agent’scompliance with applicable law nor its disclaimer of warranties relating to theCollateral shall be considered to adversely affect the commercialreasonableness of any sale. In addition to all other sums due theAdministrative Agent and the holders of the Secured Obligations with respect tothe Secured Obligations, the Grantors shall pay the Administrative Agent andeach of the holders of the Secured Obligations all reasonable documented costsand expenses incurred by the Administrative Agent or any such holder of theSecured Obligations, including Attorney Costs and court costs, in obtaining orliquidating the Collateral, in enforcing payment of the Secured Obligations, orin the prosecution or defense of any action or proceeding by or against theAdministrative Agent or the holders of the Secured Obligations or the Grantorsconcerning any matter arising out of or connected with this Domestic SecurityAgreement, any Collateral or the Secured Obligations, including, withoutlimitation, any of the foregoing arising in, arising under or related to a caseunder the Debtor Relief Laws. To the extent the rights of notice cannot belegally waived hereunder, each Grantor agrees that any requirement ofreasonable notice shall be met if such notice is personally served on ormailed, postage prepaid, to GFI in accordance with the notice provisions ofSection 11.02 of the Credit Agreement at least ten Business Days before thetime of sale or other event giving rise to the requirement of such notice. TheAdministrative Agent shall not be obligated to make any sale or other dispositionof the Collateral regardless of notice having been given. To the extentpermitted by law, any holder of the Secured

 

10

----

 

Obligations may be a purchaser at any such sale. To the extentpermitted by applicable law, each of the Grantors hereby waives all of itsrights of redemption with respect to any such sale. Subject to the provisionsof applicable law, the Administrative Agent and the holders of the SecuredObligations may postpone or cause the postponement of the sale of all or anyportion of the Collateral by announcement at the time and place of such sale,and such sale may, without further notice, to the extent permitted by law, bemade at the time and place to which the sale was postponed, or the AdministrativeAgent may further postpone such sale by announcement made at such time andplace.

 

(b)           Remediesrelating to Accounts. Upon the occurrence of an Event of Default and duringthe continuation thereof, whether or not the Administrative Agent has exercisedany or all of its rights and remedies hereunder, (i) each Grantor will promptlyupon request of the Administrative Agent instruct all account debtors to remitall payments in respect of Accounts to a mailing location selected by theAdministrative Agent and (ii) the Administrative Agent shall have the right toenforce any Grantor’s rights against its customers and account debtors, and theAdministrative Agent or its designee may notify any Grantor’s customers andaccount debtors that the Accounts of such Grantor have been assigned to theAdministrative Agent or of the Administrative Agent’s security interesttherein, and may (either in its own name or in the name of a Grantor or both)demand, collect (including without limitation by way of a lockbox arrangement),receive, take receipt for, sell, sue for, compound, settle, compromise and giveacquittance for any and all amounts due or to become due on any Account, and,in the Administrative Agent’s discretion, file any claim or take any otheraction or proceeding to protect and realize upon the security interest of theholders of the Secured Obligations in the Accounts. Each Grantor acknowledgesand agrees that the Proceeds of its Accounts remitted to or on behalf of theAdministrative Agent in accordance with the provisions hereof shall be solelyfor the Administrative Agent’s own convenience and that such Grantor shall nothave any right, title or interest in such Accounts or in any such other amountsexcept as expressly provided herein. The Administrative Agent and the holdersof the Secured Obligations shall have no liability or responsibility to anyGrantor for acceptance of a check, draft or other order for payment of moneybearing the legend “payment in full” or words of similar import or any other restrictivelegend or endorsement or be responsible for determining the correctness of anyremittance. Each Grantor hereby agrees to indemnify the Administrative Agentand the holders of the Secured Obligations from and against all liabilities,damages, losses, actions, claims, judgments, costs, expenses, charges andAttorney Costs suffered or incurred by the Administrative Agent or the holdersof the Secured Obligations (each, an “Indemnified Party”) because of themaintenance of the foregoing arrangements except as relating to or arising outof the gross negligence or willful misconduct of an Indemnified Party or itspartners, officers, employees or agents. In the case of any investigation,litigation or other proceeding, the foregoing indemnity shall be effectivewhether or not such investigation, litigation or proceeding is brought by aGrantor, its directors, shareholders or creditors or an Indemnified Party orany other Person or any other Indemnified Party is otherwise a party thereto.

