Document:

Exhibit 10.3

 

 

SECURITY AGREEMENT

 

By

 

D 56, INC., DEPARTMENT
56 RETAIL, INC., 

 

TIME TO CELEBRATE, INC. and
LENOX, INCORPORATED,

 

as
Borrowers,

 

DEPARTMENT 56,
INC.,

 

and

 

THE OTHER GUARANTORS PARTY
HERETO,

 

as
Guarantors

 

and

 

UBS AG, STAMFORD BRANCH,

 

as
Administrative Agent

 

 

Dated as of September 1, 2005

 

 

 

TABLE OF CONTENTS

 

	
  PREAMBLE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RECITALS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREEMENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Interpretation

  	
   

  
	
  Section 1.3

  	
  Resolution of
  Drafting Ambiguities

  	
   

  
	
  Section 1.4

  	
  Perfection
  Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. GRANT OF SECURITY AND SECURED OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Pledge

  	
   

  
	
  Section 2.2

  	
  Secured
  Obligations

  	
   

  
	
  Section 2.3

  	
  Security Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF
  PLEDGED COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Delivery of
  Certificated Securities Collateral

  	
   

  
	
  Section 3.2

  	
  Perfection of
  Uncertificated Securities Collateral

  	
   

  
	
  Section 3.3

  	
  Financing
  Statements and Other Filings; Maintenance of Perfected Security Interest

  	
   

  
	
  Section 3.4

  	
  Other Actions

  	
   

  
	
  Section 3.5

  	
  Joinder of
  Additional Pledgors

  	
   

  
	
  Section 3.6

  	
  Supplements;
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Title

  	
   

  
	
  Section 4.2

  	
  Limitation on
  Liens; Defense of Claims; Transferability of Pledged Collateral

  	
   

  
	
  Section 4.3

  	
  Chief Executive
  Office; Change of Name; Jurisdiction of Organization

  	
   

  
	
  Section 4.4

  	
  Location of
  Collateral

  	
   

  
	
  Section 4.5

  	
  Condition and
  Maintenance of Equipment

  	
   

  
	
  Section 4.6

  	
  Corporate Names;
  Prior Transactions

  	
   

  
	
  Section 4.7

  	
  Due Authorization
  and Issuance

  	
   

  
	
  Section 4.8

  	
  No Claims

  	
   

  
	
  Section 4.9

  	
  No Conflicts,
  Consents, etc.

  	
   

  

 

i

 

	
  Section 4.10

  	
  Pledged
  Collateral

  	
   

  
	
  Section 4.11

  	
  Insurance

  	
   

  
	
  Section 4.12

  	
  Payment of Taxes;
  Compliance with Laws; Contested Liens; Claims

  	
   

  
	
  Section 4.13

  	
  Access to Pledged
  Collateral, Books and Records; Other Information

  	
   

  
	
  Section 4.14

  	
  Third Party
  Consents Relating to Intellectual Property Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Pledge of
  Additional Securities Collateral

  	
   

  
	
  Section 5.2

  	
  Voting Rights;
  Distributions; etc.

  	
   

  
	
  Section 5.3

  	
  Operative Agreements

  	
   

  
	
  Section 5.4

  	
  Defaults, etc.

  	
   

  
	
  Section 5.5

  	
  Certain Agreements of Pledgors As Issuers
  and Holders of Equity Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. CERTAIN PROVISIONS
  CONCERNING INTELLECTUAL PROPERTY COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Grant of License

  	
   

  
	
  Section 6.2

  	
  Registrations

  	
   

  
	
  Section 6.3

  	
  No Violations or Proceedings

  	
   

  
	
  Section 6.4

  	
  Protection of Administrative Agent’s
  Security

  	
   

  
	
  Section 6.5

  	
  After-Acquired Property

  	
   

  
	
  Section 6.6

  	
  Modifications

  	
   

  
	
  Section 6.7

  	
  Litigation

  	
   

  
	
  Section 6.8

  	
  U.S. Intent-to-Use Trademark Applications

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. CERTAIN PROVISIONS
  CONCERNING ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Special Representations and Warranties

  	
   

  
	
  Section 7.2

  	
  Maintenance of Records

  	
   

  
	
  Section 7.3

  	
  Legend

  	
   

  
	
  Section 7.4

  	
  Modification of Terms, etc.

  	
   

  
	
  Section 7.5

  	
  Collection

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. TRANSFERS AND OTHER
  LIENS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Transfers of and other Liens on Pledged
  Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Remedies

  	
   

  
	
  Section 9.2

  	
  Notice of Sale

  	
   

  
	
  Section 9.3

  	
  Waiver of Notice and Claims

  	
   

  
	
  Section 9.4

  	
  Certain Sales of Pledged Collateral

  	
   

  

 

ii

 

	
  Section 9.5

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  Section 9.6

  	
  Certain Additional Actions Regarding
  Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. PROCEEDS OF CASUALTY EVENTS
  AND COLLATERAL DISPOSITIONS/APPLICATION OF PROCEEDS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Proceeds of Casualty Events and Collateral
  Dispositions

  	
   

  
	
  Section 10.2

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Concerning Administrative Agent

  	
   

  
	
  Section 11.2

  	
  Administrative Agent May Perform;
  Administrative Agent Appointed Attorney-in-Fact

  	
   

  
	
  Section 11.3

  	
  Expenses

  	
   

  
	
  Section 11.4

  	
  Continuing Security Interest; Assignment

  	
   

  
	
  Section 11.5

  	
  Termination; Release

  	
   

  
	
  Section 11.6

  	
  Modification in Writing

  	
   

  
	
  Section 11.7

  	
  Notices

  	
   

  
	
  Section 11.8

  	
  GOVERNING LAW

  	
   

  
	
  Section 11.9

  	
  CONSENT TO JURISDICTION AND SERVICE OF
  PROCESS; WAIVER OF JURY TRIAL

  	
   

  
	
  Section 11.10

  	
  Severability of Provisions

  	
   

  
	
  Section 11.11

  	
  Execution in Counterparts

  	
   

  
	
  Section 11.12

  	
  Business Days

  	
   

  
	
  Section 11.13

  	
  No Credit for Payment of Taxes or
  Imposition

  	
   

  
	
  Section 11.14

  	
  No Claims Against Administrative Agent

  	
   

  
	
  Section 11.15

  	
  No Release

  	
   

  
	
  Section 11.16

  	
  Obligations Absolute

  	
   

  
	
   

  	
   

  
	
  EXHIBIT 1

  	
  Form of Issuers Acknowledgment

  
	
  EXHIBIT 2

  	
  Form of Securities Pledge Amendment

  
	
  EXHIBIT 3

  	
  Form of Joinder Agreement

  
	
  EXHIBIT 4

  	
  Form of Securities Account Control
  Agreement

  
	
  EXHIBIT 5-A

  	
  Form of Deposit Account Control
  Agreement - Springing Dominion

  
	
  EXHIBIT 5-B

  	
  Form of Deposit Account Control
  Agreement - Full Dominion

  
				

 

iii

 

SECURITY AGREEMENT

 

SECURITY
AGREEMENT dated as of September 1, 2005 (as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the provisions
hereof, the “Agreement”) made among D 56, INC., a Minnesota corporation
(“D 56”), DEPARTMENT 56 RETAIL, INC., a Minnesota corporation (“D 56
Retail”), TIME TO CELEBRATE, INC., a Minnesota corporation (“TTC”),
LENOX, INCORPORATED, a New Jersey corporation (“Lenox” and, together
with D 56, D 56 Retail and TTC, “Borrowers” and each individually, a “Borrower”),
DEPARTMENT 56, INC., a Delaware corporation (“Holdings”), THE SUBSIDIARY
GUARANTORS PARTY TO THE CREDIT AGREEMENT (and together with Holdings, the “Guarantors”)
ANY ADDITIONAL BORROWERS OR GUARANTORS FROM TIME TO TIME PARTY HERETO BY
EXECUTION OF A JOINDER AGREEMENT (the “Additional Pledgors,”), as
pledgors, assignors and debtors (the Borrowers, together with the Guarantors
and the Additional Pledgors, in such capacities and together with any
successors in such capacities, the “Pledgors,” and each, a “Pledgor”),
in favor of UBS AG, STAMFORD BRANCH, having an office at 677 Washington
Boulevard, Stamford, Connecticut  06901,
in its capacity as administrative agent pursuant to the Credit Agreement (as
hereinafter defined), as pledgee, assignee and secured party (in such
capacities and together with any successors in such capacities, the “Administrative
Agent”).

 

R E C I T A L S:

 

A.                                   The
Pledgors, the Administrative Agent, Wells Fargo Foothill, LLC and Bank of
America Business Capital, as co-documentation agents, JPMorgan Business Credit,
as collateral agent and co-syndication agent, UBS Securities LLC, as co-syndication
agent and arranger, UBS AG, Stamford Branch, as Issuing Bank, UBS Loan Finance
LLC, as Swingline Lender and the lending institutions listed therein (the “Lenders”)
have, in connection with the execution and delivery of this Agreement, entered
into that certain Revolving Credit Agreement, dated as of even date herewith
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”).

 

B.                                     Each
Guarantor has, pursuant to the Credit Agreement, among other things, unconditionally
guaranteed the obligations of the Borrowers under the Credit Agreement and the
other Loan Documents (as hereinafter defined).

 

C.                                     The
Borrowers and each Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Credit
Agreement and the other Loan Documents and each is, therefore, willing to enter
into this Agreement.

 

D.                                    It
is contemplated that one or more of the Pledgors may enter (or may have
entered) into one or more Lender Hedging Agreements with one or more of the
Lenders or their respective Affiliates.

 

E.                                      Each
Pledgor is or, as to Pledged Collateral (as hereinafter defined) acquired by
such Pledgor after the date hereof will be, the legal and/or beneficial owner
of the Pledged Collateral pledged by it hereunder.

 

 

F.                                      This
Agreement is given by each Pledgor in favor of the Administrative Agent for the
benefit of the Secured Parties to secure the payment and performance of all of
the Obligations.

 

G.                                     It
is a condition to the obligations of the Lenders to make the Loans under the
Credit Agreement and a condition to any Lender issuing Letters of Credit under
the Credit Agreement or entering into any Lender Hedging Agreement that each
Pledgor execute and deliver the applicable Loan Documents, including this
Agreement.

 

A G R E E M E N T:

 

NOW THEREFORE,
in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Pledgor and the Administrative Agent hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS AND
INTERPRETATION

 

Section 1.1                                      Definitions.

 

(a)                                  Unless otherwise defined herein,
terms used herein that are defined in the UCC shall have the meanings assigned
to them in the UCC.

 

(b)                                 Capitalized terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have
the meanings given to them in the Credit Agreement.

 

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

 

“Acquisition
Document Rights” shall mean, with respect to each Pledgor, collectively,
all of such Pledgor’s rights, title and interest in, to and under the
Acquisition Documents including, without limitation (i) all rights and
remedies relating to monetary damages, including indemnification rights and
remedies, and claims for damages or other relief pursuant to or in respect of
the Acquisition Documents, (ii) all rights and remedies relating to
monetary damages, including indemnification rights and remedies, and claims for
monetary damages under or in respect of the agreements, documents and instruments
referred to in the Acquisition Documents or related thereto and (iii) all
proceeds, collections, recoveries and rights of subrogation with respect to the
foregoing.

 

“Acquisition
Agreement” shall mean the stock purchase agreement, dated as of July 21,
2005 by and between Holdings and Brown-Forman Corporation (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof and of the Credit Agreement).

 

“Acquisition
Documents” shall mean the collective reference to the Acquisition Agreement
together with any and all documents, agreements and other instruments then or
at any time thereafter executed and/or delivered in connection therewith or
related thereto, in each case,

 

2

 

as amended, amended and restated,
supplemented, extended, renewed, replaced or otherwise modified from time to
time.

 

“Additional
Pledged Interests” shall mean, collectively, with respect to each Pledgor, (i) all
options, warrants, rights, agreements, additional membership, partnership or
other equity interests of whatever class of any issuer of Initial Pledged
Interests or any interest in any such issuer, together with all rights, privileges,
authority and powers of such Pledgor relating to such interests in each issuer
or under the Operative Agreement of any such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other
interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such membership, partnership or
other equity interests from time to time acquired by such Pledgor in any manner
and (ii) to the extent required to be pledged by the terms of the Credit
Agreement, all membership, partnership or other equity interests, as
applicable, of each limited liability company, partnership or other entity
(other than a corporation) hereafter acquired or formed by such Pledgor and all
options, warrants, rights, agreements, additional membership, partnership or
other equity interests of whatever class of such limited liability company,
partnership or other entity together with all rights, privileges, authority and
powers of such Pledgor relating to such interests or under the Operative
Agreement of any such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other equity interests and any and
all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests,
from time to time acquired by such Pledgor in any manner.

 

“Additional
Pledged Shares” shall mean, collectively, with respect to each Pledgor, (i) all
options, warrants, rights, agreements, additional shares of capital stock of
whatever class of any issuer of the Initial Pledged Shares or any other equity
interest in any such issuer, together with all rights, privileges, authority
and powers of such Pledgor relating to such interests issued by any such issuer
under the Operative Agreement of any such issuer, and the certificates,
instruments and agreements representing such interests and any and all interest
of such Pledgor in the entries on the books of any financial intermediary
pertaining to such interests, from time to time acquired by such Pledgor in any
manner and (ii) to the extent required to be pledged by the terms of the
Credit Agreement, all the issued and outstanding shares of capital stock of each
corporation hereafter acquired or formed by such Pledgor and all options,
warrants, rights, agreements or additional shares of capital stock of whatever
class of such corporation together with all rights, privileges, authority and
powers of such Pledgor relating to such shares or under the Operative Agreement
of such corporation and the certificates, instruments and agreements
representing such shares and any and all interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such shares,
from time to time acquired by such Pledgor in any manner.

 

“Additional
Pledgors” shall have the meaning assigned to such term in the Preamble
hereof.

 

“Administrative
Agent” shall have the meaning assigned to such term in the Preamble hereof.

 

“Agreement”
shall have the meaning assigned to such in the Preamble hereof. 

 

3

 

“Borrower”
and “Borrowers” each shall have the meaning assigned to such term in the
Preamble hereof.

 

“Claims”
shall mean any and all property taxes and other taxes, assessments and special
assessments, levies, fees and all governmental charges imposed upon or assessed
against, and all claims (including, without limitation, landlords’, carriers’,
mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and
warehousemen’s Liens and other claims arising by operation of law) against, all
or any portion of the Pledged Collateral.

 

“Collateral
Account” shall mean a collateral account or sub-account established and
maintained by the Administrative Agent (or a Lender that agrees to be an
administrative sub-agent for the Administrative Agent) in its name as
Administrative Agent for the Secured Parties, including, without limitation,
the LC Collateral Account maintained in accordance with the provisions of Section 9.01
of the Credit Agreement, and all funds from time to time on deposit in the Collateral
Account including, without limitation, all Cash Equivalents and all
certificates and instruments from time to time representing or evidencing such
investments; all notes, certificates of deposit, checks and other instruments
from time to time hereafter delivered to or otherwise possessed by the
Administrative Agent for or on behalf of any Pledgor in substitution for, or in
addition to, any or all of the Pledged Collateral; and all interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the items
constituting Pledged Collateral.

 

“Contracts”
shall mean, collectively, with respect to each Pledgor, all sale, service, performance,
equipment or property lease contracts, agreements and grants and all other
contracts, agreements or grants (in each case, whether written or oral, or
third party or intercompany), between such Pledgor and third parties, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof.

 

“Control”
shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any
Security Entitlement, “control,” as such term is defined in Section 8-106
of the UCC and (iii) in the case of any Commodity Contract, “control,” as
such term is defined in Section 9-106 of the UCC.  

 

“Control
Agreements” shall mean, collectively, the Deposit Account Control
Agreements and the Securities Account Control Agreements.

 

“Copyrights”
shall mean, collectively, with respect to each Pledgor, all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof whether registered or
unregistered and whether published or unpublished) and all copyright registrations
and applications made by such Pledgor, in each case, whether now owned or
hereafter created or acquired by or assigned to such Pledgor, including,
without limitation, the copyrights, registrations and applications listed in Schedule 13(b) annexed
to the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor’s use of
such copyrights, (ii) reissues, renewals, continuations and extensions
thereof, (iii) income, fees, royalties, damages, claims and payments now
or hereafter due and/or payable with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (iv) rights corresponding

 

4

 

thereto throughout the world and (v) rights
to sue for past, present or future infringements thereof.

 

“Credit
Agreement” shall have the meaning assigned to such term in Recital A
hereof.

 

“Deposit
Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 5-A or Exhibit 5-B.

 

“Deposit
Accounts” shall mean, collectively, with respect to each Pledgor, (i) all
“deposit accounts” as such term is defined in the UCC and in any event shall
include, without limitation, all accounts and sub-accounts relating to any of
the foregoing accounts and (ii) all cash, funds, checks, notes and instruments
from time to time on deposit in any of the accounts or sub-accounts described
in clause (i) of this definition.

 

“Distributions”
shall mean, collectively, with respect to each Pledgor, all dividends, cash,
options, warrants, rights, instruments, distributions, returns of capital or
principal, income, interest, profits and other property, interests (debt or
equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect
of or in exchange for any or all of the Pledged Securities or Pledged Notes.

 

“General
Intangibles” shall mean, collectively, with respect to each Pledgor, all “general
intangibles,” as such term is defined in the UCC, of such Pledgor and, in any
event, shall include, without limitation, (i) all of such Pledgor’s
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights,
claims, choses-in-action and causes of action of such Pledgor against any other
Person and the benefits of any and all collateral or other security given by
any other Person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Pledged Collateral or
any of the Mortgaged Property, (v) all lists, books, records,
correspondence, ledgers, print-outs, files (whether in printed form or stored
electronically), tapes and other papers or materials containing information
relating to any of the Pledged Collateral or any of the Mortgaged Property,
including, without limitation, all customer or tenant lists, identification of
suppliers, data, plans, blueprints, specifications, designs, drawings,
appraisals, recorded knowledge, surveys, studies, engineering reports, test
reports, manuals, standards, processing standards, performance standards,
catalogs, research data, computer and automatic machinery software and programs
and the like, field repair data, accounting information pertaining to such
Pledgor’s operations or any of the Pledged Collateral or any of the Mortgaged
Property and all media in which or on which any of the information or knowledge
or data or records may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or data, (vi) all
licenses, consents, permits, variances, certifications, authorizations and
approvals, however characterized, of any Governmental Authority (or any Person
acting on behalf of a Governmental Authority) now or hereafter acquired or held
by such Pledgor pertaining to operations now or hereafter conducted by such
Pledgor or any of the Pledged Collateral or any of the Mortgaged Property
including, without limitation, building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and

 

5

 

certificates
of operation and (vii) all rights to reserves, deferred payments,
deposits, refunds, indemnification of claims to the extent the foregoing relate
to any Pledged Collateral or Mortgaged Property and claims for tax or other
refunds against any Governmental Authority relating to any Pledged Collateral
or any of the Mortgaged Property.

 

“Goodwill”
shall mean, collectively, with respect to each Pledgor, the goodwill connected
with such Pledgor’s business including, without limitation, (i) all
goodwill connected with the use of and symbolized by any of the Intellectual
Property Collateral in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions,
technical data, drawings, specifications, name plates, catalogs, confidential
information and the right to limit the use or disclosure thereof by any Person,
pricing and cost information, business and marketing plans and proposals,
consulting agreements, engineering contracts and such other assets which relate
to such goodwill and (iii) all product lines of such Pledgor’s business.

 

“Guarantors”
shall have the meaning assigned to such term in the Preamble hereof.

 

“Indemnitees”
shall have the meaning assigned to such term in Section 11.3(a) hereof.

 

“Initial
Pledged Interests” shall mean, with respect to each Pledgor, all membership,
partnership or other equity interests (other than in a corporation), as
applicable, of each issuer owned by such Pledgor as described in Schedule 10
annexed to the Perfection Certificate, together with all rights, privileges,
authority and powers of such Pledgor in and to each such issuer or under the
Operative Agreement of each such issuer, and the certificates, instruments and
agreements representing such membership, partnership or other interests and any
and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.

 

“Initial
Pledged Shares” shall mean, collectively, with respect to each Pledgor, the
issued and outstanding shares of capital stock of each issuer owned by such
Pledgor as described in Schedule 10 annexed to the Perfection
Certificate together with all rights, privileges, authority and powers of such
Pledgor relating to such interests in each such issuer or under the Operative
Agreement of each such issuer, and the certificates, instruments and agreements
representing such shares of capital stock and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
the Initial Pledged Shares.

 

“Instruments”
shall mean, collectively, with respect to each Pledgor, all “instruments,” as
such term is defined in Article 9 of the UCC and shall include, without
limitation, all promissory notes, drafts, bills of exchange or acceptances.

 

“Intellectual
Property Collateral” shall mean, collectively, the Patents, Trademarks,
Copyrights, Licenses and Goodwill.

 

“Intercompany
Notes” shall mean, with respect to each Pledgor, all intercompany notes
described in Schedule 11 annexed to the Perfection Certificate and
each intercompany note hereafter acquired by such Pledgor and all certificates,
instruments or agreements evidencing

 

6

 

such
intercompany notes, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the extent
permitted pursuant to the terms hereof.

 

“Investment
Property” shall mean a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract or commodity
account, excluding, however, the Securities Collateral.

 

“Joinder
Agreement” shall mean an agreement substantially in the form annexed hereto
as Exhibit 3.

 

“Lenders”
shall have the meaning assigned to such term in Recital A hereof.

 

“Licenses”
shall mean, collectively, with respect to each Pledgor, all license and
distribution agreements with, and covenants not to sue, any other party with
respect to any Patent, Trademark or Copyright or any other patent, trademark or
copyright, whether such Pledgor is a licensor or licensee, distributor or
distributee under any such license or distribution agreement, including,
without limitation, the license and distribution agreements listed in Schedule 13(a) and
13(b) annexed to the Perfection Certificate, together with any and
all (i) renewals, extensions, supplements and continuations thereof, (ii) income,
fees, royalties, damages, claims and payments now and hereafter due and/or
payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements or violations
thereof, (iii) rights to sue for past, present and future infringements or
violations thereof and (iv) other rights to use, exploit or practice any
or all of the Patents, Trademarks or Copyrights or any other patent, trademark
or copyright.

 

“Mortgaged
Property” shall have the meaning assigned to such term in the Mortgages.

 

“Operative
Agreement” shall mean (i) in the case of any limited liability company
or partnership or other non-corporate entity, any membership or partnership
agreement or other organizational agreement or document thereof and (ii) in
the case of any corporation, any charter or certificate of incorporation and
by-laws thereof.

 

“Patents”
shall mean, collectively, with respect to each Pledgor, all patents issued or
assigned to and all patent applications and registrations made by such Pledgor
(whether established or registered or recorded in the United States or any
other country or any political subdivision thereof), including, without
limitation, those listed in Schedule 13(a) annexed to the Perfection
Certificate, together with any and all (i) rights and privileges arising
under applicable law with respect to such Pledgor’s use of any patents, (ii) inventions
and improvements described and claimed therein, (iii) reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof, (iv) income,
fees, royalties, damages, claims and payments now or hereafter due and/or
payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for
past, present or future infringements thereof.

 

7

 

“Perfection
Certificate” shall mean that certain perfection certificate dated as of the
date hereof, executed and delivered by Borrowers or Guarantors, as applicable,
on behalf of each Pledgor in favor of the Administrative Agent for the benefit
of the Secured Parties, and each other Perfection Certificate (which shall be
in form and substance reasonably acceptable to the Administrative Agent)
executed and delivered by any Additional Pledgor in favor of the Administrative
Agent for the benefit of the Secured Parties contemporaneously with the
execution and delivery of each Joinder Agreement executed in accordance with Section 3.5
hereof, in each case, as the same may be supplemented by each Perfection
Certificate Supplement delivered in accordance with the Credit Agreement.  

 

“Pledge
Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

 

“Pledged
Collateral” shall have the meaning assigned to such term in Section 2.1
hereof.

 

“Pledged
Notes” shall mean, collectively, the Intercompany Notes and each additional
note or Instrument hereafter acquired by any Pledgor that is required to be
pledged hereunder and all certificates or agreements evidencing such notes or
Instruments, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the extent
permitted pursuant to the terms hereof.

 

“Pledged
Interests” shall mean, collectively, the Initial Pledged Interests and the
Additional Pledged Interests; provided, however, that to the
extent applicable, Pledged Interests shall not include any interest possessing
more than 66% of the voting power or control of all classes of interests
entitled to vote of any foreign Subsidiary which is a first-tier controlled foreign
corporation (as defined in Section 957(a) of the Code) to the extent
such pledge would result in an adverse tax consequence to the Pledgor and, in
any event, shall not include the interests of any Subsidiary otherwise required
to be pledged pursuant to this Agreement to the extent that such pledge would
constitute an investment of earnings in United States property under Section 956
(or a successor provision) of the Code, to the extent such pledge would trigger
a material  increase in the gross income
of a United States shareholder of such Subsidiary pursuant to Section 951
(or a successor provision) of the Code.

 

“Pledged
Securities” shall mean, collectively, the Pledged Interests, the Pledged
Shares and the Successor Interests.

 

“Pledged
Shares” shall mean, collectively, the Initial Pledged Shares and the Additional
Pledged Shares; provided, however, that Pledged Shares shall not
include shares possessing more than 66% of the voting power of all classes of
capital stock entitled to vote of any Subsidiary which is a first tier
controlled foreign corporation (as defined in Section 957(a) of the
Code) to the extent such pledge would result in an adverse tax consequence to
the Pledgor and, in any event, shall not include the shares of stock of any
foreign Subsidiary otherwise required to be pledged pursuant to this Agreement
to the extent that such pledge would constitute an investment of earnings in
United States property under Section 956 (or a successor provision) of the
Code, to the extent such pledge would trigger a material increase in the gross
income of a

 

8

 

United States shareholder of such Subsidiary pursuant to Section 951
(or a successor provision) of the Code.

