exv10w2



 



Exhibit
10.2


 





GUARANTEE AND COLLATERAL AGREEMENT

(ASOT)




made by




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY GUARANTOR, L.P.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL GUARANTOR, L.L.C.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I CORP.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PRINCIPAL, L.P.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY NOMINEE (GP), L.L.C.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY NOMINEE, L.P.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES I TRUST,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES II, L.L.C.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES III, L.L.C.,




TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES IV, L.L.C.,




TISHMAN SPEYER ARCHSTONE-SMITH OC/SD JV HOLDINGS, L.L.C.,




TISHMAN SPEYER ARCHSTONE-SMITH OC/SD JV, L.L.C.,




THE ADDITIONAL PARENT GUARANTORS,




ARCHSTONE-SMITH OPERATING TRUST,




and




certain of its Subsidiaries




in favor of




LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent




Dated as of October 5, 2007




 












 



 




TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	SECTION 1.
	 	 	 	 
	 
	 	 	 	 
	DEFINED TERMS
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	1.2 Other Definitional Provisions
	 	 	7	 
	 
	 	 	 	 
	SECTION 2.
	 	 	 	 
	 
	 	 	 	 
	GUARANTEE
	 	 	7	 
	2.1 Guarantee
	 	 	7	 
	2.2 Right of Contribution
	 	 	9	 
	2.3 Subrogation
	 	 	9	 
	2.4 Amendments, etc. with Respect to the Borrower Obligations
	 	 	10	 
	2.5 Guarantee Absolute and Unconditional
	 	 	10	 
	2.6 Reinstatement
	 	 	12	 
	2.7 Payments
	 	 	12	 
	 
	 	 	 	 
	SECTION 3.
	 	 	 	 
	 
	 	 	 	 
	GRANT OF SECURITY INTEREST
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	14	 
	4.1 Representations in Credit Agreement
	 	 	14	 
	4.2 Title; No Other Liens
	 	 	14	 
	4.3 Perfected First Priority Liens
	 	 	14	 
	4.4 Jurisdiction of Organization; Chief Executive Office
	 	 	14	 
	4.5 Inventory and Equipment
	 	 	15	 
	4.6 Farm Products
	 	 	15	 
	4.7 Investment Property
	 	 	15	 
	4.8 Receivables
	 	 	15	 
	4.9 Contracts
	 	 	15	 
	4.10 Intellectual Property
	 	 	16	 
	4.11 Certificates
	 	 	16	 
	 
	 	 	 	 
	SECTION 5.
	 	 	 	 
	 
	 	 	 	 
	COVENANTS
	 	 	17	 
	5.1 Covenants in Credit Agreement
	 	 	17	 
	5.2 Delivery of Instruments and Chattel Paper
	 	 	17	 
	5.3 Maintenance of Insurance
	 	 	17	 




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	 	 	Page
	5.4 Payment of Obligations
	 	 	17	 
	5.5 Maintenance of Perfected Security Interest; Further Documentation
	 	 	17	 
	5.6 Changes in Name, etc.
	 	 	18	 
	5.7 Notices
	 	 	18	 
	5.8 Investment Property
	 	 	18	 
	5.9 Receivables
	 	 	20	 
	5.10 Contracts
	 	 	20	 
	5.11 Intellectual Property
	 	 	20	 
	 
	 	 	 	 
	SECTION 6.
	 	 	 	 
	 
	 	 	 	 
	REMEDIAL PROVISIONS
	 	 	22	 
	6.1 Certain Matters Relating to Receivables
	 	 	22	 
	6.2 Communications with Obligors; Grantors Remain Liable
	 	 	23	 
	6.3 Pledged Stock
	 	 	23	 
	6.4 Proceeds to be Turned Over To Administrative Agent
	 	 	24	 
	6.5 Application of Proceeds
	 	 	24	 
	6.6 Code and Other Remedies
	 	 	25	 
	6.7 Investment Property
	 	 	26	 
	6.8 Deficiency
	 	 	26	 
	 
	 	 	 	 
	SECTION 7.
	 	 	 	 
	 
	 	 	 	 
	THE ADMINISTRATIVE AGENT
	 	 	27	 
	7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc.
	 	 	27	 
	7.2 Duty of Administrative Agent
	 	 	28	 
	7.3 Execution of Financing Statements
	 	 	29	 
	7.4 Authority of Administrative Agent
	 	 	29	 
	7.5 Irrevocable Proxy
	 	 	29	 
	 
	 	 	 	 
	SECTION 8.
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	30	 
	8.1 Amendments in Writing
	 	 	30	 
	8.2 Notices
	 	 	30	 
	8.3 No Waiver by Course of Conduct; Cumulative Remedies
	 	 	30	 
	8.4 Enforcement Expenses; Indemnification
	 	 	31	 
	8.5 Successors and Assigns
	 	 	31	 
	8.6 Set-Off
	 	 	31	 
	8.7 Counterparts
	 	 	32	 
	8.8 Severability
	 	 	32	 
	8.9 Section Headings
	 	 	32	 
	8.10 Integration
	 	 	32	 
	8.11 GOVERNING LAW
	 	 	32	 
	8.12 Submission To Jurisdiction; Waivers
	 	 	32	 
	8.13 Acknowledgments
	 	 	33	 
	8.14 Additional Grantors
	 	 	33	 




-ii-








 





	 	 	 	 	 
	 	 	Page
	8.15 Releases
	 	 	33	 
	8.16 WAIVER OF JURY TRIAL
	 	 	34	 
	8.17 Limitation on Liability
	 	 	34	 




-iii-








 






          GUARANTEE AND COLLATERAL AGREEMENT (ASOT), dated as of October 5, 2007, made by each of the
signatories hereto (together with any other entity that may become a party hereto as provided
herein, the “Grantors”), in favor of LEHMAN COMMERCIAL PAPER INC., as administrative agent
(in such capacity, the “Administrative Agent”) for the banks and other financial
institutions (the “Lenders”) from time to time parties to the Credit Agreement, dated as of
October 5, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY GUARANTOR, L.P., a Delaware
limited partnership (“Guarantor 1”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL
GUARANTOR, L.L.C., a Delaware limited liability company (“Guarantor 2”), TISHMAN SPEYER
ARCHSTONE-SMITH MULTIFAMILY PRINCIPAL, L.P., a Delaware limited partnership (the “Principal
Guarantor”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY NOMINEE (GP), L.L.C., a Delaware
limited liability company (the “Nominee GP Guarantor”), TISHMAN SPEYER ARCHSTONE-SMITH
MULTIFAMILY NOMINEE, L.P., a Delaware limited partnership (the “Nominee Guarantor”),
TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I CORP., a Delaware corporation
(“Holdings I Corp”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES I TRUST, a Maryland
trust (“Holdings”), each of the entities listed on Annex A (the “Additional
Parent Guarantors”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES II, L.L.C., a Delaware
limited liability company (“Smith LLC”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY
SERIES III, L.L.C., a Delaware limited liability company (“NTPA LLC”), TISHMAN SPEYER
ARCHSTONE-SMITH MULTIFAMILY SERIES IV, L.L.C., a Delaware limited liability company (“Secured
Note LLC”), TISHMAN SPEYER ARCHSTONE-SMITH OC/SD JV HOLDINGS, L.L.C., a Delaware limited
liability company (“OC/SD JV Holdings LLC”), TISHMAN SPEYER ARCHSTONE-SMITH OC/SD JV,
L.L.C., a Delaware limited liability company (“OC/SD JV LLC”), ARCHSTONE-SMITH OPERATING
TRUST, a Maryland real estate investment trust (the “Borrower”), the several banks and
other financial institutions or entities from time to time parties to the Credit Agreement (the
“Lenders”), LEHMAN BROTHERS INC. and BANC OF AMERICA SECURITIES LLC, as joint lead
arrangers and joint bookrunners (in such capacity, the “Arrangers”), BANK OF AMERICA, N.A.,
as syndication agent (in such capacity, the “Syndication Agent”), BARCLAYS CAPITAL REAL
ESTATE INC., as documentation agent (in such capacity, the “Documentation Agent”), and the
Administrative Agent.




