Document:

Exhibit 10.2

 

THIS GUARANTEE AND COLLATERAL AGREEMENT is subject to the
terms and provisions of the Intercreditor Agreement, dated as of June 16,
2010 (as such agreement may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), among Royal Bank of Canada, as the Term Loan Collateral Agent, PNC
Bank, National Association, as the Revolving Credit Collateral Agent and the
Grantors (as defined below)

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

TRIUMPH GROUP, INC.

and certain of its Subsidiaries

in favor of

PNC BANK, NATIONAL ASSOCIATION,

as Administrative Agent

and as Collateral Agent for the other Secured Parties identified herein

 

Dated as of June 16, 2010

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINED TERMS

  	
  2

  
	
   

  	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
  1.2

  	
  Other Definitional Provisions

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  GUARANTEE

  	
  7

  
	
   

  	
  2.1

  	
  Guarantee

  	
  7

  
	
   

  	
  2.2

  	
  Right of Contribution

  	
  8

  
	
   

  	
  2.3

  	
  No Subrogation

  	
  8

  
	
   

  	
  2.4

  	
  Amendments, etc. with respect to the Borrower
  Obligations

  	
  8

  
	
   

  	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
  9

  
	
   

  	
  2.6

  	
  Reinstatement

  	
  10

  
	
   

  	
  2.7

  	
  Payments

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  GRANT OF SECURITY INTEREST

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  11

  
	
   

  	
  4.1

  	
  Title; No Other Liens

  	
  11

  
	
   

  	
  4.2

  	
  Perfected First Priority Liens

  	
  12

  
	
   

  	
  4.3

  	
  Jurisdiction of Organization; Chief Executive Office

  	
  12

  
	
   

  	
  4.4

  	
  Inventory and Equipment

  	
  12

  
	
   

  	
  4.5

  	
  Farm Products

  	
  12

  
	
   

  	
  4.6

  	
  Investment Property

  	
  13

  
	
   

  	
  4.7

  	
  [RESERVED]

  	
  13

  
	
   

  	
  4.8

  	
  [RESERVED]

  	
  13

  
	
   

  	
  4.9

  	
  Intellectual Property

  	
  13

  
	
   

  	
  4.10

  	
  Commercial Tort Claims

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  COVENANTS

  	
  14

  
	
   

  	
  5.1

  	
  Delivery of Instruments, Certificated Securities and
  Chattel Paper

  	
  14

  
	
   

  	
  5.2

  	
  [RESERVED]

  	
  14

  
	
   

  	
  5.3

  	
  [RESERVED]

  	
  14

  
	
   

  	
  5.4

  	
  Maintenance of Perfected Security Interest; Further
  Documentation

  	
  14

  
	
   

  	
  5.5

  	
  Changes in Name, etc.

  	
  15

  
	
   

  	
  5.6

  	
  Notices

  	
  15

  
	
   

  	
  5.7

  	
  Investment Property

  	
  15

  
	
   

  	
  5.8

  	
  [RESERVED]

  	
  16

  
	
   

  	
  5.9

  	
  Intellectual Property

  	
  16

  
	
   

  	
  5.10

  	
  Commercial Tort Claims

  	
  18

  
	
   

  	
  5.11

  	
  Further Actions of Grantors

  	
  18

  
	
   

  	
  5.12

  	
  Compliance with Credit Agreement

  	
  18

  

 

i

 

	
  6.

  	
  REMEDIAL PROVISIONS

  	
  18

  
	
   

  	
  6.1

  	
  Certain Matters Relating to Receivables

  	
  18

  
	
   

  	
  6.2

  	
  Communications with Obligors; Grantors Remain Liable

  	
  19

  
	
   

  	
  6.3

  	
  Pledged Stock

  	
  19

  
	
   

  	
  6.4

  	
  Proceeds to be Turned Over To Administrative Agent

  	
  20

  
	
   

  	
  6.5

  	
  Application of Proceeds

  	
  21

  
	
   

  	
  6.6

  	
  Code and Other Remedies

  	
  21

  
	
   

  	
  6.7

  	
  Registration Rights

  	
  22

  
	
   

  	
  6.8

  	
  Subordination

  	
  23

  
	
   

  	
  6.9

  	
  Deficiency

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  THE ADMINISTRATIVE AGENT

  	
  23

  
	
   

  	
  7.1

  	
  Administrative Agent’s Appointment as
  Attorney-in-Fact, etc.

  	
  23

  
	
   

  	
  7.2

  	
  Duty of Administrative Agent

  	
  25

  
	
   

  	
  7.3

  	
  Execution of Financing Statements

  	
  25

  
	
   

  	
  7.4

  	
  Authority of Administrative Agent

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  MISCELLANEOUS

  	
  26

  
	
   

  	
  8.1

  	
  Amendments in Writing

  	
  26

  
	
   

  	
  8.2

  	
  Notices

  	
  26

  
	
   

  	
  8.3

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
  26

  
	
   

  	
  8.4

  	
  Enforcement Expenses; Indemnification

  	
  26

  
	
   

  	
  8.5

  	
  Successors and Assigns

  	
  26

  
	
   

  	
  8.6

  	
  Set-Off

  	
  27

  
	
   

  	
  8.7

  	
  Counterparts

  	
  27

  
	
   

  	
  8.8

  	
  Severability

  	
  27

  
	
   

  	
  8.9

  	
  Section Headings

  	
  27

  
	
   

  	
  8.10

  	
  Integration

  	
  27

  
	
   

  	
  8.11

  	
  GOVERNING LAW

  	
  27

  
	
   

  	
  8.12

  	
  Submission To Jurisdiction; Waivers

  	
  28

  
	
   

  	
  8.13

  	
  Acknowledgements

  	
  28

  
	
   

  	
  8.14

  	
  Additional Grantors

  	
  28

  
	
   

  	
  8.15

  	
  Releases

  	
  29

  
	
   

  	
  8.16

  	
  [RESERVED]

  	
  29

  
	
   

  	
  8.17

  	
  Intercreditor Agreement

  	
  29

  

 

ii

 

SCHEDULES

 

	
  Schedule
  1

  	
  Notice
  Addresses of Guarantors

  
	
   

  	
   

  
	
  Schedule
  2

  	
  Investment
  Property

  
	
   

  	
   

  
	
  Schedule
  3

  	
  Perfection
  Matters

  
	
   

  	
   

  
	
  Schedule
  4

  	
  Jurisdictions
  of Organization and Chief Executive Offices

  
	
   

  	
   

  
	
  Schedule
  5

  	
  Inventory
  and Equipment Locations

  
	
   

  	
   

  
	
  Schedule
  6

  	
  Intellectual
  Property

  

 

iii

 

GUARANTEE AND COLLATERAL AGREEMENT

 

GUARANTEE
AND COLLATERAL AGREEMENT, dated as of June 16, 2010, made by TRIUMPH GROUP, INC. (“TGI”) and each of its
Subsidiaries which are signatories hereto (TGI and such signatories, together
with any other entity that may become a party hereto as provided herein, the “Grantors”),
in favor of PNC BANK, NATIONAL ASSOCIATION, as
Administrative Agent and Collateral Agent for the banks and other financial
institutions or entities (the “Lenders”) from time to time parties to the
Credit Agreement, dated as of May 10, 2010 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among TGI and
the other borrowers now or hereafter a party thereto (collectively, the “Borrowers”),
the Lenders, the guarantors now or hereafter a party thereto and the
Administrative Agent and as Collateral Agent for the Lenders, and as Collateral
Agent for Brown Brothers Harriman & Co. (“BBH”) pursuant to a
Collateral Agency Agreement of even date herewith between the Agent, BBH, Royal
Bank of Canada and the Grantors.  PNC
Bank, National Association, acting in the capacity as Administrative Agent
and/or Collateral Agent shall be referred to herein as the “Administrative
Agent”.

 

WITNESSETH:

 

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

 

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

 

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

 

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

 

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

 

WHEREAS,
TGI is obligated to BBH pursuant to the IDB Guaranty which  provides, in part, that if TGI or its
Subsidiaries grants a lien on any of their assets to secure obligations under
the Credit Agreement, then such grantor shall grant a pari passu lien on such
assets to BBH to secure the Specified IDB Obligations.

 

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 Borrowers
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:

 

 

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 Pennsylvania UCC:  Accessions, Accounts, Certificated Security,
Chattel Paper, Commercial Tort Claims, Documents, Electronic Chattel Paper,
Equipment, Farm Products, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Letter-of-Credit Rights and Supporting Obligations.

 

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

 

“Administrative
Agent”:  as defined in the introductory
paragraph.

 

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

 

“BBH”:  Brown Brothers Harriman & Co.

 

“Borrower
Obligations”:  the collective reference
to (i) the unpaid principal of and interest on the Loans made to any
Borrower and all other obligations and liabilities of any Borrower (including,
without limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans 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 any 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 (or, in the case of any Bank-Provided
Hedge or any Other Bank Provided Financial Service Product, any Affiliate of
any Lender), 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, the Credit Agreement, this Agreement, the other Loan
Documents, any Bank-Provided Hedge, or any Other Bank Provided Financial
Service Product or any other document made, delivered or given by any Borrower
in connection with any of the foregoing, 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 Borrowers pursuant to the terms of any of the
foregoing agreements); and (ii) the Specified IDB Obligations.

 

“Borrowers”:  as defined in the introductory paragaraph.

 

“Cash
Collateralized” or “Cash Collateralization”: 
with respect to Letters of Credit, means that such Letters of
Credit  have been cash collateralized or
supported by one or more backstop letters of credit from an issuer, in an
amount and in a form reasonably satisfactory to the Issuing Bank.

 

“Collateral”:  as defined in Section 3.

 

2

 

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

 

“Contingent
Borrower Obligations”:  contingent
indemnification obligations for which no claims have been asserted and
obligations in respect of Letters of Credit that are Cash Collateralized.

 

“Copyrights”:  (i) all copyrights and works of
authorship 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.

 

“Credit
Agreement”:  as defined in the
introductory paragraph.

 

“Foreign
Subsidiary”:  (a) any Subsidiary
organized under the laws of any jurisdiction outside the United States of
America and (b) any Subsidiary of a Subsidiary described in clause (a).

 

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

 

“Grantors”:  as defined in the introductory paragraph.

 

“Guarantor
Obligations”:  with respect to any
Guarantor, 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, any Bank-Provided Hedge or any Other Bank Provided
Financial Service Product 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 the Lenders
that are required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).

 

“Guarantors”:  the entities designated as Guarantors on the
signature pages hereto and each other entity that joins this Agreement as
a Guarantor pursuant to Section 10. 20 [Joinder of Borrowers and
Guarantors] of the Credit Agreement.

 

“Hedge
and Financial Service Obligations”: 
obligations in respect of Bank-Provided Hedges and Other Bank Provided
Financial Service Products.

 

“IDB
Guaranty” shall mean the Amended and Restated Guaranty And Suretyship
Agreement, dated as of April 18, 2008, between TGI and BBH, as amended by
an amendment thereto dated June 16, 2010, and as hereafter amended from
time to time provided that the principal amount of indebtedness guaranteed
thereunder shall not exceed, in the aggregate, $10,800,000.00.

 

“Indiana
Bonds”:  City of Shelbyville, Indiana,
Economic Development Revenue Bond (K-T Corporation Project), Series 2005A,
in the original aggregate principal amount of 

 

3

 

$500,000,
and City of Shelbyville, Indiana, Economic Development Revenue Bond (K-T
Corporation Project), Series 2005B, in the original aggregate principal
amount of $5,800,000, issued in each case pursuant to the Indiana Financing
Agreement.

 

“Indiana
Borrower”:  The Triumph Group Operations, Inc.,
a Delaware corporation, as the borrower under the Indiana Financing Agreement.

 

“Indiana
Financing Agreement”:  the Financing
Agreement dated November 29, 2005, among the City of Shelbyville, Indiana,
the Indiana Borrower and BBH, as amended by separate amendments dated
April 22, 2008, and June 16, 2010, and as may be further amended from
time to time.

 

“Intellectual
Property”:  the collective reference to (a) all
rights, priorities and privileges relating to intellectual property  arising under United States laws, including,
without limitation, the Copyrights, the Patents, the Trademarks, 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 (to the
extent such Copyrights, Patents, Trademarks and rights arise under United
States law) (collectively, the “U.S. Intellectual Property”) and (b) all
rights, priorities and privileges relating to intellectual property arising
under multinational or foreign laws or otherwise (other than under United
States law), including without limitation, the Copyrights, the Patents, the
Trademarks, 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, other than those described in clause (a) above
(collectively, the “Foreign Intellectual Property”).

 

“Intercompany
Note”:  any promissory note evidencing
loans made by any Grantor to any Borrower or any Subsidiary of any Borrower.

 

“Investment
Property”:  the  collective  reference  to  (i) all  “investment  property”  as  such  term is defined in Section 9-102(a)(49)
of the Pennsylvania UCC (other than any Foreign Subsidiary Voting Stock
excluded from the definition of “Pledged Stock”) owned by a Grantor 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.

 

“Lenders”:  as defined in the introductory paragraph.

 

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

 

“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, including those listed on Schedule 6, and (iii) all reissues
and extensions thereof, all goodwill associated therewith, all divisions,
continuations and continuations-in-part of the foregoing.

 

4

 

“Pennsylvania
Bond”:  Montgomery County Industrial
Development Authority Economic Development Revenue Bond (Triumph Controls, LLC
Project), Series 2008, in the aggregate principal amount of $5,000,000,
issued pursuant to the Pennsylvania Financing Agreement.

 

“Pennsylvania
Borrower”:  Triumph Controls, LLC, a
Delaware limited liability company, as the borrower under the Pennsylvania
Financing Agreement.

 

“Pennsylvania
Financing Agreement”:  the Financing
Agreement dated April 18, 2008, among the Montgomery County Industrial
Development Authority, the Pennsylvania Borrower and BBH, as amended by a
separate amendment dated June 16, 2010, and as may be further amended from
time to time.

 

“Pennsylvania
UCC”:  the Uniform Commercial Code as
from time to time in effect in the Commonwealth of Pennsylvania.

 

“Permitted
Pari Passu Liens”:  as defined in Section 4.2.

 

“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
Stock”:  the shares of Capital Stock
directly owned by each Grantor, including the shares of Capital Stock listed on
Schedule 2, together with any shares of Capital Stock owned directly in
the future by any Grantor and any certificates representing such shares of
Capital Stock; provided that Pledged Stock shall not include (i) more than
65% of the total outstanding Foreign Subsidiary Voting Stock of any Foreign
Subsidiary  or more than 65% of any
interest in a U.S.-Owned DRE, (ii) the capital stock of Triumph
Receivables, LLC, or (iii) any equity or interests in Triumph Group
Charitable Foundation.