 

(c)           Access.In addition to the rights and remedies hereunder, upon the occurrence of anEvent of Default and during the continuation thereof, the Administrative Agentshall have the right to enter and remain upon the various premises of theGrantors without cost or charge to the Administrative Agent, and use the same,together with materials, supplies, books and records of the Grantors for thepurpose of collecting and liquidating the Collateral, or for preparing for saleand conducting the sale of the Collateral, whether by foreclosure, auction orotherwise. In addition, the Administrative Agent may remove Collateral, or anypart thereof, from such premises and/or any records with respect thereto, inorder to effectively collect or liquidate such Collateral.

 

(d)           NonexclusiveNature of Remedies. Failure by the Administrative Agent or the holders ofthe Secured Obligations to exercise any right, remedy or option under thisDomestic Security Agreement, any other Loan Document, any other documentsrelating to the Secured Obligations, or as provided by law, or any delay by theAdministrative Agent or the holders of the Secured Obligations in exercisingthe same, shall not operate as a waiver of any such right, remedy or option. Nowaiver hereunder shall be effective unless it is in writing, signed by theparty against whom such waiver is sought to be enforced and then only to theextent

 

11

----

 

specifically stated, which in the case of the Administrative Agent orthe holders of the Secured Obligations shall only be granted as provided herein.To the extent permitted by law, neither the Administrative Agent, the holdersof the Secured Obligations, nor any party acting as attorney for theAdministrative Agent or the holders of the Secured Obligations, shall be liablehereunder for any acts or omissions or for any error of judgment or mistake offact or law other than their gross negligence or willful misconduct hereunder. Therights and remedies of the Administrative Agent and the holders of the SecuredObligations under this Domestic Security Agreement shall be cumulative and notexclusive of any other right or remedy that the Administrative Agent or theholders of the Secured Obligations may have.

 

(e)           Retentionof Collateral. To the extent permitted under applicable law, in addition tothe rights and remedies hereunder, upon the occurrence and during thecontinuation of an Event of Default, the Administrative Agent may, afterproviding the notices required by Sections 9-620 and 9-621 of the UCC orotherwise complying with the requirements of applicable law of the relevantjurisdiction, accept or retain all or any portion of the Collateral insatisfaction of the Secured Obligations. Unless and until the AdministrativeAgent shall have provided such notices, however, the Administrative Agent shallnot be deemed to have accepted or retained any Collateral in satisfaction ofany Secured Obligations for any reason.

 

(f)            Deficiency.In the event that the proceeds of any sale, collection or realization areinsufficient to pay all amounts to which the Administrative Agent or theholders of the Secured Obligations are legally entitled, the Grantors shall bejointly and severally liable for the deficiency (subject to Section 23 hereof),together with interest thereon at the Default Rate, together with the costs ofcollection and Attorney Costs. Any surplus remaining after the full payment andsatisfaction of the Secured Obligations shall be returned to the Grantors or towhomsoever a court of competent jurisdiction shall determine to be entitledthereto.

 

8.             Rightsof the Administrative Agent.

 

(a)           Powerof Attorney. In addition to other powers of attorney contained herein, eachGrantor hereby designates and appoints the Administrative Agent, on behalf ofthe holders of the Secured Obligations, and each of its designees or agents, asattorney-in-fact of such Grantor, irrevocably and with power of substitution,with authority to take any or all of the following actions upon the occurrenceand during the continuation of an Event of Default:

 

(i)            to demand, collect, settle,compromise and adjust, and give discharges and releases concerning theCollateral, all as the Administrative Agent may reasonably deem appropriate;

 

(ii)           to commence and prosecute any actionsat any court for the purposes of collecting any of the Collateral and enforcingany other right in respect thereof;

 

(iii)          to defend, settle or compromise anyaction brought and, in connection therewith, give such discharge or release asthe Administrative Agent may reasonably deem appropriate;

 