W I T N E S S E T H:




          WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the conditions set forth
therein;




          WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other
Grantor;










 



 




 2




          WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in
part to enable the Borrower to make valuable transfers to one or more of the other Grantors in
connection with the operation of their respective businesses;




          WHEREAS, certain of the Qualified Counterparties may enter into Specified Hedge Agreements
with one or more of the Grantors;




          WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each
Grantor will derive substantial direct and indirect benefit from the extensions of credit under the
Credit Agreement and from the Specified Hedge Agreements; and




          WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective
extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have
executed and delivered this Agreement to the Administrative Agent;




          NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative
Agent, for the benefit of the Secured Parties, as follows:




SECTION 1.




DEFINED TERMS




          1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit Agreement and the
following terms are used herein as defined in the New York UCC: Accounts, Certificated Security,
Chattel Paper, Documents, Equipment, Farm Products, General Intangibles, Goods, Instruments,
Inventory, Letter-of-Credit Rights and Supporting Obligations.




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




          “Agreement”: this Guarantee and Collateral Agreement (ASOT), as the same may be
amended, supplemented or otherwise modified from time to time.




          “Article 8 Matter”: as defined in Section 7.5(b).




          “Borrower Credit Agreement Obligations”: the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations and all other obligations and
liabilities of the Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the Loans and Reimbursement
Obligations and interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or










 



3



now existing or hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit, or any other
document made, delivered or given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the Administrative Agent
or to the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).




          “Borrower Hedge Agreement Obligations”: the collective reference to all obligations
and liabilities of the Borrower (including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to any Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, any Specified Hedge Agreement or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the relevant Qualified Counterparty that are required to be
paid by the Borrower pursuant to the terms of any Specified Hedge Agreement).




          “Borrower Obligations”: the collective reference to (i) the Borrower Credit Agreement
Obligations, (ii) the Borrower Hedge Agreement Obligations, but only to the extent that, and only
so long as, the Borrower Credit Agreement Obligations are secured and guaranteed pursuant hereto,
and (iii) all other obligations and liabilities of the Borrower, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement (including, without limitation, all fees
and disbursements of counsel to the Administrative Agent or to the Secured Parties that are
required to be paid by the Borrower pursuant to the terms of this Agreement).




          “Collateral”: as defined in Section 3.




          “Collateral Account”: any collateral account established by the Administrative Agent
as provided in Section 6.1 or 6.4.




          “Contracts”: the contracts and agreements listed in Schedule 7, as the same
may be amended, supplemented or otherwise modified from time to time, including, without
limitation, (i) all rights of any Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of any Grantor to damages arising thereunder and
(iii) all rights of any Grantor to perform and to exercise all remedies thereunder.




          “Copyrights”: (i) all copyrights arising under the laws of the United States, any
other country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished (including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United States Copyright
Office, and (ii) the right to obtain all renewals thereof.










 



4




          “Copyright Licenses”: any written agreement naming any Grantor as licensor or
licensee (including, without limitation, those listed in Schedule 6), granting any right
under any Copyright, including, without limitation, the grant of rights to manufacture, distribute,
exploit and sell materials derived from any Copyright.




          “Deposit Account”: as defined in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including, without limitation, any demand, time, savings, passbook
or like account maintained with a depositary institution.




          “Excluded Assets”: the collective reference to (i) any contract, General Intangible,
Copyright License, Patent License or Trademark License (“Intangible Assets”), in each case
to the extent the grant by the relevant Grantor of a security interest pursuant to this Agreement
in such Grantor’s right, title and interest in such Intangible Asset (A) is prohibited by legally
enforceable provisions of any contract, agreement, instrument or indenture governing such
Intangible Asset, (B) would give any other party to such contract, agreement, instrument or
indenture a legally enforceable right to terminate its obligations thereunder or (C) is permitted
only with the consent of another party, if the requirement to obtain such consent is legally
enforceable and such consent has not been obtained; provided, that in any event any
Receivable or any money or other amounts due or to become due under any such contract, agreement,
instrument or indenture shall not be Excluded Assets to the extent that any of the foregoing is (or
if it contained a provision limiting the transferability or pledge thereof would be) subject to
Sections 9-406, 9-408 and 9-409 of the New York UCC, (ii) Foreign Subsidiary Voting Stock excluded
from the definition of “Pledged Stock” set forth in this Section 1.1, (iii) the Financial Reporting
Party Deferred Compensation Account and (iv) all the Capital Stock listed on Schedule 8
hereto.




          “Foreign Subsidiary”: any Subsidiary organized under the laws of any jurisdiction
outside the United States of America.




          “Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary.




          “Grantor”: as defined in the preamble hereto.




          “Guarantor Hedge Agreement Obligations”: the collective reference to all obligations
and liabilities of a Guarantor (including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to
such Guarantor, whether or not a claim for post-filing or post-petition interest is allowed in such
proceeding) to any Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, any Specified Hedge Agreement or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all
fees and disbursements of counsel to the relevant Qualified Counterparty that are required to be
paid by such Guarantor pursuant to the terms of any Specified Hedge Agreement).










 



5




          “Guarantor Obligations”: with respect to any Guarantor, the collective reference to
(i) any Guarantor Hedge Agreement Obligations of such Guarantor, but only to the extent that, and
only so long as, the other Obligations of such Guarantor are secured and guaranteed pursuant
hereto, and (ii) all obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, Section 2) or any other Loan
Document to which such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Administrative Agent or to any
Secured Party that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).




          “Guarantors”: the collective reference to each Grantor other than the Borrower.




          “Hedge Agreements”: as to any Person, all interest rate swaps, currency exchange
agreements, commodity swaps, caps or collar agreements or similar arrangements entered into by such
Person providing for protection against fluctuations in interest rates, currency exchange rates or
commodity prices or the exchange of nominal interest obligations, either generally or under
specific contingencies. For avoidance of doubt, Hedge Agreements shall include any interest rate
swap or similar agreement that provides for the payment by the Borrower or any of its Subsidiaries
of amounts based upon a floating rate in exchange for receipt by the Borrower or such Subsidiary of
amounts based upon a fixed rate.




          “Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses,
the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue
at law or in equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.




          “Intercompany Note”: any promissory note evidencing loans made by any Combined Group
Member to any Grantor or any of their respective Subsidiaries.




          “Investment Property”: the collective reference to (i) all “investment property” as
such term is defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary
Voting Stock excluded from the definition of “Pledged Stock” in this Section 1.1) and (ii) whether
or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Stock.




          “Issuers”: the collective reference to each issuer of any Investment Property.




          “New York UCC”: the Uniform Commercial Code as from time to time in effect in the
State of New York.




          “Obligations”: (i) in the case of the Borrower, the Borrower Obligations, and (ii) in
the case of each Guarantor, its Guarantor Obligations.




          “Parent Guarantor”: as defined in the preamble hereto.










 



6




          “Parent/Affiliate Guarantors”: as defined in the preamble hereto.




          “Patents”: (i) all letters patent of the United States, any other country or any
political subdivision thereof, all reissues and extensions thereof and all goodwill associated
therewith, including, without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States or any other country and all
divisions, continuations and continuations-in-part thereof, including, without limitation, any of
the foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues or
extensions of the foregoing.




          “Patent License”: all agreements, whether written or oral, providing for the grant by
or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in
part by a Patent, including, without limitation, any of the foregoing referred to in
Schedule 6.




          “Pledged Notes”: all promissory notes listed on Schedule 2, all Intercompany
Notes at any time issued to any Grantor and all other promissory notes issued to or held by any
Grantor (other than promissory notes issued in connection with extensions of trade credit by any
Grantor in the ordinary course of business).




          “Pledged Securities”: the collective reference to the Pledged Notes and the Pledged
Stock.




          “Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together
with any other shares, stock certificates, options or rights of any nature whatsoever in respect of
the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while
this Agreement is in effect; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be pledged
hereunder.




          “Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the
Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event,
including, without limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.