 

“Proceeds”:  all “proceeds” as such term is defined in Section 9-102(a)(64)
of the Pennsylvania UCC and, in any event, shall include, without limitation,
all dividends or other income from the Investment Property, collections thereon
or distributions or payments with respect thereto.

 

“Receivable”:  any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).

 

“Requirement
of Law”:  as to any Person, the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Official Body, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Secured
Parties”:  the collective reference to
the Administrative Agent, the Lenders and any affiliate of any Lender, and BBH
to which Borrower Obligations or Guarantor Obligations, as applicable, are
owed.

 

5

 

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

 

“Specified
IDB Obligations”:  the collective
reference to:  (i) the Indebtedness
of the Indiana Borrower to BBH with respect to the Indiana Bonds, including,
without limitation, all principal, accrued and unpaid interest and all other
costs and expenses, advances, breakage or other prepayment costs, and all other
liabilities or obligations, 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 the Indiana Bonds, the Indiana Financing
Agreement and each Borrower Financing Document (as defined in the Indiana
Financing Agreement); (ii) the Indebtedness of the Pennsylvania Borrower
to BBH with respect to the Pennsylvania Bonds, including, without limitation,
all principal, accrued and unpaid interest and all other costs and expenses,
advances, breakage or other prepayment costs, and all other liabilities or
obligations, 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 the Pennsylvania Bonds, the Pennsylvania Financing
Agreement and each Borrower Financing Document (as defined in the Pennsylvania
Financing Agreement); and (iii) the Indebtedness of TGI arising pursuant
to the IDB Guaranty, provided that the aggregate principal amount of the
Specified IDB Obligations shall not exceed $10,800,000.00.

 

“TGI”:  as defined in the introductory paragraph.

 

“Trademarks”:  (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, trade dress, domain names, 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.

 

“Vehicles”:  all aircraft, aircraft engines and other
parts or components (but only to the extent that such aircraft, aircraft
engines and other parts or components (i) constitute Equipment of the
relevant Grantor (ii) do not constitute Inventory of the relevant Grantor
and otherwise are not  held for sale in
the ordinary course of business and (iii) are covered by a certificate of
title under federal law), boats, cars, trucks, trailers, construction and earth
moving equipment covered by a certificate of title law of any state or a
comparable federal law and all tires and other appurtenances to any of the
foregoing.

 

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.

 

6

 

(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.

 

2.                                      GUARANTEE

 

2.1                               Guarantee.

 

(a)                                  Each of the
Guarantors and Borrowers hereby, jointly and severally, unconditionally and
irrevocably, guarantees 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 Borrowers when
due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations.

 

(b)                                 Anything herein
or in any other Loan Document to the contrary notwithstanding, 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 the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2).

 

(c)                                  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 contained in this Section 2 or affecting the rights and remedies
of the Administrative Agent or any Lender hereunder.

 

(d)                                 The guarantee
contained in this Section 2 shall remain in full force and effect until
all the Borrower Obligations and the obligations of each Guarantor under the
guarantee contained in this Section 2 shall have been satisfied by
indefeasible payment in full, expiration of or Cash Collateralization of all
Letters of Credit and termination of the Commitments, notwithstanding that from
time to time during the term of the Credit Agreement the Borrowers may be free
from any Borrower Obligations.

 

(e)                                  No payment made
by the Borrowers, any of the Guarantors, any other guarantor or any other
Person or received or collected by the Administrative Agent or any Lender from
the Borrowers, 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 shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Borrower Obligations or any payment received or collected
from such Guarantor in respect of the Borrower Obligations), remain liable for
the Borrower Obligations up to the maximum liability of such Guarantor
hereunder until the Borrower Obligations are indefeasibly paid in full, all
Letters of Credit have expired or have been Cash Collateralized and the
Commitments shall have been terminated.

 

7

 

2.2                               Right
of Contribution.

 

Each
Guarantor hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder, 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.  Each Guarantor’s right of
contribution 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 any Guarantor to the
Administrative Agent and the Secured Parties, and each Guarantor shall remain
liable to the Administrative Agent and the Secured Parties for the full amount
guaranteed by such Guarantor hereunder.

 

2.3                               No
Subrogation.

 

Notwithstanding
any payment made by any Guarantor hereunder or any set-off or application of
funds of any Guarantor by the Administrative Agent or any Secured Party, no
Guarantor shall be entitled to be subrogated in whole or in part to any of the
rights or claims of the Administrative Agent or any Secured Party against the
Borrowers 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 any portion thereof, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from
the Borrowers or any other Guarantor in respect of payments made by such
Guarantor hereunder, until all amounts owing to the Administrative Agent and
the Secured Parties by the Borrowers on account of the Borrower Obligations are
indefeasibly paid in full, all Letters of Credit have expired or been Cash
Collateralized and the Commitments shall have been terminated.  If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Administrative Agent in the
exact form received by such Guarantor (with any necessary endorsement or assignment),
to be applied against the Borrower Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.

 

2.4                               Amendments, etc.
with respect to the Borrower Obligations.

 

Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, (i) any demand for payment of any of the Borrower
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 continued, (ii) the Borrower 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, (iii) 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, from time to time, and (iv) 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 

 

8

 

Obligations
may be sold, exchanged, waived, surrendered or released.  Neither the Administrative Agent nor any
Secured Party shall have any obligation to protect, secure, perfect or insure
any Lien (or any property subject thereto) at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this Section 2.

 

2.5                               Guarantee
Absolute and Unconditional.

 

Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations 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 Borrowers 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 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 Borrowers or any of
the Guarantors with respect to the Borrower Obligations.  Each Guarantor understands and agrees that
the guarantee 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 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 Lender, (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
Borrowers 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 Borrowers or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrowers for
the Borrower Obligations, or of such Guarantor under the guarantee 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 Lender 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 Borrowers, 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 Lender to make any such demand, to pursue such other rights or remedies or
to collect any payments from the Borrowers, 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 Borrowers, 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
hereunder, 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 Lender against any Guarantor.  For
the purposes hereof “demand” shall include the commencement and continuance of
any legal proceedings.

 

9

 

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 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
Borrowers 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
Borrowers or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.

 

2.7                               Payments.

 

Each
Guarantor hereby guarantees that payments hereunder will be paid to the
Administrative Agent without set-off or counterclaim in Dollars in immediately
available funds at the office of the Administrative Agent located at 249 Fifth
Avenue, Pittsburgh, PA 15222.

 

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 the Obligations:

 

(a)                                  all Accounts;

 

(b)                                 all Chattel
Paper (including, without limitation, Electronic Chattel Paper);

 

(c)                                  all Contracts;

 

(d)                                 all Documents
(other than title documents with respect to Vehicles);

 

(e)                                  all Equipment;

 

(f)                                    all Fixtures
and other Goods;

 

(g)                                 all General
Intangibles including Payment Intangibles and Software;

 

(h)                                 all Instruments;

 

(i)                                     all U.S.
Intellectual Property, all U.S. Intellectual Property agreements, and all
Foreign Intellectual Property for which filings or other actions outside the
United States are not required for perfection of the security interest granted
herein;

 

(j)                                     all Inventory;

 

(k)                                  all Investment
Property;

 

10

 

(l)                                     all
Letter-of-Credit Rights;

 

(m)                               all Commercial
Tort Claims described on Schedule 7;

 

(n)                                 all other
personal property not otherwise described above (except for any property
specifically excluded from any clause in this section above, and any property
specifically excluded from any defined term used in any clause of this section
above);

 

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

 

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

 

provided,
however, that notwithstanding any of the other provisions set forth in this Section 3,
this Agreement shall not constitute a grant of a security interest in
(i) any property to the extent that such grant of a security interest is
prohibited by any Requirements of Law of an Official Body, requires a consent
not obtained of any Official Body pursuant to such Requirement of Law or is
prohibited by, or constitutes a breach or default under or results in the
termination of or requires any consent not obtained under, any contract,
license, agreement, instrument or other document evidencing or giving rise to
such property or evidencing or creating any purchase money lien or capital
lease obligation regarding such property permitted by the Credit Agreement or,
in the case of any Investment Property, Pledged Stock or Pledged Notes (other
than any of the foregoing issued by a Grantor), any applicable shareholder or
similar agreement, except to the extent that such Requirement of Law or the
term in such contract, license, agreement, instrument or other document or
shareholder or similar agreement providing for such prohibition, breach,
default or termination or requiring such consent is ineffective under
applicable law, (ii) Vehicles, (iii) any leasehold interest in real
property, (iv) cash, deposit accounts, securities accounts and other
similar accounts (excluding in all cases accounts receivable), (v) any
items specifically excluded from the definition of Pledged Stock, (vi) any
property or assets if the Administrative Agent shall determine in its sole
discretion that the cost to the Borrowers or the Guarantors of creating or
perfecting such security interests in such property or assets in favor of the
Administrative Agent for the benefit of the Secured Parties is excessive in
relation to the benefits to be obtained therefrom by the Secured Parties and (vii) any
property specifically excluded from any clause in this section above, and any
property specifically excluded from any defined term used in any clause of this
section above.

 

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 Borrowers thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each Lender that:

 

4.1                               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 or any other Loan
Document and the other 

 

11

 

Liens
permitted to exist on the Collateral by the Credit Agreement, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others.  For the avoidance of doubt, it
is understood and agreed that any Grantor may, as part of its business, grant
licenses in the ordinary course of business to third parties to use
Intellectual Property owned or developed by a Grantor.  For purposes of this Agreement and the other
Loan Documents, such licensing activity shall not constitute a “Lien” on such
Intellectual Property.  Each of the
Administrative Agent and each Lender understands that any such licenses may be
exclusive to the applicable licensees, and such exclusivity provisions may
limit the ability of the Administrative Agent to utilize, sell, lease or
transfer the related Intellectual Property or otherwise realize value from such
Intellectual Property pursuant hereto.

 

4.2                               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 existing on the date hereof (or, as
applicable, each other date that the representation in this Section 4.2 is
made) in which a security interest may be perfected by the filings and other
actions described on Schedule 3, 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 and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for (x) Liens permitted
by the Credit Agreement and which have priority over the Liens on the
Collateral by operation of law and (y) Liens securing the Vought Term Loan
Obligations which shall rank pari passu with the Liens granted hereunder and
shall be subject to the Intercreditor Agreement (the “Permitted Pari Passu
Liens”).

 

4.3                               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, 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 (in each
case to the extent officials in the jurisdiction of organization provide such
certified documents or certificates).

 

4.4                               Inventory
and Equipment.

 

On
the date hereof, the Inventory and the Equipment held by any Grantor having an
aggregate book value at any one location in excess of $10,000,000 (other than
mobile goods or any other Inventory or Equipment in transit) are kept at the
locations listed on Schedule 5.

 

4.5                               Farm
Products.

 

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

 

12

 

4.6                               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 of such
Pledged Stock owned by such Grantor; provided, with respect to Foreign
Subsidiary Voting Stock, if a Grantor owns more than 65% of the outstanding
Foreign Subsidiary Voting Stock of any relevant Issuer, the shares of Pledged
Stock pledged by such Grantor hereunder shall constitute 65% of the outstanding
Foreign Subsidiary Voting Stock of such relevant Issuer.

 

(b)                                 All the shares
of the Pledged Stock (solely with respect to Pledged Stock issued by a person
that is not a Subsidiary of any Borrower or an Affiliate of any such
Subsidiary, to the best of each Grantor’s knowledge) have been duly and validly
issued and are fully paid and nonassessable (other than Pledged Stock in
limited liability companies and partnerships).

 

(c)                                  Each of the
Pledged Notes (solely with respect to Pledged Notes issued by a person that is
not a Subsidiary of any Borrower or an Affiliate of any such Subsidiary, to the
best of each Grantor’s knowledge) 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, non-consensual Liens arising by operation
of law which are Permitted Liens and Permitted Pari Passu Liens.

 

4.7                               [RESERVED].

 

4.8                               [RESERVED].

 

4.9                               Intellectual
Property.

 

(a)                                  Schedule 6 lists all U.S.
Intellectual Property applications and registrations owned by such Grantor in
its own name on the date hereof and all agreements by which Grantor is the
exclusive licensee of any U.S. Intellectual Property applications and
registrations of a third party.

 

(b)                                 On the date
hereof, all material U.S. Intellectual Property owned by Grantor is valid,
subsisting, unexpired and enforceable, and has not been abandoned.  The conduct of such Grantor’s business does
not infringe or violate the Intellectual Property of any other Person and is
not being infringed on or violated by any other Person, except as would not
reasonably be expected to result in a Material Adverse Change.

 

(c)                                  Each Grantor
owns, licenses or otherwise has the right to use all Intellectual Property that
is material to its business as currently conducted, free of all Liens, except
as would not reasonably be expected to result in a Material Adverse Change.

 

13

 

(d)                                 No holding,
decision or judgment has been rendered by any Official Body against such
Grantor’s Intellectual Property restricting the use of such Intellectual
Property by Grantor or that would impair the validity, ownership or enforceability
of such Intellectual Property in any respect that could reasonably be expected
to result in a Material Adverse Change.

 

(e)                                  No action or
proceeding is pending, or, to the knowledge of such Grantor, threatened, on the
date hereof (i) seeking to limit, cancel or question the validity,
enforceability or use of any Intellectual Property or such Grantor’s ownership
interest therein, or (ii) which, if adversely determined, would result in
a Material Adverse Change on the value of any Intellectual Property.

 

4.10                        Commercial
Tort Claims.

 

On
the date hereof, except to the extent listed on Schedule 7, no Grantor
has rights in any Commercial Tort Claim filed with any Official Body which
could reasonably be expected to result in an award of damages in excess of
$1,000,000.

 

5.                                      COVENANTS

 

Each
Grantor covenants and agrees with the Administrative Agent and the Lenders
that, from and after the date of this Agreement until such time as the Loans
and the other Obligations (other than Hedge and Financial Service Obligations
and Contingent Borrower Obligations) shall have indefeasibly been paid in full,
all Letters of Credit have expired or have been Cash Collateralized and all
Commitments have been terminated:

 

5.1                               Delivery
of Instruments, Certificated Securities and Chattel Paper.

 

If
any amount payable to a Grantor under or in connection with any of the
Collateral shall be or become evidenced by any Instrument (other than with
respect to checks to be deposited), Certificated Security or Chattel Paper, in
each case evidencing an amount in excess of $1,000,000, such Grantor shall
promptly notify the Administrative Agent thereof and thereafter, at the request
of the Administrative Agent, deliver such Instrument, Certificated Security or
Chattel Paper (other than electronic chattel paper) to the Administrative
Agent, duly indorsed in a manner reasonably satisfactory to the Administrative
Agent, to be held as Collateral pursuant to this Agreement and, shall take such
other actions as the Administrative Agent may request in accordance with Section 5.11
hereof.