(iv)          to receive, open and dispose of mailaddressed to a Grantor and endorse checks, notes, drafts, acceptances, moneyorders, bills of lading, warehouse receipts or other instruments or documentsevidencing payment, shipment or storage of the goods giving rise to theCollateral on behalf of and in the name of such Grantor, or securing, orrelating to such Collateral;

 

(v)           to pay or discharge taxes, liens,security interests or other encumbrances levied or placed on or threatenedagainst the Collateral;

 

12

----

 

(vi)          to direct any parties liable for anypayment in connection with any of the Collateral to make payment of any and allmonies due and to become due thereunder directly to the Administrative Agent oras the Administrative Agent shall direct;

 

(vii)         to receive payment of and receipt forany and all monies, claims, and other amounts due and to become due at any timein respect of or arising out of any Collateral;

 

(viii)        to sell, assign, transfer, make anyagreement in respect of, or otherwise deal with or exercise rights in respectof, any Collateral or the goods or services that have given rise thereto, asfully and completely as though the Administrative Agent were the absolute ownerthereof for all purposes;

 

(ix)           to adjust and settle claims under anyinsurance policy relating thereto;

 

(x)            to execute and deliver allassignments, conveyances, statements, financing statements, renewal financingstatements, security and pledge agreements, affidavits, notices and otheragreements, instruments and documents that the Administrative Agent mayreasonably deem appropriate in order to perfect and maintain the securityinterests and liens granted in this Domestic Security Agreement and in order tofully consummate all of the transactions contemplated therein;

 

(xi)           to institute any foreclosureproceedings that the Administrative Agent may reasonably deem appropriate; and

 

(xii)          to do and perform all such other actsand things as the Administrative Agent may reasonably deem appropriate inconnection with the Collateral.

 

Thispower of attorney is a power coupled with an interest and shall be irrevocablefor so long as any of the Secured Obligations shall remain outstanding anduntil all of the commitments relating thereto shall have been terminated. TheAdministrative Agent shall be under no duty to exercise or withhold theexercise of any of the rights, powers, privileges and options expressly orimplicitly granted to the Administrative Agent in this Domestic SecurityAgreement, and shall not be liable for any failure to do so or any delay indoing so. The Administrative Agent shall not be liable for any act or omissionor for any error of judgment or any mistake of fact or law in its individualcapacity or its capacity as attorney-in-fact except acts or omissions resultingfrom its gross negligence or willful misconduct. This power of attorney isconferred on the Administrative Agent solely to protect, preserve and realizeupon its security interest in the Collateral.

 

(b)           TheAdministrative Agent’s Duty of Care. Other than the exercise of reasonablecare to assure the safe custody of the Collateral while being held by theAdministrative Agent hereunder, the Administrative Agent shall have no duty orliability to preserve rights pertaining thereto, it being understood and agreedthat the Grantors shall be responsible for preservation of all rights in theCollateral, and the Administrative Agent shall be relieved of all responsibilityfor the Collateral upon surrendering it or tendering the surrender of it to theGrantors. The Administrative Agent shall be deemed to have exercised reasonablecare in the custody and preservation of the Collateral in its possession ifsuch Collateral is accorded treatment substantially equal to that which theAdministrative Agent accords its own property, which shall be no less than thetreatment employed by a reasonable and prudent agent in the industry, it beingunderstood that the Administrative Agent shall not have responsibility fortaking any necessary steps to preserve rights against any parties with respectto any of the Collateral. In the event of a public or private sale ofCollateral pursuant to Section 7 hereof, the Administrative Agent shall have noobligation to clean, repair or otherwise prepare the Collateral for sale.

 

13

----

 

9.             Rightsof Required Lenders. All rights of the Administrative Agent hereunder, ifnot exercised by the Administrative Agent, may be exercised by the RequiredLenders. If such rights are so exercised by the Required Lenders, then theRequired Lenders shall have all of the rights, privileges and indemnitiesafforded the Administrative Agent in the exercise of such rights.