          “Qualified Counterparty”: with respect to any Specified Hedge Agreement, any
counterparty thereto that, at the time such Specified Hedge Agreement was entered into, was a
Lender, an Affiliate of a Lender, an Agent or an Affiliate of an Agent, including, without
limitation, any Hedge Agreement entered into prior to the Closing Date by an Agent or an Affiliate
of an Agent in connection with the Facilities; provided that, in the event a counterparty
to a Hedge Agreement at the time such Hedge Agreement was entered into was a Qualified
Counterparty, such counterparty shall constitute a Qualified Counterparty hereunder and under the
other Loan Documents; provided, further that, with respect to any Hedge Agreement
entered into prior to the date hereof, any counterparty thereto shall be a “Qualified Counterparty”
if such counterparty was a Lender, an Affiliate of a Lender, an Agent or an Affiliate of an Agent
as of the date hereof.




          “Receivable”: any right to payment for goods sold, leased, licensed, assigned or
otherwise disposed of, or for services rendered, whether or not such right is evidenced by an










 



7



Instrument or Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).




          “Secured Parties”: the collective reference to the Administrative Agent, the
Syndication Agent, the Documentation Agent, the Lenders (including any Issuing Lender in its
capacity as Issuing Lender) and any Qualified Counterparties.




          “Securities Act”: the Securities Act of 1933, as amended.




          “Specified Hedge Agreement”: any Hedge Agreement entered into by (i) the Borrower or
any Guarantor and (ii) any Qualified Counterparty.




          “Trademarks”: (i) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos and other source or
business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in connection therewith,
whether in the United States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without limitation, any of the
foregoing referred to in Schedule 6, and (ii) the right to obtain all renewals thereof.




          “Trademark License”: any agreement, whether written or oral, providing for the grant
by or to any Grantor of any right to use any Trademark, including, without limitation, any of the
foregoing referred to in Schedule 6.




          1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”, “hereto” and
“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.




          (b) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.




          (c) Where the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the relevant part
thereof.




SECTION 2.




GUARANTEE




          2.1 Guarantee. (a)(i) The Guarantors hereby, jointly and severally, unconditionally
and irrevocably, guarantee to the Administrative Agent, for the ratable benefit of the Secured
Parties and their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case of each Guarantor,
Borrower Obligations arising pursuant to clause (ii) of this Section 2.1(a) in










 



8



respect of Guarantor Hedge Agreement Obligations in respect of which such Guarantor is a
primary obligor).





     (ii) The Borrower hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties and their respective
successors, endorsees, transferees and assigns, the prompt and complete payment and
performance by each Guarantor when due (whether at stated maturity, by acceleration or
otherwise) of the Guarantor Hedge Agreement Obligations of such Guarantor.



          (b) Anything herein or in any other Loan Document to the contrary notwithstanding, (i) the
maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws
relating to fraudulent conveyances or transfers or the insolvency of debtors (after giving effect
to the right of contribution established in Section 2.2) and (ii) the maximum liability of the
Borrower under this Section 2 shall in no event exceed the amount which can be guaranteed by the
Borrower under applicable federal and state laws relating to fraudulent conveyances or transfers or
the insolvency of debtors (after giving effect to the right of contribution established in
Section 2.2).




          (c) (i) Each Guarantor agrees that the Borrower Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee
of such Guarantor contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Secured Party hereunder.





     (ii) The Borrower agrees that the Guarantor Hedge Agreement Obligations may at any time
and from time to time exceed the amount of the liability of the Borrower under this Section
2 without impairing the guarantee of the Borrower contained in this Section 2 or affecting
the rights and remedies of the Administrative Agent or any Secured Party hereunder.



          (d) Subject to Section 8.15 hereof, the guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations (other than Borrower Obligations arising
under Section 2.1(a)(ii) hereof) and the obligations of each Guarantor under the guarantee
contained in this Section 2 (other than (i) Guarantor Obligations in respect of Borrower
Obligations arising under Section 2.1(a)(ii) hereof and (ii) indemnification obligations and other
contingent obligations as to which no claim has been made) shall have been satisfied by full and
final payment in cash, no Letter of Credit shall be outstanding (unless fully cash collateralized)
and the Commitments shall be terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations and any or all of the
Guarantors may be free from their respective Guarantor Hedge Agreement Obligations.




          (e) No payment made by the Borrower, any of the Guarantors, any other guarantor or any other
Person or received or collected by the Administrative Agent or any Secured Party from the Borrower,
any of the Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations or the Guarantor










 



9



Hedge Agreement Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of the Borrower or any Guarantor under this Section 2 which shall, notwithstanding any
such payment (other than any payment made by the Borrower or such Guarantor in respect of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations or any payment received or
collected from the Borrower or such Guarantor in respect of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations), remain liable for the Borrower Obligations and the
Guarantor Hedge Agreement Obligations up to the maximum liability of the Borrower or such Guarantor
hereunder until the Borrower Obligations and the Guarantor Hedge Agreement Obligations (other than
indemnification obligations and other contingent obligations as to which no claim has been made)
are fully and finally paid in cash, no Letter of Credit shall be outstanding (unless fully cash
collateralized) and the Commitments are terminated.




          2.2 Right of Contribution. (a) Each Guarantor hereby agrees that to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made hereunder or the
Guarantor Hedge Agreement Obligations, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid its proportionate
share of such payment.




          (b) The Borrower and each Guarantor agrees that to the extent that the Borrower or any
Guarantor shall have paid more than its proportionate share of any payment made hereunder in
respect of any Guarantor Hedge Agreement Obligation of any other Guarantor, the Borrower or such
Guarantor, as the case may be, shall be entitled to seek and receive contribution from and against
the Borrower and any other Guarantor which has not paid its proportionate share of such payment.




          (c) The Borrower’s and each Guarantor’s right of contribution under this Section 2.2 shall be
subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no
respect limit the obligations and liabilities of the Borrower or any Guarantor to the
Administrative Agent and the Secured Parties, and the Borrower and each Guarantor shall remain
liable to the Administrative Agent and the Secured Parties for the full amount guaranteed by the
Borrower or such Guarantor hereunder.




          2.3 Subrogation. Notwithstanding any payment made by the Borrower or any Guarantor
hereunder or any set-off or application of funds of the Borrower or any Guarantor by the
Administrative Agent or any Secured Party, neither the Borrower nor any Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent or any Secured Party against the
Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by
the Administrative Agent or any Secured Party for the payment of the Borrower Obligations or the
Guarantor Hedge Agreement Obligations, nor shall the Borrower or any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of
payments made by the Borrower or such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Secured Parties by the Borrower on account of the Borrower Obligations
(other than indemnification obligations and other contingent obligations as to which no claim has
been made) are fully and finally paid in cash, no Letter of Credit shall be outstanding (unless
fully cash collateralized) and the Commitments are terminated. If any amount shall be paid to the
Borrower or any Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been fully and










 



10



finally paid in cash, such amount shall be held by the Borrower or such Guarantor in trust for
the Administrative Agent and the Secured Parties, segregated from other funds of the Borrower or
such Guarantor, and shall, forthwith upon receipt by the Borrower or such Guarantor, be turned over
to the Administrative Agent in the exact form received by the Borrower or such Guarantor (duly
indorsed by the Borrower or such Guarantor to the Administrative Agent, if required), to be applied
against the Borrower Obligations or the Guarantor Hedge Agreement Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.




          2.4 Amendments, etc. with Respect to the Borrower Obligations. The Borrower and each
Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights
against the Borrower or any Guarantor and without notice to or further assent by the Borrower or
any Guarantor, any demand for payment of any of the Borrower Obligations or the Guarantor Hedge
Agreement Obligations made by the Administrative Agent or any Secured Party may be rescinded by the
Administrative Agent or such Secured Party and any of the Borrower Obligations or the Guarantor
Hedge Agreement Obligations continued, and the Borrower Obligations or the Guarantor Hedge
Agreement Obligations, or the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect thereto, may, from time
to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Administrative Agent or any Secured Party (with the consent
of the Borrower and/or any Guarantor as shall be required by the applicable Loan Documents), and
the Specified Hedge Agreements, the Credit Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all
Lenders, as the case may be) may (with the consent of the Borrower and/or any Guarantor as shall be
required by the applicable Loan Documents) deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative Agent or any Secured
Party for the payment of the Borrower Obligations or the Guarantor Hedge Agreement Obligations may
(with the consent of the Borrower and/or any Guarantor as shall be required thereunder) be sold,
exchanged, waived, surrendered or released. Neither the Administrative Agent nor any Secured Party
shall, except to the extent set forth in, and for the benefit of the parties to, the agreements and
instruments governing such Lien or guarantee, have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Borrower Obligations or the Guarantor
Hedge Agreement Obligations or for the guarantees contained in this Section 2 or any property
subject thereto.