 

“Pledgor”
shall have the meaning assigned to such term in the Preamble hereof.

 

“Securities
Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 4.

 

“Securities
Collateral” shall mean, collectively, the Pledged Securities, the Pledged
Notes and the Distributions.

 

“Successor
Interests” shall mean, collectively, with respect to each Pledgor, all
shares of each class of the capital stock of the successor corporation or
interests or certificates of the successor limited liability company,
partnership or other entity owned by such Pledgor (unless such successor is
such Pledgor itself) formed by or resulting from any consolidation or merger in
which any issuer of Pledged Interests or Pledged Shares is not the surviving
entity; provided, however, that Successor Interest shall not
include shares or interests possessing more than 66% of the voting power or
control of all classes of capital stock or interests entitled to vote of any
Subsidiary which is a first-tier controlled foreign corporation (as defined in Section 957(a) of
the Code) to the extent such pledge would result in an adverse tax consequence
to the Pledgor and, in any event, shall not include shares of stock or
interests of any foreign Subsidiary otherwise required to be pledged pursuant
to this Agreement to the extent that such pledge would constitute an investment
of earnings in United States property under Section 956 (or a successor
provision) of the Code, to the extent such pledge would trigger a material
increase in the gross income of a United States shareholder of such Pledgor
pursuant to Section 951 (or a successor provision) of the Code.

 

“Term Loan
Administrative Agent” shall mean the “Administrative Agent” under the Term
Loan Agreement.

 

“Trademarks”
shall mean, collectively, with respect to each Pledgor, all trademarks
(including service marks), slogans, logos, certification marks, trade dress,
uniform resource locations (URL’s), domain names, corporate names and trade
names, whether registered or unregistered, owned by or assigned to such Pledgor
and all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States or any
other country or any political subdivision thereof), including, without limitation,
the registrations and applications listed in Schedule 13(a) annexed
to the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor’s use of
any trademarks, (ii) reissues, continuations, extensions and renewals
thereof, (iii) income, fees, royalties, damages and payments now and
hereafter due and/or payable thereunder and with respect thereto, including,
without limitation, damages, claims and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the
world and (v) rights to sue for past, present and future infringements
thereof.

 

“UCC”
shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided, however, that if by reason of
mandatory provisions of law,

 

9

 

any or all of
the attachment, perfection or priority of the Administrative Agent’s and the
Secured Parties’ security interest in any item or portion of the Pledged
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect on the date hereof in such other jurisdiction
for purposes of the provisions hereof relating to such attachment, perfection
or priority and for purposes of definitions relating to such provisions.

 

Section 1.2                                      Interpretation. 
The rules of interpretation specified in the Credit Agreement shall
be applicable to this Agreement.  If any
conflict or inconsistency exists between this Agreement and the Credit
Agreement, the Credit Agreement shall govern.

 

Section 1.3                                      Resolution of
Drafting Ambiguities.  Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and participated
in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Administrative Agent) shall not be employed in
the interpretation hereof.

 

Section 1.4                                      Perfection
Certificate.  The Administrative
Agent and each Secured Party agree that the Perfection Certificate and all
descriptions of Pledged Collateral, schedules, amendments and supplements
thereto are and shall at all times remain a part of this Agreement.

 

ARTICLE II.

 

GRANT OF SECURITY
AND SECURED OBLIGATIONS

 

Section 2.1                                      Pledge.  As collateral security for the payment and
performance in full of all the Obligations, each Pledgor hereby pledges and
grants to the Administrative Agent for its benefit and for the benefit of the
Secured Parties, a lien on and security interest in and to all of the right,
title and interest of such Pledgor in, to and under all personal property and
interests in personal property, wherever located, whether now existing or
hereafter arising or acquired from time to time (collectively, the “Pledged
Collateral”), including, without limitation:

 

(i)                                                                                     all Accounts;

 

(ii)                                                                                  all Equipment, Goods, Inventory and
Fixtures;

 

(iii)                                                                               all Documents, Instruments and Chattel
Paper;

 

(iv)                                                                              all Letters of Credit and
Letter-of-Credit Rights;

 

(v)                                                                                 all Securities Collateral;

 

(vi)                                                                              all Collateral Accounts;

 

(vii)                                                                           all Investment Property;

 

(viii)                                                                        all Intellectual Property Collateral;

 

10

 

(ix)                                                                                the Commercial Tort Claims described on
Schedule 14 to the Perfection Certificate;

 

(x)                                                                                   all General Intangibles;

 

(xi)                                                                                all Deposit Accounts;

 

(xii)                                                                             all Acquisition Documents and
Acquisition Document Rights;

 

(xiii)                                                                          all Supporting Obligations;

 

(xiv)                                                                         all books and records relating to the
Pledged  Collateral; and

 

(xv)                                                                            to the extent not covered by clauses
(i) through (xiv) of this sentence, all other personal property of such
Pledgor, whether tangible or intangible and all Proceeds and products of each
of the foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of, each of the foregoing, any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to such Pledgor from
time to time with respect to any of the foregoing.

 

Notwithstanding
anything to the contrary contained in clauses (i) through (xv) above, the
security interest created by this Agreement shall not extend to, and the term “Pledged
Collateral” shall not include, (A) any License to which any Pledgor is a
party to the extent, and solely to the extent, and for so long as, and solely
for so long as, the terms of such License or any Requirement of Law applicable
thereto validly prohibit the creation by such Pledgor of a security interest in
such License in favor of the Administrative Agent, after giving effect to Sections 9-406(d),
9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions)
or any other applicable law or principles of equity; provided, however,
that Proceeds of any License described in this sentence shall not be excluded
from “Pledged Collateral”; and (B) certain Inventory to the extent, and
solely to the extent, that such Inventory bears a trademark subject to a
license agreement listed on Annex A hereto that prohibits the granting of a
Lien on any Inventory bearing such trademark unless the licensor under the
applicable license agreement shall have consented in writing to the granting of
a Lien on such Inventory hereunder. 

 

Section 2.2                                      Secured
Obligations.  This Agreement secures,
and the Pledged Collateral is collateral security for, the payment and
performance in full when due of the Obligations.

 

Section 2.3                                      Security
Interest.  (a)  Each Pledgor hereby irrevocably
authorizes the Administrative Agent at any time and from time to time to
authenticate and file in any relevant jurisdiction any initial financing
statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment
relating to the Pledged Collateral, including, without limitation, (i) whether
such Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) any financing or
continuation statements or other documents without the signature of such
Pledgor where permitted by law, including, without limitation, the filing of a
financing statement

 

11

 

describing the Pledged Collateral as “all assets” or “all assets in which
the Pledgor now owns or hereafter acquires rights” or words to that effect and (iii) in
the case of a financing statement filed as a fixture filing or covering Pledged
Collateral constituting minerals or the like to be extracted or timber to be
cut, a sufficient description of the real property to which such Pledged
Collateral relates.  Each Pledgor agrees
to provide all information described in the immediately preceding sentence to
the Administrative Agent promptly upon request.

 

(b)                                 Each Pledgor hereby ratifies its
authorization for the Administrative Agent to file in any relevant jurisdiction
any initial financing statements or amendments thereto relating to the Pledged
Collateral if filed prior to the date hereof.

 

(c)                                  Each Pledgor hereby further authorizes
the Administrative Agent to file filings with the United States Patent and
Trademark Office and United States Copyright Office (or any successor office or
any similar office in any other country) or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security interest
granted by such Pledgor hereunder, without the signature of such Pledgor, and
naming such Pledgor, as debtor, and the Administrative Agent, as secured party.

 

ARTICLE III.

 

PERFECTION; SUPPLEMENTS;
FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL

 

Section 3.1                                      Delivery
of Certificated Securities Collateral.  Each Pledgor represents and warrants that all
certificates, agreements or instruments representing or evidencing the
Securities Collateral in existence on the date hereof have been or
contemporaneously herewith will be delivered to the Administrative Agent in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank and that the Administrative
Agent has or contemporaneously herewith shall have a perfected first priority
security interest therein.  Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor after the date
hereof, shall, within the time periods required by the Credit Agreement, be
delivered to and held by or on behalf of the Administrative Agent pursuant
hereto.  All certificated Securities
Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance reasonably satisfactory to the Administrative
Agent.  The Administrative Agent shall
have the right, at any time upon the occurrence and during the continuance of
any Event of Default, to endorse, assign or otherwise transfer to or to
register in the name of the Administrative Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the security interest
hereunder.  In addition, the
Administrative Agent shall have the right at any time to exchange certificates
representing or evidencing Securities Collateral for certificates of smaller or
larger denominations.

 

Section 3.2                                      Perfection
of Uncertificated Securities Collateral.  Each Pledgor represents and warrants that the
Administrative Agent has a perfected first priority security

 

12

 

interest in all uncertificated Pledged Securities pledged by it
hereunder that are in existence on the date hereof and that the applicable
partnership agreement, operating agreement or other organizational documents do
not require the consent of the other shareholders, members, partners or other
Person to permit the Administrative Agent or its designee to be substituted for
the applicable Pledgor as a shareholder, member, partner or other equity owner,
as applicable, thereto.  Each Pledgor hereby
agrees that if any of the Pledged Securities are at any time not evidenced by
certificates of ownership, then each applicable Pledgor shall, to the extent
permitted by applicable law, cause such pledge to be recorded on the
equityholder register or the books of the issuer, cause the issuer to execute
and deliver to the Administrative Agent an acknowledgment of the pledge of such
Pledged Securities substantially in the form of Exhibit 1 annexed
hereto, execute customary pledge forms or other documents necessary or appropriate
to complete the pledge and give the Administrative Agent the right to transfer
such Pledged Securities under the terms hereof and provide to the
Administrative Agent an opinion of counsel, in form and substance satisfactory
to the Administrative Agent, confirming such pledge and perfection thereof.

 

Section 3.3                                      Financing
Statements and Other Filings; Maintenance of Perfected Security Interest.  Each Pledgor represents and warrants that the
only filings, registrations and recordings necessary and appropriate to create,
preserve, protect, publish notice of and perfect the security interest granted
by each Pledgor to the Administrative Agent (for the benefit of the Secured
Parties) pursuant to this Agreement in respect of the Pledged Collateral are
listed in Schedule 5 annexed to the Perfection Certificate.  Each Pledgor represents and warrants that all
such filings, registrations and recordings have been delivered to the
Administrative Agent in completed and, to the extent necessary or appropriate,
duly executed form for filing in each governmental, municipal or other office
specified in Schedule 6 annexed to the Perfection Certificate and
shall be filed, registered and recorded immediately after the date
thereof.  Each Pledgor agrees that at the
sole cost and expense of the Pledgors, (i) such Pledgor will maintain the
security interest created by this Agreement in the Pledged Collateral as a
perfected first priority security interest and shall defend such security
interest against the claims and demands of all Persons, provided, however,
that, prior to the payment in full of the Term Loan Indebtedness and the
termination of the Term Loan Documents, the security interest created by this
Agreement in that portion of the Pledged Collateral constituting Term Loan
Priority Collateral shall be maintained as a perfected second priority security
interest junior to the security interest of the Term Loan Administrative Agent,
(ii) such Pledgor shall furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the Pledged
Collateral and such other reports in connection with the Pledged Collateral as
the Administrative Agent may deem reasonably necessary, all in reasonable detail
and (iii) at any time and from time to time, upon the written request of
the Administrative Agent, such Pledgor shall promptly and duly execute and
deliver, and file and have recorded, such further instruments and documents and
take such further action as the Administrative Agent may deem reasonably
necessary for the purpose of obtaining or preserving the full benefits of this
Agreement and the rights and powers herein granted, including the filing of any
financing statements, continuation statements and other documents (including
the Agreement) under the Uniform Commercial Code (or other similar laws) in
effect in any jurisdiction with respect to the security interest created hereby
and the execution and delivery of Control Agreements, all in form reasonably
satisfactory to the Administrative Agent and in such offices (including,
without limitation, the United States Patent and Trademark Office) wherever
required by law to perfect,

 

13

 

continue and maintain a valid, enforceable, first priority security
interest in the Pledged Collateral, as provided herein, and to preserve the
other rights and interests granted to the Administrative Agent hereunder, as
against third parties, with respect to the Pledged Collateral; provided,
however, that, prior to the payment in full of the Term Loan
Indebtedness and the termination of the Term Loan Documents, the security
interest created by this Agreement in that portion of the Pledged Collateral
constituting Term Loan Priority Collateral shall be maintained as a perfected
second priority security interest junior to the security interest of the Term
Loan Administrative Agent.  Each Pledgor
hereby authorizes the Administrative Agent to file any such financing or
continuation statement or other document without the signature of such Pledgor
where permitted by law, including, without limitation, the filing of a
financing statement describing the Pledged Collateral as “all assets” or “all
assets in which the Pledgor now owns or hereafter acquires rights” or words to
that effect.

 

Section 3.4                                      Other Actions.  In order to further insure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in the Pledged Collateral,
each Pledgor represents, warrants and agrees, in each case at such Pledgor’s
own expense, with respect to the following Pledged Collateral that:

 

(a)                                  Instruments and Tangible Chattel
Paper.  As of the date hereof (i) no amount
individually or in the aggregate in excess of $100,000 payable under or in connection
with any of the Pledged Collateral is evidenced by any Instrument or Tangible
Chattel Paper other than such Instruments and Tangible Chattel Paper listed in Schedule 11
annexed to the Perfection Certificate and (ii) each Instrument and each
item of Tangible Chattel Paper listed in Schedule 11 annexed to the
Perfection Certificate has been properly endorsed, assigned and delivered to
the Administrative Agent, accompanied by instruments of transfer or assignment
duly executed in blank.  If any amount
individually or in the aggregate in excess of $100,000 payable under or in
connection with any of the Pledged Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, the Pledgor acquiring such Instrument or
Tangible Chattel Paper shall forthwith endorse, assign and deliver the same to
the Administrative Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Administrative Agent may from time to
time specify.

 

(b)                                 Deposit Accounts. 
As of the date hereof (i) it does not maintain any Deposit Accounts
other than the accounts listed in Schedule 15 annexed to the
Perfection Certificate and (ii) to the extent required by the Credit
Agreement, the Administrative Agent, upon execution and delivery of a Deposit
Account Control Agreement by the Pledgor of the Deposit Account and the
financial institution holding such Deposit Account, will have a perfected first
priority security interest in each Deposit Account listed in Schedule 15
annexed to the Perfection Certificate by Control.  No Pledgor shall hereafter establish and
maintain any Deposit Account unless (1) the applicable Pledgor shall have
given the Administrative Agent 30 days’ prior written notice of its intention
to establish such new Deposit Account with a Bank, (2) such Bank shall be
reasonably acceptable to the Administrative Agent and (3) to the extent
required by the Credit Agreement, such Bank and such Pledgor shall have duly
executed and delivered to the Administrative Agent a Deposit Account Control
Agreement with respect to such Deposit Account substantially in the form of Exhibit 5-A
or Exhibit 5-B annexed

 

14

 

hereto or such other form acceptable to the
Administrative Agent.  No Pledgor shall
grant Control of any Deposit Account to any Person other than the
Administrative Agent.  With respect to
any Deposit Account for which the applicable Deposit Account Control Agreement
provides that the depository institution may accept instructions from the
applicable Pledgor unless and until the Administrative Agent otherwise notifies
the depository institution, the Administrative Agent agrees that it shall
deliver such notice only if a Default or Event of Default has occurred and is
continuing and that it shall not give any instructions directing the
disposition of funds from time to time credited to any such Deposit Account
unless a Default or Event of Default has occurred and is continuing.

 

(c)                                  Investment Property.  (i)  As of
the date hereof (1) it has no Securities Accounts or Commodity Accounts
other than those listed in Schedule 15 annexed to the Perfection
Certificate and the Administrative Agent has a perfected first priority
security interest in such Securities Accounts and Commodity Accounts by Control,
(2) it does not hold, own or have any interest in any certificated
securities or uncertificated securities other than those constituting Pledged
Securities and those maintained in Securities Accounts or Commodity Accounts
listed in Schedule 15 annexed to the Perfection Certificate and (3) it
has entered into a duly authorized, executed and delivered Securities Account
Control Agreement, substantially in the form of Exhibit 4 annexed
hereto with respect to each Securities Account listed in Schedule 15
annexed to the Perfection Certificate, as applicable.

 

(ii)                                  If any Pledgor shall at any time
hold or acquire any certificated securities constituting Investment Property,
other than any securities of Foreign Subsidiaries not required to be pledged
hereunder, such Pledgor shall (a) within the time periods required by the
Credit Agreement, endorse, assign and deliver the same to the Administrative
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank, all in form and substance reasonably satisfactory to the
Administrative Agent or (b) deliver such securities into a Securities
Account with respect to which a Securities Account Control Agreement is in
effect in favor of the Administrative Agent. 
If any securities now or hereafter acquired by any Pledgor constituting
Investment Property, other than any securities of Foreign Subsidiaries not required
to be pledged hereunder, are uncertificated and are issued to such Pledgor or
its nominee directly by the issuer thereof, such Pledgor shall, within the time
periods required by the Credit Agreement, notify the Administrative Agent
thereof and pursuant to an agreement in form and substance satisfactory to the
Administrative Agent, either (a) cause the issuer to agree to comply with
instructions from the Administrative Agent as to such securities, without
further consent of any Pledgor or such nominee, (b) cause a Security
Entitlement with respect to such uncertificated security to be held in a
Securities Account with respect to which the Administrative Agent has Control
or (c) arrange for the Administrative Agent to become the registered owner
of the securities.  Pledgor shall not
hereafter establish and maintain any Securities Account or Commodity Account
with any Securities Intermediary or Commodity Intermediary unless (1) the
applicable Pledgor shall have given the Administrative Agent 30 days’ prior
written notice of its intention to establish such new Securities Account or
Commodity Account with such Securities Intermediary or Commodity Intermediary,
(2) such Securities Intermediary or

 

15

 

Commodity Intermediary shall be reasonably
acceptable to the Administrative Agent and (3) such Securities Intermediary
or Commodity Intermediary, as the case may be, and such Pledgor shall have duly
executed and delivered a Control Agreement with respect to such Securities
Account or Commodity Account, as the case may be.  Each Pledgor shall accept any cash and
Investment Property which are proceeds of the Pledged Interests in trust for
the benefit of the Administrative Agent and, within the time periods required
by the Credit Agreement, deposit any cash or Investment Property and any new
securities, instruments, documents or other property by reason of ownership of
the Investment Property received by it into an account in which the
Administrative Agent has Control.  The
Administrative Agent agrees with each Pledgor that the Administrative Agent
shall not give any entitlement orders or instructions or directions to any
issuer of uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by such Pledgor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any such investment and
withdrawal rights, would occur.  The
provisions of this Section 3.4(c) shall not apply to any
Financial Assets credited to a Securities Account for which the Administrative
Agent is the Securities Intermediary.  No
Pledgor shall grant control over any Investment Property to any Person other
than the Administrative Agent.

 

(iii)                               As between the Administrative Agent
and the Pledgors, the Pledgors shall bear the investment risk with respect to
the Investment Property and Pledged Securities, and the risk of loss of, damage
to, or the destruction of the Investment Property and Pledged Securities,
whether in the possession of, or maintained as a security entitlement or
deposit by, or subject to the control of, the Administrative Agent, a
Securities Intermediary, Commodity Intermediary, any Pledgor or any other
Person; provided, however, that nothing contained in this Section 3.4(c) shall
release or relieve any Securities Intermediary or Commodity Intermediary of its
duties and obligations to the Pledgors or any other Person under any Control
Agreement or under applicable law. 
Subject to Section 4.12, each Pledgor shall promptly pay all
Claims and fees of whatever kind or nature with respect to the Investment
Property and Pledged Securities pledged by it under this Agreement.  In the event any Pledgor shall fail to make
such payment contemplated in the immediately preceding sentence, the
Administrative Agent may do so for the account of such Pledgor and the Pledgors
shall promptly reimburse and indemnify the Administrative Agent for all costs
and expenses incurred by the Administrative Agent under this Section 3.4(c) in
accordance with Section 11.3 hereof.

 

(d)                                 Electronic Chattel Paper and
Transferable Records.  As of the date hereof no
amount individually or in the aggregate in excess of $100,000 payable under or
in connection with any of the Pledged Collateral is evidenced by any Electronic
Chattel Paper or any “transferable record,” as that term is defined in Section 201
of the Federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction other than such Electronic Chattel Paper and transferable
records listed in Schedule 11 annexed to the Perfection Certificate.  If any amount individually or in the
aggregate in excess of $100,000 payable under or in connection with any of the
Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify the

 

16

 

Administrative Agent thereof and shall take
such action as the Administrative Agent may reasonably request to vest in the
Administrative Agent control under UCC Section 9-105 of such Electronic
Chattel Paper or control under Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, Section 16 of
the Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record.  The
Administrative Agent agrees with such Pledgor that the Administrative Agent
will arrange, pursuant to procedures satisfactory to the Administrative Agent
and so long as such procedures will not result in the Administrative Agent’s
loss of control, for the Pledgor to make alterations to the Electronic Chattel
Paper or transferable record permitted under UCC Section 9-105 or, as the
case may be, Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act of Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Pledgor with respect to such Electronic Chattel
Paper or transferable record.

 

(e)                                  Letter-of-Credit Rights. 
If such Pledgor is at any time a beneficiary under a Letter of Credit
now or hereafter issued in favor of such Pledgor, other than a Letter of Credit
issued pursuant to the Credit Agreement, in an amount individually or in the aggregate
in excess of $100,000, such Pledgor shall promptly notify the Administrative
Agent thereof and such Pledgor shall, pursuant to an agreement in form and
substance satisfactory to the Administrative Agent, either (i) arrange for
the issuer and any confirmer of such Letter of Credit to consent to an assignment
to the Administrative Agent of the proceeds of any drawing under the Letter of
Credit or (ii) arrange for the Administrative Agent to become the
transferee beneficiary of such Letter of Credit, with the Administrative Agent
agreeing, in each case, that the proceeds of any drawing under the Letter of
Credit are to be applied as provided in the Credit Agreement.  

 

(f)                                    Commercial Tort Claims. 
As of the date hereof it holds no Commercial Tort Claims other than
those listed in Schedule 14 annexed to the Perfection
Certificate.  If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim having a value individually or in
the aggregate in excess of $100,000, such Pledgor shall immediately notify the
Administrative Agent in writing signed by such Pledgor of the brief details
thereof and grant to the Administrative Agent in such writing a security
interest therein and in the Proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the
Administrative Agent.

 

(g)                                 Landlord Lien Waivers/Bailee
Letters/Processor Agreements.  To the extent
required under the Credit Agreement, such Pledgor shall obtain a waiver of
bailee’s, landlord’s or other applicable possessory lien and obtain a bailee
letter, landlord lien waiver or processor agreement, as applicable and in form
and substance reasonably satisfactory to the Administrative Agent, from each
bailee, landlord and third party processor who from time to time has possession
of Pledged Collateral or who leases or sub-leases premises to such Pledgor at
which Pledged Collateral is located; provided, that, to the extent that
any waivers, bailee letters, landlord lien waivers and processor agreements
required to be obtained under this Section 3.4(g) have not
been obtained, the

 

17

 

Administrative Agent shall have the right to
establish an appropriate Reserve as determined in its discretion.

 

Section 3.5                                      Joinder
of Additional Pledgors.  The
Pledgors shall cause each Subsidiary of the Borrowers which, from time to time,
after the date hereof shall be required to pledge any assets to the
Administrative Agent for the benefit of the Secured Parties pursuant to the
provisions of the Credit Agreement, to execute and deliver to the
Administrative Agent (i) a Joinder Agreement substantially in the form of Exhibit 3
annexed hereto within five (5) Business Days on which it was acquired or
created and (ii) a Perfection Certificate, in each case, within five (5) Business
Days of the date on which it was acquired or created and, upon such execution
and delivery, such Subsidiary shall constitute a “Borrower” or “Guarantor”, as
applicable, and a “Pledgor” for all purposes hereunder with the same force and
effect as if originally named as a Borrower or Guarantor, as applicable, and
Pledgor herein.  The execution and
delivery of such Joinder Agreement shall not require the consent of any Pledgor
hereunder.  The rights and obligations of
each Pledgor hereunder shall remain in full force and effect notwithstanding
the addition of any new Borrower, Guarantor and Pledgor as a party to this Agreement.

 

Section 3.6                                      Supplements;
Further Assurances.  Each
Pledgor shall take such further actions, and execute and deliver to the
Administrative Agent such additional assignments, agreements, supplements,
powers and instruments, as the Administrative Agent may in its reasonable
judgment deem necessary or appropriate, wherever required by law, in order to
perfect, preserve and protect the security interest in the Pledged Collateral
as provided herein and the rights and interests granted to the Administrative
Agent hereunder, to carry into effect the purposes hereof or better to assure
and confirm unto the Administrative Agent or permit the Administrative Agent to
exercise and enforce its rights, powers and remedies hereunder with respect to
any Pledged Collateral.  Without limiting
the generality of the foregoing, each Pledgor shall make, execute, endorse, acknowledge,
file or refile and/or deliver to the Administrative Agent from time to time
upon reasonable request such lists, descriptions and designations of the
Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments.  If an Event of Default has occurred and is
continuing, the Administrative Agent may institute and maintain, in its own
name or in the name of any Pledgor, such suits and proceedings as the
Administrative Agent may be advised by counsel shall be necessary or expedient
to prevent any impairment of the security interest in or the perfection thereof
in the Pledged Collateral.  All of the
foregoing shall be at the sole cost and expense of the Pledgors.  The Pledgors and the Administrative Agent
acknowledge that this Agreement is intended to grant to the Administrative
Agent for the benefit of the Secured Parties a security interest in and Lien
upon the Pledged Collateral and shall not constitute or create a present
assignment of any of the Pledged Collateral.