 

5.2                               [RESERVED].

 

5.3                               [RESERVED].

 

5.4                               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 4.2
and shall defend such security interest against the claims and demands of all
Persons whomsoever, subject to the rights of such Grantor under the Loan
Documents to dispose of the Collateral, and other than claims and demands
permitted under any Loan Document (including Section 4.2).

 

14

 

(b)                                 Such Grantor
will furnish to the Administrative Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and
such other documents 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 request 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) filing 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, Letter-of-Credit Rights and any other relevant property
constituting Collateral, taking any actions necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

 

5.5                               Changes
in Name, etc.

 

Such
Grantor will not, except upon (a) 10 Business Days’ prior written notice
of such change to the Administrative Agent and (b) 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 from that referred to in Section 4.3
or (ii) change its legal name to the extent that any financing statement
filed in connection with this Agreement would become misleading.

 

5.6                               Notices.

 

Such
Grantor will advise the Administrative Agent and each Secured Party promptly
upon a responsible officer having actual knowledge thereof, in reasonable
detail, of:

 

(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.

 

5.7                               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, or in connection
with a partial or total liquidation or dissolution) in respect of the Capital
Stock, or option or right to receive the same that constitutes, 

 

15

 

or would constitute upon receipt, Pledged Stock,
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
Lenders, hold the same in trust for the Administrative Agent and the Lenders
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 and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof as additional collateral security for the Obligations.

 

(b)                                 Without the
prior written consent of the Administrative Agent, such Grantor will not,
except as permitted under the Credit Agreement (i) vote to enable, or take
any other action to permit, any Issuer to issue any Capital Stock of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any Capital Stock of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Investment Property, (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 any interest therein, or (iv) enter
into any agreement or undertaking after the date hereof restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Investment Property.

 

(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 Investment Property 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 5.7(a) with
respect to the Investment Property 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 Investment Property issued by it.

 

5.8                               [RESERVED].

 

5.9                               Intellectual
Property.

 

(a)                                  Such Grantor
(either itself or through licensees) will, for each material U.S. and foreign
Trademark necessary to the normal conduct of such Grantor’s business (i) maintain
such Trademark in full force free from any adjudication of abandonment for
non-use, (ii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable
Requirements of Law, and (iii) not do any act or knowingly omit to do any
act whereby such Trademark is reasonably likely to 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 U.S. and foreign Patent necessary to the normal
conduct of such Grantor’s business may become prematurely forfeited, abandoned
or dedicated to the public.

 

(c)                                  Such Grantor
(either itself or through licensees) will not, and will use its commercially
reasonable efforts to cause its licensees not to, do any act or knowingly omit
to do any act whereby any material portion
of the U.S. and foreign Copyrights necessary to the normal 

 

16

 

conduct of such Grantor’s
business may become invalidated, impaired, or fall into the public
domain.

 

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

 

(e)                                  Such Grantor
will notify the Administrative Agent promptly upon becoming aware that any
application or registration relating to any U.S. Intellectual Property material
to the normal conduct of such Grantor’s business may imminently become
forfeited, abandoned or dedicated to the public, or of any materially adverse
determination (including, without limitation, any determination in any
proceeding in the United States Patent and Trademark Office or the United
States Copyright Office) regarding such Grantor’s ownership of, or the
validity, enforceability or use of, any Intellectual Property material to the
normal conduct of such Grantor’s Business 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 acquire, or file an application for the registration of any Intellectual
Property with the United States Patent and Trademark Office or the United States
Copyright Office, 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 acquisition or 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 security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby constituting Collateral pursuant to the terms of this
Agreement.

 

(g)                                 Such Grantor
will take all reasonable steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office or the United
States Copyright Office, to maintain and pursue each application (and to obtain
the relevant registration) and to maintain each registration of the
Intellectual Property material to the normal conduct of such Grantor’s
business, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.

 

(h)                                 In the event
that any material U.S. Intellectual Property is infringed or violated by a third
party, and such Grantor has knowledge of such infringement or violation, such
Grantor shall exercise reasonable business judgment and (i) when
applicable and necessary in such Grantor’s reasonable judgment, 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, and the infringement or
violation is material, promptly notify the Administrative Agent after it learns
thereof and if such Grantor deems it necessary in its reasonable business
judgment, promptly sue for infringement, misappropriation or dilution, seek
injunctive relief where appropriate and recover any and all damages for such
infringement or violation.

 

17

 

5.10                        Commercial
Tort Claims.

 

Such
Grantor shall promptly, and in any event within ten Business Days after any
interest in the same is obtained by it, (a) notify the Administrative Agent of
any Commercial Tort Claim obtained by it which could reasonably be expected to
result in an award of damages in excess of $1,000,000 and (b) (i) grant
to the Administrative Agent in writing a security interest in any such
Commercial Tort Claim and the proceeds thereof, all in form and substance
reasonably satisfactory to the Administrative Agent, (ii) supplement Schedule
7 hereto, (iii) amend, update or file any existing or additional
financing statements and take all such other actions as are required to perfect
the Administrative Agent’s security interest in such Commercial Tort Claims.

 

5.11                        Further
Actions of Grantors.

 

Each Grantor shall, from
time to time, at its own expense, execute such documents and certificates, file
such financing statements, and do such other acts and things as the
Administrative Agent in its reasonable discretion may deem necessary or
advisable from time to time in order to preserve, perfect and protect the Liens
granted herein, with the priority contemplated hereby, and the rights of the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to the Collateral.

 

5.12                        Compliance
with Credit Agreement.

 

Each
Grantor agrees that until such time as the Loans and the other Obligations
(other than Hedge and Financial Service Obligations and Contingent Borrower Obligations)
shall have indefeasibly been paid in full, the Letters of Credit have expired
or have been Cash Collateralized and the Commitments shall have terminated, it
shall comply at all times with the affirmative and negative covenants (the “Incorporated
Covenants”) set forth in Article 7 of the Credit Agreement (i) as if
each of the Incorporated Covenants was set forth in full in this Agreement and (ii) regardless
of any waivers of or amendments to any of the Incorporated Covenants, except
such waivers and amendments as are agreed to in writing by the Required Banks
(or such other number of Banks and/or other parties required pursuant to the
Credit Agreement to approve any such waiver or amendment). The definitions set
forth in the Credit Agreement shall apply mutatis mutandis in construing the
meanings of the Incorporated Covenants.

 

6.                                      REMEDIAL
PROVISIONS

 

6.1                               Certain
Matters Relating to Receivables.

 

(a)                                  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 deposited by such Grantor in the
same form received, duly indorsed by such Grantor to the Administrative Agent
if reasonably 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 Lenders 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.  

 

18

 

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.

 

(b)                                 At any time
during the continuance of an Event of Default, at the Administrative Agent’s
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, including, without limitation,
all original orders, invoices and shipping receipts.

 

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 to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Receivables.

 

(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 that the Receivables 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 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 Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any Lender of any payment relating thereto, nor shall
the Administrative Agent or any Lender 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), 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, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate or other organizational rights inuring to the owner of the Investment
Property; provided, however, that no vote shall be cast or other right
exercised which would materially and adversely impair the Collateral (other
than in connection with a transaction permitted under the Credit Agreement or
other Loan Documents) or which would be inconsistent 

 

19

 

with or result in any violation of any provision of
the Credit Agreement or the other Loan Documents.

 

(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 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 Investment
Property and make application thereof to the Obligations in accordance with the
Credit Agreement  and (ii) any or
all of the Investment Property 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 Investment Property 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 Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
or other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option
pertaining to such Investment Property, and in connection therewith, the right
to deposit and deliver any and all of the Investment Property 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 Investment Property pledged
by such Grantor hereunder to comply with any instruction received by it from
the Administrative Agent in writing (including with respect to the payment of
dividends or other payments with respect to the Investment Property) 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; provided the Administrative
Agent agrees not to give any such instruction referenced in this clause (c) unless
an Event of Default shall be continuing.

 

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 other near-cash items shall be held by
such Grantor in trust for the Administrative Agent and the Lenders, segregated
from other funds of such Grantor, and shall, forthwith upon receipt by such
Grantor, be turned over to the Administrative Agent in the same form received
by such Grantor (duly indorsed by such Grantor as reasonably requested by the
Administrative Agent).  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 

 

20

 

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.  Except
with respect to cash collateral held for Letters of Credit and Hedge and
Financial Service Obligations (provided that such cash collateral was provided
by the Borrowers for a reason other than an Event of Default by the Borrowers),
at any time that no Event of Default shall be continuing, the Grantors may
request that, and promptly upon receipt of such notice, the Administrative
Agent shall direct that, the proceeds being held in any Collateral Account (or
by such Grantor in trust for the Administrative Agent) be released therefrom
and redirected to Borrowers or the other Grantors, as applicable.

 

6.5                               Application
of Proceeds.

 

During
the continuance of an Event of Default, the Administrative Agent may apply all
or any part of Proceeds constituting Collateral (subject to the terms of the
Intercreditor Agreement), 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 remaining after the Obligations shall
have been paid in full shall be paid over to the Borrowers 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 Pennsylvania 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 Lender or elsewhere upon such terms 

 

21

 

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, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Secured Parties hereunder, including, without
limitation, reasonable attorneys’ fees and disbursements, to the payment in
whole or in part of the Obligations, as set forth in Section 6.5 above,
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 Pennsylvania 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                               Registration
Rights.

 

(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 best efforts to do or cause to be done all such other acts as
may be 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 Lenders, that the Administrative
Agent and the Lenders 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 

 

22

 

covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.

 

6.8                               Subordination.

 

Each
Grantor hereby agrees that, upon the occurrence and during the continuance of
an Event of Default, unless otherwise agreed by the Administrative Agent, all
Indebtedness owing by it to any Subsidiary of the Borrowers shall be fully
subordinated to the indefeasible payment in full in cash of such Grantor’s
Obligations.

 

6.9                               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 Lender to collect such deficiency.

 

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 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 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 with respect to any other Collateral whenever payable;

 

(ii)                                  in the case of
any Intellectual Property owned by the Grantors, 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 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;

 

23

 

(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 necessary or appropriate to evidence such sale; and

 

(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 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 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.

 

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 highest rate per annum at which interest would then be
payable on any category of past due Loans bearing interest under the Base Rate
Option 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 

 

24

 

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 Pennsylvania UCC or otherwise, shall be to deal with it 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” 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.

 

25

 

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
[Modifications, Amendments or Waivers] of the Credit 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 10.6
[Notices] 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 Lender 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 Lender, 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 Lender 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 or such Lender 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.

 

Each
Grantor shall comply with Section 9.5 [Reimbursement and Indemnification
of Administrative Agent by the Borrowers] and Section 10.3 [Reimbursement
and Indemnification of Banks by the Borrowers; Taxes] of the Credit Agreement
with regard to the costs and expenses incurred in connection with the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights
under this Agreement.  The agreements in
this Section 8.4 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 Lenders 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.

 

26

 

8.6                               Set-Off.

 

In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without notice to any Grantor, any such notice being
expressly waived by each Grantor to the extent permitted by applicable law,
upon any Obligations becoming due and payable by any Grantor (whether at the
stated maturity, by acceleration or otherwise), to apply to the payment of such
Obligations, by setoff or otherwise, 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 such Lender, any affiliate thereof or any of their respective branches
or agencies to or for the credit or the account of such Grantor.  Each Lender agrees promptly to notify the
relevant Grantor and the Administrative Agent after any such application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such application.

 

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 email or 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 COMMONWEALTH OF PENNSYLVANIA.

 

27

 

8.12                        Submission
To Jurisdiction; Waivers.

 

EACH GRANTOR HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF CHESTER COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE GRANTORS AT THE
ADDRESSES PROVIDED FOR IN SECTION 10.6 OF THE CREDIT AGREEMENT AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.  EACH GRANTOR WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN
AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR
VENUE.  EACH GRANTOR, THE ADMINISTRATIVE
AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING
OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
CREDIT AGREEMENT, THE COLLATERAL OR ANY OTHER LOAN DOCUMENT TO THE FULL EXTENT
PERMITTED BY LAW.

 

8.13                        Acknowledgements.

 

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 each of the Borrowers or Guarantor that is required to become a
party to this Agreement pursuant to Section 10.20 [Joinder of Borrowers
and Guarantors] of the Credit Agreement shall become a Grantor for all purposes
of this Agreement upon execution and delivery by such Subsidiary Borrower or
Guarantor of a Borrower Joinder or Guarantor Joinder, as the case may be, in
the form attached to the Credit Agreement as Exhibit 10.20(A) [Borrower
Joinder] or Exhibit 10.20(B) [Guarantor Joinder].

 

28

 

8.15                        Releases.

 

(a)                                  At such time as
the Loans and the other Obligations (other than Hedge and Financial Service
Obligations and Contingent Borrower Obligations) shall have been indefeasibly
paid in full, the Letters of Credit have expired or have been Cash
Collateralized and the Commitments have been terminated, 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 described herein shall revert to the
Grantors.  At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall 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 permitted by the Credit Agreement, then such Collateral shall
automatically be released from the Liens created hereby, all without delivery
of any instrument or performance of any act by any party.  At the reasonable request and sole expense of
such Grantor, the Administrative Agent shall execute and deliver to such
Grantor all reasonable releases or other documents reasonably necessary or
desirable to evidence such release of the Liens created hereby on such Collateral.  At the request and sole expense of the
Borrowers, a Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor shall be sold, transferred
or otherwise disposed of or such Grantor is otherwise no longer required to be
a Guarantor pursuant to the Credit Agreement, in each case, in a transaction or
other circumstance permitted by the Credit Agreement; provided that the
Borrowers shall have delivered to the Administrative Agent a written notice
identifying the relevant Guarantor and the terms of the sale or other
disposition giving rise to such release in reasonable detail, together with a
certification by the Borrowers stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents.

 

8.16                        [RESERVED].

 

8.17                        Intercreditor
Agreement.

 

Notwithstanding anything herein to the
contrary, the liens and security interests granted to the Administrative Agent for the ratable benefit of the Secured Parties pursuant to this Agreement or any other Loan Document are subject to the provisions of
the Intercreditor Agreement, so long as the Intercreditor Agreement is in force
and effect.  Until the Term Loan Obligations (as defined in the Intercreditor Agreement) are “paid in full”
(as defined in the Intercreditor Agreement),
any obligation of any Grantor hereunder or under the Credit Agreement with
respect to the delivery or control of any Collateral, the notation of any lien
on any certificate of title, bill of lading or other document, the giving of
any notice to any bailee or other Person, the provision of voting rights or the
obtaining of any consent of any Person, in each case, with respect to the Collateral, shall be deemed to be satisfied if the Grantor complies
with the requirements of the similar provision of the applicable Term Loan Document (as defined in the Intercreditor Agreement).