          2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Borrower Obligations (other
than any notice with respect to any Guarantor Hedge Agreement Obligation with respect to which such
Guarantor is a primary obligor and to which it is entitled pursuant to the applicable Specified
Hedge Agreement) and notice of or proof of reliance by the Administrative Agent or any Secured
Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in
this Section 2; the Borrower Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the Secured Parties, on the other
hand, likewise shall be conclusively presumed to have been had or










 



11



consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon
the Borrower or any of the Guarantors with respect to the Borrower Obligations (other than any
diligence, presentment, protest, demand or notice with respect to any Guarantor Hedge Agreement
Obligation with respect to which such Guarantor is a primary obligor and to which it is entitled
pursuant to the applicable Specified Hedge Agreement). Each Guarantor understands and agrees that
the guarantee of such Guarantor contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations
or any collateral security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Secured Party, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower or any other Person against the Administrative Agent or
any Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee of such Guarantor contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder
against any Guarantor, the Administrative Agent or any Secured Party may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have
against the Borrower, any other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure
by the Administrative Agent or any Secured Party to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other
Person or to realize upon any such collateral security or guarantee or to exercise any such right
of offset, or any release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability under this Section 2, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Administrative Agent or
any Secured Party against any Guarantor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.




          (b) The Borrower waives any and all notice of the creation, renewal, extension or accrual of
any of the Guarantor Hedge Agreement Obligations and notice of or proof of reliance by the
Administrative Agent or any Secured Party upon the guarantee by the Borrower contained in this
Section 2 or acceptance of the guarantee by the Borrower contained in this Section 2; the Guarantor
Hedge Agreement Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee by
the Borrower contained in this Section 2; and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the Secured Parties, on the other
hand, with respect to any Guarantor Hedge Agreement Obligation likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee by the Borrower contained
in this Section 2. The Borrower waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower with respect to the Guarantor Hedge
Agreement Obligations. The Borrower understands and agrees that the guarantee by the Borrower
contained










 



12



in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Guarantor Hedge Agreement
Obligations or any other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any Secured Party,
(b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may
at any time be available to or be asserted by any Person against the Administrative Agent or any
Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or any Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the applicable Guarantor for the applicable Guarantor Hedge Agreement
Obligations, or of the Borrower under its guarantee contained in this Section 2, in bankruptcy or
in any other instance. When making any demand under this Section 2 or otherwise pursuing its
rights and remedies under this Section 2 against the Borrower, the Administrative Agent or any
Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against any Guarantor or any other Person or against
any collateral security or guarantee for the Guarantor Hedge Agreement Obligations or any right of
offset with respect thereto, and any failure by the Administrative Agent or any Secured Party to
make any such demand, to pursue such other rights or remedies or to collect any payments from any
Guarantor or any other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of any Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve the Borrower of any obligation
or liability under this Section 2, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or any Secured Party
against the Borrower under this Section 2. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.




          2.6 Reinstatement. The guarantee contained in this Section 2 shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Borrower Obligations or Guarantor Hedge Agreement Obligations is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.




          2.7 Payments. The Borrower and each Guarantor hereby guarantees that payments by it
hereunder will be paid to the Administrative Agent without set-off or counterclaim (i) in the case
of obligations in respect of Borrower Obligations arising under the Credit Agreement or any other
Loan Document in Dollars at the Payment Office specified in the Credit Agreement and (ii) in the
case of obligations in respect of any Borrower Hedge Agreement Obligations or any Guarantor Hedge
Agreement Obligations, in the currency and at the place specified in the applicable Specified Hedge
Agreement.










 



13




SECTION 3.




GRANT OF SECURITY INTEREST




          Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to
the Administrative Agent, for the ratable benefit of the Secured Parties, a security interest in,
all of the following property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of
such Grantor’s Obligations:





     (a) all Accounts;




     (b) all Chattel Paper;




     (c) all Contracts;




     (d) all Deposit Accounts;




     (e) all Documents;




     (f) all Equipment;




     (g) all General Intangibles;




     (h) all Instruments;




     (i) all Intellectual Property;




     (j) all Inventory;




     (k) all Investment Property;




     (l) all Letter-of-Credit Rights;




     (m) all Goods and other property not otherwise described above;




     (n) all books and records pertaining to the Collateral; and




     (o) to the extent not otherwise included, all Proceeds and products of any and all of
the foregoing, all Supporting Obligations in respect of any of the foregoing and all
collateral security and guarantees given by any Person with respect to any of the foregoing;


provided, that the Collateral shall not include any Excluded Assets.










 



14




SECTION 4.




REPRESENTATIONS AND WARRANTIES




          To induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each
Grantor hereby represents and warrants to the Administrative Agent and each Lender that:




          4.1 Representations in Credit Agreement. In the case of each Guarantor, the
representations and warranties set forth in Section 4 of the Credit Agreement as they relate to
such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative Agent and each
Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided
that each reference in each such representation and warranty to the Borrower’s knowledge shall, for
the purposes of this Section 4.1, be deemed to be a reference to such Guarantor’s knowledge.




          4.2 Title; No Other Liens. Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant to this Agreement and
the other Liens permitted to exist on the Collateral by the Credit Agreement, such Grantor owns
each item of the Collateral (other than immaterial Intellectual Property) free and clear of any and
all Liens or claims of others. No financing statement with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have been filed in favor of
the Administrative Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement or as are permitted by the Credit Agreement.




          4.3 Perfected First Priority Liens. The security interests granted pursuant to this
Agreement (a)  upon completion of the filings and other actions specified on Schedule 3
(which, in the case of all filings and other documents referred to on said Schedule, have been
delivered to the Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase any Collateral from such Grantor and (b) are prior to all other
Liens on the Collateral in existence on the date hereof except for (i) unrecorded Liens permitted
by the Credit Agreement which have priority over the Liens on the Collateral by operation of law
and (ii) in the case of Collateral owned by Secured Note Holdings, Liens granted in favor of the
Borrower pursuant to the Secured Contribution Agreement.




          4.4 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such
Grantor’s jurisdiction of organization, identification number from the jurisdiction of organization
(if any), and the location of such Grantor’s chief executive office or sole place of business or
principal residence, as the case may be, are specified on Schedule 4. Such Grantor has
furnished to the Administrative Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date which is recent to the
date hereof.










 



15




          4.5 Inventory and Equipment. On the date hereof, the Inventory and the Equipment
(other than mobile goods) are kept at the locations listed on Schedule 5.




          4.6 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm
Products.




          4.7 Investment Property. (a) The shares of Pledged Stock pledged by such Grantor
hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of
each Issuer owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock, if less, 65%
of the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.




          (b) All the shares of the Pledged Stock have been duly and validly issued and are fully paid
and nonassessable.




          (c) Each of the Pledged Notes constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.




          (d) Such Grantor is the record and beneficial owner of, and has good and marketable title to,
the Investment Property pledged by it hereunder, free of any and all Liens or options in favor of,
or claims of, any other Person, except the security interest created by this Agreement.




          4.8 Receivables. (a) No amount payable to such Grantor under or in connection with
any Receivable is evidenced by any Instrument or Chattel Paper which has not been delivered to the
Administrative Agent to the extent required by Section 5.2.




          (b) Except as the Administrative Agent shall have been otherwise notified in writing by the
Borrower, none of the obligors on any Receivable is a Governmental Authority, except for
Receivables constituting not more than 5% of the face amount of all Receivables.




          (c) The amounts represented by such Grantor to the Secured Parties from time to time as owing
to such Grantor in respect of the Receivables will at such times be accurate.