 

ARTICLE IV.

 

REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

Each Pledgor
represents, warrants and covenants as follows:

 

18

 

Section 4.1                                      Title.  No financing statement or other public notice
with respect to all or any part of the Pledged Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Administrative Agent pursuant to this Agreement or as are permitted by the
Credit Agreement.  No Person other than
the Administrative Agent has control or possession of all or any part of the
Pledged Collateral, except as permitted by the Credit Agreement.

 

Section 4.2                                      Limitation
on Liens; Defense of Claims; Transferability of Pledged Collateral.  Each Pledgor is as of the date hereof, and,
as to Pledged Collateral acquired by it from time to time after the date
hereof, such Pledgor will be, the sole direct and beneficial owner of all
Pledged Collateral pledged by it hereunder free from any Lien or other right,
title or interest of any Person other than the Permitted Liens.  Each Pledgor shall, at its own cost and expense,
defend title to the Pledged Collateral pledged by it hereunder and the security
interest therein and Lien thereon granted to the Administrative Agent and the
priority thereof against all claims and demands of all Persons, at its own cost
and expense, at any time claiming any interest therein adverse to the
Administrative Agent or any other Secured Party other than Permitted
Liens.  There is no agreement, and no
Pledgor shall enter into any agreement or take any other action, that would
restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with such Pledgors’ obligations or the rights of the
Administrative Agent hereunder.

 

Section 4.3                                      Chief
Executive Office; Change of Name; Jurisdiction of Organization.  (a)  The
exact legal name, type of organization, jurisdiction of organization, Federal
Taxpayer Identification Number, organizational identification number (if any)
and chief executive office of such Pledgor is indicated set forth in Schedules
1(a) and 2(a) annexed to the Perfection Certificate.  Such Pledgor shall not change (i) its
corporate name, (ii) the location of its chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Pledged Collateral owned by it or any office or facility at which
Pledged Collateral owned by it is located (including the establishment of any
such new office or facility), (iii) its identity or type of organization
or corporate structure, (iv) its Federal Taxpayer Identification Number or
organizational identification number or (v) its jurisdiction of organization
(in each case, including, without limitation, by merging with or into any other
entity, reorganizing, dissolving, liquidating, reincorporating or incorporating
in any other jurisdiction), except in accordance with Section 5.13 of the
Credit Agreement.  Each Pledgor agrees to
promptly provide the Administrative Agent with certified organizational
documents reflecting any of the changes described in the preceding sentence.

 

(b)                                 To the extent that UCC financing
statements of the Pledgors need to be amended as a result of any of the changes
described in Section 4.3(a), if any Pledgor fails to provide information
to the Administrative Agent about such changes on a timely basis, the
Administrative Agent shall not be liable or responsible to any party for any
failure to maintain a perfected security interest in such Pledgor’s property
constituting Pledged Collateral, for which the Administrative Agent needed to
have information relating to such changes. 
The Administrative Agent shall have no duty to inquire about such
changes if any Pledgor does not inform the Administrative Agent of such
changes, the parties acknowledging and agreeing that it would not be feasible
or practical for the Administrative Agent to search for information on such
changes if such information is not provided by any Pledgor.

 

19

 

Section 4.4                                      Location of
Collateral..  All Collateral
of such Pledgor is located at the locations listed in Schedules 2(a) through
2(e) annexed to the Perfection Certificate.  Except as expressly permitted herein or in
the Credit Agreement, such Pledgor shall not move any Collateral to any location
other than one within the continental United States that is listed in such
Schedules of the Perfection Certificate unless and until (i) it shall have
given the Administrative Agent not less than 30 days’ prior written notice (in the
form of an officers’ certificate) of its intention so to do, clearly describing
such new location within the continental United States and providing such other
information in connection therewith as the Administrative Agent may request and
(ii) with respect to such new location, such Pledgor shall have taken all
action reasonably satisfactory to the Administrative Agent to maintain the
perfection and priority of the security interest of the Administrative Agent
for the benefit of the Secured Parties in the Pledged Collateral intended to be
granted hereby, including, without limitation, complying with the provisions of
Section 3.4(g) to obtain a waiver of any bailee’s, landlord’s
or other applicable possessory lien and obtain a bailee letter, landlord lien
waiver or processor agreement, as applicable.

 

Section 4.5                                      Condition
and Maintenance of Equipment. 
The Equipment of such Pledgor is in good repair, working order and
condition, reasonable wear and tear excepted. 
Each Pledgor shall cause the Equipment to be maintained and preserved in
good repair, working order and condition, reasonable
wear and tear excepted, and shall as quickly as commercially practicable make
or cause to be made all repairs, replacements and other improvements which are
necessary or appropriate in the conduct of such Pledgor’s business.

 

Section 4.6                                      Corporate
Names; Prior Transactions. 
Such Pledgor has not, during the past five years, been known by or used
any other corporate or fictitious name or been a party to any merger or consolidation,
or acquired all or substantially all of the assets of any Person, or acquired
any of its property or assets out of the ordinary course of business, except as
set forth in Schedules 1(b), 1(c) and 3 annexed to the Perfection
Certificate.

 

Section 4.7                                      Due Authorization and Issuance.  All of the Initial Pledged Shares have been,
and to the extent any Pledged Shares are hereafter issued, such shares will be,
upon such issuance, duly authorized, validly issued and fully paid and
non-assessable.  All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged Interests
or any Pledgor’s status as a partner or a member of any issuer of the Initial
Pledged Interests.

 

Section 4.8                                      No Claims.  Such Pledgor owns or has rights to use all of
the Pledged Collateral pledged by it hereunder and all rights with respect to
any of the foregoing used in, necessary for or material to such Pledgor’s
business as currently conducted.  The use
by such Pledgor of such Pledged Collateral and all such rights with respect to
the foregoing do not infringe on the rights of any Person other than such infringement
which would not, individually or in the aggregate, result in a Material Adverse
Effect.  No claim has been made and
remains outstanding that such Pledgor’s use of any Pledged Collateral does or
may violate the rights of any third Person that would individually, or in the
aggregate, have a Material Adverse Effect.

 

20

 

Section 4.9                                      No Conflicts,
Consents, etc.  Other than the
filing, registrations and recordings described in Section 3.3, no
consent of any party (including, without limitation, equity holders or
creditors of such Pledgor) and no consent, authorization, approval, license or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required (A) for the pledge by such
Pledgor of the Pledged Collateral pledged by it pursuant to this Agreement or
for the execution, delivery or performance hereof by such Pledgor, (B) for
the exercise by the Administrative Agent of the voting or other rights provided
for in this Agreement or (C) for the exercise by the Administrative Agent
of the remedies in respect of the Pledged Collateral pursuant to this
Agreement.  In the event that the
Administrative Agent desires to exercise any remedies, voting or consensual
rights or attorney-in-fact powers set forth in this Agreement and determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other Person therefor, then, upon the reasonable request of the
Administrative Agent, such Pledgor agrees to use its best efforts to assist and
aid the Administrative Agent to obtain as soon as practicable any necessary
approvals or consents for the exercise of any such remedies, rights and powers.

 

Section 4.10                                Pledged
Collateral.  All information
set forth herein and all information contained in any documents, schedules and
lists heretofore delivered to any Secured Party in connection with this
Agreement, in each case, relating to the Pledged Collateral (including all
information set forth on the schedules annexed to the Perfection Certificate),
is accurate and complete in all material respects.  Pledgors shall deliver to the Administrative
Agent a Perfection Certificate Supplement on an annual basis as required under
the Credit Agreement.

 

Section 4.11                                Insurance.  In the event that the proceeds of any
insurance claim are paid after the Administrative Agent has exercised its right
to foreclose after an Event of Default such Net Cash Proceeds shall be paid to
the Administrative Agent to be applied in accordance with the provisions of Section 9.02
of the Credit Agreement.  The
Administrative Agent shall retain its interest in the insurance policies
required to be maintained pursuant to the Credit Agreement during any redemption
period.  

 

Section 4.12                                Payment of Taxes;
Compliance with Laws; Contested Liens; Claims.  Each Pledgor represents and warrants that all
Claims imposed upon or assessed against the Pledged Collateral have been paid
and discharged except to the extent such Claims are permitted to exist or be
contested under the Credit Agreement. 
Each Pledgor shall comply with all Requirements of Law applicable to the
Pledged Collateral the failure with which to comply would, individually or in
the aggregate, have a Material Adverse Effect. 
Each Pledgor may at its own expense contest the validity, amount or
applicability of any Claims so long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Credit
Agreement.  Notwithstanding the foregoing
provisions of this Section 4.12, no contest of any such obligation
may be pursued by such Pledgor if such contest would expose the Administrative
Agent or any other Secured Party to (i) any possible criminal liability or
(ii) any additional civil liability for failure to comply with such
obligations unless such Pledgor shall have furnished a bond or other security
therefor satisfactory to the Administrative Agent, or such Secured Party, as
the case may be.

 

21

 

Section 4.13                                Access
to Pledged Collateral, Books and Records; Other Information.  Upon reasonable prior notice to each Pledgor,
the Administrative Agent, its agents, accountants and attorneys shall have full
and free access to visit and inspect, as applicable, during normal business
hours and such other reasonable times as may be requested by the Administrative
Agent, all of the Pledged Collateral and Mortgaged Property including, without
limitation, all of the books, correspondence and records of such Pledgor
relating thereto.  The Administrative
Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and such Pledgor agrees to render to the
Administrative Agent, at such Pledgor’s cost and expense, such clerical and
other assistance as may be reasonably requested by the Administrative Agent
with regard thereto.  Such Pledgor shall,
at any and all times, within a reasonable time after written request by the
Administrative Agent, furnish or cause to be furnished to the Administrative
Agent, in such manner and in such detail as may be reasonably requested by the
Administrative Agent, additional information with respect to the Pledged Collateral.

 

Section 4.14                                Third Party Consents
Relating to Intellectual Property Collateral.  Each Pledgor shall use reasonable commercial
efforts to obtain the consent of third parties to the extent such consent is
necessary or desirable to create a valid, perfected security interest in favor
of the Administrative Agent in any Intellectual Property Collateral, including,
without limitation, intent-to-use trademark applications.

 

ARTICLE V.

 

CERTAIN PROVISIONS
CONCERNING SECURITIES COLLATERAL

 

Section 5.1                                      Pledge
of Additional Securities Collateral. 
Each Pledgor shall, upon obtaining any additional Securities Collateral,
accept the same in trust for the benefit of the Administrative Agent and
forthwith deliver to the Administrative Agent a pledge amendment, duly executed
by such Pledgor, in substantially the form of Exhibit 2 annexed
hereto (each, a “Pledge Amendment”), and the certificates and other
documents required under Section 3.1 and Section 3.2
hereof in respect of the additional Pledged Securities or under Section 3.4(a) in
respect of additional Pledged Notes which are to be pledged pursuant to this
Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Pledged Notes.  Each Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Pledged Notes listed on any Pledge
Amendment delivered to the Administrative Agent shall for all purposes hereunder
be considered Pledged Collateral.

 

Section 5.2                                      Voting Rights;
Distributions; etc.

 

(a)                                  So long as no Event of Default shall
have occurred and be continuing:

 

(i)                                     Each Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof, the Credit Agreement or any other document evidencing
the Obligations.

 

22

 

(ii)                                  Each Pledgor shall be entitled to
receive and retain any and all Distributions, but only if and to the extent
made in accordance with the provisions of the Credit Agreement; provided,
however, that any and all such Distributions consisting of rights or
interests in the form of securities shall be forthwith delivered to the
Administrative Agent to hold as Pledged Collateral and shall, if received by
any Pledgor, be received in trust for the benefit of the Administrative Agent,
be segregated from the other property or funds of such Pledgor and be forthwith
delivered to the Administrative Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).

 

(iii)                               The Administrative Agent shall be
deemed without further action or formality to have granted to each Pledgor all
necessary consents relating to voting rights and shall, if necessary, upon
written request of any Pledgor and at the sole cost and expense of the
Pledgors, from time to time execute and deliver (or cause to be executed and
delivered) to such Pledgor all such instruments as such Pledgor may reasonably
request in order to permit such Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 5.2(a)(i) hereof
and to receive the Distributions which it is authorized to receive and retain
pursuant to Section 5.2(a)(ii) hereof.

 

(b)                                 Upon the occurrence and during the
continuance of any Event of Default:

 

(i)                                     All rights of each Pledgor to
exercise the voting and other consensual rights it would otherwise be entitled
to exercise pursuant to Section 5.2(a)(i) hereof shall cease,
and all such rights shall thereupon become vested in the Administrative Agent,
which shall thereupon have the sole right to exercise such voting and other consensual
rights.

 

(ii)                                  All rights of each Pledgor to
receive Distributions which it would otherwise be authorized to receive and
retain pursuant to Section 5.2(a)(ii) hereof shall cease and
all such rights shall thereupon become vested in the Administrative Agent,
which shall thereupon have the sole right to receive and hold as Pledged
Collateral such Distributions;

 

provided,
that, upon a waiver or cure, if any, of such Event of Default, the rights of
the Pledgor under such Sections 5.2(a)(i) and 5.2 (a)(ii) shall
revert to such Pledgor.

 

(c)                                  Each Pledgor shall, at its sole cost
and expense, from time to time execute and deliver to the Administrative Agent
appropriate instruments as the Administrative Agent may reasonably request in
order to permit the Administrative Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 5.2(b)(i) hereof
and to receive all Distributions which it may be entitled to receive under Section 5.2(b)(ii) hereof.

 

(d)                                 All Distributions which are received
by any Pledgor contrary to the provisions of Section 5.2(a)(ii) or
Section 5.2(b)(ii) hereof shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds of
such

 

23

 

Pledgor and shall immediately be paid over to
the Administrative Agent as Pledged Collateral in the same form as so received
(with any necessary endorsement).

 

Section 5.3                                      Operative
Agreements.  Each Pledgor has
delivered to the Administrative Agent true, correct and complete copies of the
Operative Agreements.  The Operative
Agreements are in full force and effect, have not as of the date hereof been
amended or modified except as disclosed to the Administrative Agent, and there
is no existing default by any party thereunder or any event which, with the giving
of notice or passage of time or both, would constitute a default by any party
thereunder.  Each Pledgor shall deliver
to the Administrative Agent a copy of any notice of default given or received
by it under any Operative Agreement within ten (10) days after such
Pledgor gives or receives such notice. 
No Pledgor will terminate or agree to terminate any Operative Agreement
or make any amendment or modification to any Operative Agreement except as
expressly permitted by the terms of the Credit Agreement.

 

Section 5.4                                      Defaults, etc.  Such Pledgor is not in default in the payment
of any portion of any mandatory capital contribution, if any, required to be
made under any agreement to which such Pledgor is a party relating to the
Pledged Securities pledged by it, and such Pledgor is not in violation of any
other provisions of any such agreement to which such Pledgor is a party, or
otherwise in default or violation thereunder. 
No Securities Collateral pledged by such Pledgor is subject to any defense,
offset or counterclaim, nor have any of the foregoing been asserted or alleged
against such Pledgor by any Person with respect thereto, and as of the date
hereof, there are no certificates, instruments, documents or other writings
(other than the Operative Agreements and certificates, if any, delivered to the
Administrative Agent) which evidence any Pledged Securities of such Pledgor.

 

Section 5.5                                      Certain
Agreements of Pledgors As Issuers and Holders of Equity Interests.

 

(i)                                     In the case of each Pledgor which is
an issuer of Securities Collateral, such Pledgor agrees to be bound by the
terms of this Agreement relating to the Securities Collateral issued by it and
will comply with such terms insofar as such terms are applicable to it.

 

(ii)                                  In the case of each Pledgor which is
a partner or member in a partnership, limited liability company or other
entity, such Pledgor hereby consents to the extent required by the applicable
Operative Agreement to the pledge by each other Pledgor, pursuant to the terms
hereof, of the Pledged Interests in such partnership, limited liability company
or other entity and, upon the occurrence and during the continuance of an Event
of Default, to the transfer of such Pledged Interests to the Administrative
Agent or its nominee and to the substitution of the Administrative Agent or its
nominee as a substituted partner or member in such partnership, limited
liability company or other entity with all the rights, powers and duties of a
general partner or a limited partner or member, as the case may be.

 

24

 

ARTICLE VI.

 

CERTAIN PROVISIONS
CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

 

Section 6.1                                      Grant of
License.  For the purpose of enabling
the Administrative Agent, during the continuance of an Event of Default, to
exercise rights and remedies under Article IX hereof at such time
as the Administrative Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, each Pledgor hereby grants to the
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Pledgor) to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located, including in such license access to all media in which any of
the licensed items may be recorded or stored and to all computer programs used
for the compilation or printout hereof.

 

Section 6.2                                      Registrations.  Except pursuant to Licenses that are listed
in Schedules 13(a) and 13(b) annexed to the Perfection
Certificate, and except as permitted by the Credit Agreement, on and as of the
date hereof (i) one Pledgor owns or at least one Pledgor possesses the
right to use any Copyright, Patent or Trademark listed in Schedules 13(a) and
13(b) annexed to the Perfection Certificate, (ii) no Pledgor
has granted permission to enable any other Person to use, any Copyright, Patent
or Trademark listed in Schedules 13(a) and 13(b) annexed
to the Perfection Certificate, and (iii) all registrations listed in Schedules
13(a) and 13(b) annexed to the Perfection Certificate are
valid and in full force and effect.

 

Section 6.3                                      No Violations
or Proceedings.  To each Pledgor’s
knowledge, on and as of the date hereof, there is no material violation by
others of any right of such Pledgor with respect to any Copyright, Patent or
Trademark listed in Schedules 13(a) and 13(b) annexed
to the Perfection Certificate, respectively, pledged by it under the name of
such Pledgor.

 

Section 6.4                                      Protection of
Administrative Agent’s Security.  On
a continuing basis, each Pledgor shall, at its sole cost and expense, (a) promptly
following its becoming aware thereof, notify the Administrative Agent of (i) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office with respect to any
material Patent, Trademark or Copyright or (ii) the institution of any
proceeding or any adverse determination in any Federal, state or local court or
administrative body regarding such Pledgor’s claim of ownership in or right to
use any of the Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property, its right to
register such Intellectual Property Collateral or its right to keep and
maintain such registration in full force and effect, (b) maintain and protect
the Intellectual Property Collateral material to the use and operation of the
Pledged Collateral or Mortgaged Property as presently used and operated and as
contemplated by the Credit Agreement, (c) not permit to lapse or become
abandoned any Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property as presently used and
operated and as contemplated by the Credit Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Intellectual Property Collateral, in each case except as shall
be consistent with commercially reasonable business judgment,

 

25

 

(d) upon such Pledgor obtaining knowledge thereof, promptly notify
the Administrative Agent in writing of any event which may be reasonably
expected to materially and adversely affect the value or utility of the
Intellectual Property Collateral or any portion thereof material to the use and
operation of the Pledged Collateral or Mortgaged Property, the ability of such
Pledgor or the Administrative Agent to dispose of the Intellectual Property
Collateral or any portion thereof or the rights and remedies of the
Administrative Agent in relation thereto including, without limitation, a levy
or threat of levy or any legal process against the Intellectual Property
Collateral or any portion thereof, (e) not license the Intellectual
Property Collateral other than licenses entered into by such Pledgor in, or
incidental to, the ordinary course of business, or amend or permit the
amendment of any of the licenses in a manner that materially and adversely
affects the right to receive payments thereunder, or in any manner that would
materially impair the value of the Intellectual Property Collateral or the Lien
on and security interest in the Intellectual Property Collateral intended to be
granted to the Administrative Agent for the benefit of the Secured Parties,
without the consent of the Administrative Agent, (f) until the
Administrative Agent exercises its rights to make collection, diligently keep
adequate records respecting the Intellectual Property Collateral and (g) furnish
to the Administrative Agent from time to time upon the Administrative Agent’s
reasonable request therefor detailed statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Administrative Agent may from time to time reasonably
request.  Notwithstanding the foregoing
nothing herein shall prevent any Pledgor from selling, disposing of or
otherwise using any Intellectual Property Collateral as permitted under the
Credit Agreement.

 

Section 6.5                                      After-Acquired
Property.  If any Pledgor shall, at
any time before the Obligations have been paid in full in cash, (a) obtain
any rights to any additional Intellectual Property Collateral or (b) become
entitled to the benefit of any additional Intellectual Property Collateral or
any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(a) or (b) of this Section 6.5 with respect to such
Pledgor shall automatically constitute Intellectual Property Collateral if such
would have constituted Intellectual Property Collateral at the time of execution
hereof and be subject to the Lien and security interest created by this
Agreement without further action by any party. 
Each Pledgor shall promptly (i) provide to the Administrative Agent
written notice of any of the foregoing and (ii) confirm the attachment of
the Lien and security interest created by this Agreement to any rights
described in clauses (i) and (ii) of the immediately preceding
sentence of this Section 6.5 by execution of an instrument in form
reasonably acceptable to the Administrative Agent.

 

Section 6.6                                      Modifications.  Each Pledgor authorizes the Administrative
Agent to modify this Agreement by amending Schedules 13(a) and
13(b) annexed to the Perfection Certificate to include any Intellectual
Property Collateral acquired or arising after the date hereof of such Pledgor
including, without limitation, any of the items listed in Section 6.5
hereof.

 

Section 6.7                                      Litigation.  Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other

 

26

 

actions to prevent the infringement, counterfeiting, unfair
competition, dilution, diminution in value or other damage as are necessary to
protect the Intellectual Property Collateral. 
Upon the occurrence and during the continuance of any Event of Default,
the Administrative Agent shall have the right but shall in no way be obligated
to file applications for protection of the Intellectual Property Collateral in
the name of the appropriate Pledgor and/or bring suit in the name of any
Pledgor, the Administrative Agent or the Secured Parties to enforce the
Intellectual Property Collateral and any license thereunder.  In the event of such suit, each Pledgor
shall, at the reasonable request of the Administrative Agent, do any and all
lawful acts and execute any and all documents reasonably requested by the
Administrative Agent in aid of such enforcement and the Pledgors shall promptly
reimburse and indemnify the Administrative Agent, as the case may be, for all costs
and expenses reasonably incurred by the Administrative Agent in the exercise of
its rights under this Section 6.7 in accordance with Section 11.3
hereof.  In the event that the
Administrative Agent shall elect not to bring suit to enforce the Intellectual
Property Collateral, each Pledgor agrees, at the reasonable request of the
Administrative Agent, to take all commercially reasonable actions necessary,
whether by suit, proceeding or other action, to prevent the infringement,
counterfeiting, unfair competition, dilution, diminution in value of or other
damage to any of the Intellectual Property Collateral by others and for that
purpose agrees to diligently maintain any suit, proceeding or other action
against any Person so infringing necessary to prevent such infringement.

 

Section 6.8                                      U.S.
Intent-to-Use Trademark Applications. 
Notwithstanding the provisions of Section 2.1, Article VI
and Section 9.6, the Administrative Agent acquires no security
interest or other rights in the United States for any Trademark that is the
subject of an intent-to-use application before the U.S. Patent and Trademark
Office until such time as a verified amendment to allege use or verified
statement of use is filed with the U.S. Patent and Trademark Office for such
application or the Administrative Agent arranges for an assignment of such
Trademarks from the Administrative Agent to a purchaser that would satisfy the
requirements of Section 10 of the Lanham Act, 15 U.S.C. Section 1060.  At the time the Administrative Agent seeks to
transfer all other Trademarks pursuant to Section 6.1, it may also
transfer any U.S. intent-to-use applications provided that such applications
satisfy the conditions of the preceding sentence.  In Schedule 13(a) and 13(b) annexed
to the Perfection Certificate and in any reports produced under this Article VI,
each Pledgor shall clearly identify each U.S. intent-to-use trademark
application for which a verified amendment to allege use or statement of use
has not been filed.

 

ARTICLE VII.

 

CERTAIN PROVISIONS
CONCERNING ACCOUNTS

 

Section 7.1                                      Special
Representations and Warranties.  As
of the time when each of its Accounts arises, each Pledgor shall be deemed to
have represented and warranted that such Account and all records, papers and
documents relating thereto (a) are genuine and correct and in all material
respects what they purport to be, (b) represent the legal, valid and
binding obligation of the account debtor, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability, evidencing indebtedness unpaid and owed by such
account debtor, arising out of the performance of labor or services or the
sale, lease, license,

 

27

 

assignment or other disposition and delivery of the goods or other
property listed therein or out of an advance or a loan, (c) are in
all material respects in compliance and conform with all applicable Federal,
state and local laws and applicable laws of any relevant foreign jurisdiction.

 

Section 7.2                                      Maintenance of
Records.  Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including, without
limitation, records of all payments received, all credits granted thereon, all
merchandise returned and all other documentation relating thereto.  Each Pledgor shall, at such Pledgor’s sole cost
and expense, upon the Administrative Agent’s demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including, without limitation, all documents
evidencing Accounts and any books and records relating thereto to the
Administrative Agent or to its representatives (copies of which evidence and
books and records may be retained by such Pledgor).  Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent may transfer a
full and complete copy of any Pledgor’s books, records, credit information,
reports, memoranda and all other writings relating to the Accounts to and for
the use by any person that has acquired or is contemplating acquisition of an
interest in the Accounts or the Administrative Agent’s security interest
therein without the consent of any Pledgor.

 

Section 7.3                                      Legend.  Each Pledgor shall legend, at the request of
the Administrative Agent made at any time after the occurrence of any Event of
Default and in form and manner satisfactory to the Administrative Agent, the
Accounts and the other books, records and documents of such Pledgor evidencing
or pertaining to the Accounts with an appropriate reference to the fact that
the Accounts have been assigned to the Administrative Agent for the benefit of
the Secured Parties and that the Administrative Agent has a security interest
therein.