 

29

 

[SIGNATURE PAGE FOLLOWS]

 

30

 

[SIGNATURE PAGE TO GUARANTEE AND COLLATERAL AGREEMENT]

 

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

 

 

	
   

  	
  TRIUMPH
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  

  	
  M.
  David Kornblatt

  
	
   

  	
   

  	
  Title:
  

  	
  Executive
  Vice President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  NU-TECH
  BRANDS, INC.

  
	
   

  	
  TRIUMPH
  BRANDS, INC.

  
	
   

  	
  TRIUMPH
  GROUP ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  

  	
  M.
  David Kornblatt

  
	
   

  	
   

  	
  Title:
  

  	
  President and
  Treasurer of each of the above named companies

  

 

 

[SIGNATURE PAGE TO GUARANTEE AND
COLLATERAL AGREEMENT]

 

	
   

  	
  KILROY
  STEEL, INC.

  
	
   

  	
  KILROY
  STRUCTURAL STEEL CO.

  
	
   

  	
  TRIUMPH
  METALS COMPANY

  
	
   

  	
  TRIUMPH
  STRUCTURES - EAST TEXAS, INC.

  
	
   

  	
  TRIUMPH
  PRECISION, INC.

  
	
   

  	
  TRIUMPH
  INSULATION SYSTEMS, LLC

  
	
   

  	
  THE
  MEXMIL HOLDING COMPANY, LLC

  
	
   

  	
  TRIUMPH
  STRUCTURES - LONG ISLAND, LLC

  
	
   

  	
  TRIUMPH
  INVESTMENT HOLDINGS, INC.

  
	
   

  	
  TRIUMPH
  INSTRUMENTS - BURBANK, INC.

  
	
   

  	
  AIRFRAME
  SPARES AND LOGISTICS, LLC

  
	
   

  	
  MEXMIL
  CHINA, LLC

  
	
   

  	
  TRIUMPH
  GROUP HOLDINGS - MEXICO, LLC

  
	
   

  	
  TRIUMPH
  GROUP INVESTMENT - MEXICO, LLC

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS - NEWPORT NEWS, INC.

  
	
   

  	
  TRIUMPH
  ACCESSORY SERVICES - GRAND PRAIRIE, INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS - FORT WORTH, INC.

  
	
   

  	
  CBA
  ACQUISITION, LLC

  
	
   

  	
  TRIUMPH
  FABRICATIONS - HOT SPRINGS, INC.

  
	
   

  	
  TRIUMPH
  PROCESSING, INC.

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS - VALENCIA, INC.

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS, LLC

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS - CONNECTICUT, LLC

  
	
   

  	
  HT
  PARTS, L.L.C.

  
	
   

  	
  LAMAR
  ELECTRO-AIR CORPORATION

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS - WICHITA, INC.

  
	
   

  	
  TRIUMPH
  STRUCTURES - KANSAS CITY, INC.

  
	
   

  	
  THE
  TRIUMPH GROUP OPERATIONS, INC.

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS GROUP, INC.

  
	
   

  	
  TRIUMPH
  AFTERMARKET SERVICES GROUP, INC.

  
	
   

  	
  TRIUMPH
  AIRBORNE STRUCTURES, INC.

  
	
   

  	
  TRIUMPH
  AVIATIONS INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS - SAN DIEGO, INC.

  
	
   

  	
  TRIUMPH
  COMPOSITE SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  CONTROLS, LLC

  
	
   

  	
  TRIUMPH
  ENGINEERED SOLUTIONS, INC.

  
	
   

  	
  TRIUMPH
  ENGINEERING SERVICES, INC.

  
	
   

  	
  TRIUMPH
  GEAR SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  GEAR SYSTEMS - MACOMB, INC.

  
	
   

  	
  TRIUMPH
  GROUP ACQUISITION HOLDINGS, INC.

  
	
   

  	
  TRIUMPH
  INSTRUMENTS, INC.

  
	
   

  	
  TRIUMPH
  PRECISION CASTINGS CO.

  
	
   

  	
  TRIUMPH
  STRUCTURES - LOS ANGELES, INC.

  
	
   

  	
  TRIUMPH
  THERMAL SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  TURBINE SERVICES, INC.

  
	
   

  	
  TRIUMPH
  STRUCTURES - WICHITA, INC.

  
	
   

  	
  TRIUMPH
  INTERIORS, LLC

  
	
   

  	
  TRIUMPH
  FABRICATIONS — ORANGEBURG, INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS — ST. LOUIS, INC.

  
	
   

  	
  TRIUMPH
  REAL ESTATE — MEXICO, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  

  	
  M.
  David Kornblatt

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President and Treasurer of each of the above named companies

  

 

32

 

[SIGNATURE PAGE TO GUARANTEE AND
COLLATERAL AGREEMENT]

 

	
   

  	
  TRIUMPH
  AEROSTRUCTURES, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Richard C. Ill

  
	
   

  	
   

  	
  Name:
  

  	
  Richard
  C. Ill

  
	
   

  	
   

  	
  Title:
  

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VAC
  INDUSTRIES, INC.

  
	
   

  	
  VOUGHT
  COMMERCIAL AIRCRAFT COMPANY

  
	
   

  	
  CONTOUR
  AEROSPACE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  

  	
  M.
  David Kornblatt

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President and Treasurer

  

 

33

 

ACKNOWLEDGEMENT AND CONSENT

 

The
undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of
                ,
2010 (the “Agreement”), made by the Grantors parties thereto for the benefit of
PNC Bank, National Association, as Administrative Agent.  The undersigned agrees for the benefit of the
Administrative Agent and the Secured Parties as follows:

 

1.                                       The undersigned
will be bound by the terms of the Agreement and will comply with such terms
insofar as such terms are applicable to the undersigned.

 

2.                                       The undersigned
will notify the Administrative Agent promptly in writing of the occurrence of
any of the events described in Section 5.7(a) of the Agreement.

 

3.                                       The terms of
Sections 6.3(c) and 6.7 of the Agreement 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 of the Agreement.

 

	
   

  	
  NAME
  OF ISSUER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fax:Exhibit 10.3

 

INTERCREDITOR AGREEMENT

 

Among

 

TRIUMPH GROUP, INC.,

 

the other Grantors party hereto,

 

PNC BANK, NATIONAL ASSOCIATION,

as Collateral Agent for the Revolving Credit Secured Parties,

 

and

 

ROYAL BANK OF CANADA,

as Collateral Agent for the Term Loan Secured Parties

 

dated as of June 16, 2010

 

 

INTERCREDITOR
AGREEMENT dated as of June 16, 2010 (as amended, supplemented or otherwise
modified from time to time, this “Agreement”),
among TRIUMPH GROUP, INC., a Delaware corporation (the “Company”), the other Grantors (as defined below) party
hereto, PNC BANK, NATIONAL ASSOCIATION, as collateral agent for the Revolving
Credit Secured Parties (as defined below) (in such capacity, including any
successor or assign, the “Revolving Credit
Collateral Agent”), and ROYAL BANK OF CANADA, as collateral agent
for the Term Loan Secured Parties (as defined below) (in such capacity,
including any successor or assign, the “Term Loan Collateral Agent”).

 

WHEREAS,
the Company, certain subsidiaries of the Company, the Revolving Credit
Collateral Agent and certain financial institutions and other entities are
parties to the Credit Agreement dated as of May 10, 2010 and amended as of
the date hereof (the “Existing Revolving Credit
Agreement”), pursuant to which such financial institutions and other
entities have agreed to make loans and extend other financial accommodations to
the Loan Parties;

 

WHEREAS,
the Company, the Term Loan Collateral Agent and certain financial institutions
and other entities are parties to the Credit Agreement dated as of the date
hereof (as amended, the “Existing Term Loan
Agreement”), pursuant to which such financial institutions and other
entities have agreed to make term loans to the Company, and such term loans are
guaranteed by certain of the Loan Parties;

 

WHEREAS,
the Company has granted to the Revolving Credit Collateral Agent security
interests and liens in the Collateral (as defined below) as security for
payment and performance of the Revolving Credit Obligations; and

 

WHEREAS,
the Company has granted to the Term Loan Collateral Agent security interests
and liens in the Collateral as security for payment and performance of the Term
Loan Obligations (as defined below).

 

NOW
THEREFORE, in consideration of the foregoing and the mutual agreements herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are expressly acknowledged by all of the parties hereto,
the parties agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  
Certain Defined Terms.  Capitalized
terms used but not otherwise defined herein, if defined in the New York UCC,
have the meanings specified therein.  As
used in this Agreement, the following terms have the meanings specified below:

 

“Additional Revolving Credit Agreement”
means any agreement for the incurrence of additional indebtedness that is
permitted to be secured by the Collateral pursuant to the Revolving Credit
Agreement and the Term Loan Agreement, and any agreement approved for
designation as such by the Revolving Credit Collateral Agent and the Term Loan
Collateral Agent.

 

 

“Additional Term Loan Agreement” means any
agreement for the incurrence of incremental term loans that is permitted to be
secured by the Collateral pursuant to the Revolving Credit Agreement and the Term
Loan Agreement, and any agreement approved for designation as such by the
Revolving Credit Collateral Agent and the Term Loan Collateral Agent.

 

“Affiliate” means, as to any Person, any other Person
(i) which directly or indirectly controls, is controlled by, or is under
common control with such Person, (ii) which beneficially owns or holds 10%
or more of any class of the voting or other equity interests of such Person, or
(iii) 10% or more of any class of voting interests or other equity interests
of which is beneficially owned or held, directly or indirectly, by such
Person.  “Control”, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.

 

“Agreement” has the meaning assigned to such term in the introductory
paragraph of this Agreement.

 

“B&R Obligations” means all obligations of the Company
arising pursuant to that certain Promissory Note issued by the Company to B. &
R. Machine & Tool Corp., as in effect on the date hereof.

 

“Banking Services Obligations” means any and all obligations
of the Loan Parties, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with agreements or other arrangements under which any Revolving Credit Creditor
or Term Loan Creditor, or any Affiliate thereof, provides any of the following
products or services to any of the Loan Parties: (a) credit cards, (b) credit
card processing services, (c) debit cards, (d) purchase cards, (e) ACH
transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) foreign currency exchange.

 

“Bankruptcy Case” means any case under the Bankruptcy Code to
which the Company and/or any other Grantor shall become subject as debtor(s) in
possession.

 

“Bankruptcy Code” means Title 11 of the United States Code,
as amended.

 

“Bankruptcy Law” means the Bankruptcy Code and any similar
Federal, state or foreign law for the relief of debtors.

 

“BBH” means Brown Brothers Harriman & Co., as lender
under the IDB Financing Agreements.

 

“Business Day” means any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania or New York, New York.

 

2

 

“Class”, when used in reference to (a) any Obligation,
shall refer to whether such Obligation is a Revolving Credit Obligation or Term
Loan Obligation or (b) any Secured Party, shall refer to whether such
Secured Party is a Revolving Credit Secured Party or a Term Loan Secured Party.

 

“Collateral” means (x) all assets and properties subject
to Liens created pursuant to any Security Document to secure any of the
Obligations and (y) the proceeds of any setoff rights of any Secured Party
in respect of the Obligations.

 

“Collateral Agent” means, collectively, the Revolving Credit
Collateral Agent and the Term Loan Collateral Agent.

 

“Company” means Triumph Group, Inc., a Delaware
corporation, or any successor or assign.

 

“Controlling Collateral Agent” means (i) at any time
after an Enforcement Event by the Revolving Credit Secured Parties, the
Revolving Credit Collateral Agent and (ii) at any time after an
Enforcement Event by the Term Loan Secured Parties, the Term Loan Collateral
Agent; provided that at any time that there has been an Enforcement
Event by both the Revolving Credit Secured Parties and the Term Loan Secured
Parties, “Controlling Collateral Agent” shall mean the Collateral Agents,
acting in consultation with one another (it being understood that no
disagreement among the Collateral Agents when both are a “Controlling
Collateral Agent” pursuant to this proviso shall prevent either Collateral
Agent from taking action in any manner consistent with this Agreement and the
other Loan Documents); provided  further that a Controlling
Collateral Agent shall cease to be a Controlling Collateral Agent upon delivery
to the other Collateral Agent of a Notice of Cancellation with respect to the
applicable Enforcement Event (it being understood that such Collateral Agent
may become the Controlling Collateral Agent again pursuant to the terms of this
definition following the occurrence of a new Enforcement Event).

 

“Controlling Secured Parties” means (i) at any time
after an Enforcement Event by the Revolving Credit Secured Parties, the
Revolving Credit Secured Parties and (ii) at any time after an Enforcement
Event by the Term Loan Secured Parties, the Term Loan Secured Parties; provided
that at any time that there has been an Enforcement Event by both the Revolving
Credit Secured Parties and the Term Loan Secured Parties that remains in
effect, “Controlling Secured Parties” shall mean, collectively, the Revolving
Credit Secured Parties and the Term Loan Secured Parties.

 

“Credit Agreements” means collectively, the Revolving Credit
Agreement and the Term Loan Agreement.

 

“Designated Cash Collateral” means cash of any Loan Party
that is used to collateralize Letters of Credit Outstanding other than (x) so
long as no Enforcement Event has occurred on or prior to the Expiration Date
and is continuing, any such cash that supports any Letter of Credit with an
expiration date that is later than the Expiration Date and (y) any such
cash that has been delivered in respect of obligations of any Defaulting Bank
(as defined in the Revolving Credit Agreement).

 

3

 

“Discharge” means, with respect to any Collateral and any Obligations,
the date on which such Obligations are no longer secured by such
Collateral.  The term “Discharged” shall have a corresponding meaning.

 

“Enforcement Event” means, with respect to the Revolving
Credit Obligations or the Term Loan Obligations, (x) the exercise of any
rights and remedies with respect to any Collateral securing such obligations or
the commencement or prosecution of enforcement of any of the rights and
remedies under, as applicable, the Revolving Credit Documents or the Term Loan
Documents, or applicable law, including without limitation the exercise of any
rights of set-off or recoupment, after an Event of Default, and the exercise of
any rights or remedies of a secured creditor under the Uniform Commercial Code
of any applicable jurisdiction or under the Bankruptcy Code, (y) such
Obligations have not been paid in full at the stated final maturity thereof and
any applicable grace period has expired or (z) an Event of Default has
occurred under the relevant Loan Document and, as a result thereof, all such
Obligations outstanding have become due and payable and have not been paid in
full or, in the case of any reimbursement obligation in respect of an
outstanding letter of credit or similar instrument, a requirement for cash
collateralization has not been satisfied as of the time such requirement is to
be satisfied pursuant to the relevant Loan Document.