          4.9 Contracts. (a) No consent of any party (other than such Grantor) to any Contract
is required, or purports to be required, in connection with the execution, delivery and performance
of this Agreement.




          (b) Each Contract is in full force and effect and constitutes a valid and legally enforceable
obligation of the parties thereto, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally, general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.










 



16




          (c) No consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the execution, delivery, performance,
validity or enforceability of any of the Contracts by any party thereto other than those which have
been duly obtained, made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general in nature.




          (d) Neither such Grantor nor (to the best of such Grantor’s knowledge) any of the other
parties to the Contracts is in default in the performance or observance of any of the terms
thereof.




          (e) The right, title and interest of such Grantor in, to and under the Contracts are not
subject to any defenses, offsets, counterclaims or claims.




          (f) Such Grantor has delivered to the Administrative Agent a complete and correct copy of each
Contract, including all amendments, supplements and other modifications thereto.




          (g) No amount payable to such Grantor under or in connection with any Contract is evidenced by
any Instrument or Chattel Paper which has not been delivered to the Administrative Agent in
accordance with the terms of this Agreement (to the extent required).




          (h) None of the parties to any Contract is a Governmental Authority.




          4.10 Intellectual Property. (a) Schedule 6 lists all Intellectual Property
material to the business of each Grantor, owned by such Grantor in its own name on the date hereof.




          (b) On the date hereof, all material Intellectual Property of such Grantor described on
Schedule 6 is valid, subsisting, unexpired and enforceable, has not been abandoned and, to
the knowledge of such Grantor, does not infringe the intellectual property rights of any other
Person.




          (c) Except as set forth in Schedule 6, on the date hereof, none of the Intellectual
Property material to the business of each Grantor is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.




          (d) No holding, decision or judgment has been rendered by any Governmental Authority which
would limit or cancel the validity of, or such Grantor’s rights in, any Intellectual Property
material to the business of each Grantor in any respect that could reasonably be expected to have a
Material Adverse Effect.




          (e) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on
the date hereof (i) seeking to limit or cancel the validity of any material Intellectual Property
or such Grantor’s ownership interest therein, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any Intellectual Property material to the business of each
Grantor.




          4.11 Certificates. With respect to Pledged Securities comprised of limited liability
company interests and partnership interests, there exist no certificates, instruments or










 



17



writings representing such Pledged Securities except as delivered or to be delivered to the
Administrative Agent in accordance with Sections 6.10 and 6.18(b) of the Credit Agreement.




SECTION 5.




COVENANTS




          Each Grantor covenants and agrees with the Administrative Agent and the Secured Parties that,
from and after the date of this Agreement until the Obligations shall have been paid in full (other
than indemnification obligations and other contingent obligations as to which no claim has been
made), no Letter of Credit shall be outstanding (unless fully cash collateralized) and the
Commitments shall have terminated:




          5.1 Covenants in Credit Agreement. In the case of each Guarantor, such Guarantor
shall take, or shall refrain from taking, as the case may be, each action that is necessary to be
taken or not taken, as the case may be, so that no Default or Event of Default is caused by the
failure to take such action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.




          5.2 Delivery of Instruments and Chattel Paper. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be
promptly delivered to the Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement; provided, that
the Grantors shall not be obligated to deliver to the Administrative Agent any Instruments or
Chattel Paper held by any Grantor at any time to the extent that the aggregate face amount of all
such Instruments and Chattel Paper held by all Grantors at such time does not exceed $250,000.




          5.3 Maintenance of Insurance. (a) Such Grantor shall maintain such insurance as
required by Section 6.5 of the Credit Agreement.




          5.4 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all taxes, assessments
and governmental charges or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral, except that no such charge need
be paid if the amount or validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been provided on the books
of such Grantor and such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest therein.




          5.5 Maintenance of Perfected Security Interest; Further Documentation.
(a) Such Grantor shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 4.3 and, except with respect to
immaterial Intellectual Property, shall defend such security interest against the claims and
demands of all Persons whomsoever.










 



18




          (b) Such Grantor will furnish to the Administrative Agent for distribution to the Lenders
from time to time statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.




          (c) At any time and from time to time, upon the written request of the Administrative Agent,
and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver,
and have recorded, such further instruments and documents and take such further actions as the
Administrative Agent may reasonably deem necessary for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted, including, without
limitation, (i) the filing of any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts and Letter-of-Credit
Rights, taking, to the extent required by the Credit Agreement, any actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable Uniform Commercial
Code) with respect thereto.




          5.6 Changes in Name, etc. Such Grantor will not, except upon 15 days’ prior written
notice to the Administrative Agent and delivery to the Administrative Agent of all additional
executed financing statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests provided for herein:





     (i) change its jurisdiction of organization or the location of its chief executive
office or sole place of business or principal residence from that referred to in
Section 4.4; or 




     (ii) change its name.



          5.7 Notices. Such Grantor will advise the Administrative Agent and the Administrative
Agent shall notify the Lenders promptly, in reasonable detail, upon such Grantor becoming aware of
the following occurrences:




          (a) any Lien (other than security interests created hereby or Liens permitted under the Credit
Agreement) on any of the Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder; and




          (b) the occurrence of any other event which could reasonably be expected to have a material
adverse effect on the aggregate value of the Collateral or on the security interests created
hereby.




          5.8 Investment Property. (a) If such Grantor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate representing a
dividend or a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the
Secured Parties, hold the same










 



19



in trust for the Administrative Agent and the Secured Parties and deliver the same forthwith
to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the
Administrative Agent, if required, together with an undated stock power covering such certificate
duly executed in blank by such Grantor, to be held by the Administrative Agent, subject to the
terms hereof, as additional collateral security for the Obligations. Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any Issuer shall be paid
over to the Administrative Agent to be held by it hereunder as additional collateral security for
the Obligations, and in case any distribution of capital shall be made on or in respect of the
Investment Property, or any property shall be distributed upon or with respect to the Investment
Property pursuant to the recapitalization or reclassification of the capital of any Issuer or
pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject
to a perfected security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect of the Investment
Property shall be received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral security for the
Obligations. Notwithstanding the foregoing, the Grantors shall not be required to pay over to the
Administrative Agent or deliver to the Administrative Agent as Collateral any proceeds of any
liquidation or dissolution of any Issuer, or any distribution of capital or property in respect of
any Investment Property, to the extent that (i) such liquidation, dissolution or distribution, if
treated as a Disposition of the relevant Issuer, would be permitted by the Credit Agreement and
(ii) the proceeds thereof are applied toward prepayment of Loans and reduction of Commitments to
the extent required by the Credit Agreement.




          (b) Without the prior written consent of the Administrative Agent, such Grantor will not
(i) vote to enable, or take any other action to permit, any Issuer to issue any stock or other
equity securities of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any nature of any Issuer,
unless such securities are delivered to the Administrative Agent, concurrently with the issuance
thereof, to be held by the Administrative Agent as Collateral, (ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or
Proceeds thereof (except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Investment Property or Proceeds thereof, or any interest therein,
except for Liens not prohibited by the Credit Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the Administrative Agent to sell,
assign or transfer any of the Pledged Securities or Proceeds thereof except as permitted by the
Credit Agreement.




          (c) In the case of each Grantor which is an Issuer, such Issuer agrees that (i) it will be
bound by the terms of this Agreement relating to the Pledged Securities issued by it and will
comply with such terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events described in
Section 5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the Pledged
Securities issued by it.










 



20




          (d) Except as indicated on Schedule 2, each Issuer that is a partnership or a limited
liability company (i) confirms that none of the terms of any equity interest issued by it provides
that such equity interest is a “security” within the meaning of Sections 8-102 and 8-103 of the New
York UCC (a “Security”), (ii) agrees that it will take no action to cause or permit any
such equity interest to become a Security, (iii) agrees that it will not issue any certificate
representing any such equity interest and (iv) agrees that if, notwithstanding the foregoing, any
such equity interest shall be or become a Security, such Issuer will (and the Grantor that holds
such equity interest hereby instructs such Issuer to) comply with instructions originated by the
Administrative Agent without further consent by such Grantor.