 

Section 7.4                                      Modification
of Terms, etc.  No Pledgor shall
rescind or cancel any indebtedness evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or
renew any such indebtedness except in the ordinary course of business
consistent with prudent business practice or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto or sell any Account or
interest therein except in the ordinary course of business consistent with
prudent business practice without the prior written consent of the
Administrative Agent.  Each Pledgor shall
timely fulfill all obligations on its part to be fulfilled under or in
connection with the Accounts.

 

Section 7.5                                      Collection.  Each Pledgor shall cause to be collected from
the account debtor of each of the Accounts, as and when due in the ordinary
course of business consistent with prudent business practice (including,
without limitation, Accounts that are delinquent, such Accounts to be collected
in accordance with generally accepted commercial collection procedures), any
and all amounts owing under or on account of such Account, and apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balance of such Account, except that any Pledgor may, with respect to an
Account, allow in the ordinary course of business (i) a refund or credit
due as a result of returned or damaged or defective merchandise and (ii) such
extensions of time to pay amounts due in respect of Accounts and such other
modifications of payment terms or settlements in respect of Accounts as

 

28

 

shall be commercially reasonable in the circumstances, all in
accordance with such Pledgor’s ordinary course of business consistent with its
collection practices as in effect from time to time.  The costs and expenses (including, without
limitation, attorneys’ fees) of collection, in any case, whether incurred by
any Pledgor, the Administrative Agent or any Secured Party, shall be paid by
the Pledgors.

 

ARTICLE VIII.

 

TRANSFERS AND
OTHER LIENS

 

Section 8.1                                      Transfers of
and other Liens on Pledged Collateral. 
No Pledgor shall (i) sell, convey, assign or otherwise dispose of,
or grant any option with respect to, or (ii) grant, convey or permit to
exist any Lien on, any of the Pledged Collateral pledged by it hereunder
except, in each case, as permitted by the Credit Agreement.

 

ARTICLE IX.

REMEDIES

 

Section 9.1                                      Remedies.  (a)  Upon
the occurrence and during the continuance of any Event of Default the
Administrative Agent may from time to time exercise the following rights and
remedies (alternatively, successively or concurrently on any one or more
occasions) in respect of the Pledged Collateral, in addition to the other
rights and remedies provided for herein or otherwise available to it:

 

(i)                                     Personally, or by agents or
attorneys, immediately take possession of the Pledged Collateral or any part
thereof, from any Pledgor or any other Person who then has possession of any
part thereof with or without notice or process of law, and for that purpose may
enter upon any Pledgor’s premises where any of the Pledged Collateral is
located, remove such Pledged Collateral, remain present at such premises to
receive copies of all communications and remittances relating to the Pledged
Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;

 

(ii)                                  Demand, sue for, collect or receive
any money or property at any time payable or receivable in respect of the
Pledged Collateral including, without limitation, instructing the obligor or
obligors on any agreement, instrument or other obligation constituting part of
the Pledged Collateral to make any payment required by the terms of such
agreement, instrument or other obligation directly to the Administrative Agent,
and in connection with any of the foregoing, compromise, settle, extend the
time for payment and make other modifications with respect thereto; provided,
however, that in the event that any such payments are made directly to
any Pledgor, prior to receipt by any such obligor of such instruction, such
Pledgor shall segregate all amounts received pursuant thereto in trust for the
benefit of the Administrative Agent and shall promptly (but in no event later
than one (1) Business Day after receipt thereof) pay such amounts to the
Administrative Agent;

 

29

 

(iii)                               Sell, assign, grant a license to use
or otherwise liquidate, or direct any Pledgor to sell, assign, grant a license
to use or otherwise liquidate, any and all investments made in whole or in part
with the Pledged Collateral or any part thereof, and take possession of the
proceeds of any such sale, assignment, license or liquidation;

 

(iv)                              Take possession of the Pledged
Collateral or any part thereof, by directing any Pledgor in writing to deliver
the same to the Administrative Agent at any place or places so designated by
the Administrative Agent, in which event such Pledgor shall at its own expense:  (A) forthwith cause the same to be moved
to the place or places designated by the Administrative Agent and there
delivered to the Administrative Agent, (B) store and keep any Pledged
Collateral so delivered to the Administrative Agent at such place or places
pending further action by the Administrative Agent and (C) while the
Pledged Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to preserve
and maintain them in good condition. 
Each Pledgor’s obligation to deliver the Pledged Collateral as
contemplated in this Section 9.1(a)(iv) is of the essence
hereof.  Upon application to a court of
equity having jurisdiction, the Administrative Agent shall be entitled to a
decree requiring specific performance by any Pledgor of such obligation;

 

(v)                                 Withdraw all moneys, instruments,
securities and other property in any bank, financial securities, deposit or
other account of any Pledgor constituting Pledged Collateral for application to
the Obligations as provided in Article X hereof;

 

(vi)                              Retain and apply the Distributions
to the Obligations as provided in Article X hereof;

 

(vii)                           Exercise any and all rights as
beneficial and legal owner of the Pledged Collateral, including, without
limitation, perfecting assignment of and exercising any and all voting,
consensual and other rights and powers with respect to any Pledged Collateral;
and

 

(viii)                        Exercise all the rights and remedies
of a secured party under the UCC, and the Administrative Agent may also in its
sole discretion, without notice except as specified in Section 9.2
hereof, sell, assign or grant a license to use the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of the Administrative Agent’s offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and
upon such other terms as the Administrative Agent may deem commercially reasonable.  The Administrative Agent or any other Secured
Party or any of their respective Affiliates may be the purchaser, licensee,
assignee or recipient of any or all of the Pledged Collateral at any such sale
and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged Collateral
sold, assigned or licensed at such sale, to use and apply any of the
Obligations owed to such Person as a credit on account of the purchase price of
any Pledged Collateral payable by such Person at such sale.  Each purchaser, assignee, licensee or
recipient at any such sale shall acquire the property sold, assigned or licensed
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives, to the fullest extent

 

30

 

permitted by law, all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.  The Administrative Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given.  The Administrative
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.  Each Pledgor hereby waives, to the fullest extent
permitted by law, any claims against the Administrative Agent arising by reason
of the fact that the price at which any Pledged Collateral may have been sold,
assigned or licensed at such a private sale was less than the price which might
have been obtained at a public sale, even if the Administrative Agent accepts
the first offer received and does not offer such Pledged Collateral to more
than one offeree.

 

Section 9.2                                      Notice of Sale.  Each Pledgor acknowledges and agrees that, to
the extent notice of sale or other disposition of Pledged Collateral shall be
required by law, ten (10) days’ prior notice to such Pledgor of the time
and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters.  No
notification need be given to any Pledgor if it has signed, after the
occurrence of an Event of Default, a statement renouncing or modifying (as
permitted under law) any right to notification of sale or other intended disposition.

 

Section 9.3                                      Waiver of
Notice and Claims.  Each Pledgor
hereby waives, to the fullest extent permitted by applicable law, notice or
judicial hearing in connection with the Administrative Agent’s taking
possession or the Administrative Agent’s disposition of any of the Pledged
Collateral, including, without limitation, any and all prior notice and hearing
for any prejudgment remedy or remedies and any such right which such Pledgor
would otherwise have under law, and each Pledgor hereby further waives, to the
fullest extent permitted by applicable law: 
(a) all damages occasioned by such taking of possession, (b) all
other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Administrative Agent’s
rights hereunder and (c) all rights of redemption, appraisal, valuation,
stay, extension or moratorium now or hereafter in force under any applicable
law.  The Administrative Agent shall not
be liable for any incorrect or improper payment made pursuant to this Article IX
in the absence of gross negligence or willful misconduct.  Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate
to divest all right, title, interest, claim and demand, either at law or in
equity, of the applicable Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against such Pledgor and against any and all
Persons claiming or attempting to claim the Pledged Collateral so sold,
optioned or realized upon, or any part thereof, from, through or under such
Pledgor.

 

Section 9.4                                      Certain Sales
of Pledged Collateral.

 

(i)                                     Each Pledgor recognizes that, by
reason of certain prohibitions contained in law, rules, regulations or orders
of any Governmental Authority, the Administrative Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who meet the requirements of such Governmental
Authority.  Each Pledgor acknowledges
that any such sales may be at prices and on terms less favorable to the
Administrative Agent than those obtainable

 

31

 

through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Administrative Agent shall
have no obligation to engage in public sales.

 

(ii)                                  Each Pledgor recognizes that, by
reason of certain prohibitions contained in the Securities Act, and applicable
state securities laws, the Administrative Agent may be compelled, with respect
to any sale of all or any part of the Securities Collateral and Investment
Property, to limit purchasers to Persons who will agree, among other things, to
acquire such Securities Collateral or Investment Property for their own
account, for investment and not with a view to the distribution or resale
thereof.  Each Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable to the
Administrative Agent than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Administrative Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Securities Collateral or Investment Property for the period of
time necessary to permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.

 

(iii)                               If the Administrative Agent
determines to exercise its right to sell any or all of the Securities
Collateral or Investment Property, upon written request, the applicable Pledgor
shall from time to time furnish to the Administrative Agent all such
information as the Administrative Agent may request in order to determine the
number of securities included in the Securities Collateral or Investment
Property which may be sold by the Administrative Agent as exempt transactions
under the Securities Act and the rules of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.

 

(iv)                              Each Pledgor further agrees that a
breach of any of the covenants contained in this Section 9.4 will
cause irreparable injury to the Administrative Agent and other Secured Parties,
that the Administrative Agent and the other Secured Parties have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 9.4 shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing.

 

Section 9.5                                      No Waiver;
Cumulative Remedies.

 

(i)                                     No failure on the part of the
Administrative Agent to exercise, no course of dealing with respect to, and no
delay on the part of the Administrative Agent in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy;

 

32

 

nor shall the Administrative Agent be
required to look first to, enforce or exhaust any other security, collateral or
guaranties.  The remedies herein provided
are cumulative and are not exclusive of any remedies provided by law.

 

(ii)                                  In the event that the Administrative
Agent shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Administrative Agent, then and in every
such case, the Pledgors, the Administrative Agent and each other Secured Party
shall be restored to their respective former positions and rights hereunder
with respect to the Pledged Collateral, and all rights, remedies and powers of
the Administrative Agent and the other Secured Parties shall continue as if no
such proceeding had been instituted.

 

Section 9.6                                      Certain
Additional Actions Regarding Intellectual Property.  If any Event of Default shall have occurred
and be continuing, upon the written demand of Administrative Agent, each
Pledgor shall execute and deliver to Administrative Agent an assignment or
assignments of the registered Patents, Trademarks and/or Copyrights and such
other documents as are necessary or appropriate to carry out the intent and
purposes hereof.  Within five (5) Business
Days of written notice thereafter from Administrative Agent, each Pledgor shall
make available to Administrative Agent, to the extent within such Pledgor’s
power and authority, such personnel in such Pledgor’s employ on the date of the
Event of Default as Administrative Agent may reasonably designate to permit
such Pledgor to continue, directly or indirectly, to produce, advertise and
sell the products and services sold by such Pledgor under the registered
Patents, Trademarks and/or Copyrights, and such Persons shall be available to
perform their prior functions on Administrative Agent’s behalf.

 

ARTICLE X.

 

PROCEEDS OF
CASUALTY EVENTS AND COLLATERAL

DISPOSITIONS/APPLICATION OF PROCEEDS

 

Section 10.1                                Proceeds of Casualty
Events and Collateral Dispositions. 
The Pledgors shall take all actions required by the Credit Agreement
with respect to any Net Cash Proceeds of any Casualty Event or from the sale or
disposition of any Pledged Collateral.

 

Section 10.2                                Application of
Proceeds.  The proceeds received by
the Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Administrative Agent of its remedies shall be applied, together with any
other sums then held by the Administrative Agent pursuant to this Agreement, in
accordance with and as set forth in Section 9.02 of the Credit Agreement.

 

ARTICLE XI.

 

MISCELLANEOUS

 

Section 11.1                                Concerning
Administrative Agent.

 

33

 

(i)                                     The Administrative Agent has been
appointed as Administrative Agent pursuant to the Credit Agreement.  The actions of the Administrative Agent
hereunder are subject to the provisions of the Credit Agreement.  The Administrative Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including,
without limitation, the release or substitution of the Pledged Collateral), in
accordance with this Agreement and the Credit Agreement.  The Administrative Agent may employ agents
and attorneys-in-fact in connection herewith and shall not be liable for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.  The Administrative Agent
may resign and a successor Administrative Agent may be appointed in the manner
provided in the Credit Agreement.  Upon
the acceptance of any appointment as the Administrative Agent by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent under this Agreement, and the retiring
Administrative Agent shall thereupon be discharged from its duties and
obligations under this Agreement.  After
any retiring Administrative Agent’s resignation, the provisions hereof shall
inure to its benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was the Administrative Agent.

 

(ii)                                  The Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which the Administrative Agent, in
its individual capacity, accords its own property consisting of similar
instruments or interests, it being understood that neither the Administrative
Agent nor any of the Secured Parties shall have responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Securities Collateral, whether or not
the Administrative Agent or any other Secured Party has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve
rights against any Person with respect to any Pledged Collateral.

 

(iii)                               The Administrative Agent shall be
entitled to rely upon any written notice, statement, certificate, order or
other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person, and, with respect
to all matters pertaining to this Agreement and its duties hereunder, upon
advice of counsel selected by it.

 

(iv)                              If any item of Pledged Collateral
also constitutes collateral granted to Administrative Agent under any other
deed of trust, mortgage, security agreement, pledge or instrument of any type,
in the event of any conflict between the provisions hereof and the provisions
of such other deed of trust, mortgage, security agreement, pledge or instrument
of any type in respect of such collateral, Administrative Agent, in its sole
discretion, shall select which provision or provisions shall control.

 

Section 11.2                                Administrative Agent
May Perform; Administrative Agent Appointed Attorney-in-Fact.  If any Pledgor shall fail to perform any
covenants contained in this Agreement or in the Credit Agreement (including,
without limitation, such Pledgor’s covenants

 

34

 

to (a) pay the premiums in respect of all required insurance
policies hereunder, (b) pay Claims, (c) make repairs, (d) discharge
Liens or (e) pay or perform any obligations of such Pledgor under any
Pledged Collateral) or if any warranty on the part of any Pledgor contained
herein shall be breached, the Administrative Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach, and
may expend funds for such purpose; provided, however, that
Administrative Agent shall in no event be bound to inquire into the validity of
any tax, lien, imposition or other obligation which such Pledgor fails to pay
or perform as and when required hereby and which such Pledgor does not contest
in accordance with the provisions of Section 4.12 hereof.  Any and all amounts so expended by the
Administrative Agent shall be paid by the Pledgors in accordance with the
provisions of Section 11.3 hereof. 
Neither the provisions of this Section 11.2 nor any action
taken by Administrative Agent pursuant to the provisions of this Section 11.2
shall prevent any such failure to observe any covenant contained in this
Agreement nor any breach of warranty form constituting an Event of Default.  Each Pledgor hereby appoints the
Administrative Agent its attorney-in-fact, with full authority in the place and
stead of such Pledgor and in the name of such Pledgor, or otherwise, from time
to time in the Administrative Agent’s discretion to take any action and to
execute any instrument consistent with the terms of the Credit Agreement and
the other Security Documents which the Administrative Agent may deem necessary
or advisable to accomplish the purposes hereof. 
The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof.  Each Pledgor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof.

 

Section 11.3                                Expenses.

 

(a)                                  Each Pledgor will upon demand pay to
the Administrative Agent the amount of any and all costs and expenses,
including the reasonable fees and expenses of its counsel and the reasonable
fees and expenses of any experts and agents which the Administrative Agent may
incur in connection with (i) any action, suit or other proceeding
affecting the Pledged Collateral or any part thereof commenced, in which
action, suit or proceeding the Administrative Agent is made a party or
participates or in which the right to use the Pledged Collateral or any part
thereof is threatened, or in which it becomes necessary in the judgment of the
Administrative Agent to defend or uphold the Lien hereof (including, without
limitation, any action, suit or proceeding to establish or uphold the
compliance of the Pledged Collateral with any requirements of any Governmental
Authority or law), (ii) the collection of the Obligations, (iii) the
enforcement and administration hereof, (iv) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Collateral, (v) the exercise or enforcement of any of the rights
of the Administrative Agent or any Secured Party hereunder or (vi) the
failure by any Pledgor to perform or observe any of the provisions hereof.  All amounts expended by the Administrative
Agent and payable by any Pledgor under this Section 11.3 shall be
due upon demand therefor (together with interest thereon accruing at the
highest rate then in effect under the Credit Agreement during the period from
and including the date on which such funds were so expended to the date of
repayment) and shall be part of the Obligations.

 

(b)                                 The Pledgors agree, jointly and
severally, to indemnify the Administrative Agent, each Lender, the Issuing
Bank, the Swingline Lender, each other

 

35

 

Secured Party, each Affiliate of any of the
foregoing Persons and each of their respective directors, officers, trustees, employees
and agents (each such Person being called an “Indemnitee”), against, and
to hold each Indemnitee harmless from, all reasonable out-of-pocket costs and
any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges, expenses and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of this Agreement, the Credit Agreement, any other
Loan Document or any other document evidencing the Obligations (including,
without limitation, any misrepresentation by any Pledgor in this Agreement, the
Credit Agreement, other Loan Document or any other document evidencing the
Obligations); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or
willful misconduct or bad faith of such Indemnitee.

 

(c)                                  The provisions of this Section 11.3
shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the repayment of any of the Loans,
the expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Agents, the Issuing Bank or any Lender. 
All amounts due under this Section 11.3 shall be payable promptly
(but in any event no more than 10 days following) upon written demand therefor
accompanied by reasonable documentation with respect to any reimbursement,
indemnification or other amount requested.

 

Section 11.4                                Continuing Security
Interest; Assignment.  This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(a) be binding upon the Pledgors, their respective successors and assigns
and (b) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and the other
Secured Parties and each of their permitted respective successors, transferees
and assigns.  No other Persons
(including, without limitation, any other creditor of any Pledgor) shall have
any interest herein or any right or benefit with respect hereto.  Without limiting the generality of the foregoing
clause (b), any Secured Party may assign or otherwise transfer any indebtedness
held by it secured by this Agreement to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party, herein or otherwise, subject however, to the provisions
of the Credit Agreement and any Lender Hedging Agreement.

 

Section 11.5                                Termination; Release.  The Pledged Collateral shall be released from
the Lien of this Agreement in accordance with the provisions of the Credit
Agreement.  Upon termination hereof or
any release of Pledged Collateral in accordance with the provisions of the
Credit Agreement, the Administrative Agent shall, upon the request and at the
sole cost and expense of the Pledgors, assign, transfer and deliver to Pledgor,
against receipt and without recourse to or warranty by the Administrative Agent
except as to the fact that the Administrative Agent has not encumbered the
released assets, such of the Pledged Collateral to be released (in the case of
a release) as may be in possession of the Administrative Agent and as shall not
have been sold or otherwise applied pursuant to the terms hereof, and, with
respect to any other

 

36

 

Pledged Collateral, proper documents and instruments (including UCC-3
termination statements or releases) acknowledging the termination hereof or the
release of such Pledged Collateral, as the case may be.

 

Section 11.6                                Modification in
Writing.  No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same
shall be made in accordance with the terms of the Credit Agreement and unless
in writing and signed by the Administrative Agent and the Pledgors.  Any amendment, modification or supplement of
or to any provision hereof, any waiver of any provision hereof and any consent
to any departure by any Pledgor from the terms of any provision hereof shall be
effective only in the specific instance and for the specific purpose for which
made or given.  Except where notice is
specifically required by this Agreement or any other document evidencing the
Obligations, no notice to or demand on any Pledgor in any case shall entitle
any Pledgor to any other or further notice or demand in similar or other circumstances.

 

Section 11.7                                Notices.  Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrowers set forth in the Credit Agreement and as to the Administrative Agent,
addressed to it at the address set forth in the Credit Agreement, or in each case
at such other address as shall be designated by such party in a written notice
to the other party complying as to delivery with the terms of this Section 11.7.

 

Section 11.8                                GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.

 

Section 11.9                                CONSENT TO
JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
PLEDGOR OR SECURED PARTY WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN
THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
AND APPELLATE COURTS OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT.  EACH PLEDGOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A
COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO THE BORROWERS AT ITS ADDRESS SET FORTH IN THE CREDIT
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE
BEEN NOTIFIED PURSUANT THERETO.  IF ANY
AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH PLEDGOR HEREBY
AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.  NOTHING

 

37

 

HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT TO BRING
PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION.  THE PLEDGORS HEREBY IRREVOCABLY WAIVE ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 11.10                          Severability of Provisions.  Any provision hereof 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section 11.11                          Execution in Counterparts.  This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or by email in PDF format
shall be as effective as a delivery of a manually executed counterpart of this
Agreement.

 

Section 11.12                          Business Days.  In the event any time period or any date provided
in this Agreement ends or falls on a day other than a Business Day, then such
time period shall be deemed to end and such date shall be deemed to fall on the
next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.

 

Section 11.13                          No Credit for Payment of
Taxes or Imposition.  Such Pledgor
shall not be entitled to any credit against the principal, premium, if any, or
interest payable under the Credit Agreement, and such Pledgor shall not be
entitled to any credit against any other sums which may become payable under
the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.

 

Section 11.14                          No Claims Against
Administrative Agent.  Nothing
contained in this Agreement shall constitute any consent or request by the
Administrative Agent, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Pledged Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against the Administrative Agent in
respect thereof or any claim that any Lien based on the performance of such
labor or services or the furnishing of any such materials or other property is
prior to the Lien hereof.

 

Section 11.15                          No Release.  Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor’s part to be performed or observed under or in
respect of any of the Pledged Collateral or from any liability to any Person
under or in respect of any of the Pledged Collateral or shall impose any

 

38

 

obligation on the Administrative Agent or any other Secured Party to
perform or observe any such term, covenant, condition or agreement on such
Pledgor’s part to be so performed or observed or shall impose any liability on
the Administrative Agent or any other Secured Party for any act or omission on
the part of such Pledgor relating thereto or for any breach of any representation
or warranty on the part of such Pledgor contained in this Agreement, the Credit
Agreement or the other Loan Documents, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith.  The obligations of each Pledgor contained in
this Section 11.15 shall survive the termination hereof and the
discharge of such Pledgor’s other obligations under this Agreement, the Credit
Agreement and the other Loan Documents.

 

Section 11.16                          Obligations Absolute.  All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

 

(i)                                     any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like
of any Pledgor;

 

(ii)                                  any lack of validity or
enforceability of the Credit Agreement, any Lender Hedging Agreement or any
other Loan Document, or any other agreement or instrument relating thereto;

 

(iii)                               any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any Lender Hedging Agreement or any other Loan Document or
any other agreement or instrument relating thereto;

 

(iv)                              any pledge, exchange, release or
non-perfection of any other collateral, or any release or amendment or waiver
of or consent to any departure from any guarantee, for all or any of the Obligations;

 

(v)                                 any exercise, non-exercise or waiver
of any right, remedy, power or privilege under or in respect hereof, the Credit
Agreement, any Lender Hedging Agreement or any other Loan Document except as
specifically set forth in a waiver granted pursuant to the provisions of Section 11.6
hereof; or

 

(vi)                              any other circumstances which might
otherwise constitute a defense available to, or a discharge of, any Pledgor.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 

39

 

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

 

	
   

  	
  PLEDGORS:

  
	
   

  	
   

  
	
   

  	
  D 56, INC.

  
	
   

  	
  DEPARTMENT 56 RETAIL, INC.

  
	
   

  	
  TIME TO CELEBRATE, INC.

  
	
   

  	
  DEPARTMENT 56, INC.

  
	
   

  	
  DEPARTMENT 56 SALES, INC.

  
	
   

  	
  CAN 56, INC.

  
	
   

  	
  FL 56 INTERMEDIATE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan E. Engel

  	
   

  
	
   

  	
   

  	
  Name: Susan E. Engel

  
	
   

  	
   

  	
  Title:  
  Chairwoman & Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  LENOX, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James G. Berwick

  	
   

  
	
   

  	
   

  	
  Name: James G. Berwick

  
	
   

  	
   

  	
  Title:  
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  DID, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward Paolella

  	
   

  
	
   

  	
   

  	
  Name: Edward Paolella

  
	
   

  	
   

  	
  Title:  
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UBS AG, STAMFORD BRANCH,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wilfred V. Saint

  	
   

  
	
   

  	
   

  	
  Name:
  Wilfred V. Saint

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
  Banking
  Products Services, US

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Tavrow

  	
   

  
	
   

  	
   

  	
  Name:
  Richard L. Tavrow

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
  Banking
  Products Services, US

  

 

 

EXHIBIT 1

 

[Form of]

 

ISSUERS ACKNOWLEDGMENT

 

The
undersigned hereby (i) acknowledges receipt of a copy of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of
[                   ],
made by [                   ],
a [                   ]
(the “Borrower”), and the Guarantors party thereto in favor of [                                      ],
as Administrative Agent (in such capacity and together with any successors in
such capacity, the “Administrative Agent”), (ii) agrees promptly to
note on its books the security interests granted to the Administrative Agent
and confirmed under the Security Agreement, (iii) agrees that it will
comply with instructions of the Administrative Agent with respect to the
applicable Securities Collateral without further consent by the applicable
Pledgor, (iv) agrees to notify the Administrative Agent upon obtaining
knowledge of any interest in favor of any Person in the applicable Securities
Collateral that is adverse to the interest of the Administrative Agent therein
and (v) waives any right or requirement at any time hereafter to receive a
copy of the Security Agreement in connection with the registration of any
Securities Collateral thereunder in the name of the Administrative Agent or its
nominee or the exercise of voting rights by the Administrative Agent or its nominee.