 

10.           Applicationof Proceeds. Upon the occurrence and during the continuation of an Event ofDefault, any payments in respect of the Secured Obligations and any proceeds ofthe Collateral, when received by the Administrative Agent or any of the holdersof the Secured Obligations in cash or its equivalent, will be applied inreduction of the Secured Obligations in the order set forth in the CreditAgreement or other document relating to the Secured Obligations, and eachGrantor irrevocably waives the right to direct the application of such paymentsand proceeds and acknowledges and agrees that the Administrative Agent shallhave the continuing and exclusive right to apply and reapply any and all suchpayments and proceeds in the Administrative Agent’s sole discretion,notwithstanding any entry to the contrary upon any of its books and records.

 

11.           ContinuingAgreement.

 

(a)           ThisDomestic Security Agreement shall be a continuing agreement in every respectand shall remain in full force and effect so long as any of the SecuredObligations remains outstanding and until all of the commitments relatingthereto have been terminated (other than any obligations with respect to theindemnities set forth in the Loan Documents). Upon such payment andtermination, this Domestic Security Agreement and the liens and securityinterests of the Administrative Agent hereunder shall be automaticallyterminated and the Administrative Agent shall, upon the request and at theexpense of the Grantors, execute and deliver all UCC termination statementsand/or other documents reasonably requested by the Grantors evidencing suchtermination. Notwithstanding the foregoing, all releases and indemnitiesprovided hereunder shall survive termination of this Domestic SecurityAgreement.

 

(b)           ThisDomestic Security Agreement shall continue to be effective or be automaticallyreinstated, as the case may be, if at any time payment, in whole or in part, ofany of the Secured Obligations is rescinded or must otherwise be restored orreturned by the Administrative Agent or any holder of the Secured Obligationsas a preference, fraudulent conveyance or otherwise under any bankruptcy,insolvency or similar law, all as though such payment had not been made;provided that in the event payment of all or any part of the SecuredObligations is rescinded or must be restored or returned, all reasonable costsand expenses (including Attorney Costs) incurred by the Administrative Agent orany holder of the Secured Obligations in defending and enforcing such reinstatementshall be deemed to be included as a part of the Secured Obligations.

 

12.           Amendmentsand Waivers. This Domestic Security Agreement and the provisions hereof maynot be amended, waived, modified, changed, discharged or terminated except asset forth in Section 11.01 of the Credit Agreement.

 

13.           Successorsin Interest. This Domestic Security Agreement shall create a continuingsecurity interest in the Collateral and shall be binding upon each Grantor, itssuccessors and assigns, and shall inure, together with the rights and remediesof the Administrative Agent and the holders of the Secured Obligationshereunder, to the benefit of the Administrative Agent and the holders of theSecured Obligations and their successors and permitted assigns; provided,however, none of the Grantors may assign its rights or delegate itsduties hereunder without the prior written consent of the requisite Lendersunder the Credit Agreement. To the fullest extent permitted by law, eachGrantor hereby releases the Administrative Agent and each holder of the SecuredObligations, their respective successors and assigns and their respectiveofficers, attorneys, employees and agents, from any liability for any act oromission or any error of judgment or mistake of fact or of law relating to thisDomestic Security Agreement or the Collateral, except for any

 

14

----

 

liability arising from the gross negligence or willful misconduct ofthe Administrative Agent or such holder, or their respective officers,attorneys, employees or agents.

 

14.           Notices.All notices required or permitted to be given under this Domestic SecurityAgreement shall be given as provided in Section 11.02 of the Credit Agreement.

 

15.           Counterparts.This Domestic Security Agreement may be executed in any number of counterparts,each of which where so executed and delivered shall be an original, but all ofwhich shall constitute one and the same instrument. It shall not be necessaryin making proof of this Domestic Security Agreement to produce or account formore than one such counterpart.

 

16.           Headings.The headings of the sections and subsections hereof are provided forconvenience only and shall not in any way affect the meaning or construction ofany provision of this Domestic Security Agreement.

 

17.           GoverningLaw; Submission to Jurisdiction; Venue.

 

(a)           THIS DOMESTICSECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THELAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMEDENTIRELY WITHIN SUCH STATE**;**PROVIDEDTHAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISINGUNDER FEDERAL LAW.