 

“Event of Default” means an “Event of Default” as defined in
any Credit Agreement.

 

“Existing Revolving Credit Agreement” has the meaning
assigned to such term in the recitals hereto.

 

“Existing Term Loan Agreement” has the meaning assigned to
such term in the recitals hereto.

 

“Expiration Date” has the meaning assigned to such term in
the Revolving Credit Agreement.

 

“Foreign” shall mean with respect to a Loan Party or a
Subsidiary, (i) one which is organized under the laws of a jurisdiction
other than the United States of America, any state thereof or the District of
Columbia and (ii) any Subsidiary of a Loan Party or Subsidiary that is
described in clause (i) of this definition that is organized under the
laws of the United States of America, any state of, or the District of Columbia
and is not treated as a corporation for United States federal tax purposes.

 

“Grantors” means the Company and each direct or indirect
Subsidiary of the Company which has granted a security interest pursuant to any
Security Document to secure any Obligations. 
The Grantors existing on the date hereof are set forth in Annex I
hereto.

 

“Hedge Liabilities” means, with respect to any Loan Party,
any obligations of such Loan Party owed to a Revolving Credit Creditor or a
Term Loan Creditor (or any of their respective affiliates) in respect of an
interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable
strike corridor or similar agreement entered into by such Loan Party or its
Subsidiaries in order to provide protection to, or minimize the impact upon,
the Borrowers, the Guarantors and/or their Subsidiaries of increasing floating
rates of interest applicable to 

 

4

 

indebtedness,
or any other hedging transaction entered into by such Loan Party or its
Subsidiaries and which (i) is documented in a standard International Swap
Dealer Association agreement, (ii) provides for the method of calculating
the reimbursable amount of the provider’s credit exposure in a reasonable and
customary manner, and (iii) is entered into for hedging (rather than
speculative) purposes.

 

“IDB Financing Agreement” means, individually and
collectively, the Indiana Financing Agreement and the Pennsylvania Financing
Agreement (each as defined in the Revolving Credit Agreement).

 

“Insolvency or Liquidation Proceeding” means:

 

(1) any case commenced by or against the Company or any other
Grantor under any Bankruptcy Law, any other proceeding for the reorganization,
recapitalization or adjustment or marshalling of the assets or liabilities of
the Company or any other Grantor, any receivership or assignment for the
benefit of creditors relating to the Company or any other Grantor or any
similar case or proceeding relative to the Company or any other Grantor or its
creditors, as such, in each case whether or not voluntary;

 

(2) any liquidation, dissolution, marshalling of assets or liabilities
or other winding up of or relating to the Company or any other Grantor, in each
case whether or not voluntary and whether or not involving bankruptcy or
insolvency; or

 

(3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Company or any other Grantor are
determined and any payment or distribution is or may be made on account of such
claims.

 

“Joinder Agreement” means a supplement to this Agreement in
the form of Annex II hereof required to be delivered by each new Grantor
pursuant to Section 5.16 hereof in order to become a party hereto.

 

“Letter of Credit” shall have the meaning assigned to such
term in the Revolving Credit Agreement.

 

“Letters of Credit Outstanding” shall have the meaning
assigned thereto in the Revolving Credit Agreement.

 

“Lien” means any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the
filing).

 

“Loan Document” means, collectively, the Revolving Credit
Documents and the Term Loan Documents.

 

5

 

“Loan Party” means the Company and each direct or indirect
affiliate or shareholder (or equivalent) of the Company or any of its
affiliates that is now or hereafter becomes a party to any Revolving Credit
Document or any Term Loan Document.  All
references in this Agreement to any Loan Party shall include such Loan Party as
debtor-in-possession and any receiver or trustee for such Loan Party in any
Insolvency Proceeding.

 

“Majority Class Holders” shall mean, with respect to any
Class, the “Required Banks” under and as defined in the Revolving Credit
Agreement or the Term Loan Agreement, as applicable.  For the purpose of this definition, the
Revolving Credit Collateral Agent shall be deemed to hold or represent, and
shall be entitled to vote and give notices and directions with respect to, all
Revolving Credit Obligations and the Term Loan Collateral Agent shall be deemed
to hold or represent, and shall be entitled to vote and give notices and
directions with respect to, all Term Loan Obligations.

 

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

 

“Non-Controlling Collateral Agent” means, at any time, the
Collateral Agent that is not the Controlling Collateral Agent.

 

“Non-Controlling Secured Parties” means the Secured Parties
which are not Controlling Secured Parties.

 

“Notice of Cancellation” has the meaning assigned to such
term in Section 2.02(a).

 

“Obligations” means, collectively, the Revolving Credit
Obligations and the Term Loan Obligations.

 

“paid in full” or “payment in full”
or “pay such amounts in full” shall mean,
with respect to any Obligations (other than contingent indemnification and
expense reimbursement obligations for which no claim has been made), the
payment in full (other than as part of a Refinancing) in cash of the principal
of, accrued (but unpaid) interest (including Post-Petition Interest) and
premium, if any on all such Obligations, after or concurrently with termination
of any commitments thereunder and payment in full in cash of all fees and other
amounts payable at or prior to the time such principal and interest are paid.

 

“Person” means any person, individual, sole proprietorship,
partnership, joint venture, corporation, limited liability company,
unincorporated organization, association, institution, entity, party, including
any government and any political subdivision, agency or instrumentality
thereof.

 

“Possessory Collateral” means any Collateral in the
possession of any Collateral Agent (or its agents or bailees), to the extent
that possession thereof perfects a Lien thereon under the Uniform Commercial
Code of any jurisdiction.  Possessory
Collateral includes, without limitation, any Certificated Securities,
promissory notes, Instruments, Chattel Paper and Designated Cash
Collateral, in each case, delivered to or in the possession of the applicable
Collateral Agent under the terms of the applicable Security Documents.

 

6

 

“Post-Petition Interest” means any interest or entitlement to
fees or expenses or other charges that accrues after the commencement of any
Insolvency Proceeding (or would accrue but for the commencement of an
Insolvency Proceeding), whether or not allowed or allowable in any such
Insolvency Proceeding.

 

“Proceeds” has the meaning assigned to such term in
Section 2.01 hereof.

 

“Refinance” means, in respect of any indebtedness, to
refinance, extend, renew, defease, discharge, amend, increase, modify,
supplement, restructure, refund, replace or repay, or to issue other
indebtedness or enter alternative financing arrangements, in exchange or
replacement for such indebtedness (in whole or in part), including by adding or
replacing lenders, creditors, agents, borrowers and/or guarantors, and
including in each case, but not limited to, after the original instrument
giving rise to such indebtedness has been terminated and including, in each
case, through any credit agreement, indenture or other agreement.  “Refinanced” and
“Refinancing” have correlative meanings.

 

“Replacement Revolving Credit Agreement” has
the meaning set forth in the definition of “Revolving Credit Agreement.”

 

“Replacement Term Loan Agreement” has the
meaning set forth in the definition of “Term Loan Agreement.”

 

“Revolving Credit Agreement” means the collective reference
to (a) the Existing Revolving Credit Agreement, (b) any Additional
Revolving Credit Agreement and (c) any other credit agreement, loan
agreement, note agreement, promissory note, indenture or other agreement or
instrument evidencing or governing the terms of any indebtedness or other
financial accommodation that has at any time been incurred to extend, replace,
refinance or refund in whole or in part the indebtedness and other obligations
outstanding under the Existing Revolving Credit Agreement (regardless of
whether such replacement, refunding or refinancing (i) is a “working
capital” facility, asset-based facility, revolving loan facility, term loan
facility or otherwise or (ii) was entered into while any other Revolving
Credit Agreement remains outstanding), any Additional Revolving Credit
Agreement or any other agreement or instrument referred to in this clause (c) unless
such agreement or instrument expressly provides that it is not intended to be
and is not a Revolving Credit Agreement hereunder (a “Replacement Revolving Credit Agreement”).  Any reference to the Revolving Credit
Agreement hereunder shall be deemed a reference to any Revolving Credit
Agreement then extant.

 

“Revolving Credit Collateral Agent” has the meaning assigned
to such term in the introductory paragraph hereof; provided, if the
Revolving Credit Collateral Agent at any time is replaced as collateral agent
for the Revolving Credit Secured Parties pursuant to the terms of the Revolving
Credit Agreement, such replacement collateral agent shall be the “Revolving
Credit Collateral Agent” hereunder upon 15 days’ prior written notice to the
other Collateral Agent and the Company. 
In the case of any Replacement Revolving Credit Agreement that extends,
replaces, refinances or refunds the Existing Revolving Credit Agreement in its
entirety, the Revolving Credit Collateral Agent shall be the Person identified
as such in such Agreement.

 

7

 

“Revolving Credit Creditors”
means, collectively, the “Banks”, the “Issuing Bank” and the “Administrative
Agent”, each as defined in the Revolving Credit Agreement.

 

“Revolving Credit Documents” means the Revolving Credit
Agreement, each Revolving Credit Security Document, each Revolving Credit
Guarantee and each other “Loan Document” as defined in the Revolving Credit
Agreement.

 

“Revolving Credit Guarantee” means any
guarantee by any Loan Party of any or all of the Revolving Credit Obligations.

 

“Revolving Credit Obligations” means (a) all principal
of and interest (including without limitation any Post-Petition Interest)
prepayment penalty and premium (if any) on all loans made pursuant to the
Revolving Credit Agreement, (b) all reimbursement obligations (if any) and
interest thereon (including without limitation any Post-Petition Interest) with
respect to any letter of credit or similar instruments issued pursuant to the
Revolving Credit Agreement, (c) all Hedge Liabilities owing to any
Revolving Credit Creditor or any Affiliate thereof, (d) all Banking
Services Obligations owing to any Revolving Credit Creditor or any Affiliate
thereof, (e) all guarantee obligations, indemnities, fees, expenses and
other amounts payable from time to time pursuant to the Revolving Credit
Documents and (f) all obligations and liabilities of the Borrower and the
other Loan Parties to BBH, including, without limitation, all principal,
accrued and unpaid interest and all other costs and expenses, advances,
breakage or other prepayment costs, and all other liabilities or obligations,
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 the IDB Financing Agreements or any other document made,
delivered or given in connection therewith, in each case whether or not allowed
or allowable in an Insolvency Proceeding. To the extent any payment with
respect to any Revolving Credit Obligation (whether by or on behalf of any Loan
Party, as Proceeds of security, enforcement of any right of setoff or otherwise)
is declared to be a fraudulent conveyance or a preference in any respect, set
aside or required to be paid to a debtor in possession, any Term Loan Secured
Party, receiver or similar Person, then the obligation or part thereof
originally intended to be satisfied shall, for the purposes of this Agreement
and the rights and obligations of the Revolving Credit Secured Parties and the
Term Loan Secured Parties, be deemed to be reinstated and outstanding as if
such payment had not occurred.

 

“Revolving Credit Secured Parties” means the Revolving Credit
Collateral Agent, the Revolving Credit Creditors and any other holders of the
Revolving Credit Obligations.

 

“Revolving Credit Security Documents” means the “Collateral
Documents” as defined in the Revolving Credit Agreement, and any other
documents that are designated under the Revolving Credit Agreement as “Revolving
Credit Security Documents” for purposes of this Agreement.

 

“Secured Parties” means the Revolving Credit Secured Parties
and the Term Loan Secured Parties.

 

8

 

“Security Documents” means, collectively, the Revolving
Credit Security Documents and the Term Loan Security Documents.

 

“Subsidiary” of any Person at any time shall mean
(i) any corporation or trust of which 50% or more (by number of shares or
number of votes) of the outstanding capital stock or shares of beneficial
interest normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such Person or
one or more of such Person’s Subsidiaries, or (ii) any partnership of
which such Person is a general partner or of which 50% or more of the partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person’s Subsidiaries, (iii) any limited liability company of
which such Person is a managing member or of which 50% or more of the limited
liability company interests is at the time directly or indirectly owned by such
Person or one or more of such Person’s Subsidiaries, or (iv) any
corporation, trust, partnership, limited liability company or other entity
which is controlled or capable of being controlled by such Person or one or
more of such Person’s Subsidiaries.

 

“Term Loan Agreement” means the collective reference to (a) the
Existing Term Loan Agreement, (b) any Additional Term Loan Agreement and (c) any
other credit agreement, loan agreement, note agreement, promissory note,
indenture or other agreement or instrument evidencing or governing the terms of
any indebtedness or other financial accommodation that has at any time been
incurred to extend, replace, refinance or refund in whole or in part the indebtedness
and other obligations outstanding under the Existing Term Loan Agreement, any
Additional Term Loan Agreement or any other agreement or instrument referred to
in this clause (c) unless such agreement or instrument expressly provides
that it is not intended to be and is not a Term Loan Agreement hereunder (a “Replacement Term Loan Agreement”).  Any reference to the Term Loan Agreement
hereunder shall be deemed a reference to any Term Loan Agreement then extant.

 

“Term Loan Collateral Agent” has the meaning assigned to such
term in the introductory paragraph of this Agreement; provided, if the
Term Loan Collateral Agent at any time is replaced as collateral agent for the
Term Loan Secured Parties pursuant to the terms of the Term Loan Credit
Agreement, such replacement collateral agent shall be the “Term Loan Collateral
Agent” hereunder upon 15 day’s notice to the other Collateral Agent and the
Company.  In the case of any Replacement
Term Loan Agreement that extends, replaces, refinances or refunds the Existing
Term Loan Agreement in its entirety, the Term Loan Collateral Agent shall be
the Person identified as such in such Agreement.

 

“Term Loan Creditors”
means, collectively, the “Banks”, as defined in the Term Loan Agreement.

 

“Term Loan Documents” means the Term Loan Agreement, each
Term Loan Security Document, each Term Loan Guarantee and each other “Loan
Document” as defined in the Term Loan Agreement.

 

“Term Loan Guarantee” means any guarantee by
any Loan Party of any or all of the Term Loan Obligations.