 

	
   

  	
  [                                                     ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT 2

 

[Form of]

 

SECURITIES PLEDGE AMENDMENT

 

This Security
Pledge Amendment, dated as of [                ],
is delivered pursuant to Section 5.1 of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of [                ],
made by [                ],
a
[                ]
(the “Borrower”), and the Guarantors party thereto in favor of [                                ],
as Administrative Agent (in such capacity and together with any successors in
such capacity, the “Administrative Agent”).  The undersigned hereby agrees that this
Pledge Amendment may be attached to the Security Agreement and that the Pledged
Securities and/or Pledged Notes listed on this Pledge Amendment shall be deemed
to be and shall become part of the Pledged Collateral and shall secure all
Obligations.

 

PLEDGED SECURITIES

 

 

	
  ISSUER

  	
   

  	
  CLASS OF

  STOCK OR

  INTERESTS

  	
   

  	
  PAR

  VALUE

  	
   

  	
  CERTIFICATE

  NO(S).

  	
   

  	
  NUMBER

  OF SHARES

  OR

  INTERESTS

  	
   

  	
  PERCENTAGE OF

  ALL ISSUED

  CAPITAL OR OTHER

  EQUITY INTERESTS

  OF ISSUER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

PLEDGED NOTES

 

	
  ISSUER

  	
   

  	
  PRINCIPAL

  AMOUNT

  	
   

  	
  DATE OF

  ISSUANCE

  	
   

  	
  INTEREST RATE

  	
   

  	
  MATURITY DATE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  [

  	
   

  	
  ],

  	
   

  
	
  as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
									

 

 

EXHIBIT 3

 

[Form of]

 

JOINDER AGREEMENT

 

[Name of New Pledgor]

[Address of New Pledgor]

 

[Date]

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

Ladies and
Gentlemen:

 

Reference is
made to that certain security agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement;”
capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of
[                    ],
made by [                    ],
a [                                 ]
(the “Borrower”), and the Guarantors party thereto in favor of [                              ],
as Administrative Agent (in such capacity and together with any successors in
such capacity, the “Administrative Agent”).

 

This letter
supplements the Security Agreement and is delivered by the undersigned, [                    ]
(the “New Pledgor”), pursuant to Section 3.5 of the Security
Agreement.  The New Pledgor hereby agrees
to be bound as a [Borrower]  [Guarantor] and as a Pledgor by all of the terms,
covenants and conditions set forth in the Security Agreement to the same extent
that it would have been bound if it had been a signatory to the Security
Agreement on the execution date of the Security Agreement.  Without limiting the generality of the
foregoing, the New Pledgor hereby grants and pledges to the Administrative
Agent, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Obligations, a Lien on and security interest in, all of its right, title
and interest in, to and under the Pledged Collateral and expressly assumes all
obligations and liabilities of a [Borrower]  [Guarantor] and Pledgor thereunder.  The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable
to the Pledgors contained in the Security Agreement.

 

The New
Pledgor is executing and delivering to the Administrative Agent a Perfection
Certificate with respect to itself on and as of the date hereof.

 

This agreement
and any amendments, waivers, consents or supplements hereto may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and the
same agreement.

 

 

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

 

 

IN WITNESS
WHEREOF, the New Pledgor has caused this letter agreement to be executed and
delivered by its duly authorized officer as of the date first above written.

 

	
   

  	
  [NEW PLEDGOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  AGREED TO AND ACCEPTED:

  
	
   

  
	
  [

  	
   

  	
  ],

  	
   

  
	
  as Administrative Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
								

 

 

 

EXHIBIT 4

 

FORM OF CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS

 

This Control
Agreement Concerning Securities Accounts (this “Control Agreement”),
dated as of
[                        ],
by and among                          
(the “Company”), [                        ],
as Administrative Agent for the Lenders and the Agents (the “Administrative
Agent”) and
[              ]
(the “Securities Intermediary”), is delivered pursuant to Section 3.4(c) of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security  Agreement”),
dated as of [                        ], made by and among [                                                ]  [(the
“Borrower”)]  [the Company],(1) each of the Guarantors listed on the signature pages thereto
(together with [the Borrower]  [the
Company], the “Pledgors”),
in favor of the Administrative Agent for the benefit of the Lenders and the
Agents.  This Control Agreement is for
the purpose of perfecting the security interests of the Secured Parties granted
by the Pledgor in the Designated Securities Accounts described below.  Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Security Agreement.

 

Section 1.                                            Confirmation of Establishment and Maintenance of Designated  Accounts.  The Securities Intermediary hereby confirms
that (i) the Securities Intermediary has established for the Company and
maintains the securities account(s) listed in Schedule 1 annexed
hereto (such account(s), together with each such other securities account
maintained by the Company with the Securities Intermediary collectively, the “Designated
Accounts” and each a “Designated Account”), (ii) each of the
Designated Accounts is a “securities account” as such term is defined in Section 8-501(a) of
the UCC, (iii) the Securities Intermediary shall, subject to the terms of
this Control Agreement and the Security Agreement, treat the Administrative
Agent as entitled to exercise the rights that comprise any financial asset
which is Investment Property and which is credited to a Designated Account and (iv) all
securities or other property underlying any financial assets which constitute
Investment Property and which are credited to any Designated Account shall be
registered in the name of the Securities Intermediary, indorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
financial asset credited to any Designated Account be registered in the name of
the Company, payable to the order of the Company or specially endorsed to the
Company, except to the extent the foregoing have been specially endorsed to the
Securities Intermediary or in blank.  For
avoidance of doubt, it is noted that the term “Designated Accounts” as used in
any security agreement or collateral agreement means both the Designated
Accounts hereunder and the “Designated Accounts” in the comparable agreement
entered into with respect to any other Pledgor.

 

Section 2.                                            “Financial Assets” Election.  The Securities Intermediary hereby agrees
that each item of Investment Property (whether investment property, financial
asset,

 

(1) Use “the Company” if Borrower owns
the Designated Account(s).  If a Subsidiary owns the Designated Account(s), use [                                  ].
(the “Borrower”)”.

 

 

security, instrument or cash) credited to
any Designated Account shall be treated as a “financial asset” within the
meaning of Section 8-102(a)(9) of the UCC.

 

Section 3.                                            Entitlement Order. 
If at any time the Securities Intermediary shall receive an “entitlement
order” (within the meaning of Section 8-102(a)(8) of
the UCC) issued by the Administrative Agent and relating to Investment Collateral
or other Investment Property maintained in one or more of the Designated
Accounts, the Securities Intermediary shall comply with such entitlement order
without further consent by the Company or any other Person.

 

Section 4.                                            Subordination of Lien; Waiver of Set-Off.  In the event that the Securities Intermediary
has or subsequently obtains by agreement, operation of law or otherwise a
security interest in any Designated Account or any Investment Property, the
Securities Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Administrative Agent.  The financial assets and other items
deposited to any Designated Account will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any Person other than the Secured
Parties (except that the Securities Intermediary may set off (i) all
amounts due to the Securities Intermediary in respect of its customary fees and
expenses for the routine maintenance and operation of the Designated Accounts,
including overdraft fees and amounts advanced to settle authorized
transactions, and (ii) the face amount of any checks or other items which
have been credited to any Designated Account but are subsequently returned
unpaid because of uncollected or insufficient funds).

 

Section 5.                                            Choice of Law. 
Both this Control Agreement and the Designated Accounts shall be
governed by the laws of the State of New York. 
Regardless of any provision in any other agreement, for purposes of the
UCC, New York shall be deemed to be the Securities Intermediary’s location and
the Designated Accounts (as well as the security entitlements related thereto)
shall be governed by the laws of the State of New York.

 

Section 6.                                            Conflict with Other Agreements; Amendments.  As of the date hereof, there are no other
agreements entered into between the Securities Intermediary and the Company
with respect to any Designated Account or any security entitlements or other
financial assets credited thereto (other than standard and customary
documentation with respect to the establishment and maintenance of such
Designated Accounts).  The Securities
Intermediary and the Company will not enter into any other agreement with
respect to any Designated Account unless the Administrative Agent shall have
received prior written notice thereof. 
The Securities Intermediary and the Company will not enter into any
other agreement with respect to creation or perfection of any security interest
in, or control of security entitlements maintained in any of the Designated
Accounts without the prior written consent of the Administrative Agent acting
in its sole discretion.  In the event of
any conflict with respect to “control” over any Designated Account between this
Control Agreement (or any portion hereof) and any other agreement now existing
or hereafter entered into, the terms of this Control Agreement shall
prevail.  No amendment or modification of
this Control Agreement or waiver of any rights hereunder shall be binding on
any party hereto unless it is in writing and is signed by all the parties
hereto.

 

 

Section 7.                                            Certain Agreements.

 

(i)                                     The
Securities Intermediary acknowledges receipt of a copy of the Security
Agreement.

 

(ii)                                  The
Securities Intermediary has furnished to the Administrative Agent and the
Company the most recent account statement issued by the Securities Intermediary
with respect to each of the Designated Accounts and the financial assets and
cash balances held therein.  The account
statement for each Designated Account identifies the Investment Collateral held
therein in the manner set forth on Exhibit B annexed hereto.  The Securities Intermediary represents and
warrants to the Administrative Agent that each such statement accurately reflects
the assets held in such Designated Account as of the date thereof.

 

(iii)                               The
Securities Intermediary will, upon its receipt of each supplement to the
Security Agreement signed by the Company and identifying one or more security
entitlements or other financial assets as “Investment Collateral,” enter into
its records, including computer records, with respect to each Designated
Account a notation with respect to Investment collateral so that such records
and reports generated with respect thereto identify the Investment Collateral
as “Pledged.”

 

(iv)                              The
Administrative Agent has delivered to the Securities Intermediary a list,
signed by an authorized representative (the “Authorized Representative”),
of the officers of the Administrative Agent authorized to give approvals or
instructions under this Control Agreement (including notices and other
instructions under Section 9 hereof) and
the Securities Intermediary shall be entitled to rely on communications from
such authorized officers until the earlier of (A) the termination of this
Control Agreement in accordance with the terms hereof, (B) notification by
the Authorized Representative of a change in the officers authorized to give
approvals or instructions and (C) the assignment of the rights of the Secured
Parties in accordance with Section 11 hereof.

 

Section 8.                                            Notice of Adverse Claims.  Except for the claims and interest of the
Administrative Agent and of the Company in the Investment Collateral and other
Investment Property, the Securities Intermediary on the date hereof does not
know of any claim to, or security interest in, any Designated Account or in any
“financial asset” (as defined in Section 8-102(a) of the UCC)
credited thereto and does not know of any claim that any Person other than the
Administrative Agent has been given “control” of any Designated Account or any
such financial asset.  If any Person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process and any claim of “control”)
against any of the Investment Collateral or in any financial asset carried in
any Designated Account constituting Investment Property, the Securities
Intermediary will promptly notify the Administrative Agent and the Company
thereof.

 

Section 9.                                            Maintenance of Designated Accounts.  In addition to, and not in lieu of, the
obligation of the Securities Intermediary to honor entitlement orders as agreed
in Section 3 hereof, the
Securities Intermediary agrees to maintain the Designated Accounts as follows:

 

(i)                                     Notice
of Sole Control.  If at any time the
Administrative Agent delivers to the Securities Intermediary a notice of sole
control in substantially the form set forth in

 

 

Exhibit A
attached hereto (the “Notice of Sole Control”) with respect to any Designated
Account, the Securities Intermediary agrees that,
after receipt of such notice, it will take all instructions with respect to
such Designated Account solely from the Administrative Agent.  Permitting settlement of trades pending at
the time of receipt of such notice shall not constitute a violation of the
immediately preceding sentence.  Without
limiting the generality of the first sentence of this paragraph, upon receipt
of a Notice of Sole Control, the Securities Intermediary shall (x) no
longer permit any trading with respect to the applicable Investment Collateral
to be initiated by the Company or any representative of, or investment manager
appointed by, the Company and the Securities Intermediary shall follow all
instructions given by an authorized officer of the Administrative Agent,
including without limitation instructions for distribution or transfer of any
Investment Collateral or other Investment Property in any Designated Account to
be made to the Administrative Agent and (y) follow all instructions given
by an authorized officer of the Administrative Agent, including, without
limitation, instructions for distribution or transfer of any funds in any
Designated Account to be made to the Administrative Agent.

 

(ii)                                  Voting
Rights.  Until such time as the
Securities Intermediary receives a Notice of Sole Control pursuant to clause (i) of
this Section 9, the Company, or an investment manager on behalf of
the Company, shall direct the Securities Intermediary with respect to the
voting of any Investment Collateral or other financial assets constituting
Investment Property credited to any Designated Account.

 

(iii)                               Permitted
Dispositions.  Until such time as the
Securities Intermediary receives either a Notice of Sole Control signed by the
Administrative Agent with respect to some or all of the Investment Collateral
and other Investment Property or a notice signed by the Administrative Agent
that a proposed sale, exchange or transfer of certain Investment Collateral by
or on behalf of the Company will violate the Security Agreement, the  Company, or any representative of, or
investment manager appointed by, the Company, may direct the Securities
Intermediary with respect to the sale, exchange or transfer of such Investment
Collateral held in a Designated Account.

 

(iv)                              Statements
and Confirmations.  The Securities
Intermediary will send copies of all statements and other correspondence
(excluding routine confirmations) concerning any Designated Account or any
financial assets constituting Investment Property credited thereto
simultaneously to the Company and the Administrative Agent at the address set
forth in Section 12 hereof. 
The Securities Intermediary will provide to the Administrative Agent and
to the Company, upon the Administrative Agent’s request therefor from time to
time (which may be as frequent as daily and is expected to be at least as
frequent as weekly) and, in any event as of the last business day of each calendar
month, a statement of the market value of each item of the Investment
Collateral in each Designated Account.

 

(v)                                 Bailee
for Perfection.  The Securities
Intermediary acknowledges that, in the event that it should come into
possession of any certificate representing any security or other assets held as
Investment Collateral in any of the Designated Accounts, the Securities
Intermediary shall retain possession of the same for the benefit of the
Administrative Agent (and such act shall cause the Securities Intermediary to
be deemed

 

 

a
bailee for the Administrative Agent, if necessary) to perfect the Administrative
Agent’s security interest in such securities or assets.  The Securities Intermediary hereby
acknowledges its receipt of a copy of the Security Agreement as notice to the
Securities Intermediary regarding notice of a security interest in collateral
held by a bailee.

 

(vi)                              Certain
Matters Relating to Interest, Dividends, etc.  Until receipt of a Notice of Sole Control
with respect to some or all of the Investment Collateral (or of a notice from
the Administrative Agent, making reference to this Section 9(vi),
that an Event of Default, as defined in the Security Agreement, has occurred
and is continuing), the Securities Intermediary shall have no responsibility to
furnish reports to the Administrative Agent with respect to, or to segregate or
otherwise account to the Administrative Agent for, dividends, interest or other
amounts received in Designated Accounts with respect to Investment Collateral.

 

Section 10.                                      Representations, Warranties and Covenants of the Securities Intermediary.  The Securities Intermediary hereby makes the
following representations, warranties and covenants:

 

(i)                                     The
Designated Accounts have been established as set forth in Section 1
hereof and each Designated Account will be maintained in the manner set forth
herein until termination of this Control Agreement.  The Securities Intermediary shall not change
the name or account number of any Designated Account without the prior written
consent of the Administrative Agent.

 

(ii)                                  No
financial asset constituting Investment Collateral is or will be registered in
the name of the Company, payable to its order or specially indorsed to it,
except to the extent such financial asset has been indorsed to the Securities
Intermediary or in blank.

 

(iii)                               This
Control Agreement is the valid and legally binding obligation of the Securities
Intermediary.

 

(iv)                              The
Securities Intermediary has not entered into any agreement with any other
Person pursuant to which it has agreed to comply with entitlement orders (as
defined in Section 8-102(a)(8) of the UCC) with respect to financial
assets credited to any Designated Account. 
Until the termination of this Control Agreement the Securities Intermediary
will not, without the written approval of the Administrative Agent, enter into
any agreement with any Person pursuant to which it agrees to comply with entitlement
orders with respect to Investment Collateral. 
Until the termination of this Control Agreement, the Securities
Intermediary will not, without the written approval of the Administrative Agent
(which shall not be unreasonably withheld), enter into any agreement with any
Person relating to any Designated Account or any financial assets credited
thereto pursuant to which it agrees to comply with entitlement orders of such
Person.

 

(v)                                 The
Securities Intermediary is a “securities intermediary” as defined in Article 8-102(a)(14) of the UCC.

 

 

(vi)                              The
Securities Intermediary has not entered into any other agreement with the
Company or Administrative Agent purporting to limit or condition the obligation
of the Securities Intermediary to comply with entitlement orders with respect
to financial assets credited to any Designated Account as set forth in Section 3 hereof.

 

Section 11.                                      Successors; Assignment.  The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors and permitted assignees.

 

Section 12.                                      Notices.  Any
notice, request or other communication required or permitted to be given under
this Control Agreement shall be in writing and deemed to have been properly
given when delivered in person, or when sent by telecopy or other electronic
means and electronic confirmation of error free receipt is received or
two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Pledgors:                                              [                                    ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
copy to:

 

[                                    ]

[Address]

Attention:

Telecopy:

Telephone:

 

Securities

Intermediary:                          [                                    ]

[Address]

Attention:

Telecopy: 

Telephone:

 

Administrative

Agent:                                                            [                                    ]

[Address]

Attention:

Telecopy: 

Telephone:

 

with
a copy to:

 

 

Winston & Strawn LLP

200 Park Avenue

New York, NY 10166

Attention:                      William D.
Brewer

Telecopy.:                     (212) 294-4700

 

Any party may
change its address for notices in the manner set forth above.

 

Section 13.                                      Termination. 
The rights and powers granted herein to the Administrative Agent have
been granted in order to perfect the security interests of the Secured Parties
in the Investment Collateral and other Investment Property maintained in the
Designated Accounts, are powers coupled with an interest and will be affected
neither by the bankruptcy of the Company nor by the lapse of time.  The obligations of the Securities
Intermediary hereunder shall continue in effect until the security interests of
the Secured Parties with respect to the Investment Collateral and other
Investment Property have been terminated and an Authorized Representative has
notified the Securities Intermediary of such termination in writing.

 

Section 14.                                      Definitions. 
The following terms shall have the following meanings:

 

“Investment
Collateral” shall mean, all “investment property,” as such term is used in
the UCC, of the Company and, in any event, shall include, without limitation, (i) the
Designated Account, (ii) all financial assets, cash, checks, drafts, securities
and instruments deposited or held or required to be deposited or held in the
Designated Account and all security entitlements relating thereto, (iii) all
investments and all certificates and instruments, if any, from time to time
representing or evidencing any other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing items listed in clauses (i) and (ii) of this
definition and (iv) each consent, control or other agreement, including,
without limitation, this Control Agreement, entered into by the Company with
the Securities Intermediary and all rights, if any, and interests of the
Company in, to and under each such consent, control or other agreement; provided,
however, that Investment Collateral shall in no event include the
Securities Collateral.

 

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

 

Section 15.                                      Severability. 
If any term or provision set forth in this Agreement shall be invalid or
unenforceable, the remainder of this Agreement, other than those provisions
held invalid or unenforceable, shall be construed in all respects as if such
invalid or unenforceable term or provision were omitted.

 

 

Section 16.                                      Counterparts. 
This Control Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

 

	
   

  	
  [                                                                  ],

  
	
   

  	
  as Pledgor

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  As Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  [                                                                  ],

  
	
   

  	
  as
  Securities Intermediary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
							

 

 

SCHEDULE I

 

Designated Account(s)

 

 

EXHIBIT A

 

[Letterhead of [                           ]]

 

[Date]

 

[Securities Intermediary]

[Address]

 

Attention:

 

Re:                               Notice
of Sole Control

 

Ladies and
Gentlemen:

 

As referenced
in Section 9(i) of the Control Agreement Concerning Designated
Accounts dated as of [                           ],
by and among [                           ]
(the “Company”), us and you (the “Control Agreement;” capitalized terms
used but not defined herein shall have the meanings assigned to such terms in
the Control Agreement) (a copy of which is attached) we hereby give you notice
of our sole control over the Investment Collateral and other financial assets
constituting Investment Property maintained in the securities accounts, account
numbers                            
(the “Specified Designated Accounts”). 
You are hereby instructed not to accept any direction, instruction or
entitlement order with respect to Investment Collateral maintained in the
Specified Designated Accounts or the financial assets constituting Investment
Property credited thereto from any Person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.

 

You are
instructed to deliver a copy of this notice by facsimile transmission to
[Company].

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  cc: [Name of Company]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

 

EXHIBIT 5-A

 

FORM OF CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS

(Springing Dominion)

 

This CONTROL
AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this “Control Agreement”), dated
as of [                     ],
by and among [                     ]
(the “Company”), UBS AG, STAMFORD BRANCH, as Administrative Agent for
the Lenders and the Agents (the “Administrative Agent”), and [                     ]
(the “Bank”), is delivered pursuant to Section 3.4(b) of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”),
dated as of [                     ],
made by [                                          ]  [(the
“Borrower”)]  [the Company],(1) and each of the Guarantors listed on the signature pages thereto
(together with [the Borrower]  [the
Company], the “Pledgors”),
in favor of the Administrative Agent for the benefit of the Lenders and the
Agents.  This Control Agreement is for
the purpose of perfecting the security interests of the Administrative Agent
granted by the Company in the Designated Accounts described below.  All references herein to the “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the State of New
York.  Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Security
Agreement.

 

Section 1.                                            Confirmation of Establishment and Maintenance of Designated  Accounts.  The Bank hereby confirms that (i) the
Bank has established for the Company and maintains the deposit account(s)
listed in Schedule 1 annexed hereto (such deposit account(s),
collectively, the “Designated Accounts” and each a “Designated
Account”) and (ii) each Designated Account is a “deposit account” as
such term is defined in Article 9 of the UCC.  For avoidance of doubt, it is noted that the
term “Designated Accounts” as used in any security agreement means both the
Designated Accounts hereunder and the “Designated Accounts” in the comparable
agreement entered into with respect to any other Pledgor.

 

Section 2.                                            Control.  The
Administrative Agent shall at all times (i) have “control” (as defined in Section 9-104
of the UCC) of any Designated Account and (ii) be authorized to direct the
Bank to comply, without further consent of the Company or any Person acting or
purporting to act for the Company being required, with all instructions
originated by the Administrative Agent directing disposition of the funds in
the Designated Account.  The Company, the
Administrative Agent, and the Bank agree that the Bank will comply with
instructions originated by the Administrative Agent directing the disposition
of the funds in the Designated Account without further consent by the
Company.  The Bank shall also comply with
instructions directing the disposition of funds in the Designated Accounts
originated by the Company or its authorized representatives until such time as
the Administrative Agent delivers a Notice of Sole Control pursuant to Section 8(i) hereof
to the Bank.

 

(1) Use “the Company” if
Borrower owns the Designated Account(s). 
If a Subsidiary owns the Designated Account(s), use [                            ].
(the “Borrower”)”.

 

 

Section 3.                                            Subordination of Lien; Waiver of Set-Off.  In the event that the Bank has or
subsequently obtains by agreement, operation of law or otherwise a security interest
in any Designated Account, the Bank hereby agrees that such security interest
shall be subordinate to that of the Secured Parties.  The funds deposited into any Designated
Account will not be subject to deduction, set-off, banker’s lien, or any other
right in favor of any Person other than the Secured Parties (except that the
Bank may set off (i) all amounts due to the Bank in respect of its
customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees, and (ii) the face amount of
any checks or other items which have been credited to any Designated Account
but are subsequently returned unpaid because of uncollected or insufficient
funds).

 

Section 4.                                            Choice of Law. 
Both this Control Agreement and the Designated Accounts shall be
governed by the law of the State of New York. 
Regardless of any provision in any other agreement, for purposes of the
UCC, New York shall be deemed to be the Bank’s jurisdiction and the Designated
Accounts shall be governed by the law of the State of New York.

 

Section 5.                                            Conflict with Other Agreements; Amendments.  As of the date hereof, there are no other
agreements entered into between the Bank and the Company with respect to any
Designated Account or any funds credited thereto (other than standard and customary
documentation with respect to the establishment and maintenance of such
Designated Accounts).  The Bank and the
Company will not enter into any other agreement with respect to any Designated
Account, other than standard and customary documentation with respect to the
establishment and maintenance of such Designated Accounts, unless the
Administrative Agent shall have received prior written notice thereof.  The Bank and the Company will not enter into
any other agreement with respect to control of the Designated Accounts without
the prior written consent of the Administrative Agent acting in its sole
discretion.  In the event of any conflict
with respect to “control” over any Designated Account between this Control
Agreement (or any portion hereof) and any other agreement now existing or
hereafter entered into, the terms of this Control Agreement shall prevail.  No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.

 

Section 6.                                            Certain Agreements.

 

(i)                                     The
Bank has furnished to the Administrative Agent and the Company the most recent
account statement issued by the Bank with respect to each of the Designated
Accounts and the cash balances held therein. 
The Bank represents and warrants to the Administrative Agent that such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.

 

(ii)                                  The
Administrative Agent has delivered to the Bank a list, signed by an authorized
representative (the “Authorized Representative”), of the officers of the
Administrative Agent authorized to give approvals or instructions under this
Control Agreement (including notices and other instructions under Section 8
hereof) and the Bank shall be entitled to rely on communications from such
authorized officers until the earlier of (A) the termination of this
Control Agreement in accordance with the terms hereof, (B)

 

 

the
notification by the Authorized Representative of a change and (C) the
assignment of the rights of the Secured Parties in accordance with Section 11
hereof.