 

(b)           ANY LEGAL ACTIONOR PROCEEDING WITH RESPECT TO THIS DOMESTIC SECURITY AGREEMENT OR ANY OTHERLOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING INNEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCHSTATE, AND BY EXECUTION AND DELIVERY OF THIS DOMESTIC SECURITY AGREEMENT, EACHGRANTOR AND THE ADMINISTRATIVE AGENT, ON BEHALF OF ITSELF AND EACH LENDER,CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVEJURISDICTION OF THOSE COURTS. EACH GRANTOR AND THE ADMINISTRATIVE AGENT, ONBEHALF OF ITSELF AND EACH LENDER, IRREVOCABLY WAIVES ANY OBJECTION, INCLUDINGANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF *FORUM NON CONVENIENS*, WHICH IT MAY NOW OR HEREAFTER HAVE TOTHE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OFTHIS DOMESTIC SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHER DOCUMENTRELATED THERETO. EACH GRANTOR AND THE ADMINISTRATIVE AGENT, ON BEHALF OF ITSELFAND EACH LENDER, WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHERPROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCHSTATE.

 

18.           Waiverof Right to Trial by Jury.

 

EACH PARTY TO THISDOMESTIC SECURITY AGREEMENT HEREBY EXPRESSLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,ACTION OR CAUSE OF ACTION ARISING UNDER THIS DOMESTIC SECURITY AGREEMENT OR ANYOTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TOTHE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS DOMESTICSECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATEDTHERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHERFOUNDED IN CONTRACT OR TORT OR OTHERWISE;

 

15

----

 

AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, ANDTHAT ANY PARTY TO THIS DOMESTIC SECURITY AGREEMENT MAY FILE AN ORIGINALCOUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THECONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEYOF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHERPERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOINGWAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEENINDUCED TO ENTER INTO THIS DOMESTIC SECURITY AGREEMENT AND THE OTHER LOANDOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THISSECTION.

 

19.           Severability.If any provision of this Domestic Security Agreement is determined to beillegal, invalid or unenforceable, such provision shall be fully severable andthe remaining provisions shall remain in full force and effect and shall beconstrued without giving effect to the illegal, invalid or unenforceableprovisions.

 

20.           Entirety.This Domestic Security Agreement, the other Loan Documents and the otherdocuments relating to the Secured Obligations represent the entire agreement ofthe parties hereto and thereto, and supersede all prior agreements andunderstandings, oral or written, if any, including any commitment letters orcorrespondence relating to the Loan Documents, any other documents relating tothe Secured Obligations, or the transactions contemplated herein and therein.

 

21.           Survival.All representations and warranties of the Grantors hereunder shall survive theexecution and delivery of this Domestic Security Agreement, the other LoanDocuments and the other documents relating to the Secured Obligations, thedelivery of the Notes and the extension of credit thereunder or in connectiontherewith.

 

22.           OtherSecurity. To the extent that any of the Secured Obligations are now orhereafter secured by property other than the Collateral (including, withoutlimitation, real property and securities owned by a Grantor), or by aguarantee, endorsement or property of any other Person, then the AdministrativeAgent shall have the right to proceed against such other property, guarantee orendorsement upon the occurrence of any Event of Default, and the AdministrativeAgent shall have the right, in its sole discretion, to determine which rights,security, liens, security interests or remedies the Administrative Agent shallat any time pursue, relinquish, subordinate, modify or take with respectthereto, without in any way modifying or affecting any of them or the SecuredObligations or any of the rights of the Administrative Agent or the holders ofthe Secured Obligations under this Domestic Security Agreement, under any ofthe other Loan Documents or under any other document relating to the SecuredObligations.

 

23.           Jointand Several Obligations of Grantors.

 

(a)           Subjectto subsection (c) of this Section 23, each of the Grantors is accepting jointand several liability hereunder in consideration of the financial accommodationto be provided by the holders of the Secured Obligations, for the mutualbenefit, directly and indirectly, of each of the Grantors and in considerationof the undertakings of each of the Grantors to accept joint and severalliability for the obligations of each of them.

 

(b)           Subjectto subsection (c) of this Section 23, each of the Grantors jointly andseverally hereby irrevocably and unconditionally accepts, not merely as asurety but also as a co-debtor, joint and several liability with the otherGrantors with respect to the payment and performance of all of the SecuredObligations arising under this Domestic Security Agreement, the other LoanDocuments and any other

 

16

----

 

documents relating to the Secured Obligations, it being the intentionof the parties hereto that all the Secured Obligations shall be the joint andseveral obligations of each of the Grantors without preferences or distinctionamong them.