          5.9 Receivables. (a) Other than in the ordinary course of business consistent with
its past practice, or as otherwise permitted by the Credit Agreement, such Grantor will not
(i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any
Receivable or (v) amend, supplement or modify any Receivable in any manner that could adversely
affect the value thereof.




          (b) Such Grantor will deliver to the Administrative Agent a copy of each material demand,
notice or document received by it that questions or calls into doubt the validity or enforceability
of more than 10% of the aggregate amount of the then outstanding Receivables.




          5.10 Contracts. (a) Such Grantor will perform and comply in all material respects
with all its obligations under the Contracts.




          (a) Such Grantor will not amend, modify, terminate or waive any provision of any Contract in
any manner which could reasonably be expected to materially adversely affect the value of such
Contract as Collateral.




          (b) Such Grantor will exercise, as and to the extent appropriate in its reasonable judgment,
each and every material right which it may have under each Contract (other than any right of
termination).




          (c) Such Grantor will deliver to the Administrative Agent a copy of each material demand,
notice or document received by it relating in any way to any Contract that questions the validity
or enforceability of such Contract.




          5.11 Intellectual Property. (a) Such Grantor (either itself or through licensees)
will (i) continue to use each material Trademark on each and every trademark class of goods
applicable to its current line as reflected in its current catalogs, brochures and price lists in
order to maintain such Trademark in full force free from any claim of abandonment for non-use,
(ii) maintain as in the past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and all other notices and
legends required by applicable Requirements of Law, (iv) not adopt or use any mark which is
confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for
the ratable benefit of the Secured Parties, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not (and not permit any licensee or sublicensee thereof










 



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to) do any act or knowingly omit to do any act whereby such Trademark may become invalidated
or impaired in any way.




          (b) Such Grantor (either itself or through licensees) will not do any act, or omit to do any
act, whereby any material Patent may become forfeited, abandoned or dedicated to the public.




          (c) Such Grantor (either itself or through licensees) (i) will employ each material Copyright
and (ii) will not (and will not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of the Copyrights may become invalidated
or otherwise impaired. Such Grantor will not (either itself or through licensees) do any act
whereby any material portion of the Copyrights may fall into the public domain.




          (d) Such Grantor (either itself or through licensees) will not do any act that knowingly uses
any material Intellectual Property to infringe the intellectual property rights of any other
Person.




          (e) Such Grantor will notify the Administrative Agent promptly if it knows, or has reason to
know, that any application or registration relating to any material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, 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 court or tribunal in any country) regarding such Grantor’s ownership of, or
the validity of, any material Intellectual Property or such Grantor’s right to register the same or
to own and maintain the same.




          (f) Whenever such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual Property 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, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the Administrative Agent’s and the
Secured Parties’ security interest in any Copyright, Patent (to the extent commercially reasonable)
or Trademark and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby, provided, that no Grantor shall be required to place any trade secrets
or confidential information in the public domain to the extent such action would have a Material
Adverse Effect.




          (g) Such Grantor will take all reasonable and necessary steps, including, without limitation,
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 each application relating to any material Intellectual Property (and to
obtain the relevant registration) and to maintain each registration of











 



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the material Intellectual Property, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.




          (h) In the event that any material Intellectual Property is infringed, misappropriated or
diluted by a third party, such Grantor shall (i) take such actions as such Grantor shall reasonably
deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the Administrative Agent after
it learns thereof and sue for infringement, misappropriation or dilution, to seek injunctive relief
where appropriate and to recover any and all damages for such infringement, misappropriation or
dilution.




SECTION 6.




REMEDIAL PROVISIONS




          6.1 Certain Matters Relating to Receivables. (a) The Administrative Agent shall have
the right, at any time after the occurrence and during the continuance of an Event of Default, to
make test verifications of the Receivables in any manner and through any medium that it reasonably
considers advisable, and each Grantor shall furnish all such assistance and information as the
Administrative Agent may require in connection with such test verifications. At any time and from
time to time after the occurrence and during the continuance of an Event of Default, upon the
Administrative Agent’s request and at the expense of the relevant Grantor, such Grantor shall cause
independent public accountants or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.




          (b) The Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Administrative Agent’s direction and control after the occurrence and
during the continuance of an Event of Default, and the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the continuance of an Event of
Default. If required by the Administrative Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected by any Grantor,
(i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in
the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in
a Collateral Account maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the Secured Parties only as
provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for
the Administrative Agent and the Secured Parties, segregated from other funds of such Grantor.
Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.




          (c) At the Administrative Agent’s reasonable request, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating to, the agreements
and transactions which gave rise to the Receivables.










 



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          (d) At any time after the occurrence and during the continuance of an Event of Default, each
Grantor will cooperate with the Administrative Agent to establish a system of lockbox accounts,
under the sole dominion and control of the Administrative Agent, into which all Receivables shall
be paid and from which all collected funds will be transferred to a Collateral Account.




          6.2 Communications with Obligors; Grantors Remain Liable. (a) The Administrative
Agent in its own name or in the name of others may at any time after the occurrence and during the
continuance of an Event of Default communicate with obligors under the Receivables and parties to
the Contracts to verify with them to the Administrative Agent’s satisfaction the existence, amount
and terms of any Receivables or Contracts.




          (b) Upon the request of the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables and
parties to the Contracts that the Receivables and the Contracts have been assigned to the
Administrative Agent for the ratable benefit of the Secured Parties and that payments in respect
thereof shall be made directly to the Administrative Agent.




          (c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each of the Receivables (or any agreement giving rise thereto) and the Contracts to observe and
perform all the conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the Administrative Agent
nor any Secured Party shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) or Contract by reason of or arising out of this Agreement or the receipt by
the Administrative Agent or any Secured Party of any payment relating thereto, nor shall the
Administrative Agent or any Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or Contract, to make any payment, to make any inquiry as to the nature or the sufficiency
of any payment received by it or as to the sufficiency of any performance by any party thereunder,
to present or file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be entitled at any
time or times.




          6.3 Pledged Stock. (a) Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(b), each
Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes, in each case paid in the normal course of
business of the relevant Issuer and consistent with past practice, to the extent permitted in the
Credit Agreement, and to exercise all voting and corporate rights with respect to the Pledged
Securities; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Administrative Agent’s reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other Loan Document.




          (b) If an Event of Default shall occur and be continuing and the Administrative Agent shall
give notice of its intent to exercise such rights to the relevant Grantor










 



24



or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Pledged Securities and make
application thereof to the Obligations in the order set forth in Section 6.5, and (ii) any or all
of the Pledged Securities shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting of shareholders of
the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such Pledged Securities as
if it were the absolute owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Securities upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to
such Pledged Securities, and in connection therewith, the right to deposit and deliver any and all
of the Pledged Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.




          (c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged
by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative
Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or further instructions
from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so
complying, and (ii) pay any dividends or other payments with respect to the Pledged Securities
directly to the Administrative Agent if an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative
Agent’s intent to exercise its corresponding rights pursuant to Section 6.3(a) or 6.3(b), unless
otherwise expressly permitted hereby.




          6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the rights of
the Administrative Agent and the Secured Parties specified in Section 6.1 with respect to payments
of Receivables, if an Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and Instruments shall be held by such Grantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of such Grantor, and
shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the
exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in
trust for the Administrative Agent and the Secured Parties) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.




          6.5 Application of Proceeds. At such intervals as may be agreed upon by the Borrower
and the Administrative Agent, or, if an Event of Default shall have occurred and be continuing, at
any time at the Administrative Agent’s election, the Administrative Agent may










 



25



apply all or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account, and any proceeds of the guarantee set forth in Section 2, in payment of the
Obligations in the following order:





     First , to pay incurred and unpaid fees and expenses of the Administrative Agent under
the Loan Documents;




     Second , to the Administrative Agent, for application by it towards payment of amounts
then due and owing and remaining unpaid in respect of the Obligations, pro rata among the
Secured Parties according to the amounts of the Obligations then due and owing and remaining
unpaid to the Secured Parties;




     Third , to the Administrative Agent, for application by it towards prepayment of the
Obligations, pro rata among the Secured Parties according to the amounts of the Obligations
then held by the Secured Parties; and




     Fourth , any balance of such Proceeds remaining after the Obligations (other than
indemnification obligations and other contingent obligations as to which no claim has been
made) shall have been paid in full, no Letters of Credit shall be outstanding (unless fully
cash collateralized) and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.