 

Section 7.                                            Notice of Adverse Claims.  Except for the claims and interest of the
Administrative Agent and of the Company in the Designated Accounts, the Bank on
the date hereof does not know of any claim to, or security interest in, any
Designated Account or in any funds credited thereto and does not know of any claim
that any Person other than the Administrative Agent has been given “control” of
any Designated Account or any such funds. 
If any Person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process and any claim of “control”) against any funds in any Designated
Account, the Bank will promptly notify the Administrative Agent and the Company
thereof.

 

Section 8.                                            Maintenance of Designated Accounts.  In addition to, and not in lieu of, the
obligation of the Bank agreed in Section 2 hereof, the Bank agrees
to maintain the Designated Accounts as follows:

 

(i)                                     Notice
of Sole Control.  If at any time the
Administrative Agent delivers to the Bank a notice of sole control in
substantially the form set forth in Exhibit A attached hereto (the “Notice
of Sole Control”) with respect to any Designated Account, the Bank agrees
that, after receipt of such notice, it will take all instruction with respect
to such Designated Account solely from the Administrative Agent.  Without limiting the generality of the first
sentence of this paragraph, upon receipt of a Notice of Sole Control, the Bank
shall follow all instructions given by an authorized officer of the
Administrative Agent, including, without limitation, instructions for distribution
or transfer of any funds in any Designated Account to be made to the
Administrative Agent.

 

(ii)                                  Permitted
Dispositions.  Until such time as the
Bank receives a Notice of Sole Control signed by the Administrative Agent with
respect to a Designated Account, the Company, or any representative of the
Company, may direct the Bank with respect to the transfer of the funds held in
such Designated Account.  Until such time
as the Bank receives a Notice of Sole Control, the Company shall be entitled to
write checks against amounts in each Designated Account, and make withdrawals,
transfers, and other dispositions of the funds in each Designated Account.

 

(iii)                               Statements
and Confirmations.  The Bank will
promptly send copies of all statements and other correspondence (excluding
routine confirmations) concerning any Designated Account to the Company and the
Administrative Agent at the addresses set forth in Section 11
hereof.  The Bank will promptly provide
to the Administrative Agent and to the Company, upon the Administrative Agent’s
request therefor from time to time and in any event as of the last business day
of each calendar month, a statement of the cash balance in each Designated Account.

 

Section 9.                                            Representations, Warranties and Covenants of the Bank.  The Bank hereby makes the following
representations, warranties and covenants:

 

 

(i)                                     The
Designated Accounts have been established as set forth in Section 1
hereof and each Designated Account will be maintained in the manner set forth
herein until termination of this Control Agreement.  The Bank shall not change the name or account
number of any Designated Account without the prior written consent of the
Administrative Agent.

 

(ii)                                  The
Bank is a “bank,” as such term is defined in the UCC.

 

(iii)                               This
Control Agreement is the valid and legally binding obligation of the Bank.

 

(iv)                              The
Bank has not entered into any agreement with any other Person pursuant to which
it has agreed to comply with any orders or instructions with respect to any
Designated Account.  Until the
termination of this Control Agreement, the Bank will not, without the written
approval of the Administrative Agent, enter into any agreement with any Person
pursuant to which it agrees to comply with any orders or instructions of such
Person with respect to any Designated Account.

 

(v)                                 The
Bank has not entered into any other agreement with the Company or the
Administrative Agent purporting to limit or condition the obligation of the
Bank to comply with any orders or instructions with respect to any Designated Account
as set forth in Section 2 hereof.

 

Section 10.                                      Successors; Assignment.  The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors and permitted assignees.

 

Section 11.                                      Notices.  Any
notice, request or other communication required or permitted to be given under
this Control Agreement shall be in writing and deemed to have been properly
given when delivered in person, or when sent by telecopy or other electronic
means and electronic confirmation of error free receipt is received or
two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Company:                                          [                                   ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
copy to:

 

[                                   ]

[Address]

Attention:

Telecopy:

Telephone:

 

 

Bank:                                                                [                                  ]

[Address]

Attention:

Telecopy: 

Telephone:

 

Administrative

Agent:                                                            [                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
a copy to:

 

[                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

Any party may
change its address for notices in the manner set forth above.

 

Section 12.                                      Termination. 
The rights and powers granted herein to the Administrative Agent have
been granted in order to perfect the security interests of the Secured Parties
in the Designated Accounts, are powers coupled with an interest and will be
affected neither by the bankruptcy of the Company nor by the lapse of
time.  The obligations of the Bank hereunder
shall continue in effect until the termination of the security interests of the
Secured Parties (including, without limitation, by virtue of the notice
pursuant to Section 11 hereof) with respect to the Designated
Accounts have been terminated and an Authorized Representative has notified the
Bank of such termination in writing.

 

Section 13.                                      Severability. 
If any term or provision set forth in this Agreement shall be invalid or
unenforceable, the remainder of this Agreement, other than those provisions
held invalid or unenforceable, shall be construed in all respects as if such
invalid or unenforceable term or provision were omitted.

 

Section 14.                                      Counterparts. 
This Control Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

 

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

 

 

	
   

  	
  [                                                                    ],

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                    ],

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                                    ],

  
	
   

  	
  as Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

SCHEDULE 1

 

Designated Accounts

 

 

EXHIBIT A

 

Letterhead of UBS AG, Stamford Branch

 

[Date]

 

[Bank]

[Address]

 

Attention: 

 

Re:                               Notice
of Sole Control

 

Ladies and
Gentlemen:

 

As referenced
in Section 8(i) of the Control Agreement Concerning Deposit
Accounts dated as of                    ,
2005, by and among D 56, Inc., a Minnesota corporation and Lenox,
Incorporated, a New Jersey corporation (collectively, the “Company”), us
and you (the “Control Agreement”; capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Control Agreement)
(a copy of which is attached) we hereby give you notice of our sole control
over the Designated Account(s), account number(s):                                                                              
(the “Specified Designated Accounts”). 
You are hereby instructed not to accept any direction or instructions
with respect to the Specified Designated Accounts or any funds credited thereto
from any Person other than the undersigned, unless otherwise ordered by a court
of competent jurisdiction.

 

You are
instructed to deliver a copy of this notice by facsimile transmission to the
Company.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  UBS AG, Stamford Branch,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

cc:  D 56, Inc., and Lenox,
Incorporated

 

 

EXHIBIT 5-B

 

FORM OF CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS

(Full Dominion)

 

This CONTROL
AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this “Control Agreement”), dated
as of [                          ],
by and among [                          ]
(the “Company”), UBS AG, STAMFORD BRANCH, as Administrative Agent for
the Lenders and the Agents (the “Administrative Agent”), and [                          ]
(the “Bank”), is delivered pursuant to Section 3.4(b) of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”),
dated as of [                          ],
made by [                          ]  [(the
“Borrower”)]  [the Company],(1) and each of the Guarantors listed on the signature pages thereto
(together with [the Borrower]  [the
Company], the “Pledgors”),
in favor of the Administrative Agent for the benefit of the Lenders and the
Agents.  This Control Agreement is for
the purpose of perfecting the security interests of the Administrative Agent
granted by the Company in the Designated Accounts described below.  All references herein to the “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the State of New
York.  Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Security
Agreement.

 

Section 1.                                            Confirmation of Establishment and Maintenance of Designated  Accounts.  The Bank hereby confirms that (i) the
Bank has established for the Company and maintains the deposit account(s) listed
in Schedule 1 annexed hereto (such deposit account(s),
collectively, the “Designated Accounts” and each a “Designated
Account”) and (ii) each Designated Account is a “deposit account” as
such term is defined in Article 9 of the UCC.  For avoidance of doubt, it is noted that the
term “Designated Accounts” as used in any security agreement means both the
Designated Accounts hereunder and the “Designated Accounts” in the comparable
agreement entered into with respect to any other Pledgor.

 

Section 2.                                            Control.  The
Administrative Agent shall at all times (i) have “control” (as defined in Section 9-104
of the UCC) of any Designated Account and (ii) be authorized to direct the
Bank to comply, without further consent of the Company or any Person acting or
purporting to act for the Company being required, with all instructions
originated by the Administrative Agent directing disposition of the funds in
the Designated Account.  The Company, the
Administrative Agent, and the Bank agree that the Bank will comply with
instructions originated by the Administrative Agent directing the disposition
of the funds in the Designated Account without further consent by the
Company.  The Company, the Administrative
Agent, and the Bank further agree that the Bank shall not comply with any
instructions directing the disposition of funds in the Designated Accounts
originated by the Company or any of its representatives.

 

(1) Use “the
Company” if Borrower owns the Designated Account(s).  If a Subsidiary owns the
Designated Account(s), use [                                   ].
(the “Borrower”)”.

 

 

Section 3.                                            Subordination of Lien; Waiver of Set-Off.  In the event that the Bank has or
subsequently obtains by agreement, operation of law or otherwise a security interest
in any Designated Account, the Bank hereby agrees that such security interest
shall be subordinate to that of the Secured Parties.  The funds deposited into any Designated
Account will not be subject to deduction, set-off, banker’s lien, or any other
right in favor of any Person other than the Secured Parties (except that the
Bank may set off (i) all amounts due to the Bank in respect of its
customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees, and (ii) the face amount of
any checks or other items which have been credited to any Designated Account
but are subsequently returned unpaid because of uncollected or insufficient
funds).

 

Section 4.                                            Choice of Law. 
Both this Control Agreement and the Designated Accounts shall be
governed by the law of the State of New York. 
Regardless of any provision in any other agreement, for purposes of the
UCC, New York shall be deemed to be the Bank’s jurisdiction and the Designated
Accounts shall be governed by the law of the State of New York.

 

Section 5.                                            Conflict with Other Agreements; Amendments.  As of the date hereof, there are no other
agreements entered into between the Bank and the Company with respect to any
Designated Account or any funds credited thereto (other than standard and customary
documentation with respect to the establishment and maintenance of such
Designated Accounts).  The Bank and the
Company will not enter into any other agreement with respect to any Designated
Account, other than standard and customary documentation with respect to the
establishment and maintenance of such Designated Accounts, unless the
Administrative Agent shall have received prior written notice thereof.  The Bank and the Company will not enter into
any other agreement with respect to control of the Designated Accounts without
the prior written consent of the Administrative Agent acting in its sole
discretion.  In the event of any conflict
with respect to “control” over any Designated Account between this Control
Agreement (or any portion hereof) and any other agreement now existing or
hereafter entered into, the terms of this Control Agreement shall prevail.  No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.

 

Section 6.                                            Certain Agreements.

 

(i)                                     The
Bank has furnished to the Administrative Agent and the Company the most recent
account statement issued by the Bank with respect to each of the Designated
Accounts and the cash balances held therein. 
The Bank represents and warrants to the Administrative Agent that such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.

 

(ii)                                  The
Administrative Agent has delivered to the Bank a list, signed by an authorized
representative (the “Authorized Representative”), of the officers of the
Administrative Agent authorized to give approvals or instructions under this
Control Agreement (including notices and other instructions under Section 8
hereof) and the Bank shall be entitled to rely on communications from such
authorized officers until the earlier of (A) the termination of this
Control Agreement in accordance with the terms hereof, (B)

 

 

the
notification by the Authorized Representative of a change and (C) the
assignment of the rights of the Secured Parties in accordance with Section 11
hereof.

 

Section 7.                                            Notice of Adverse Claims.  Except for the claims and interest of the
Administrative Agent and of the Company in the Designated Accounts, the Bank on
the date hereof does not know of any claim to, or security interest in, any
Designated Account or in any funds credited thereto and does not know of any
claim that any Person other than the Administrative Agent has been given “control”
of any Designated Account or any such funds. 
If any Person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process and any claim of “control”) against any funds in any Designated
Account, the Bank will promptly notify the Administrative Agent and the Company
thereof.

 

Section 8.                                            Maintenance of Designated Accounts.  In addition to, and not in lieu of, the
obligation of the Bank agreed in Section 2 hereof, the Bank agrees
to maintain the Designated Accounts as follows:

 

(i)                                     No later than 10:00 a.m. (Eastern time) on each
Business Day, the Bank shall, automatically and without further
direction, initiate a federal funds wire
transfer of all available funds in the Designated Accounts, at the
Company’s cost and expense, to the
following account (or such other account as may be designed in writing by the
Administrative Agent):

 

UBS
AG, Stamford Branch

Stamford,
Connecticut

ABA
No. 026 007 993

Account
No.                                 

Attention:                                   

Reference:                                   

 

(ii)                                  The
Company shall have no authority to withdraw any amount from, draw upon, or
otherwise exercise powers as a depositor or owner with respect to the
Designated Accounts and the funds deposited therein.

 

(iii)                               The
Bank will promptly send copies of all statements and other correspondence
(excluding routine confirmations) concerning any Designated Account to the
Company and the Administrative Agent at the addresses set forth in Section 11
hereof.  The Bank will promptly provide
to the Administrative Agent and to the Company, upon the Administrative Agent’s
request therefor from time to time, a statement of the cash balance in each
Designated Account.

 

Section 9.                                            Representations, Warranties and Covenants of the Bank.  The Bank hereby makes the following
representations, warranties and covenants:

 

(i)                                     The
Designated Accounts have been established as set forth in Section 1
hereof and each Designated Account will be maintained in the manner set forth
herein until termination of this Control Agreement.  The Bank shall not change the name or

 

 

account
number of any Designated Account without the prior written consent of the
Administrative Agent.

 

(ii)                                  The
Bank is a “bank,” as such term is defined in the UCC.

 

(iii)                               This
Control Agreement is the valid and legally binding obligation of the Bank.

 

(iv)                              The
Bank has not entered into any agreement with any other Person pursuant to which
it has agreed to comply with any orders or instructions with respect to any
Designated Account.  Until the
termination of this Control Agreement, the Bank will not, without the written
approval of the Administrative Agent, enter into any agreement with any Person
pursuant to which it agrees to comply with any orders or instructions of such
Person with respect to any Designated Account.

 

(v)                                 The
Bank has not entered into any other agreement with the Company or the
Administrative Agent purporting to limit or condition the obligation of the
Bank to comply with any orders or instructions with respect to any Designated Account
as set forth in Section 2 hereof.

 

Section 10.                                      Successors; Assignment.  The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors and permitted assignees.

 

Section 11.                                      Notices.  Any
notice, request or other communication required or permitted to be given under
this Control Agreement shall be in writing and deemed to have been properly
given when delivered in person, or when sent by telecopy or other electronic
means and electronic confirmation of error free receipt is received or
two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Company:                                        [                                     ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
copy to:

 

[                                     ]

[Address]

Attention:

Telecopy:

Telephone:

 

Bank:                                                                  [                                    ]

 

 

[Address]

Attention:

Telecopy: 

Telephone:

 

Administrative

Agent:                                                           [                                    ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
a copy to:

 

[                                    ]

[Address]

Attention:

Telecopy:

Telephone:

 

Any party may
change its address for notices in the manner set forth above.

 

Section 12.                                      Termination. 
The rights and powers granted herein to the Administrative Agent have
been granted in order to perfect the security interests of the Secured Parties
in the Designated Accounts, are powers coupled with an interest and will be
affected neither by the bankruptcy of the Company nor by the lapse of
time.  The obligations of the Bank hereunder
shall continue in effect until the termination of the security interests of the
Secured Parties (including, without limitation, by virtue of the notice
pursuant to Section 11 hereof) with respect to the Designated
Accounts have been terminated and an Authorized Representative has notified the
Bank of such termination in writing.

 

Section 13.                                      Severability. 
If any term or provision set forth in this Agreement shall be invalid or
unenforceable, the remainder of this Agreement, other than those provisions
held invalid or unenforceable, shall be construed in all respects as if such
invalid or unenforceable term or provision were omitted.

 

Section 14.                                      Counterparts. 
This Control Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

 

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

 

	
   

  	
  [                                                              ],

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UBS AG, STAMFORD BRANCH,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                              ],

  
	
   

  	
  as Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

SCHEDULE 1

 

Designated AccountsExhibit 10.4

 

 

SECURITY AGREEMENT

 

By

 

D 56, INC., DEPARTMENT
56 RETAIL, INC.,

 

TIME TO CELEBRATE, INC. and
LENOX, INCORPORATED,

 

as
Borrowers,

 

DEPARTMENT 56,
INC.,

 

and

 

THE OTHER GUARANTORS PARTY
HERETO,

 

as
Guarantors

 

and

 

UBS AG, STAMFORD BRANCH,

 

as
Administrative Agent

 

 

Dated as of September 1, 2005

 

 

 

TABLE OF CONTENTS

 

	
  PREAMBLE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RECITALS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREEMENT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Interpretation

  	
   

  
	
  Section 1.3

  	
  Resolution of
  Drafting Ambiguities

  	
   

  
	
  Section 1.4

  	
  Perfection Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. GRANT OF SECURITY AND SECURED OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Pledge

  	
   

  
	
  Section 2.2

  	
  Secured Obligations

  	
   

  
	
  Section 2.3

  	
  Security Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF
  PLEDGED COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Delivery of
  Certificated Securities Collateral

  	
   

  
	
  Section 3.2

  	
  Perfection of
  Uncertificated Securities Collateral

  	
   

  
	
  Section 3.3

  	
  Financing
  Statements and Other Filings; Maintenance of Perfected Security Interest

  	
   

  
	
  Section 3.4

  	
  Other Actions

  	
   

  
	
  Section 3.5

  	
  Joinder of Additional
  Pledgors

  	
   

  
	
  Section 3.6

  	
  Supplements; Further
  Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Title

  	
   

  
	
  Section 4.2

  	
  Limitation on
  Liens; Defense of Claims; Transferability of Pledged Collateral

  	
   

  
	
  Section 4.3

  	
  Chief Executive
  Office; Change of Name; Jurisdiction of Organization

  	
   

  
	
  Section 4.4

  	
  Location of Collateral

  	
   

  
	
  Section 4.5

  	
  Condition and
  Maintenance of Equipment

  	
   

  
	
  Section 4.6

  	
  Corporate Names;
  Prior Transactions

  	
   

  
	
  Section 4.7

  	
  Due Authorization
  and Issuance

  	
   

  
	
  Section 4.8

  	
  No Claims

  	
   

  
	
  Section 4.9

  	
  No Conflicts,
  Consents, etc.

  	
   

  

 

i

 

	
  Section 4.10

  	
  Pledged Collateral

  	
   

  
	
  Section 4.11

  	
  Insurance

  	
   

  
	
  Section 4.12

  	
  Payment of Taxes;
  Compliance with Laws; Contested Liens; Claims

  	
   

  
	
  Section 4.13

  	
  Access to Pledged
  Collateral, Books and Records; Other Information

  	
   

  
	
  Section 4.14

  	
  Third Party Consents Relating to
  Intellectual Property Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. CERTAIN PROVISIONS CONCERNING
  SECURITIES COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Pledge of Additional Securities Collateral

  	
   

  
	
  Section 5.2

  	
  Voting Rights; Distributions; etc.

  	
   

  
	
  Section 5.3

  	
  Operative Agreements

  	
   

  
	
  Section 5.4

  	
  Defaults, etc.

  	
   

  
	
  Section 5.5

  	
  Certain Agreements of Pledgors As Issuers
  and Holders of Equity Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. CERTAIN
  PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Grant of License

  	
   

  
	
  Section 6.2

  	
  Registrations

  	
   

  
	
  Section 6.3

  	
  No Violations or Proceedings

  	
   

  
	
  Section 6.4

  	
  Protection of Administrative Agent’s
  Security

  	
   

  
	
  Section 6.5

  	
  After-Acquired Property

  	
   

  
	
  Section 6.6

  	
  Modifications

  	
   

  
	
  Section 6.7

  	
  Litigation

  	
   

  
	
  Section 6.8

  	
  U.S. Intent-to-Use Trademark Applications

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.
  CERTAIN PROVISIONS CONCERNING ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Special Representations and Warranties

  	
   

  
	
  Section 7.2

  	
  Maintenance of Records

  	
   

  
	
  Section 7.3

  	
  Legend

  	
   

  
	
  Section 7.4

  	
  Modification of Terms, etc.

  	
   

  
	
  Section 7.5

  	
  Collection

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.
  TRANSFERS AND OTHER LIENS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Transfers of and other Liens on Pledged
  Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Remedies

  	
   

  
	
  Section 9.2

  	
  Notice of Sale

  	
   

  
	
  Section 9.3

  	
  Waiver of Notice and Claims

  	
   

  
	
  Section 9.4

  	
  Certain Sales of Pledged Collateral

  	
   

  

 

ii

 

	
  Section 9.5

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  Section 9.6

  	
  Certain Additional Actions Regarding
  Intellectual Property

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X.
  PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS/APPLICATION OF
  PROCEEDS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
  Proceeds of Casualty Events and Collateral
  Dispositions

  	
   

  
	
  Section 10.2

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI.
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
  Concerning Administrative Agent

  	
   

  
	
  Section 11.2

  	
  Administrative Agent May Perform;
  Administrative Agent Appointed Attorney-in-Fact

  	
   

  
	
  Section 11.3

  	
  Expenses

  	
   

  
	
  Section 11.4

  	
  Continuing Security Interest; Assignment

  	
   

  
	
  Section 11.5

  	
  Termination; Release

  	
   

  
	
  Section 11.6

  	
  Modification in Writing

  	
   

  
	
  Section 11.7

  	
  Notices

  	
   

  
	
  Section 11.8

  	
  GOVERNING LAW

  	
   

  
	
  Section 11.9

  	
  CONSENT TO JURISDICTION AND SERVICE OF
  PROCESS; WAIVER OF JURY TRIAL

  	
   

  
	
  Section 11.10

  	
  Severability of Provisions

  	
   

  
	
  Section 11.11

  	
  Execution in Counterparts

  	
   

  
	
  Section 11.12

  	
  Business Days

  	
   

  
	
  Section 11.13

  	
  No Credit for Payment of Taxes or
  Imposition

  	
   

  
	
  Section 11.14

  	
  No Claims Against Administrative Agent

  	
   

  
	
  Section 11.15

  	
  No Release

  	
   

  
	
  Section 11.16

  	
  Obligations Absolute

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1

  	
  Form of Issuers Acknowledgment

  
	
  EXHIBIT 2

  	
  Form of Securities Pledge Amendment

  
	
  EXHIBIT 3

  	
  Form of Joinder Agreement

  
	
  EXHIBIT 4

  	
  Form of Securities Account Control
  Agreement

  
	
  EXHIBIT 5

  	
  Form of Deposit Account Control
  Agreement

  
				

 

iii

 

SECURITY AGREEMENT

 

SECURITY
AGREEMENT dated as of September 1, 2005 (as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the provisions
hereof, the “Agreement”) made among D 56, INC., a Minnesota corporation
(“D 56”), DEPARTMENT 56 RETAIL, INC., a Minnesota corporation (“D 56
Retail”), TIME TO CELEBRATE, INC., a Minnesota corporation (“TTC”),
LENOX, INCORPORATED, a New Jersey corporation (“Lenox” and, together
with D 56, D 56 Retail and TTC, “Borrowers” and each individually, a “Borrower”),
DEPARTMENT 56, INC., a Delaware corporation (“Holdings”), THE SUBSIDIARY
GUARANTORS PARTY TO THE CREDIT AGREEMENT (and together with Holdings, the “Guarantors”)
ANY ADDITIONAL BORROWERS OR GUARANTORS FROM TIME TO TIME PARTY HERETO BY
EXECUTION OF A JOINDER AGREEMENT (the “Additional Pledgors,”), as pledgors,
assignors and debtors (the Borrowers, together with the Guarantors and the
Additional Pledgors, in such capacities and together with any successors in
such capacities, the “Pledgors,” and each, a “Pledgor”), in favor
of UBS AG, STAMFORD BRANCH, having an office at 677 Washington Boulevard,
Stamford, Connecticut  06901, in its capacity
as administrative agent pursuant to the Credit Agreement (as hereinafter
defined), as pledgee, assignee and secured party (in such capacities and
together with any successors in such capacities, the “Administrative Agent”).

 

R E C I T A L S:

 

A.                                   The
Pledgors, the Administrative Agent, UBS Securities LLC, as Syndication Agent
and Arranger, UBS AG, Stamford Branch, as Collateral Agent, and the lending
institutions listed therein (the “Lenders”) have, in connection with the
execution and delivery of this Agreement, entered into that certain Term Loan
Credit Agreement, dated as of even date herewith (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”).

 

B.                                     Each
Guarantor has, pursuant to the Credit Agreement, among other things, unconditionally
guaranteed the obligations of the Borrowers under the Credit Agreement and the
other Loan Documents (as hereinafter defined).

 

C.                                     The
Borrowers and each Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Credit
Agreement and the other Loan Documents and each is, therefore, willing to enter
into this Agreement.

 

D.                                    It
is contemplated that one or more of the Pledgors may enter (or may have
entered) into one or more Lender Hedging Agreements with one or more of the
Lenders or their respective Affiliates.

 

E.                                      Each
Pledgor is or, as to Pledged Collateral (as hereinafter defined) acquired by
such Pledgor after the date hereof will be, the legal and/or beneficial owner
of the Pledged Collateral pledged by it hereunder.

 

F.                                      This
Agreement is given by each Pledgor in favor of the Administrative Agent for the
benefit of the Secured Parties to secure the payment and performance of all of
the Obligations.

 

 

G.                                     It
is a condition to the obligations of the Lenders to make the Loans under the
Credit Agreement or entering into any Lender Hedging Agreement that each
Pledgor execute and deliver the applicable Loan Documents, including this
Agreement.

 

A G R E E M E N T:

 

NOW THEREFORE,
in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor and the Administrative Agent hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS AND
INTERPRETATION

 

Section 1.1                                      Definitions.

 

(a)                                                                                  Unless otherwise defined herein,
terms used herein that are defined in the UCC shall have the meanings assigned
to them in the UCC.

 

(b)                                                                                 Capitalized terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have
the meanings given to them in the Credit Agreement.