 

(c)           Notwithstandingany provision to the contrary contained herein, in any other of the LoanDocuments or in any other documents relating to the Secured Obligations, theobligations of each Grantor under the Credit Agreement, the other LoanDocuments and the other documents relating to the Secured Obligations shall belimited to an aggregate amount equal to the largest amount that would notrender such obligations subject to avoidance under Section 548 of the UnitedStates Bankruptcy Code or any comparable provisions of any applicable statelaw.

 

[Signature Pages Follow]

 

17

----

 

Each of the parties hereto has caused a counterpart ofthis Domestic Security Agreement to be duly executed and delivered as of thedate first above written.

 
| GRANTORS: | GFI GROUP INC.,                       |
|-----------|---------------------------------------|
|      | a Delaware  corporation               |
|      |                                  |   |
|      | By:                                   | /s/ James A. Peers |   |
|      | Name: James A.  Peers                 |
|      | Title :Chief  Financial Officer       |
|      |                                  |   |
|      | GFI GROUP LLC,                        |
|      | a New York limited  liability company |
|      |                                  |
|      | By:                                   | /s/ James A. Peers |   |
|      | Name: James A.  Peers                 |
|      | Title :Chief Financial  Officer       |
|      |                                  |   |
|      | GFINET INC.,                          |
|      | a Delaware corporation                |
|      |                                  |   |
|      | By:                                   | /s/ James A. Peers |   |
|      | Name: James A.  Peers                 |
|      | Title :Chief Financial  Officer       |
|      |                                  |   |
|      | GFI BROKERS LLC,                      |
|      | a Delaware limited  liability company |
|      |                                  |
|      | By:                                   | /s/ James A. Peers |   |
|      | Name: James A.  Peers                 |
|      | Title :Chief Financial  Officer       |
|      |                                  |   |
|      | INTERACTIVE VENTURES  LLC,            |
|      | a Delaware limited  liability company |
|      |                                  |
|      |                                  |
|      | By:                                   | /s/ James A. Peers |   |
|      | Name: James A.  Peers                 |
|      | Title :Chief Financial  Officer       |
|      |                                  |
|      | FENICS SOFTWARE INC.,                 |
|      | a Delaware corporation                |
|      |                                  |   |
|      | By:                                   | /s/ James A. Peers |   |
|      | Name: James A.  Peers                 |
|      | Title :Chief Financial  Officer       |

 

----

 

Accepted and agreed to asof the date first above written.

 

Bank of America, N.A., asAdministrative Agent

 
| By:    | /s/ Sean Cassidy       |   |
|--------|------------------------|--------|
| Name:  | Sean Cassidy           |
| Title: | Senior Vice  President |
|        |                        |        |  |

 

----

 

SCHEDULE 2(d)

 

COMMERCIAL TORT CLAIMS

 

----

 

SCHEDULE 4(a)

 

LEGAL NAME, STATE OF FORMATION, TAXPAYER IDENTIFICATION NUMBER, ORGANIZATIONIDENTIFICATION NUMBER AND CERTAIN STRUCTURAL CHANGES

 

----

 

EXHIBIT 5(d)(i)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

COPYRIGHTS

 

United States CopyrightOffice

 

Ladies and Gentlemen:

 

Pleasebe advised that pursuant to the Amended and Restated Domestic SecurityAgreement dated as of February 24, 2006 (as the same may be amended, modified, extendedor restated from time to time, the “Domestic Security Agreement”) by andamong the Grantors from time to time party thereto (each an “Grantor”and collectively, the “Grantors”) and Bank of America, N.A., asAdministrative Agent (the “Administrative Agent”) for the holders of theSecured Obligations referenced therein, the undersigned Grantor has granted acontinuing security interest in and continuing lien upon, the copyrights andcopyright applications shown on Schedule 1 attached hereto to theAdministrative Agent for the ratable benefit of the holders of the SecuredObligations.