 

9

 

“Term Loan Obligations” means (a) all principal of and
interest (including without limitation any Post-Petition Interest), prepayment
penalty and premium (if any) on all indebtedness under the Term Loan Agreement
owing to the Term Loan Secured Parties, (b) all guarantee obligations,
indemnities, fees, expenses and other amounts payable from time to time
pursuant to the Term Loan Documents and (c) all Hedge Liabilities owing to
any Term Loan Creditor or any Affiliate thereof, (d) all Banking Services
Obligations owing to any Term Loan Creditor, and (e) all B&R
Obligations, in each case whether or not allowed or allowable in an Insolvency
Proceeding.  To the extent any payment
with respect to any Term Loan Obligation (whether by or on behalf of any Loan
Party, as Proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be a fraudulent conveyance or a preference in any
respect, set aside or required to be paid to a debtor in possession, any
Revolving Credit Secured Party, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall, for the purposes of
this Agreement and the rights and obligations of the Revolving Credit Secured
Parties and the Term Loan Secured Parties, be deemed to be reinstated and
outstanding as if such payment had not occurred.

 

“Term Loan Secured Parties” means the Term Loan Collateral
Agent, the Term Loan Creditors and any other holders of the Term Loan
Obligations.

 

“Term Loan Security Documents” means the “Collateral
Documents” as defined in the Term Loan Agreement and any documents that are
designated under the Term Loan Agreement as “Term Loan Security Documents” for
purposes of this Agreement.

 

SECTION 1.02.  
Terms Generally.  The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will” shall be
construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument, other document,
statute or regulation herein shall be construed as referring to such agreement,
instrument, other document, statute or regulation as from time to time amended,
supplemented or otherwise modified, (ii) any reference herein to any
Person shall be construed to include such Person’s successors and assigns, but
shall not be deemed to include the subsidiaries of such Person unless express
reference is made to such subsidiaries, (iii) the words “herein,” “hereof
and “hereunder,” and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (iv) all
references herein to Articles, Sections and Annexes shall be construed to refer
to Articles, Sections and Annexes of this Agreement, (v) unless otherwise
expressly qualified herein, the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights, (vi) the term “or” is not exclusive and (vii) for
the avoidance of doubt, all notices, requests, directions, demands or other
forms of communication delivered to any Collateral Agent pursuant to this
Agreement shall be in writing.

 

SECTION 1.03.  
Collateral Agents.  The
Term Loan Collateral Agent and the Revolving Credit Collateral Agent have
entered into this Agreement on behalf of the Term Loan Secured Parties and
Revolving Credit Secured Parties, respectively. 
Each agreement, 

 

10

 

acknowledgment
or confirmation herein of any Secured Party shall be deemed to be an agreement,
acknowledgment or confirmation of the applicable Collateral Agent on behalf of
such Secured Party and shall be binding on such Secured party to the same
extent as if it were a party hereto.

 

ARTICLE II

 

Priorities and Agreements
with Respect to Collateral

 

SECTION 2.01.  
Priority of Claims.  (a) Anything
contained herein or in any of the Loan Documents to the contrary notwithstanding,
if an Event of Default has occurred and is continuing, and any Collateral Agent
or any Secured Party is taking action to enforce rights in respect of any
Collateral, or any distribution is made in respect of any Collateral in any
Bankruptcy Case of the Company or any other Grantor or any Secured Party
receives any payment pursuant to any intercreditor agreement (other than this
Agreement) with respect to any Collateral, or any Collateral Agent or Secured
Party shall receive any Collateral or Proceeds thereof while an Enforcement
Event is continuing (whether or not received as a result of such Enforcement
Event), the proceeds of any sale, collection or other liquidation of any such
Collateral by any Secured Party or received by any Collateral Agent or any
Secured Party pursuant to any such intercreditor agreement with respect to such
Collateral or otherwise so received, and proceeds of any such distribution to
which the Obligations are entitled under any intercreditor agreement (other
than this Agreement) (all proceeds of any sale, collection or other liquidation
of any Collateral and all proceeds of any such distribution being collectively
referred to as “Proceeds” ), shall be applied (i) FIRST,
to the payment of all fees, out-of-pocket costs, expenses and disbursements
(including, without limitation, fees and expenses of counsel), costs of
administration and enforcement, and all other amounts owing to the Collateral
Agents (in their respective capacities as Collateral Agents and/or
Administrative Agents) pursuant to the terms of any Loan Document, ratably, (ii) SECOND,
without duplication, to the payment in full of the Obligations on a ratable
basis (determined by reference to the aggregate Obligations then outstanding
(including, for the avoidance of doubt, Letters of Credit Outstanding)) in
accordance with the terms of the applicable Loan Documents and (iii) THIRD,
after payment of all Obligations, to the Company and the other Grantors or
their successors or permitted assigns, as their interests may appear, or to
whosoever may be lawfully entitled to receive the same, or as a court of
competent jurisdiction may direct.

 

(b)           It is acknowledged that any of the Obligations (other than
the B&R Obligations) may, subject to the limitations set forth in the then
extant Credit Agreements, be increased, extended, renewed, replaced, restated,
supplemented, restructured, repaid, refunded, Refinanced or otherwise amended
or modified from time to time, all without affecting the priorities set forth
in Section 2.01(a) or the provisions of this Agreement defining the
relative rights of the Secured Parties.

 

(c)           Notwithstanding the date, time, method, manner or order of
grant, attachment or perfection of any Liens securing any Obligations granted
on the Collateral and notwithstanding any provision of the Uniform Commercial
Code of any jurisdiction, or any other 

 

11

 

applicable law or the Loan Documents or any defect
or deficiencies in the Liens securing the Obligations or any other circumstance
whatsoever, each Secured Party hereby agrees that the Liens securing the
Obligations on any Collateral shall be of equal priority.

 

SECTION 2.02.  
Actions with Respect to Collateral; Prohibition on Contesting Liens.  (a) With respect to any Collateral, (i) only
the Controlling Collateral Agent shall act or refrain from acting with respect
to the Collateral (including with respect to any intercreditor agreement with
respect to any Collateral), in each case, subject to Section 2.01, this Section 2.02
and the terms of the applicable Loan Documents, (ii) no Non-Controlling
Collateral Agent or other Secured Party (other than the Controlling Collateral
Agent) shall commence any judicial or nonjudicial foreclosure proceedings with
respect to, seek to have a trustee, receiver, liquidator or similar official
appointed for or over, attempt any action to take possession of, exercise any
right, remedy or power with respect to, or otherwise take any action to enforce
its security interest in or realize upon, or take any other action available to
it in respect of, any Collateral (including with respect to any intercreditor
agreement with respect to any Collateral), whether under any Security Document,
applicable law or otherwise, it being agreed that only the Controlling
Collateral Agent, acting in accordance with the applicable Security Documents,
shall be entitled to take any such actions or exercise any such remedies with
respect to Collateral; provided that nothing herein shall limit the
right of either Collateral Agent from commencing (in consultation with the
other Collateral Agent) any Enforcement Event after the other Collateral Agent
has become a Controlling Collateral Agent, and thereby becoming a joint
Controlling Collateral Agent pursuant to the first proviso of the definition of
“Controlling Collateral Agent”. 
Notwithstanding the equal priority of the Liens, the Controlling
Collateral Agent may deal with the Collateral as if such Controlling Collateral
Agent had a senior Lien on such Collateral. 
No Collateral Agent or Secured Party will contest, protest or object to
any foreclosure proceeding or action brought by the Controlling Collateral
Agent or any other exercise by the Controlling Collateral Agent of any rights
and remedies relating to the Collateral. 
The Revolving Credit Collateral Agent hereby agrees to notify the Term
Loan Collateral Agent and the Company upon the occurrence of an Enforcement
Event in respect of the Revolving Credit Obligations (though any failure to
provide such notice shall not affect the rights of the Revolving Credit
Collateral Agent or the Revolving Credit Secured Parties hereunder) and the
Term Loan Collateral Agent hereby agrees to notify the Revolving Credit
Collateral Agent and the Company upon the occurrence of an Enforcement Event in
respect of the Term Loan Obligations (though any failure to provide such notice
shall not affect the rights of the Term Loan Collateral Agent or the Term Loan
Secured Parties hereunder).  Each
Collateral Agent hereby agrees to promptly deliver a written notice (a “Notice of Cancellation”) to the
other Collateral Agent in the event any such Enforcement Event is no longer
continuing. No Collateral Agent shall be liable to any Person for any losses,
damages or expenses arising out of or related to actions taken at the direction
of the Loan Parties after the receipt of such a notice.

 

(b)           So long as the Discharge of each of the Obligations has
not occurred, the parties hereto agree that if any Lien on any assets of any
Loan Party is granted to any Collateral Agent to secure any Obligation, those
same assets must be made subject to, and shall be deemed subject to, a Lien in
favor of the other Collateral Agent for the benefit of the applicable Secured
Parties (other than any Lien granted to the Revolving Credit Collateral Agent
on the assets of any Foreign Subsidiary which secures the Revolving Credit
Obligations of any Foreign Subsidiary). To the extent that the foregoing
provisions are not complied with for any reason, or are held to 

 

12

 

be invalid, without limiting any other rights and
remedies available to the Secured Parties, each Collateral Agent, on behalf of
itself and the Secured Parties for which it is acting hereunder, agrees that
any Lien granted to it shall be deemed granted to it as agent for all of the
Secured Parties, whether or not so expressly stated in the grant of such Lien,
unless the other Collateral Agent declines such Collateral in writing. Each of
the Collateral Agents and the Secured Parties agrees that it will not accept
any Lien on any collateral for the benefit of any Obligations other than
pursuant to the Security Documents, and by executing this Agreement, each
Collateral Agent and the Secured Parties for which it is acting hereunder,
agrees to be bound by the provisions of this Agreement and the other Security
Documents applicable to it.

 

(c)           Each of the Secured Parties agrees that it will not (and
hereby waives any right to) question or contest or support any other Person in
contesting, in any proceeding (including any Insolvency or Liquidation
Proceeding), the perfection, priority, validity, attachment or enforceability
of a Lien held by or on behalf of any of the Secured Parties in all or any part
of the Collateral, or the provisions of this Agreement; provided that
nothing in this Agreement shall be construed to prevent or impair the rights of
any Collateral Agent or any Secured Party to enforce this Agreement.

 

SECTION 2.03.  
No Interference; Payment Over. 
(a) Each Secured Party agrees that (i) it will not challenge
or question in any proceeding the validity or enforceability of any Obligations
or any Security Document or the validity, attachment, perfection or priority of
any Lien under any Security Document or the validity or enforceability of the
priorities, rights or duties established by, or other provisions of, this
Agreement; (ii) it will not take or cause to be taken any action the
purpose or intent of which is, or could be, to interfere, hinder or delay, in
any manner, whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral by any Collateral Agent in accordance with
the provisions of this Agreement, (iii) except as provided in
Section 2.02, it shall have no right, to the extent inconsistent with this
Agreement, to (A) direct any Collateral Agent or any other Secured Party
to exercise any right, remedy or power with respect to any Collateral
(including pursuant to any intercreditor agreement) under any Collateral
Document or (B) consent to the exercise by any Collateral Agent or any
other Secured Party of any right, remedy or power with respect to any
Collateral under any Collateral Document, (iv) it will not institute any
suit or assert in any suit, bankruptcy, insolvency or other proceeding any
claim against any Collateral Agent or any other Secured Party seeking damages
from or other relief by way of specific performance, instructions or otherwise
with respect to any Collateral, and no Collateral Agent or any other Secured
Party shall be liable for any action taken or omitted to be taken by such
Collateral Agent or such Secured Party with respect to any Collateral; provided
that such action is in accordance with the provisions of this Agreement, (v) it
will not seek, and hereby waives any right, to have any Collateral or any part
thereof marshaled upon any foreclosure or other disposition of such Collateral
and (vi) it will not attempt, directly or indirectly, whether by judicial
proceedings or otherwise, to challenge the enforceability of any provision of
this Agreement; provided that nothing in this Agreement shall be
construed to prevent or impair the rights of any Collateral Agent or any other
Secured Party to enforce this Agreement.

 

(b)           Each Secured Party hereby agrees that if it shall obtain
possession of any Collateral or shall realize any proceeds or payment in
respect of any such Collateral, pursuant to the exercise of remedies under any
Security Document or by the exercise of any rights available 

 

13

 

to it under applicable law or in any Insolvency or
Liquidation Proceeding or through any other exercise of remedies (including
pursuant to any intercreditor agreement), at any time prior to the Discharge of
each of the Obligations, then it shall hold such Collateral, proceeds or
payment in trust for the other Secured Parties (and promptly transfer such
Collateral, proceeds or payment, as the case may be, to the applicable
Collateral Agent, to be distributed in accordance with the provisions of
Section 2.01 hereof).

 

SECTION 2.04.  
Automatic Release of Liens. 
(a) If, at any time any Collateral Agent forecloses upon or
otherwise exercises remedies against any Collateral resulting in a sale or
disposition thereof, then (whether or not any Insolvency or Liquidation
Proceeding is pending at the time) the Liens in favor of each Collateral Agent
for the benefit of the applicable Secured Parties upon such Collateral will
automatically be released and discharged; provided that any proceeds of
any Collateral realized therefrom shall be applied pursuant to
Section 2.01 hereof.

 

(b)           [Reserved]

 

(c)           Each Collateral Agent agrees to execute and deliver (at
the sole cost and expense of the Grantors) all such authorizations and other
instruments as shall reasonably be requested by the other Collateral Agent to
evidence and confirm any release of Collateral provided for in this Section.

 

SECTION 2.05.  
Certain Agreements with Respect to Bankruptcy or Insolvency Proceedings.  (a) This Agreement shall continue in
full force and effect notwithstanding the commencement of any proceeding under
the Bankruptcy Code or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law by or against the Company or any of its
Subsidiaries.

 

(b)           [Reserved]

 

SECTION 2.06.  
Reinstatement.  In the
event that any of the Obligations shall be paid in full and such payment or any
part thereof shall subsequently, for whatever reason (including an order or
judgment for disgorgement of a preference under Title 11 of the United Stated
Code, or any similar law, or the settlement of any claim in respect thereof),
be required to be returned or repaid, the terms and conditions of this Article II,
to the fullest extent permitted pursuant to applicable law, shall be fully
applicable thereto until all such Obligations shall again have been paid in
full in cash.

 

SECTION 2.07.  
Insurance.  As between the
Secured Parties, the Controlling Collateral Agent, acting at the direction of
the applicable Majority Class Holders, shall have the right to adjust or
settle any insurance policy or claim covering or constituting Collateral in the
event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding affecting the Collateral, in each case, in
accordance with the applicable Loan Documents.