 

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

 

“Acquisition
Document Rights” shall mean, with respect to each Pledgor, collectively,
all of such Pledgor’s rights, title and interest in, to and under the
Acquisition Documents including, without limitation (i) all rights and
remedies relating to monetary damages, including indemnification rights and
remedies, and claims for damages or other relief pursuant to or in respect of
the Acquisition Documents, (ii) all rights and remedies relating to
monetary damages, including indemnification rights and remedies, and claims for
monetary damages under or in respect of the agreements, documents and instruments
referred to in the Acquisition Documents or related thereto and (iii) all
proceeds, collections, recoveries and rights of subrogation with respect to the
foregoing.

 

“Acquisition
Agreement” shall mean the stock purchase agreement, dated as of July 21,
2005 by and between Holdings and Brown-Forman Corporation (as amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof and of the Credit Agreement).

 

“Acquisition
Documents” shall mean the collective reference to the Acquisition Agreement
together with any and all documents, agreements and other instruments then or
at any time thereafter executed and/or delivered in connection therewith or
related thereto, in each case, as amended, amended and restated, supplemented,
extended, renewed, replaced or otherwise modified from time to time.

 

“Additional
Pledged Interests” shall mean, collectively, with respect to each Pledgor, (i) all
options, warrants, rights, agreements, additional membership, partnership or
other equity interests of whatever class of any issuer of Initial Pledged
Interests or any interest in any

 

2

 

such issuer,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each issuer or under the Operative Agreement of
any such issuer, and the certificates, instruments and agreements representing
such membership, partnership or other interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other equity interests from time
to time acquired by such Pledgor in any manner and (ii) to the extent
required to be pledged by the terms of the Credit Agreement, all membership,
partnership or other equity interests, as applicable, of each limited liability
company, partnership or other entity (other than a corporation) hereafter
acquired or formed by such Pledgor and all options, warrants, rights,
agreements, additional membership, partnership or other equity interests of
whatever class of such limited liability company, partnership or other entity
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests or under the Operative Agreement of any such issuer,
and the certificates, instruments and agreements representing such membership,
partnership or other equity interests and any and all interest of such Pledgor
in the entries on the books of any financial intermediary pertaining to such
membership, partnership or other interests, from time to time acquired by such
Pledgor in any manner.

 

“Additional
Pledged Shares” shall mean, collectively, with respect to each Pledgor, (i) all
options, warrants, rights, agreements, additional shares of capital stock of
whatever class of any issuer of the Initial Pledged Shares or any other equity
interest in any such issuer, together with all rights, privileges, authority
and powers of such Pledgor relating to such interests issued by any such issuer
under the Operative Agreement of any such issuer, and the certificates,
instruments and agreements representing such interests and any and all interest
of such Pledgor in the entries on the books of any financial intermediary
pertaining to such interests, from time to time acquired by such Pledgor in any
manner and (ii) to the extent required to be pledged by the terms of the
Credit Agreement, all the issued and outstanding shares of capital stock of
each corporation hereafter acquired or formed by such Pledgor and all options,
warrants, rights, agreements or additional shares of capital stock of whatever
class of such corporation together with all rights, privileges, authority and
powers of such Pledgor relating to such shares or under the Operative Agreement
of such corporation and the certificates, instruments and agreements
representing such shares and any and all interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such shares,
from time to time acquired by such Pledgor in any manner.

 

“Additional
Pledgors” shall have the meaning assigned to such term in the Preamble
hereof.

 

“Administrative
Agent” shall have the meaning assigned to such term in the Preamble hereof.

 

“Agreement”
shall have the meaning assigned to such in the Preamble hereof.

 

“Borrower”
and “Borrowers” each shall have the meaning assigned to such term in the
Preamble hereof.

 

“Claims”
shall mean any and all property taxes and other taxes, assessments and special
assessments, levies, fees and all governmental charges imposed upon or assessed
against,

 

3

 

and all claims
(including, without limitation, landlords’, carriers’, mechanics’, workmen’s, repairmen’s,
laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims
arising by operation of law) against, all or any portion of the Pledged
Collateral.

 

“Collateral
Account” shall mean a collateral account or sub-account established and
maintained by the Administrative Agent (or a Lender that agrees to be an
administrative sub-agent for the Administrative Agent) in its name as
Administrative Agent for the Secured Parties and all funds from time to time on
deposit in the Collateral Account including, without limitation, all Cash
Equivalents and all certificates and instruments from time to time representing
or evidencing such investments; all notes, certificates of deposit, checks and
other instruments from time to time hereafter delivered to or otherwise
possessed by the Administrative Agent for or on behalf of any Pledgor in substitution
for, or in addition to, any or all of the Pledged Collateral; and all interest,
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the items constituting Pledged Collateral.

 

“Contracts”
shall mean, collectively, with respect to each Pledgor, all sale, service, performance,
equipment or property lease contracts, agreements and grants and all other
contracts, agreements or grants (in each case, whether written or oral, or
third party or intercompany), between such Pledgor and third parties, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof.

 

“Control”
shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any
Security Entitlement, “control,” as such term is defined in Section 8-106
of the UCC and (iii) in the case of any Commodity Contract, “control,” as
such term is defined in Section 9-106 of the UCC.

 

“Control
Agreements” shall mean, collectively, the Deposit Account Control
Agreements and the Securities Account Control Agreements.

 

“Copyrights”
shall mean, collectively, with respect to each Pledgor, all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof whether registered or
unregistered and whether published or unpublished) and all copyright registrations
and applications made by such Pledgor, in each case, whether now owned or
hereafter created or acquired by or assigned to such Pledgor, including,
without limitation, the copyrights, registrations and applications listed in Schedule 13(b) annexed
to the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor’s use of
such copyrights, (ii) reissues, renewals, continuations and extensions
thereof, (iii) income, fees, royalties, damages, claims and payments now
or hereafter due and/or payable with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (iv) rights corresponding thereto throughout the world and (v) rights
to sue for past, present or future infringements thereof.

 

“Credit
Agreement” shall have the meaning assigned to such term in Recital A
hereof.

 

4

 

“Deposit
Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 5.

 

“Deposit
Accounts” shall mean, collectively, with respect to each Pledgor, (i) all
“deposit accounts” as such term is defined in the UCC and in any event shall
include, without limitation, all accounts and sub-accounts relating to any of
the foregoing accounts and (ii) all cash, funds, checks, notes and instruments
from time to time on deposit in any of the accounts or sub-accounts described
in clause (i) of this definition.

 

“Distributions”
shall mean, collectively, with respect to each Pledgor, all dividends, cash,
options, warrants, rights, instruments, distributions, returns of capital or
principal, income, interest, profits and other property, interests (debt or
equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect
of or in exchange for any or all of the Pledged Securities or Pledged Notes.

 

“General
Intangibles” shall mean, collectively, with respect to each Pledgor, all “general
intangibles,” as such term is defined in the UCC, of such Pledgor and, in any
event, shall include, without limitation, (i) all of such Pledgor’s
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights,
claims, choses-in-action and causes of action of such Pledgor against any other
Person and the benefits of any and all collateral or other security given by
any other Person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Pledged Collateral or
any of the Mortgaged Property, (v) all lists, books, records,
correspondence, ledgers, print-outs, files (whether in printed form or stored
electronically), tapes and other papers or materials containing information
relating to any of the Pledged Collateral or any of the Mortgaged Property,
including, without limitation, all customer or tenant lists, identification of
suppliers, data, plans, blueprints, specifications, designs, drawings,
appraisals, recorded knowledge, surveys, studies, engineering reports, test
reports, manuals, standards, processing standards, performance standards,
catalogs, research data, computer and automatic machinery software and programs
and the like, field repair data, accounting information pertaining to such
Pledgor’s operations or any of the Pledged Collateral or any of the Mortgaged
Property and all media in which or on which any of the information or knowledge
or data or records may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or data, (vi) all
licenses, consents, permits, variances, certifications, authorizations and approvals,
however characterized, of any Governmental Authority (or any Person acting on
behalf of a Governmental Authority) now or hereafter acquired or held by such
Pledgor pertaining to operations now or hereafter conducted by such Pledgor or
any of the Pledged Collateral or any of the Mortgaged Property including,
without limitation, building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and (vii) all
rights to reserves, deferred payments, deposits, refunds, indemnification of
claims to the extent the foregoing relate to any Pledged Collateral or
Mortgaged Property and claims for tax or other refunds against any Governmental
Authority relating to any Pledged Collateral or any of the Mortgaged Property.

 

5

 

“Goodwill”
shall mean, collectively, with respect to each Pledgor, the goodwill connected
with such Pledgor’s business including, without limitation, (i) all
goodwill connected with the use of and symbolized by any of the Intellectual
Property Collateral in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions,
technical data, drawings, specifications, name plates, catalogs, confidential
information and the right to limit the use or disclosure thereof by any Person,
pricing and cost information, business and marketing plans and proposals, consulting
agreements, engineering contracts and such other assets which relate to such
goodwill and (iii) all product lines of such Pledgor’s business.

 

“Guarantors”
shall have the meaning assigned to such term in the Preamble hereof.

 

“Indemnitees”
shall have the meaning assigned to such term in Section 11.3(a) hereof.

 

“Initial
Pledged Interests” shall mean, with respect to each Pledgor, all membership,
partnership or other equity interests (other than in a corporation), as
applicable, of each issuer owned by such Pledgor as described in Schedule 10
annexed to the Perfection Certificate, together with all rights, privileges,
authority and powers of such Pledgor in and to each such issuer or under the
Operative Agreement of each such issuer, and the certificates, instruments and
agreements representing such membership, partnership or other interests and any
and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.

 

“Initial
Pledged Shares” shall mean, collectively, with respect to each Pledgor, the
issued and outstanding shares of capital stock of each issuer owned by such
Pledgor as described in Schedule 10 annexed to the Perfection
Certificate together with all rights, privileges, authority and powers of such
Pledgor relating to such interests in each such issuer or under the Operative
Agreement of each such issuer, and the certificates, instruments and agreements
representing such shares of capital stock and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
the Initial Pledged Shares.

 

“Instruments”
shall mean, collectively, with respect to each Pledgor, all “instruments,” as
such term is defined in Article 9 of the UCC and shall include, without
limitation, all promissory notes, drafts, bills of exchange or acceptances.

 

“Intellectual
Property Collateral” shall mean, collectively, the Patents, Trademarks,
Copyrights, Licenses and Goodwill.

 

“Intercompany
Notes” shall mean, with respect to each Pledgor, all intercompany notes
described in Schedule 11 annexed to the Perfection Certificate and
each intercompany note hereafter acquired by such Pledgor and all certificates,
instruments or agreements evidencing such intercompany notes, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.

 

6

 

“Investment
Property” shall mean a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract or commodity
account, excluding, however, the Securities Collateral.

 

“Joinder
Agreement” shall mean an agreement substantially in the form annexed hereto
as Exhibit 3.

 

“Lenders”
shall have the meaning assigned to such term in Recital A hereof.

 

“Licenses”
shall mean, collectively, with respect to each Pledgor, all license and
distribution agreements with, and covenants not to sue, any other party with
respect to any Patent, Trademark or Copyright or any other patent, trademark or
copyright, whether such Pledgor is a licensor or licensee, distributor or
distributee under any such license or distribution agreement, including,
without limitation, the license and distribution agreements listed in Schedule 13(a) and
13(b) annexed to the Perfection Certificate, together with any and
all (i) renewals, extensions, supplements and continuations thereof, (ii) income,
fees, royalties, damages, claims and payments now and hereafter due and/or
payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements or violations
thereof, (iii) rights to sue for past, present and future infringements or
violations thereof and (iv) other rights to use, exploit or practice any
or all of the Patents, Trademarks or Copyrights or any other patent, trademark
or copyright.

 

“Mortgaged
Property” shall have the meaning assigned to such term in the Mortgages.

 

“Operative
Agreement” shall mean (i) in the case of any limited liability company
or partnership or other non-corporate entity, any membership or partnership
agreement or other organizational agreement or document thereof and (ii) in
the case of any corporation, any charter or certificate of incorporation and
by-laws thereof.

 

“Patents”
shall mean, collectively, with respect to each Pledgor, all patents issued or
assigned to and all patent applications and registrations made by such Pledgor
(whether established or registered or recorded in the United States or any
other country or any political subdivision thereof), including, without
limitation, those listed in Schedule 13(a) annexed to the Perfection
Certificate, together with any and all (i) rights and privileges arising
under applicable law with respect to such Pledgor’s use of any patents, (ii) inventions
and improvements described and claimed therein, (iii) reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof, (iv) income,
fees, royalties, damages, claims and payments now or hereafter due and/or
payable thereunder and with respect thereto including, without limitation,
damages and payments for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for
past, present or future infringements thereof.

 

“Perfection
Certificate” shall mean that certain perfection certificate dated as of the
date hereof, executed and delivered by Borrowers or Guarantors, as applicable,
on behalf of each Pledgor in favor of the Administrative Agent for the benefit
of the Secured Parties, and each other Perfection Certificate (which shall be
in form and substance reasonably acceptable to

 

7

 

the
Administrative Agent) executed and delivered by any Additional Pledgor in favor
of the Administrative Agent for the benefit of the Secured Parties contemporaneously
with the execution and delivery of each Joinder Agreement executed in accordance
with Section 3.5 hereof, in each case, as the same may be supplemented
by each Perfection Certificate Supplement delivered in accordance with the
Credit Agreement.

 

“Pledge
Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

 

“Pledged
Collateral” shall have the meaning assigned to such term in Section 2.1
hereof.

 

“Pledged
Notes” shall mean, collectively, the Intercompany Notes and each additional
note or Instrument hereafter acquired by any Pledgor that is required to be
pledged hereunder and all certificates or agreements evidencing such notes or
Instruments, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the extent permitted
pursuant to the terms hereof.

 

“Pledged
Interests” shall mean, collectively, the Initial Pledged Interests and the
Additional Pledged Interests; provided, however, that to the
extent applicable, Pledged Interests shall not include any interest possessing
more than 66% of the voting power or control of all classes of interests
entitled to vote of any foreign Subsidiary which is a first-tier controlled foreign
corporation (as defined in Section 957(a) of the Code) to the extent
such pledge would result in an adverse tax consequence to the Pledgor and, in
any event, shall not include the interests of any Subsidiary otherwise required
to be pledged pursuant to this Agreement to the extent that such pledge would
constitute an investment of earnings in United States property under Section 956
(or a successor provision) of the Code, to the extent such pledge would trigger
a material  increase in the gross income
of a United States shareholder of such Subsidiary pursuant to Section 951
(or a successor provision) of the Code.

 

“Pledged
Securities” shall mean, collectively, the Pledged Interests, the Pledged
Shares and the Successor Interests.

 

“Pledged
Shares” shall mean, collectively, the Initial Pledged Shares and the Additional
Pledged Shares; provided, however, that Pledged Shares shall not
include shares possessing more than 66% of the voting power of all classes of
capital stock entitled to vote of any Subsidiary which is a first tier
controlled foreign corporation (as defined in Section 957(a) of the
Code) to the extent such pledge would result in an adverse tax consequence to
the Pledgor and, in any event, shall not include the shares of stock of any
foreign Subsidiary otherwise required to be pledged pursuant to this Agreement
to the extent that such pledge would constitute an investment of earnings in
United States property under Section 956 (or a successor provision) of the
Code, to the extent such pledge would trigger a material increase in the gross
income of a United States shareholder of such Subsidiary pursuant to Section 951
(or a successor provision) of the Code.

 

“Pledgor”
shall have the meaning assigned to such term in the Preamble hereof.

 

8

 

“Securities
Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 4.

 

“Securities
Collateral” shall mean, collectively, the Pledged Securities, the Pledged
Notes and the Distributions.

 

“Successor
Interests” shall mean, collectively, with respect to each Pledgor, all
shares of each class of the capital stock of the successor corporation or
interests or certificates of the successor limited liability company,
partnership or other entity owned by such Pledgor (unless such successor is
such Pledgor itself) formed by or resulting from any consolidation or merger in
which any issuer of Pledged Interests or Pledged Shares is not the surviving
entity; provided, however, that Successor Interest shall not
include shares or interests possessing more than 66% of the voting power or
control of all classes of capital stock or interests entitled to vote of any
Subsidiary which is a first-tier controlled foreign corporation (as defined in Section 957(a) of
the Code) to the extent such pledge would result in an adverse tax consequence
to the Pledgor and, in any event, shall not include shares of stock or
interests of any foreign Subsidiary otherwise required to be pledged pursuant
to this Agreement to the extent that such pledge would constitute an investment
of earnings in United States property under Section 956 (or a successor
provision) of the Code, to the extent such pledge would trigger a material
increase in the gross income of a United States shareholder of such Pledgor
pursuant to Section 951 (or a successor provision) of the Code.

 

“Trademarks”
shall mean, collectively, with respect to each Pledgor, all trademarks
(including service marks), slogans, logos, certification marks, trade dress,
uniform resource locations (URL’s), domain names, corporate names and trade
names, whether registered or unregistered, owned by or assigned to such Pledgor
and all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States or any
other country or any political subdivision thereof), including, without limitation,
the registrations and applications listed in Schedule 13(a) annexed
to the Perfection Certificate, together with any and all (i) rights and
privileges arising under applicable law with respect to such Pledgor’s use of
any trademarks, (ii) reissues, continuations, extensions and renewals
thereof, (iii) income, fees, royalties, damages and payments now and
hereafter due and/or payable thereunder and with respect thereto, including,
without limitation, damages, claims and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the
world and (v) rights to sue for past, present and future infringements
thereof.

 

“UCC”
shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided, however, that if by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of the Administrative Agent’s and the Secured Parties’ security
interest in any item or portion of the Pledged Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term “UCC” shall mean the Uniform Commercial Code as in effect on
the date hereof in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions relating to such provisions.

 

9

 

Section 1.2                                      Interpretation. 
The rules of interpretation specified in the Credit Agreement shall
be applicable to this Agreement.  If any
conflict or inconsistency exists between this Agreement and the Credit
Agreement, the Credit Agreement shall govern.

 

Section 1.3                                      Resolution of
Drafting Ambiguities.  Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and participated
in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Administrative Agent) shall not be employed in
the interpretation hereof.

 

Section 1.4                                      Perfection
Certificate.  The Administrative
Agent and each Secured Party agree that the Perfection Certificate and all
descriptions of Pledged Collateral, schedules, amendments and supplements
thereto are and shall at all times remain a part of this Agreement.

 

ARTICLE II.

 

GRANT OF SECURITY
AND SECURED OBLIGATIONS

 

Section 2.1                                      Pledge.  As collateral security for the payment and
performance in full of all the Obligations, each Pledgor hereby pledges and
grants to the Administrative Agent for its benefit and for the benefit of the
Secured Parties, a lien on and security interest in and to all of the right,
title and interest of such Pledgor in, to and under all personal property and
interests in personal property, wherever located, whether now existing or
hereafter arising or acquired from time to time (collectively, the “Pledged
Collateral”), including, without limitation:

 

(i)                                                                                     all Accounts;

 

(ii)                                                                                  all Equipment, Goods, Inventory and
Fixtures;

 

(iii)                                                                               all Documents, Instruments and Chattel
Paper;

 

(iv)                                                                              all letters of credit and
Letter-of-Credit Rights;

 

(v)                                                                                 all Securities Collateral;

 

(vi)                                                                              all Collateral Accounts;

 

(vii)                                                                           all Investment Property;

 

(viii)                                                                        all Intellectual Property Collateral;

 

(ix)                                                                                the Commercial Tort Claims described on
Schedule 14 to the Perfection Certificate;

 

(x)                                                                                   all General Intangibles;

 

(xi)                                                                                all Deposit Accounts;

 

10

 

(xii)                                                                             all Acquisition Documents and
Acquisition Document Rights;

 

(xiii)                                                                          all Supporting Obligations;

 

(xiv)                                                                         all books and records relating to the
Pledged  Collateral; and

 

(xv)                                                                            to the extent not covered by clauses
(i) through (xiv) of this sentence, all other personal property of such
Pledgor, whether tangible or intangible and all Proceeds and products of each
of the foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of, each of the foregoing, any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to such Pledgor from
time to time with respect to any of the foregoing.

 

Notwithstanding
anything to the contrary contained in clauses (i) through (xv) above, the
security interest created by this Agreement shall not extend to, and the term “Pledged
Collateral” shall not include, (A) any License to which any Pledgor is a
party to the extent, and solely to the extent, and for so long as, and solely
for so long as, the terms of such License or any Requirement of Law applicable
thereto validly prohibit the creation by such Pledgor of a security interest in
such License in favor of the Administrative Agent, after giving effect to Sections 9-406(d),
9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions)
or any other applicable law or principles of equity; provided, however,
that Proceeds of any License described in this sentence shall not be excluded
from “Pledged Collateral” and (B) certain Inventory to the extent, and
solely to the extent, that such Inventory bears a trademark subject to a
license agreement listed on Annex A hereto that prohibits the granting of a
Lien on any Inventory bearing such trademark unless the licensor under the
applicable license agreement shall have consented in writing to the granting of
a Lien on such Inventory hereunder.

 

Section 2.2                                      Secured
Obligations.  This Agreement secures,
and the Pledged Collateral is collateral security for, the payment and
performance in full when due of the Obligations.

 

Section 2.3                                      Security
Interest.  (a)  Each Pledgor hereby irrevocably
authorizes the Administrative Agent at any time and from time to time to
authenticate and file in any relevant jurisdiction any initial financing
statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment
relating to the Pledged Collateral, including, without limitation, (i) whether
such Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) any financing or
continuation statements or other documents without the signature of such
Pledgor where permitted by law, including, without limitation, the filing of a
financing statement describing the Pledged Collateral as “all assets” or “all
assets in which the Pledgor now owns or hereafter acquires rights” or words to
that effect and (iii) in the case of a financing statement filed as a
fixture filing or covering Pledged Collateral constituting minerals or the like
to be extracted or timber to be cut, a sufficient description of the real
property to which such Pledged Collateral relates.  Each Pledgor agrees to provide all information
described in the immediately preceding sentence to the Administrative Agent
promptly upon request.

 

11

 

(b)                                                                                 Each Pledgor hereby ratifies its
authorization for the Administrative Agent to file in any relevant jurisdiction
any initial financing statements or amendments thereto relating to the Pledged
Collateral if filed prior to the date hereof.

 

(c)                                                                                  Each Pledgor hereby further
authorizes the Administrative Agent to file filings with the United States
Patent and Trademark Office and United States Copyright Office (or any
successor office or any similar office in any other country) or other documents
for the purpose of perfecting, confirming, continuing, enforcing or protecting
the security interest granted by such Pledgor hereunder, without the signature
of such Pledgor, and naming such Pledgor, as debtor, and the Administrative
Agent, as secured party.

 

ARTICLE III.

 

PERFECTION;
SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL

 

Section 3.1                                      Delivery
of Certificated Securities Collateral.  Each Pledgor represents and warrants that all
certificates, agreements or instruments representing or evidencing the
Securities Collateral in existence on the date hereof have been or
contemporaneously herewith will be delivered to the Revolving Credit Agent in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank and that the Administrative
Agent has or contemporaneously herewith shall have a perfected second priority
security interest therein.  Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor at any time after the
payment in full of the Revolving Credit Indebtedness and the termination of the
Revolving Credit Documents, shall, within the time periods required by the
Credit Agreement, be delivered to and held by or on behalf of the
Administrative Agent pursuant hereto. 
All such certificated Securities Collateral acquired by such Pledgor at
any time after the payment in full of the Revolving Credit Indebtedness and the
termination of the Revolving Credit Documents shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance reasonably
satisfactory to the Administrative Agent. 
The Administrative Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default after the payment
in full of the Revolving Credit Indebtedness and the termination of the
Revolving Credit Documents, to endorse, assign or otherwise transfer to or to
register in the name of the Administrative Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the security interest
hereunder.  In addition, the
Administrative Agent shall have the right at any time after the payment in full
of the Revolving Credit Indebtedness and the termination of the Revolving
Credit Documents to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.

 

Section 3.2                                      Perfection
of Uncertificated Securities Collateral.  Each Pledgor represents and warrants that the
Administrative Agent has a perfected second priority security interest in all
uncertificated Pledged Securities pledged by it hereunder that are in existence
on the date hereof and that the applicable partnership agreement, operating
agreement or other organizational documents do not require the consent of the
other shareholders, members, partners

 

12

 

or other Person
to permit the Administrative Agent or its designee to be substituted for the
applicable Pledgor as a shareholder, member, partner or other equity owner, as
applicable, thereto.  Each Pledgor hereby
agrees that if any of the Pledged Securities are, at any time after the payment
in full of the Revolving Credit Indebtedness and the termination of the
Revolving Credit Documents, not evidenced by certificates of ownership, then
each applicable Pledgor shall, to the extent permitted by applicable law, cause
such pledge to be recorded on the equityholder register or the books of the
issuer, cause the issuer to execute and deliver to the Administrative Agent an
acknowledgment of the pledge of such Pledged Securities substantially in the
form of Exhibit 1 annexed hereto, execute customary pledge forms or
other documents necessary or appropriate to complete the pledge and give the
Administrative Agent the right to transfer such Pledged Securities under the terms
hereof and provide to the Administrative Agent an opinion of counsel, in form
and substance satisfactory to the Administrative Agent, confirming such pledge
and perfection thereof.