 

Theundersigned Grantor and the Administrative Agent, on behalf of the holders ofthe Secured Obligations, hereby acknowledge and agree that the securityinterest in the copyrights and copyright applications set forth on Schedule1 attached hereto (i) may only be terminated in accordance with the termsof the Domestic Security Agreement and (ii) is not to be construed as anassignment of any copyright or copyright application.

 
|   | Very truly  yours, |
|--------|--------------------|
|   |               |
|   |               |   |
|   | [Grantor]          |
|   |               |
|   | By:                |   |   |
|   | Name:              |
|   | Title:             |
|        |                    |  |  |

 

 

Acknowledged andAccepted:

 
| BANK OF AMERICA,  N.A., as Administrative Agent |
|-------------------------------------------------|
|                                            |
| By:                                             |   |   |
| Name:                                           |
| Title:                                          |

 

----

 

EXHIBIT 5(d)(ii)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

PATENTS

 

United States Patent andTrademark Office

 

Ladies and Gentlemen:

 

Pleasebe advised that pursuant to the Amended and Restated Domestic SecurityAgreement dated as of February 24, 2006 (as the same may be amended, modified,extended or restated from time to time, the “Domestic Security Agreement”)by and among the Grantors from time to time party thereto (each an “Grantor”and collectively, the “Grantors”) and Bank of America, N.A., asAdministrative Agent (the “Administrative Agent”) for the holders of theSecured Obligations referenced therein, the undersigned Grantor has granted acontinuing security interest in and continuing lien upon, the patents and patentapplications set forth on Schedule 1 attached hereto to theAdministrative Agent for the ratable benefit of the holders of the SecuredObligations.

 

Theundersigned Grantor and the Administrative Agent, on behalf of the holders ofthe Secured Obligations, hereby acknowledge and agree that the security interestin the patents and patent applications set forth on Schedule 1 attachedhereto (i) may only be terminated in accordance with the terms of the DomesticSecurity Agreement and (ii) is not to be construed as an assignment of anypatent or patent application.

 
|   | Very truly  yours, |
|--------|--------------------|
|   |               |
|   |               |   |
|   | [Grantor]          |
|   |               |
|   | By:                |   |   |
|   | Name:              |
|   | Title:             |
|        |                    |  |  |

 

 

Acknowledged andAccepted:

 
| BANK OF AMERICA,  N.A., as Administrative Agent |
|-------------------------------------------------|
|                                            |
| By:                                             |   |   |
| Name:                                           |
| Title:                                          |

 

----

 

EXHIBIT 5(d)(iii)

 

NOTICE

 

OF

 

GRANT OF SECURITY INTEREST

 

IN

 

TRADEMARKS

 

United States Patent andTrademark Office

 

Ladies and Gentlemen:

 

Pleasebe advised that pursuant to the Amended and Restated Domestic SecurityAgreement dated as of February 24, 2006 (as the same may be amended, modified,extended or restated from time to time, the “Domestic Security Agreement”)by and among the Grantors from time to time party thereto (each an “Grantor”and collectively, the “Grantors”) and Bank of America, N.A., asAdministrative Agent (the “Administrative Agent”) for the holders of theSecured Obligations referenced therein, the undersigned Grantor has granted acontinuing security interest in and continuing lien upon, the trademarks and trademarkapplications set forth on Schedule 1 attached hereto to theAdministrative Agent for the ratable benefit of the holders of the SecuredObligations.

 

Theundersigned Grantor and the Administrative Agent, on behalf of the holders ofthe Secured Obligations, hereby acknowledge and agree that the securityinterest in the trademarks and trademark applications set forth on Schedule1 attached hereto (i) may only be terminated in accordance with the termsof the Domestic Security Agreement and (ii) is not to be construed as anassignment of any trademark or trademark application.

 
|   | Very truly  yours, |
|--------|--------------------|
|   |               |
|   |               |   |
|   | [Grantor]          |
|   |               |
|   | By:                |   |   |
|   | Name:              |
|   | Title:             |
|        |                    |  |  |

 

 

Acknowledged andAccepted:

 
| BANK OF AMERICA,  N.A., as Administrative Agent |
|-------------------------------------------------|
|                                            |
| By:                                             |   |   |
| Name:                                           |
| Title:                                          |

 

----