 

SECTION 2.08.  
Refinancings.  The
Obligations may be Refinanced, in whole or in part, in each case, without
notice to, or the consent (except to the extent a consent is otherwise required
to permit the refinancing transaction under any Loan Document) of any Secured
Party, all without affecting the priorities provided for herein or the other
provisions hereof; and each 

 

14

 

Collateral
Agent will execute such reasonable supplements or addenda to this Agreement as
are necessary to permit any Revolving Credit Collateral Agent under a
Replacement Revolving Credit Agreement and any Term Loan Collateral Agent under
a Replacement Term Loan Agreement to become party hereto, and the Obligations
and Liens in respect of any such applicable replacement facility to become
subject hereto.

 

SECTION 2.09.  
Possessory Collateral Agent as Gratuitous Bailee for Perfection.  (a) Each Collateral Agent agrees to hold
any Collateral constituting Possessory Collateral that is part of the
Collateral in its possession or control (or in the possession or control of its
agents or bailees) as gratuitous bailee for the benefit of the other Collateral
Agent and each other Secured Party and any assignee solely for the purpose of
perfecting the security interest granted in such Possessory Collateral, if any,
pursuant to the applicable Security Documents, in each case, subject to the
terms and conditions of this Section 2.09. 
Pending delivery to the applicable Collateral Agent, each other Secured
Party agrees to hold any Collateral constituting Possessory Collateral, from
time to time in its possession, as gratuitous bailee for the benefit of each
other Secured Party and any assignee, solely for the purpose of perfecting the
security interest granted in such Possessory Collateral, if any, pursuant to
the applicable Security Documents, in each case, subject to the terms and
conditions of this Section 2.09.

 

(b)           The duties or responsibilities of each Collateral Agent
and each other Secured Party under this Section 2.09 shall be limited
solely to holding any Collateral constituting Possessory Collateral as
gratuitous bailee for the benefit of each other Secured Party for purposes of
perfecting the Lien held by such Secured Parties therein.

 

(c)           Notwithstanding anything to the contrary set forth above,
the parties hereto hereby acknowledge that the Company shall have access to its
deposit and cash management accounts maintained with any of the Secured Parties
(unless restricted other than by this Agreement) until an Event of Default
shall have occurred and be continuing and the depository Secured Party shall
have exercised its rights to limit such access.

 

ARTICLE III

 

Existence and Amounts of
Liens and Obligations

 

SECTION 3.01.  
Determinations with Respect to Amounts of Liens and Obligations.  Whenever any Collateral Agent shall be
required, in connection with the exercise of its rights or the performance of its
obligations hereunder, to determine the existence or amount of any Obligations,
or the Collateral subject to any Lien securing any Obligations, it may request
that such information be furnished to it in writing by the other Collateral
Agent and shall be entitled to make such determination on the basis of the
information so furnished; provided, however, that if a Collateral
Agent shall fail or refuse reasonably promptly to provide the requested
information, the requesting Collateral Agent shall be entitled to make any such
determination by such method as it may, in the exercise of its good faith
judgment, determine, including by reliance upon a certificate of the
Company.  Each Collateral Agent may rely
conclusively, and shall be fully protected in so relying, on any determination
made by it in 

 

15

 

accordance
with the provisions of the preceding sentence (or as otherwise directed by a
court of competent jurisdiction) and shall have no liability to any Grantor,
any Secured Party or any other person as a result of such determination.

 

ARTICLE IV

 

The Collateral Agents

 

SECTION 4.01.  
Appointment and Authority. 
(a)  Each of (x) the Revolving Credit Secured Parties hereby
irrevocably appoints the Term Loan Collateral Agent and (y) the Term Loan
Secured Parties hereby irrevocably appoints the Revolving Credit Collateral
Agent, in each case, when such Collateral Agent is the Controlling Collateral
Agent to act on its behalf as a Collateral Agent hereunder and under each of
the other Security Documents and authorizes such Collateral Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Collateral Agent by the terms hereof or thereof, including for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
Grantor to secure any of the Obligations, together with such powers and
discretion as are reasonably incidental thereto.  In this connection, the applicable Collateral
Agent and any co-agents, sub-agents and attorneys-in-fact appointed by such
Collateral Agent pursuant to Section 4.05 for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under any
of the Security Documents, or for exercising any rights and remedies
thereunder, shall be entitled to the benefits of all provisions of this Article IV
and any equivalent provision of any applicable Security Document (as though
such co-agents, sub-agents and attorneys-in-fact were the “Collateral
Agent” named therein) as if set forth in full herein with respect
thereto.

 

(b)           Subject to Section 2.01, each Non-Controlling Secured
Party acknowledges and agrees that the Controlling Collateral Agent shall be
entitled, for the benefit of the Secured Parties, to sell, transfer or
otherwise dispose of or deal with any Collateral as provided herein and in the
Security Documents, without regard to any rights to which the Non-Controlling
Secured Parties would otherwise be entitled as a result of the Obligations held
by them.  Without limiting the foregoing,
each Non-Controlling Secured Party agrees that no Collateral Agent or any other
Secured Party shall have any duty or obligation first to marshal or realize
upon any type of Collateral (or any other collateral securing any of the
Obligations), or to sell, dispose of or otherwise liquidate all or any portion
of such Collateral (or any other collateral securing any Obligations), in any
manner that would maximize the return to the Non-Controlling Secured Parties,
notwithstanding that the order and timing of any such realization, sale,
disposition or liquidation may affect the amount of proceeds actually received
by the Non-Controlling Secured Parties from such realization, sale, disposition
or liquidation.  Each of the Secured Parties
waives any claim it may now or hereafter have against any Collateral Agent or
any other Secured Party arising out of (i) any actions which such
Collateral Agent or any Secured Party takes or omits to take (including,
actions with respect to the creation, perfection or continuation of Liens on
any Collateral, actions with respect to the foreclosure upon, sale, release or
depreciation of, or failure to realize upon, any of the Collateral and actions
with respect to the collection of any claim for all or any part of the
Obligations from any account debtor, guarantor or any other party) in
accordance with this Agreement and the applicable Security Documents or any
other agreement or document related thereto or to the collection of the
Obligations or the valuation, use, protection or release of any security for
the Obligations, (ii) any election by any 

 

16

 

holders of Obligations, in any proceeding instituted
under the Bankruptcy Code, of the application of Section 1111(b) of
the Bankruptcy Code or (iii) subject to Section 2.05, any borrowing
by, or grant of a security interest or administrative expense priority under
Section 364 of the Bankruptcy Code or any equivalent provision of any
other Bankruptcy Law by, the Company or any of its Subsidiaries, as
debtor-in-possession.  Notwithstanding
any other provision of this Agreement, no Collateral Agent shall accept any
Collateral in full or partial satisfaction of any Obligations pursuant to
Section 9-620 of the Uniform Commercial Code of any jurisdiction, without
the consent of the other Collateral Agent.

 

SECTION 4.02.  
Rights as a Secured Party. 
(a) Each Person serving as a Collateral Agent hereunder shall have
the same rights and powers in its capacity as a Secured Party in respect of any
Obligations that it holds as any other applicable Secured Party and may
exercise the same as though it were not a Collateral Agent and the term “Secured
Party” or “Secured Parties” or (as applicable) “Revolving Credit Secured Party,”
“Revolving Credit Secured Parties,” “Term Loan Secured Party” or “Term Loan
Secured Parties” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include each such Person serving as Collateral
Agent hereunder in its individual capacity. 
Each such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with the Company or any Subsidiary or
other Affiliate thereof as if such Person were not a Collateral Agent hereunder
and without any duty to account therefor to any other Secured Party.

 

SECTION 4.03.  
Exculpatory Provisions.  No
Collateral Agent shall have any duties or obligations except those expressly
set forth herein and in the applicable Loan Documents.  Without limiting the generality of the
foregoing, no Collateral Agent:

 

(i)            shall be subject to any fiduciary or other implied
duties, regardless of whether an Event of Default has occurred and is
continuing;

 

(ii)           shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that such
Collateral Agent is required to exercise as directed in writing by the
applicable Majority Class Holders; provided that no Collateral
Agent shall be required to take any action that, in its opinion or the opinion
of its counsel, may expose such Collateral Agent to liability or that is contrary
to any applicable Loan Document or applicable law, whether or not such action
has been directed by the applicable Majority Class Holders;

 

(iii)          shall, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to the Company or any of its
Affiliates that is communicated to or obtained by the Person serving as
Collateral Agent or any of its Affiliates in any capacity;

 

(iv)          shall be liable for any action taken or not taken by it (i) with
the consent or at the request of the applicable Majority Class Holders or (ii) in
the absence of its own gross negligence or willful misconduct or (iii) in
reliance on a certificate of an authorized 

 

17

 

officer of the Company
stating that such action is permitted by the terms of this Agreement.  No Collateral Agent shall be deemed to have
knowledge of any Event of Default under any Loan Document unless and until
notice describing such Event Default is delivered to such Collateral Agent by
the Collateral Agent that acts as administrative agent for the applicable
Credit Agreement, the Majority Class Holders in respect thereof, or the
Company; or

 

(v)           shall be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document, or the
creation, perfection or priority of any Lien purported to be created by any
Security Document, (v) the value or the sufficiency of any Collateral for
any Obligations, or (vi) the satisfaction of any condition set forth in
any Credit Agreement, other than to confirm receipt of items expressly required
to be delivered to such Collateral Agent.

 

SECTION 4.04.  
Reliance by Collateral Agents. 
Each Collateral Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution)
believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper Person.  Each
Collateral Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. 
Each Collateral Agent may consult with legal counsel (who may be counsel
for the Company), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.

 

SECTION 4.05.  
Delegation of Duties.  Each
Collateral Agent may perform any and all of its duties and exercise its rights
and powers hereunder or under any other Security Document by or through any one
or more sub-agents appointed by such Collateral Agent.  Each Collateral Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates.  The
exculpatory provisions of this Article shall apply to any such sub-agent
and to the Affiliates of such Collateral Agent and any such sub-agent.

 

SECTION 4.06.  
Resignation of Collateral AgentIn the event that (x) the
Revolving Credit Collateral Agent at any time is replaced as collateral agent
for the Revolving Credit Secured Parties pursuant to the terms of the Revolving
Credit Agreement or (y) the Term Loan Collateral Agent at any time is
replaced as collateral agent for the Term Loan Secured Parties pursuant to the
terms of the Term Loan Credit Agreement, such replacement collateral agent
shall be the “Revolving Credit Collateral Agent” or “Term Loan Collateral Agent”,
as applicable, hereunder upon 15 days’ prior written notice to the other
Collateral Agent and the 

 

18

 

Company.  Upon any such resignation and replacement,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Collateral Agent,
and the retiring Collateral Agent shall be discharged from all of its duties
and obligations hereunder or under the applicable Security Documents (if not
already discharged therefrom as provided above in this Section).  After the retiring Collateral Agent’s
resignation hereunder and under the other applicable Security Documents, the
provisions of this Article shall continue in effect for the benefit of
such retiring Collateral Agent, its sub-agents and their respective Affiliates
in respect of any actions taken or omitted to be taken by any of them while the
retiring Collateral Agent was acting as a Collateral Agent.  Upon any notice of resignation of any
Collateral Agent hereunder and under the other applicable Security Documents,
the Company agrees to use commercially reasonable efforts to transfer (and
maintain the validity and priority of) the Liens in favor of the retiring
Collateral Agent under the applicable Security Documents to the successor
Collateral Agent.

 

SECTION 4.07.  
Non-Reliance on Collateral Agents and Other Secured Parties.  Each Secured Party acknowledges that it has,
independently and without reliance upon any Collateral Agent or any other
Secured Party or any of their Affiliates and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents to which it
is a party.  Each Secured Party also
acknowledges that it will, independently and without reliance upon any
Collateral Agent or any other Secured Party or any of their Affiliates and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

SECTION 4.08.  
Collateral and Guaranty Matters. 
Each of the Secured Parties irrevocably authorizes and directs the
Collateral Agents:

 

(i)            to release any Lien on any Collateral granted to or held
by such Collateral Agent under any applicable Security Document in accordance
with Section 2.04 or upon receipt of an officer’s certificate from the
Company stating that the releases of such Lien is permitted by the terms of
each then extant Loan Document; and

 

(ii)           to release any Grantor from its obligations under the Loan
Documents in accordance with Section 2.04 or upon receipt of an officer’s
certificate from the Company stating that such release is permitted by the
terms of each then extant Loan Document.

 

ARTICLE V

 

Miscellaneous

 

SECTION 5.01.  
Notices.  All notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

19

 

(a)           if to the
Revolving Credit Collateral Agent, to it at

 

1000 Westlakes Drive 

Suite 200

Berwyn, PA 19312

Tel: 610-725-5740;

Fax: 610-725-5799

email: brian.vesey@pnc.com;

 

and

 

if
to the Term Loan Collateral Agent, to it at

 

P.O. Box
50, 200 Bay Street

Royal
Bank Plaza

12th
Floor, South Tower

Toronto,
Ontario

M5J
2W7

Attention:
Manager, Agency Services Group

Facsimile:
416-842-4023

 

Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt (if a Business Day) and on the
next Business Day thereafter (in all other cases) if delivered by hand or
overnight courier service or sent by telecopy or on the date five Business Days
after dispatch by certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party as provided in
this Section 5.01 or in accordance with the latest unrevoked direction
from such party given in accordance with this Section 5.01.  As agreed to in writing among each Collateral
Agent from time to time, notices and other communications may also be delivered
by e-mail to the e-mail address of a representative of the applicable person
provided from time to time by such person.

 

SECTION 5.02.  
Waivers; Amendment; Joinder Agreements.  (a) No failure or delay on the part of
any party hereto in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.  The rights and
remedies of the parties hereto are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure by any party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  No notice or demand on any party hereto in
any case shall entitle such party to any other or further notice or demand in
similar or other circumstances.

 

20

 

(b)           Neither this Agreement nor any provision hereof may be
terminated, waived, amended or modified (other than pursuant to any Joinder
Agreement) except pursuant to an agreement or agreements in writing entered
into by each Collateral Agent (and with respect to any such termination,
waiver, amendment or modification which (i) by the terms of this Agreement
requires the Company’s or any other Grantor’s consent, (ii) directly
affects any obligation or right of the Company or any Grantor hereunder or
under the Security Documents or that would impose any additional obligations on
the Company or any other Grantor, or (iii) changes the rights of the
Company or any other Grantor to refinance any of the Obligations or which
increases the obligations or reduces the rights of the Company or any other
Grantor, with the consent of the Company and/or such other Grantor).

 

SECTION 5.03.  
Parties in Interest.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, as well as the other Secured
Parties, all of whom are intended to be bound by, and to be third party
beneficiaries of, this Agreement.