          6.6 Code and Other Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of a secured party
under the New York UCC or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law referred to below)
to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale
or sales, at any exchange, broker’s board or office of the Administrative Agent or any Secured
Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the
Administrative Agent’s request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably select, whether at
such Grantor’s premises or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6 with respect to any Grantor’s Collateral, after
deducting all reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping










 



26



of any of the Collateral of such Grantor or in any way relating to the Collateral of such
Grantor or the rights of the Administrative Agent and the Secured Parties hereunder with respect
thereto, including, without limitation, reasonable attorneys’ fees and disbursements, to the
payment in whole or in part of the Obligations of such Grantor, in the order specified in
Section 6.5, and only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, including, without limitation,
Section 9-615(a)(3) of the New York UCC, need the Administrative Agent account for the surplus, if
any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims,
damages and demands it may acquire against the Administrative Agent or any Secured Party arising
out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.




          6.7 Investment Property. (a)  Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and
may be compelled to resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale thereof. Each Grantor
acknowledges and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for
the period of time necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even if such Issuer would
agree to do so.




          (b) Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done
all such other acts as may be reasonably necessary to make such sale or sales of all or any portion
of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any and
all other applicable Requirements of Law. Each Grantor further agrees that a breach of any of the
covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent
and the Secured Parties, that the Administrative Agent and the Secured Parties have no adequate
remedy at law in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such
Grantor hereby waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.




          6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent or any Secured Party
to collect such deficiency.










 



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SECTION 7.




THE ADMINISTRATIVE AGENT




          7.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Grantor
hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and instruments which may be
reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without
limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the
power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any
or all of the following:





     (i) in the name of such Grantor or its own name, or otherwise, take possession of and
indorse and collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Receivable or Contract or with respect to any other
Collateral and file any claim or take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or Contract or with respect to
any other Collateral whenever payable;




     (ii) in the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Administrative Agent may
request to evidence the Administrative Agent’s and the Secured Parties’ security interest in
such Intellectual Property (in the case of any Patents, to the extent commercially
reasonable) and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby;




     (iii) pay or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;




     (iv) execute, in connection with any sale provided for in Section 6.6 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer with respect to the
Collateral;




     (v) (1) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (3) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to









 



28



collect the Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral;(6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases as the
Administrative Agent may reasonably deem appropriate; (7) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), throughout the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion determine; and
(8) generally, sell, transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the Administrative Agent
were the absolute owner thereof for all purposes, and do, at the Administrative Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts and things
which the Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s and the Secured Parties’ security interests
therein and to effect the intent of this Agreement, all as fully and effectively as such
Grantor might do; and




     (vi) license or sublicense whether on an exclusive or non-exclusive basis, any
Intellectual Property for such term and on such conditions and in such manner as the
Administrative Agent shall in its sole judgment determine and, in connection therewith, such
Grantor hereby grants to the Administrative Agent for the benefit of the Secured Parties a
royalty-free, world-wide irrevocable license of its Intellectual Property.



          Anything in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent
agrees that it will not exercise any rights under the power of attorney provided for in this
Section 7.1(a) unless an Event of Default shall have occurred and be continuing.




          (b) If any Grantor fails to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.




          (c) The expenses of the Administrative Agent incurred in connection with actions undertaken as
provided in this Section 7.1, together with interest thereon at a rate per annum equal to the rate
per annum at which interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative
Agent on demand.




          (d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the security interests
created hereby are released.




          7.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC or otherwise, shall be to use reasonable care.










 



29



Grantors hereby agree that the Administrative Agent shall be deemed to have used reasonable
care with respect to the Collateral in its possession if it deals with such Collateral in the same
manner as the Administrative Agent deals with similar property for its own account. Neither the
Administrative Agent, any Secured Party nor any of their respective officers, directors, employees
or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers conferred on the
Administrative Agent and the Secured Parties hereunder are solely to protect the Administrative
Agent’s and the Secured Parties’ interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The Administrative Agent
and the Secured Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.




          7.3 Execution of Financing Statements. Pursuant to any applicable law, each Grantor
authorizes the Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Administrative Agent determines appropriate to
perfect the security interests of the Administrative Agent under this Agreement. Each Grantor
authorizes the Administrative Agent to use the collateral description “all personal property” or
“all assets” in any such financing statements. Each Grantor hereby ratifies and authorizes the
filing by the Administrative Agent of any financing statement with respect to the Collateral made
prior to the date hereof.




          7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect to any action taken
by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting right, request, judgment or other right or remedy provided for herein or resulting
or arising out of this Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative Agent and the Grantors,
the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such authority.
Notwithstanding any other provision herein or in any Loan Document, the only duty or responsibility
of the Administrative Agent to any Qualified Counterparty under this Agreement is the duty to remit
to such Qualified Counterparty any amounts to which it is entitled pursuant to Section 6.5.




          7.5 Irrevocable Proxy. (a) Solely with respect to Article 8 Matters, each Grantor
hereby irrevocably grants and appoints the Administrative Agent, for the benefit of the Secured
Parties, from the date of this Agreement until the termination of this Agreement in accordance with
its terms, as such Grantor’s true and lawful proxy, for and in such Grantor’s name, place and stead
to vote the Pledged Securities pledged by such Grantor hereunder, whether directly or indirectly,
beneficially or of record, now owned or hereafter acquired, with respect to










 



30



such Article 8 Matters. The proxy granted and appointed in this Section 7.5 shall include the
right to sign such Grantor’s name (as a member or partner, as the case may be of the applicable
Issuer) to any consent, certificate or other document relating to an Article 8 Matter and the
Pledged Securities pledged by such Grantor hereunder that applicable law may permit or require, to
cause the Pledged Securities pledged by such Grantor hereunder to be voted in accordance with the
preceding sentence. Each Grantor hereby represents and warrants that there are no other proxies
and powers of attorney with respect to an Article 8 Matter and the Pledged Securities pledged by
such Grantor hereunder that such Grantor may have granted or appointed to any Person other than the
Administrative Agent. Each Grantor will not give a subsequent proxy or power of attorney or enter
into any other voting agreement with respect to the Pledged Securities pledged by such Grantor
hereunder with respect to any Article 8 Matter and any attempt to do so with respect to an Article
8 Matter shall be void and of no effect.




          (b) As used herein, “Article 8 Matter” means any action, decision, determination or
election by the Issuer or its member(s) that its membership interests or other equity interests, or
any of them, be, or cease to be, a “security” as defined in and governed by Article 8 of the
Uniform Commercial Code, and all other matters related to any such action, decision, determination
or election.




          (c) The proxies and powers granted by the Grantors pursuant to this Agreement are coupled with
an interest and are given to secure the performance of the Grantors’ obligations.




SECTION 8.




MISCELLANEOUS




          8.1 Amendments in Writing. None of the terms or provisions of this Agreement may be
waived, amended, supplemented or otherwise modified except in accordance with Section 10.1 of the
Credit Agreement. No consent of any Qualified Counterparty shall be required for any waiver,
amendment, supplement or other modification to this Agreement.




          8.2 Notices. All notices, requests and demands to or upon the Administrative Agent or
any Grantor hereunder shall be effected in the manner provided for in Section 10.2 of the Credit
Agreement; provided that any such notice, request or demand to or upon any Guarantor shall
be addressed to such Guarantor at its notice address set forth on Schedule 1.




          8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative
Agent nor any Secured Party shall by any act (except by a written instrument pursuant to
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor
any delay in exercising, on the part of the Administrative Agent or any Secured Party, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Administrative Agent or any
Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Administrative Agent










 



31



or such Secured Party would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.




          8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees to pay, or
reimburse each Secured Party and the Administrative Agent for, all its costs and expenses incurred
in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise
enforcing or preserving any rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the fees and disbursements of primary counsel
to the Secured Parties and the Administrative Agent (including local counsel in each jurisdiction
deemed necessary by the Administrative Agent).




          (b) Each Guarantor agrees to pay, and to save the Administrative Agent and the Secured Parties
harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions contemplated by this
Agreement.




          (c) Each Guarantor agrees to pay, and to save the Administrative Agent and the Secured Parties
harmless from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to
the execution, delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to Section 10.5 of the Credit Agreement.




          (d) The agreements in this Section shall survive repayment of the Obligations and all other
amounts payable under the Credit Agreement and the other Loan Documents.




          8.5 Successors and Assigns. This Agreement shall be binding upon the successors and
assigns of each Grantor and shall inure to the benefit of the Administrative Agent and the Secured
Parties and their successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior written consent of
the Administrative Agent.




          8.6 Set-Off. Each Grantor hereby irrevocably authorizes the Administrative Agent and
each Secured Party at any time and from time to time while an Event of Default shall have occurred
and be continuing, without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to set-off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such
Secured Party to or for the credit or the account of such Grantor, or any part thereof in such
amounts as the Administrative Agent or such Secured Party may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such Secured Party
hereunder and claims of every nature and description of the Administrative Agent or such Secured
Party against such Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the Administrative Agent or such










 



32



Secured Party may elect, whether or not the Administrative Agent or any Secured Party has made
any demand for payment and although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Secured Party shall notify such Grantor promptly of
any such set-off and the application made by the Administrative Agent or such Secured Party of the
proceeds thereof, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Administrative Agent and each Secured
Party under this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or such Secured Party may have.




          8.7 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument.




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




          8.9 Section Headings. The Section headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.




          8.10 Integration. This Agreement and the other Loan Documents represent the agreement
of the Grantors, the Administrative Agent and the Secured Parties with respect to the subject
matter hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Secured Party relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Loan Documents.




          8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.




          8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:




          (a) submits for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;




          (b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;










 



33




          (c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;




          (d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction; and




          (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.




          8.13 Acknowledgments. Each Grantor hereby acknowledges that:




          (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;




          (b) neither the Administrative Agent nor any Secured Party has any fiduciary relationship with
or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand, and the Administrative Agent
and Secured Parties, on the other hand, in connection herewith or therewith is solely that of
debtor and creditor; and




          (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and
the Secured Parties.




          8.14 Additional Grantors. Each Subsidiary of the Borrower that is required to become
a party to this Agreement pursuant to Section 6.10 of the Credit Agreement shall become a Grantor
for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex I hereto.




          8.15 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the
other Obligations (other than (i) the Borrower Hedge Agreement Obligations and the Guarantor Hedge
Agreement Obligations and (ii) such indemnification obligation and other similar contingent
obligations as to which no claim has been made) shall have been paid in full, the Commitments have
been terminated and no Letters of Credit shall be outstanding (unless fully cash collateralized),
the Collateral shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall revert to the Grantors.
At the request and sole expense of any Grantor following any such termination, the Administrative
Agent shall promptly deliver to such Grantor any Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.




          (b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any
Grantor in a transaction not prohibited under the Credit Agreement, then the










 



34



Administrative Agent, at the request and sole expense of such Grantor, shall execute and
deliver to such Grantor all releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral. At the request and sole expense of the
Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that
all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed
of in a transaction not prohibited under the Credit Agreement; provided that the Borrower
shall have delivered to the Administrative Agent, at least five Business Days prior to the date of
the proposed release, a written request for release identifying the relevant Subsidiary Guarantor
and the terms of the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Credit Agreement and the other Loan Documents.




          (c) No consent of any Qualified Counterparty shall be required for any release of Collateral
or Guarantors pursuant to this Section.




          (d) The circumstances expressly set forth in this Section 8.15, that give rise to an
obligation by the Administrative Agent and the Lenders to release its security interest in the
applicable portion of Collateral, are in addition to, and not in lieu of, the release obligations
of the Administrative Agent and the Lenders set forth under Section 10.15 of the Credit Agreement.




          8.16 WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF,
EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.




          8.17 Limitation on Liability. Notwithstanding anything appearing to the contrary in
this Agreement or the Credit Agreement or any of the other Loan Documents, neither the
Administrative Agent nor any Lender shall be entitled to enforce the liability and obligation of
any Grantor to pay, perform and observe the obligations contained in this Agreement by any action
or proceeding against any member, shareholder, partner, manager, director, officer, agent,
affiliate, beneficiary, trustee or employee of any Grantor (or any direct or indirect member,
shareholder, partner or other owner of any such member, shareholder, partner, manager, director,
officer, agent, affiliate or employee of any Grantor, or any director, officer, employee, agent,
manager or trustee of any of the foregoing); provided that, nothing in this Section 8.17 shall have
the effect of exculpating from liability any entity that is itself a Grantor under this Agreement.











 



 




          IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and Collateral Agreement
to be duly executed and delivered as of the date first above written.




	 	 	 	 	 
	 	ARCHSTONE-SMITH OPERATING TRUST

 	 
	 	By:  	 /s/
George Hatzmann	 
	 	 	Name: George Hatzmann	 	 
	 	 	Title: Authorized Signatory	 	 
	 



[Signature Page to Guarantee and Collateral Agreement (ASOT)]










 




 


	 	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY GUARANTOR, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Tishman Speyer Archstone-Smith Multifamily Guarantor (GP), L.L.C.,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ George Hatzmann	 	 
	 

	 	 	 	 	 	 

Name: George Hatzmann
	 	 
	 

	 	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL 

GUARANTOR, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ George Hatzmann	 	 
	 

	 	 	 	 	 	 

Name: George Hatzmann
	 	 
	 

	 	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I CORP.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ George Hatzmann	 	 
	 

	 	 	 	 	 	 

Name: George Hatzmann
	 	 
	 

	 	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PRINCIPAL, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor,
L.L.C., 

its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ George Hatzmann	 	 
	 

	 	 	 	 	 	 

Name: George  Hatzmann
	 	 
	 

	 	 	 	 	 	Title: Authorized Signatory	 	 




[Signature Page to Guarantee and Collateral Agreement (ASOT)]











 



 


	 	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY NOMINEE (GP), L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title:
Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY NOMINEE, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Tishman Speyer Archstone-Smith Multifamily Nominee (GP), L.L.C.,
its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ George Hatzmann	 	 
	 

	 	 	 	 	 	 

Name: George Hatzmann
	 	 
	 

	 	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES I, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title:
Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES II, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title: Authorized
Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES III, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 


[Signature Page to Guarantee and Collateral Agreement (ASOT)]













 



 


	 	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY SERIES IV, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ Bradley Turk	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: Bradley Turk	 	 
	 	 	 	 	Title:
Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH OC/SD JV HOLDINGS, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title:
Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH OC/SD JV, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title:
Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL GUARANTOR I, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title: Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL GUARANTOR II, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 /s/ George Hatzmann	 	 	 	 
	 	 	 	 	   	 	 
	 	 	 	 	Name: George Hatzmann	 	 
	 	 	 	 	Title:
Authorized Signatory	 	 




[Signature Page to Guarantee and Collateral Agreement (ASOT)]











 



 

	 	 	 	 	 
	 	[SUBSIDIARY GUARANTORS]

 	 
	 	By:  	 /s/ George Hatzmann	 
	 	 	Name:  George Hatzmann	 	 
	 	 	Title:  Authorized Signatory	 	 
	 



[Signature Page to Guarantee and Collateral Agreement (ASOT)]











 



 




The undersigned hereby acknowledges and agrees
that, upon the effectiveness of the Merger,
it will expressly assume all of the rights and obligations
of Holdings set forth herein and that all references
herein to “Holdings” shall thereupon be deemed
to be references to the undersigned, as the surviving
entity of the Merger.




ARCHSTONE-SMITH TRUST




	 	 	 	 	 
	 	 	 
	 	By:  	 /s/ George Hatzmann	 
	 	 	Name:  George Hatzmann	 	 
	 	 	Title:  Authorized Signatory	 	 
	 



[Signature Page to Guarantee and Collateral Agreement (ASOT)]