 

SECTION 5.04.  
Survival of Agreement.  All
covenants, agreements, representations and warranties made by any party in this
Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement.

 

SECTION 5.05.  
Counterparts.  This
Agreement may be executed in counterparts, each of which shall constitute an
original but all of which when taken together shall constitute a single
contract.  Delivery of an executed
signature page to this Agreement by facsimile or electronic transmission
shall be as effective as delivery of a manually signed counterpart of this
Agreement.

 

SECTION 5.06.  
Severability.  Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.  The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

 

SECTION 5.07.  
Governing Law; Jurisdiction.  This Agreement shall be construed in
accordance with and governed by the law of the State of New York.

 

SECTION 5.08.  
Submission to Jurisdiction Waivers; Consent to Service of Process.  The Revolving Credit Collateral Agent and the
Term Loan Collateral Agent, on behalf of itself and the Secured Parties for
whom it is acting, irrevocably and unconditionally:

 

(a)           submits for itself and its property in any legal action or
proceeding relating to this Agreement and the Security Documents, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the 

 

21

 

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;

 

(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
Person at the address referred to in 5.01;

 

(d)           agrees that nothing herein shall affect the right of any
other party hereto (or any Secured Party) to effect service of process in any
other manner permitted by law or shall limit the right of any party hereto (or
any Secured Party) 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 5.08 any special, exemplary, punitive or
consequential damages.

 

SECTION 5.09.  
WAIVER OF JURY TRIAL.  EACH
PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

SECTION 5.10.  
Headings.  Article,
Section and Annex headings used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Agreement.

 

SECTION 5.11.  
Conflicts.  In the event of
any conflict or inconsistency between the provisions of this Agreement and the
provisions of any of the other Security Documents, the provisions of this
Agreement shall control.

 

SECTION 5.12.  
Provisions Solely to Define Relative Rights.  The provisions of this Agreement are and are
intended solely for the purpose of defining the relative rights of the Secured
Parties in relation to one another.  None
of the Company, any other Grantor or any other creditor thereof shall have any
rights or obligations hereunder, except as expressly provided in this Agreement
(provided that nothing in this Agreement is intended to or will amend,
waive or otherwise modify the provisions of any Loan Document), and none of the
Company or any other Grantor may rely on the terms hereof.  Nothing in this Agreement is intended to or
shall impair the obligations of any Grantor, which are absolute and
unconditional, to pay the Obligations as and when the same shall become due and
payable in accordance with their terms and nothing in this Agreement is
intended to impose any additional or greater obligation or liability on the
Company or any Grantor.

 

SECTION 5.13.  
[Reserved].

 

22

 

SECTION 5.14.  
Enforcement Expenses; Indemnification.

 

(a)           Each Grantor agrees to pay or reimburse each Collateral
Agent for all its costs and expenses incurred in collecting against such
Grantor in enforcing or preserving any rights under this Agreement, including,
without limitation, the fees and disbursements of counsel to such Collateral
Agent.

 

(b)           Each Grantor agrees to pay, and to save each Collateral
Agent 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 Grantor agrees to pay, and to save each Collateral
Agent 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 Company
would be required to do so pursuant to Section 9.5 of the Revolving Credit
Agreement or Section 8.5 of the Term Loan Agreement, as applicable.

 

(d)           In the event that any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever may at any time (whether before or after the Discharge
of the Obligations) be imposed on, incurred by or asserted against any
Collateral Agent in any way relating to, or arising out of, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Collateral Agent under or in connection with
any of the foregoing, the Collateral Agents agree to share any costs associated
therewith ratably according to the Obligations owing to the respective Secured Parties
for which they are acting hereunder, as in effect on the date on which such
sharing is requested by the applicable Collateral Agent under this Section (or,
if such sharing is sought after the date upon which the Obligations shall have
been Discharged, ratably in accordance with such Obligations Percentages
immediately prior to such Discharge).

 

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

 

SECTION 5.15.  
Integration.  This
Agreement together with the other Loan Documents represents the agreement of
each of the Grantors and the Secured Parties with respect to the subject matter
hereof and there are no promises, undertakings, representations or warranties
by any Grantor, any Collateral Agent, any or any other Secured Party relative
to the subject matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.

 

SECTION 5.16.  
Additional Grantors.  Each
Person that becomes a Grantor after the date hereof shall become a party to
this Agreement upon execution and delivery by such Person of a Joinder
Agreement in the form of Annex II hereto.

 

23

 

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

 

	
   

  	
  PNC
  BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Revolving Credit Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
  by
  

  	
  /s/
  Brian T. Vesey

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Brian T. Vesey

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

Triumph
Group, Inc. Intercreditor Agreement

 

 

	
   

  	
  ROYAL
  BANK OF CANADA,

  
	
   

  	
  as
  Term Loan Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
  by
  

  	
  /s/
  Ann Hurley

  
	
   

  	
   

  	
   

  	
  Name:
  Ann Hurley

  
	
   

  	
   

  	
   

  	
  Title:
  Manager, Agency

  

 

Triumph Group, Inc. Intercreditor Agreement

 

 

	
   

  	
  TRIUMPH
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
  Title:
  Executive Vice President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  NU-TECH
  BRANDS, INC.

  
	
   

  	
  TRIUMPH
  BRANDS, INC.

  
	
   

  	
  TRIUMPH
  GROUP ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
  Title:
  President and Treasurer of each of the above named companies

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KILROY
  STEEL, INC.

  
	
   

  	
  KILROY
  STRUCTURAL STEEL CO.

  
	
   

  	
  TRIUMPH
  METALS COMPANY

  
	
   

  	
  TRIUMPH
  STRUCTURES - EAST TEXAS, INC.

  
	
   

  	
  TRIUMPH
  PRECISION, INC.

  
	
   

  	
  TRIUMPH
  INSULATION SYSTEMS, LLC

  
	
   

  	
  THE
  MEXMIL HOLDING COMPANY, LLC

  
	
   

  	
  TRIUMPH
  STRUCTURES - LONG ISLAND, LLC

  
	
   

  	
  TRIUMPH
  INVESTMENT HOLDINGS, INC.

  
	
   

  	
  TRIUMPH
  INSTRUMENTS - BURBANK, INC.

  
	
   

  	
  AIRFRAME
  SPARES AND LOGISTICS, LLC

  
	
   

  	
  MEXMIL
  CHINA, LLC

  
	
   

  	
  TRIUMPH
  GROUP HOLDINGS - MEXICO, LLC

  
	
   

  	
  TRIUMPH
  GROUP INVESTMENT - MEXICO, LLC

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS - NEWPORT NEWS, INC.

  
	
   

  	
  TRIUMPH
  ACCESSORY SERVICES - GRAND PRAIRIE, INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS - FORT WORTH, INC.

  
	
   

  	
  CBA
  ACQUISITION, LLC

  
	
   

  	
  TRIUMPH
  FABRICATIONS - HOT SPRINGS, INC.

  
	
   

  	
  TRIUMPH
  PROCESSING, INC.

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS - VALENCIA, INC.

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS, LLC

  
	
   

  	
  TRIUMPH
  ACTUATION SYSTEMS - CONNECTICUT, LLC

  
	
   

  	
  HT
  PARTS, L.L.C.

  
	
   

  	
  LAMAR
  ELECTRO-AIR CORPORATION

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS - WICHITA, INC.

  

 

Triumph Group, Inc.
Intercreditor Agreement

 

 

	
   

  	
  TRIUMPH
  STRUCTURES - KANSAS CITY, INC.

  
	
   

  	
  THE
  TRIUMPH GROUP OPERATIONS, INC.

  
	
   

  	
  TRIUMPH
  AEROSPACE SYSTEMS GROUP, INC.

  
	
   

  	
  TRIUMPH
  AFTERMARKET SERVICES GROUP, INC.

  
	
   

  	
  TRIUMPH
  AIRBORNE STRUCTURES, INC.

  
	
   

  	
  TRIUMPH
  AVIATIONS INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS - SAN DIEGO, INC.

  
	
   

  	
  TRIUMPH
  COMPOSITE SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  CONTROLS, LLC

  
	
   

  	
  TRIUMPH
  ENGINEERED SOLUTIONS, INC.

  
	
   

  	
  TRIUMPH
  ENGINEERING SERVICES, INC.

  
	
   

  	
  TRIUMPH
  GEAR SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  GEAR SYSTEMS - MACOMB, INC.

  
	
   

  	
  TRIUMPH
  GROUP ACQUISITION HOLDINGS, INC.

  
	
   

  	
  TRIUMPH
  INSTRUMENTS, INC.

  
	
   

  	
  TRIUMPH
  PRECISION CASTINGS CO.

  
	
   

  	
  TRIUMPH
  STRUCTURES - LOS ANGELES, INC.

  
	
   

  	
  TRIUMPH
  THERMAL SYSTEMS, INC.

  
	
   

  	
  TRIUMPH
  TURBINE SERVICES, INC.

  
	
   

  	
  TRIUMPH
  STRUCTURES - WICHITA, INC.

  
	
   

  	
  TRIUMPH
  INTERIORS, LLC

  
	
   

  	
  TRIUMPH
  FABRICATIONS — ORANGEBURG, INC.

  
	
   

  	
  TRIUMPH
  FABRICATIONS — ST. LOUIS, INC.

  
	
   

  	
  TRIUMPH
  REAL ESTATE — MEXICO, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
  Title:
  Vice President and Treasurer of each of the above named companies

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIUMPH
  AEROSTRUCTURES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Richard C. Ill

  
	
   

  	
   

  	
  Name:  Richard C. Ill

  
	
   

  	
   

  	
  Title:  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  VAC
  INDUSTRIES, INC.

  
	
   

  	
  VOUGHT
  COMMERCIAL AIRCRAFT COMPANY

  
	
   

  	
  CONTOUR
  AEROSPACE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  M. David Kornblatt

  
	
   

  	
   

  	
  Name:
  M. David Kornblatt

  
	
   

  	
   

  	
  Title:  Vice President and Treasurer

  

 

Triumph Group, Inc. Intercreditor Agreement

 

 

ANNEX I

 

Grantors

 

TRIUMPH
GROUP, INC.

NU-TECH
BRANDS, INC.

TRIUMPH
BRANDS, INC.

TRIUMPH
GROUP ACQUISITION CORP.

KILROY
STEEL, INC.

KILROY
STRUCTURAL STEEL CO.

TRIUMPH
METALS COMPANY

TRIUMPH
STRUCTURES - EAST TEXAS, INC.

TRIUMPH
PRECISION, INC.

TRIUMPH
INSULATION SYSTEMS, LLC

THE
MEXMIL HOLDING COMPANY, LLC

TRIUMPH
STRUCTURES - LONG ISLAND, LLC

TRIUMPH
INVESTMENT HOLDINGS, INC.

TRIUMPH
INSTRUMENTS - BURBANK, INC.

AIRFRAME
SPARES AND LOGISTICS, LLC

MEXMIL
CHINA, LLC

TRIUMPH
GROUP HOLDINGS - MEXICO, LLC

TRIUMPH
GROUP INVESTMENT - MEXICO, LLC

TRIUMPH
AEROSPACE SYSTEMS - NEWPORT NEWS, INC.

TRIUMPH
ACCESSORY SERVICES - GRAND PRAIRIE, INC.

TRIUMPH
FABRICATIONS - FORT WORTH, INC.

CBA
ACQUISITION, LLC

TRIUMPH
FABRICATIONS - HOT SPRINGS, INC.

TRIUMPH
PROCESSING, INC.

TRIUMPH
ACTUATION SYSTEMS - VALENCIA, INC.

TRIUMPH
ACTUATION SYSTEMS, LLC

TRIUMPH
ACTUATION SYSTEMS - CONNECTICUT, LLC

HT
PARTS, L.L.C.

LAMAR
ELECTRO-AIR CORPORATION

TRIUMPH
AEROSPACE SYSTEMS - WICHITA, INC.

TRIUMPH
STRUCTURES - KANSAS CITY, INC.

THE
TRIUMPH GROUP OPERATIONS, INC.

TRIUMPH
AEROSPACE SYSTEMS GROUP, INC.

TRIUMPH
AFTERMARKET SERVICES GROUP, INC.

TRIUMPH
AIRBORNE STRUCTURES, INC.

TRIUMPH
AVIATIONS INC.

TRIUMPH
FABRICATIONS - SAN DIEGO, INC.

TRIUMPH
COMPOSITE SYSTEMS, INC.

TRIUMPH
CONTROLS, LLC

TRIUMPH
ENGINEERED SOLUTIONS, INC.

TRIUMPH
ENGINEERING SERVICES, INC.

TRIUMPH
GEAR SYSTEMS, INC.

 

 

TRIUMPH
GEAR SYSTEMS - MACOMB, INC.

TRIUMPH
GROUP ACQUISITION HOLDINGS, INC.

TRIUMPH
INSTRUMENTS, INC.

TRIUMPH
PRECISION CASTINGS CO.

TRIUMPH
STRUCTURES - LOS ANGELES, INC.

TRIUMPH
THERMAL SYSTEMS, INC.

TRIUMPH
TURBINE SERVICES, INC.

TRIUMPH
STRUCTURES - WICHITA, INC.

TRIUMPH
INTERIORS, LLC

TRIUMPH
FABRICATIONS — ORANGEBURG, INC.

TRIUMPH
FABRICATIONS — ST. LOUIS, INC.

TRIUMPH
REAL ESTATE — MEXICO, LLC

TRIUMPH
AEROSTRUCTURES, LLC

VAC
INDUSTRIES, INC.

VOUGHT
COMMERCIAL AIRCRAFT COMPANY

CONTOUR
AEROSPACE CORPORATION

 

Triumph Group, Inc. Intercreditor
Agreement

 

 

ANNEX II

 

Form of Joinder to Intercreditor Agreement

 

The
undersigned,                            ,
a                            ,
hereby joins in the execution of that certain Intercreditor Agreement dated as
of June 16, 2010 (the “Intercreditor Agreement”), issued and
executed by each Person that is or becomes a Grantor, as applicable, thereunder
on and/or after the date and pursuant to the terms thereof. By executing this
Joinder, the undersigned hereby agrees that it is a Grantor thereunder with the
same force and effect as if originally named therein as a Grantor.  The undersigned agrees to be bound by all of
the terms and provisions of the Intercreditor Agreement. Each reference to a Grantor
in the Intercreditor Agreement shall be deemed to include the undersigned.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Intercreditor Agreement.

 

IN
WITNESS WHEREOF, the undersigned has executed this Joinder this
       day of                            ,
20        .

 

	
   

  	
  [NAME
  OF GRANTOR]

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:|

  
	
   

  	
   

  	
  Address:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]