 

Section 3.3                                      Financing
Statements and Other Filings; Maintenance of Perfected Security Interest.  Each Pledgor represents and warrants that the
only filings, registrations and recordings necessary and appropriate to create,
preserve, protect, publish notice of and perfect the security interest granted
by each Pledgor to the Administrative Agent (for the benefit of the Secured
Parties) pursuant to this Agreement in respect of the Pledged Collateral are
listed in Schedule 5 annexed to the Perfection Certificate.  Each Pledgor represents and warrants that all
such filings, registrations and recordings have been delivered to the
Administrative Agent in completed and, to the extent necessary or appropriate,
duly executed form for filing in each governmental, municipal or other office
specified in Schedule 6 annexed to the Perfection Certificate and
shall be filed, registered and recorded immediately after the date
thereof.  Each Pledgor agrees that at the
sole cost and expense of the Pledgors, (i) such Pledgor will maintain the
security interest created by this Agreement in the Pledged Collateral as a
perfected first priority security interest and shall defend such security
interest against the claims and demands of all Persons, provided, however,
that, prior to the payment in full of the Revolving Credit Indebtedness
and the termination of the Revolving Credit Documents, the security interest
created by this Agreement in that portion of the Pledged Collateral
constituting Revolving Credit Priority Collateral shall be maintained as a
perfected second priority security interest junior to the security interest of
the Revolving Credit Agent, (ii) such Pledgor shall furnish to the
Administrative Agent from time to time statements and schedules further identifying
and describing the Pledged Collateral and such other reports in connection with
the Pledged Collateral as the Administrative Agent may deem reasonably
necessary, all in reasonable detail and (iii) at any time and from time to
time, upon the written request of the Administrative Agent, such Pledgor shall
promptly and duly execute and deliver, and file and have recorded, such further
instruments and documents and take such further action as the Administrative
Agent may deem reasonably necessary for the purpose of obtaining or preserving
the full benefits of this Agreement and the rights and powers herein granted,
including the filing of any financing statements, continuation statements and
other documents (including the Agreement) under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interest created hereby and the execution and delivery of Control Agreements,
all in form reasonably satisfactory to the Administrative Agent and in such
offices (including, without limitation, the United States Patent and Trademark
Office) wherever required by law to perfect, continue and maintain a valid,
enforceable, first priority security interest in the Pledged Collateral, as
provided herein, and to preserve the other rights and interests granted to the

 

13

 

Administrative Agent hereunder, as against third parties, with respect
to the Pledged Collateral; provided, however, that, prior
to the payment in full of the Revolving Credit Indebtedness and the termination
of the Revolving Credit Documents, the security interest created by this
Agreement in that portion of the Pledged Collateral constituting Revolving
Credit Priority Collateral shall be maintained as a perfected second priority
security interest junior to the security interest of the Revolving Credit
Agent.  Each Pledgor hereby authorizes
the Administrative Agent to file any such financing or continuation statement
or other document without the signature of such Pledgor where permitted by law,
including, without limitation, the filing of a financing statement describing
the Pledged Collateral as “all assets” or “all assets in which the Pledgor now
owns or hereafter acquires rights” or words to that effect.

 

Section 3.4                                      Other Actions.  In order to further insure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in the Pledged Collateral,
each Pledgor represents, warrants and agrees, in each case at such Pledgor’s
own expense, with respect to the following Pledged Collateral that:

 

(a)                                                                                  Instruments and Tangible Chattel
Paper.  As of the date hereof (i) no amount
individually or in the aggregate in excess of $100,000 payable under or in connection
with any of the Pledged Collateral is evidenced by any Instrument or Tangible
Chattel Paper other than such Instruments and Tangible Chattel Paper listed in Schedule 11
annexed to the Perfection Certificate and (ii) each Instrument and each
item of Tangible Chattel Paper listed in Schedule 11 annexed to the
Perfection Certificate has been properly endorsed, assigned and delivered to
the Revolving Credit Agent, accompanied by instruments of transfer or
assignment duly executed in blank.  If
any amount individually or in the aggregate in excess of $100,000 payable under
or in connection with any of the Pledged Collateral shall, at any time after
the payment in full of the Revolving Credit Indebtedness and the termination of
the Revolving Credit Documents, be evidenced by any Instrument or Tangible
Chattel Paper, the Pledgor acquiring such Instrument or Tangible Chattel Paper
shall forthwith endorse, assign and deliver the same to the Administrative
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank as the Administrative Agent may from time to time specify.

 

(b)                                                                                 Deposit Accounts. 
As of the date hereof (i) it does not maintain any Deposit Accounts
other than the accounts listed in Schedule 15 annexed to the
Perfection Certificate and (ii) with respect to each Deposit Account in
which the Revolving Credit Agent has, or upon execution and delivery of a
Deposit Account Control Agreement by the Pledgor of the Deposit Account and the
financial institution holding such Deposit Account, will have a perfected first
priority security interest by Control, the Administrative Agent has or will
have a perfected second priority security interest by Control.  After the payment in full of the Revolving
Credit Indebtedness and the termination of the Revolving Credit Documents, no
Pledgor shall establish and maintain any Deposit Account unless (1) the
applicable Pledgor shall have given the Administrative Agent 30 days’ prior
written notice of its intention to establish such new Deposit Account with a
Bank, (2) such Bank shall be reasonably acceptable to the Administrative
Agent and (3) to the extent required by the Credit Agreement, such Bank
and such Pledgor shall have duly executed and delivered to the Administrative
Agent a Deposit Account Control Agreement with respect to such Deposit Account
substantially in the form of Exhibit 5 annexed hereto or such other
form acceptable to the Administrative Agent. 
No Pledgor shall grant Control of any Deposit Account to any Person
other than the Administrative Agent or

 

14

 

the Revolving Credit Agent.  With respect to any Deposit Account for which
the applicable Deposit Account Control Agreement provides that the depository
institution may accept instructions from the applicable Pledgor unless and
until the Administrative Agent otherwise notifies the depository institution,
the Administrative Agent agrees that it shall deliver such notice only if a
Default or Event of Default has occurred and is continuing and that it shall
not give any instructions directing the disposition of funds from time to time
credited to any such Deposit Account unless a Default or Event of Default has
occurred and is continuing.

 

(c)                                                                                  Investment Property.  (i)  As of
the date hereof (1) it has no Securities Accounts or Commodity Accounts other
than those listed in Schedule 15 annexed to the Perfection
Certificate and, with respect to each Securities Account or Commodity Account
in which the Revolving Credit Agent has a perfected first priority security
interest by Control, the Administrative Agent has a perfected second priority security
interest by Control and (2) it does not hold, own or have any interest in
any certificated securities or uncertificated securities other than those
constituting Pledged Securities and those maintained in Securities Accounts or
Commodity Accounts listed in Schedule 15 annexed to the Perfection
Certificate.

 

(ii)                                  If any Pledgor shall, at any time
after the payment in full of the Revolving Credit Indebtedness and the
termination of the Revolving Credit Documents, hold or acquire any certificated
securities constituting Investment Property, other than any securities of
Foreign Subsidiaries not required to be pledged hereunder, such Pledgor shall (a) within
the time periods required by the Credit Agreement, endorse, assign and deliver
the same to the Administrative Agent, accompanied by such instruments of transfer
or assignment duly executed in blank, all in form and substance reasonably
satisfactory to the Administrative Agent or (b) deliver such securities
into a Securities Account with respect to which a Securities Account Control
Agreement is in effect in favor of the Administrative Agent.  If any securities acquired by any Pledgor, at
any time after the payment in full of the Revolving Credit Indebtedness and the
termination of the Revolving Credit Documents, constituting Investment
Property, other than any securities of Foreign Subsidiaries not required to be
pledged hereunder, are uncertificated and are issued to such Pledgor or its
nominee directly by the issuer thereof, such Pledgor shall, within the time
periods required by the Credit Agreement, notify the Administrative Agent
thereof and pursuant to an agreement in form and substance satisfactory to the
Administrative Agent, either (a) cause the issuer to agree to comply with
instructions from the Administrative Agent as to such securities, without
further consent of any Pledgor or such nominee, (b) cause a Security
Entitlement with respect to such uncertificated security to be held in a
Securities Account with respect to which the Administrative Agent has Control
or (c) arrange for the Administrative Agent to become the registered owner
of the securities.  After the payment in
full of the Revolving Credit Indebtedness and the termination of the Revolving
Credit Documents, Pledgor shall not establish and maintain any Securities
Account or Commodity Account with any Securities Intermediary or Commodity
Intermediary unless (1) the applicable Pledgor shall have given the
Administrative Agent 30 days’ prior written notice of its intention to
establish such new Securities Account or Commodity Account with such Securities
Intermediary or Commodity Intermediary, (2) such Securities Intermediary
or Commodity Intermediary shall be reasonably acceptable to the Administrative
Agent and (3) such Securities Intermediary or Commodity Intermediary, as
the case may be, and such Pledgor shall have duly executed and delivered a
Control Agreement with respect to such Securities Account or Commodity Account,
as the case may be.  After the payment in
full of the Revolving Credit Indebtedness and the termination of

 

15

 

the
Revolving Credit Documents, each Pledgor shall accept any cash and Investment
Property which are proceeds of the Pledged Interests in trust for the benefit
of the Administrative Agent and, within the time periods required by the Credit
Agreement, deposit any cash or Investment Property and any new securities,
instruments, documents or other property by reason of ownership of the Investment
Property received by it into an account in which the Administrative Agent has
Control.  The Administrative Agent agrees
with each Pledgor that the Administrative Agent shall not give any entitlement
orders or instructions or directions to any issuer of uncertificated securities,
Securities Intermediary or Commodity Intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by such Pledgor,
unless an Event of Default has occurred and is continuing, or, after giving
effect to any such investment and withdrawal rights, would occur.  The provisions of this Section 3.4(c) shall
not apply to any Financial Assets credited to a Securities Account for which
the Administrative Agent is the Securities Intermediary.  No Pledgor shall grant control over any
Investment Property to any Person other than the Administrative Agent or the
Revolving Credit Agent.

 

(iii)                               As between the Administrative Agent
and the Pledgors, the Pledgors shall bear the investment risk with respect to
the Investment Property and Pledged Securities, and the risk of loss of, damage
to, or the destruction of the Investment Property and Pledged Securities,
whether in the possession of, or maintained as a security entitlement or
deposit by, or subject to the control of, the Administrative Agent, a
Securities Intermediary, Commodity Intermediary, any Pledgor or any other
Person; provided, however, that nothing contained in this Section 3.4(c) shall
release or relieve any Securities Intermediary or Commodity Intermediary of its
duties and obligations to the Pledgors or any other Person under any Control
Agreement or under applicable law. 
Subject to Section 4.12, each Pledgor shall promptly pay all
Claims and fees of whatever kind or nature with respect to the Investment
Property and Pledged Securities pledged by it under this Agreement.  In the event any Pledgor shall fail to make
such payment contemplated in the immediately preceding sentence, the
Administrative Agent may do so for the account of such Pledgor and the Pledgors
shall promptly reimburse and indemnify the Administrative Agent for all costs
and expenses incurred by the Administrative Agent under this Section 3.4(c) in
accordance with Section 11.3 hereof.

 

(d)                                                                                 Electronic Chattel Paper and
Transferable Records.  As of the date hereof no
amount individually or in the aggregate in excess of $100,000 payable under or
in connection with any of the Pledged Collateral is evidenced by any Electronic
Chattel Paper or any “transferable record,” as that term is defined in Section 201
of the Federal Electronic Signatures in Global and National Commerce Act, or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction other than such Electronic Chattel Paper and transferable
records listed in Schedule 11 annexed to the Perfection Certificate.  If at any time after the payment in full of
the Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents, any amount individually or in the aggregate in excess of $100,000
payable under or in connection with any of the Pledged Collateral shall be evidenced
by any Electronic Chattel Paper or any transferable record, the Pledgor acquiring
such Electronic Chattel Paper or transferable record shall promptly notify the
Administrative Agent thereof and shall take such action as the Administrative
Agent may reasonably request to vest in the Administrative Agent control under
UCC Section 9-105 of such Electronic Chattel Paper or control under Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, Section 16 of the Uniform Electronic Transactions Act, as

 

16

 

so in effect in such jurisdiction, of
such transferable record.  After the
payment in full of the Revolving Credit Indebtedness and the termination of the
Revolving Credit Documents, the Administrative Agent agrees with such Pledgor
that the Administrative Agent will arrange, pursuant to procedures satisfactory
to the Administrative Agent and so long as such procedures will not result in
the Administrative Agent’s loss of control, for the Pledgor to make alterations
to the Electronic Chattel Paper or transferable record permitted under UCC Section 9-105
or, as the case may be, Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act of Section 16 of the Uniform
Electronic Transactions Act for a party in control to allow without loss of
control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by such Pledgor with respect to such
Electronic Chattel Paper or transferable record.

 

(e)                                                                                  Letter-of-Credit Rights. 
If such Pledgor is at any time after the payment in full of the
Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents, a beneficiary under a letter of credit now or hereafter issued in
favor of such Pledgor in an amount individually or in the aggregate in excess
of $100,000, such Pledgor shall promptly notify the Administrative Agent  thereof and such Pledgor shall, pursuant to
an agreement in form and substance satisfactory to the Administrative Agent,
either (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to the Administrative Agent of the proceeds
of any drawing under the letter of credit or (ii) arrange for the
Administrative Agent to become the transferee beneficiary of such letter of
credit, with the Administrative Agent agreeing, in each case, that the proceeds
of any drawing under the letter of credit are to be applied as provided in the
Credit Agreement.

 

(f)                                                                                    Commercial Tort Claims. 
As of the date hereof it holds no Commercial Tort Claims other than
those listed in Schedule 14 annexed to the Perfection
Certificate.  If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim having a value individually or in
the aggregate in excess of $100,000, such Pledgor shall immediately notify the
Administrative Agent in writing signed by such Pledgor of the brief details
thereof and grant to the Administrative Agent in such writing a security
interest therein and in the Proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance satisfactory to the
Administrative Agent.

 

(g)                                                                                 Landlord Lien Waivers/Bailee
Letters/Processor Agreements.  After the
payment in full of the Revolving Credit Indebtedness and the termination of the
Revolving Credit Documents, to the extent required under the Credit Agreement,
such Pledgor shall obtain a waiver of bailee’s, landlord’s or other applicable
possessory lien and obtain a bailee letter, landlord lien waiver or processor
agreement, as applicable and in form and substance reasonably satisfactory to
the Administrative Agent, from each bailee, landlord and third party processor
who from time to time has possession of Pledged Collateral or who leases or
sub-leases premises to such Pledgor at which Pledged Collateral is located.

 

Section 3.5                                      Joinder
of Additional Pledgors.  The
Pledgors shall cause each Subsidiary of the Borrowers which, from time to time,
after the date hereof shall be required to pledge any assets to the
Administrative Agent for the benefit of the Secured Parties pursuant to the
provisions of the Credit Agreement, to execute and deliver to the
Administrative Agent (i) a Joinder Agreement substantially in the form of Exhibit 3
annexed hereto within five (5) Business

 

17

 

Days on which
it was acquired or created and (ii) a Perfection Certificate, in each
case, within five (5) Business Days of the date on which it was acquired
or created and, upon such execution and delivery, such Subsidiary shall
constitute a “Borrower” or “Guarantor”, as applicable, and a “Pledgor” for all
purposes hereunder with the same force and effect as if originally named as a
Borrower or Guarantor, as applicable, and Pledgor herein.  The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder.  The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Borrower, Guarantor and Pledgor as a party to this Agreement.

 

Section 3.6                                      Supplements;
Further Assurances.  Each
Pledgor shall take such further actions, and execute and deliver to the
Administrative Agent such additional assignments, agreements, supplements,
powers and instruments, as the Administrative Agent may in its reasonable
judgment deem necessary or appropriate, wherever required by law, in order to
perfect, preserve and protect the security interest in the Pledged Collateral
as provided herein and the rights and interests granted to the Administrative
Agent hereunder, to carry into effect the purposes hereof or better to assure
and confirm unto the Administrative Agent or permit the Administrative Agent to
exercise and enforce its rights, powers and remedies hereunder with respect to
any Pledged Collateral.  Without limiting
the generality of the foregoing, each Pledgor shall make, execute, endorse, acknowledge,
file or refile and/or deliver to the Administrative Agent from time to time
upon reasonable request such lists, descriptions and designations of the
Pledged Collateral, copies of warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments.  If an Event of Default has occurred and is
continuing, the Administrative Agent may institute and maintain, in its own
name or in the name of any Pledgor, such suits and proceedings as the Administrative
Agent may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the Pledged
Collateral.  All of the foregoing shall
be at the sole cost and expense of the Pledgors.  The Pledgors and the Administrative Agent
acknowledge that this Agreement is intended to grant to the Administrative
Agent for the benefit of the Secured Parties a security interest in and Lien
upon the Pledged Collateral and shall not constitute or create a present
assignment of any of the Pledged Collateral.

 

ARTICLE IV.

 

REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

Each Pledgor
represents, warrants and covenants as follows:

 

Section 4.1                                      Title.  No financing statement or other public notice
with respect to all or any part of the Pledged Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Administrative Agent pursuant to this Agreement or as are permitted by the
Credit Agreement.  No Person other than
the Administrative Agent has control or possession of all or any part of the
Pledged Collateral, except as permitted by the Credit Agreement.

 

18

 

Section 4.2                                      Limitation
on Liens; Defense of Claims; Transferability of Pledged Collateral.  Each Pledgor is as of the date hereof, and,
as to Pledged Collateral acquired by it from time to time after the date
hereof, such Pledgor will be, the sole direct and beneficial owner of all
Pledged Collateral pledged by it hereunder free from any Lien or other right,
title or interest of any Person other than the Permitted Liens.  Each Pledgor shall, at its own cost and expense,
defend title to the Pledged Collateral pledged by it hereunder and the security
interest therein and Lien thereon granted to the Administrative Agent and the
priority thereof against all claims and demands of all Persons, at its own cost
and expense, at any time claiming any interest therein adverse to the
Administrative Agent or any other Secured Party other than Permitted
Liens.  There is no agreement, and no
Pledgor shall enter into any agreement or take any other action, that would
restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with such Pledgors’ obligations or the rights of the
Administrative Agent hereunder.

 

Section 4.3                                      Chief
Executive Office; Change of Name; Jurisdiction of Organization.  (a)  The
exact legal name, type of organization, jurisdiction of organization, Federal
Taxpayer Identification Number, organizational identification number (if any)
and chief executive office of such Pledgor is indicated set forth in Schedules
1(a) and 2(a) annexed to the Perfection Certificate.  Such Pledgor shall not change (i) its
corporate name, (ii) the location of its chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Pledged Collateral owned by it or any office or facility at which
Pledged Collateral owned by it is located (including the establishment of any
such new office or facility), (iii) its identity or type of organization
or corporate structure, (iv) its Federal Taxpayer Identification Number or
organizational identification number or (v) its jurisdiction of organization
(in each case, including, without limitation, by merging with or into any other
entity, reorganizing, dissolving, liquidating, reincorporating or incorporating
in any other jurisdiction), except in accordance with Section 5.13 of the
Credit Agreement.  Each Pledgor agrees to
promptly provide the Administrative Agent with certified organizational
documents reflecting any of the changes described in the preceding sentence.

 

(b)                                                                                 To the extent that UCC financing
statements of the Pledgors need to be amended as a result of any of the changes
described in Section 4.3(a), if any Pledgor fails to provide information
to the Administrative Agent about such changes on a timely basis, the
Administrative Agent shall not be liable or responsible to any party for any
failure to maintain a perfected security interest in such Pledgor’s property
constituting Pledged Collateral, for which the Administrative Agent needed to
have information relating to such changes. 
The Administrative Agent shall have no duty to inquire about such
changes if any Pledgor does not inform the Administrative Agent of such
changes, the parties acknowledging and agreeing that it would not be feasible
or practical for the Administrative Agent to search for information on such
changes if such information is not provided by any Pledgor.

 

Section 4.4                                      Location of
Collateral..  All Collateral
of such Pledgor is located at the locations listed in Schedules 2(a) through
2(e) annexed to the Perfection Certificate.  Except as expressly permitted herein or in
the Credit Agreement, such Pledgor shall not move any Collateral to any location
other than one within the continental United States that is listed in such
Schedules of the Perfection Certificate unless and until (i) it shall have
given the Administrative Agent not less than 30 days’ prior written notice (in
the form of an officers’ certificate) of its intention so to do, clearly
describing such new location within the continental United States and

 

19

 

providing such other information in connection therewith as the
Administrative Agent may request and (ii) with respect to such new
location, such Pledgor shall have taken all action reasonably satisfactory to
the Administrative Agent to maintain the perfection and priority of the
security interest of the Administrative Agent for the benefit of the Secured
Parties in the Pledged Collateral intended to be granted hereby, including,
without limitation, complying with the provisions of Section 3.4(g) to
obtain a waiver of any bailee’s, landlord’s or other applicable possessory lien
and obtain a bailee letter, landlord lien waiver or processor agreement, as
applicable.

 

Section 4.5                                      Condition
and Maintenance of Equipment. 
The Equipment of such Pledgor is in good repair, working order and
condition, reasonable wear and tear excepted. 
Each Pledgor shall cause the Equipment to be maintained and preserved in
good repair, working order and condition, reasonable
wear and tear excepted, and shall as quickly as commercially practicable make
or cause to be made all repairs, replacements and other improvements which are
necessary or appropriate in the conduct of such Pledgor’s business.

 

Section 4.6                                      Corporate
Names; Prior Transactions. 
Such Pledgor has not, during the past five years, been known by or used
any other corporate or fictitious name or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property or assets out of the ordinary course of
business, except as set forth in Schedules 1(b), 1(c) and 3 annexed
to the Perfection Certificate.

 

Section 4.7                                      Due Authorization and Issuance.  All of the Initial Pledged Shares have been,
and to the extent any Pledged Shares are hereafter issued, such shares will be,
upon such issuance, duly authorized, validly issued and fully paid and
non-assessable.  All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged Interests
or any Pledgor’s status as a partner or a member of any issuer of the Initial
Pledged Interests.

 

Section 4.8                                      No Claims.  Such Pledgor owns or has rights to use all of
the Pledged Collateral pledged by it hereunder and all rights with respect to
any of the foregoing used in, necessary for or material to such Pledgor’s
business as currently conducted.  The use
by such Pledgor of such Pledged Collateral and all such rights with respect to
the foregoing do not infringe on the rights of any Person other than such
infringement which would not, individually or in the aggregate, result in a
Material Adverse Effect.  No claim has
been made and remains outstanding that such Pledgor’s use of any Pledged
Collateral does or may violate the rights of any third Person that would individually,
or in the aggregate, have a Material Adverse Effect.

 

Section 4.9                                      No Conflicts,
Consents, etc.  Other than the
filing, registrations and recordings described in Section 3.3, no
consent of any party (including, without limitation, equity holders or
creditors of such Pledgor) and no consent, authorization, approval, license or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or other Person is required (A) for the pledge by such
Pledgor of the Pledged Collateral pledged by it pursuant to this Agreement or
for the execution, delivery or performance hereof by such Pledgor, (B) for
the exercise by the Administrative Agent of the voting or other rights provided
for in this Agreement or (C) for the exercise by the Administrative Agent
of the remedies in

 

20

 

respect of the
Pledged Collateral pursuant to this Agreement. 
In the event that the Administrative Agent desires to exercise any remedies,
voting or consensual rights or attorney-in-fact powers set forth in this
Agreement and determines it necessary to obtain any approvals or consents of
any Governmental Authority or any other Person therefor, then, upon the
reasonable request of the Administrative Agent, such Pledgor agrees to use its
best efforts to assist and aid the Administrative Agent to obtain as soon as
practicable any necessary approvals or consents for the exercise of any such
remedies, rights and powers.

 

Section 4.10                                Pledged
Collateral.  All information
set forth herein and all information contained in any documents, schedules and
lists heretofore delivered to any Secured Party in connection with this Agreement,
in each case, relating to the Pledged Collateral (including all information set
forth on the schedules annexed to the Perfection Certificate), is accurate and
complete in all material respects. 
Pledgors shall deliver to the Administrative Agent a Perfection
Certificate Supplement on an annual basis as required under the Credit
Agreement.

 

Section 4.11                                Insurance.  In the event that the proceeds of any
insurance claim are paid after the Administrative Agent has exercised its right
to foreclose after an Event of Default such Net Cash Proceeds shall be paid to
the Administrative Agent to be applied in accordance with the provisions of Section 8.02
of the Credit Agreement.  The
Administrative Agent shall retain its interest in the insurance policies required
to be maintained pursuant to the Credit Agreement during any redemption period.

 

Section 4.12                                Payment of Taxes;
Compliance with Laws; Contested Liens; Claims.  Each Pledgor represents and warrants that all
Claims imposed upon or assessed against the Pledged Collateral have been paid
and discharged except to the extent such Claims are permitted to exist or be
contested under the Credit Agreement. 
Each Pledgor shall comply with all Requirements of Law applicable to the
Pledged Collateral the failure with which to comply would, individually or in
the aggregate, have a Material Adverse Effect. 
Each Pledgor may at its own expense contest the validity, amount or
applicability of any Claims so long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Credit
Agreement.  Notwithstanding the foregoing
provisions of this Section 4.12, no contest of any such obligation
may be pursued by such Pledgor if such contest would expose the Administrative
Agent or any other Secured Party to (i) any possible criminal liability or
(ii) any additional civil liability for failure to comply with such
obligations unless such Pledgor shall have furnished a bond or other security
therefor satisfactory to the Administrative Agent, or such Secured Party, as
the case may be.

 

Section 4.13                                Access
to Pledged Collateral, Books and Records; Other Information.  Upon reasonable prior notice to each Pledgor,
the Administrative Agent, its agents, accountants and attorneys shall have full
and free access to visit and inspect, as applicable, during normal business
hours and such other reasonable times as may be requested by the Administrative
Agent, all of the Pledged Collateral and Mortgaged Property including, without
limitation, all of the books, correspondence and records of such Pledgor
relating thereto.  The Administrative
Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and such Pledgor agrees to render to the
Administrative Agent, at such Pledgor’s cost and expense, such clerical and
other assistance as may be reasonably

 

21

 

requested by
the Administrative Agent with regard thereto. 
Such Pledgor shall, at any and all times, within a reasonable time after
written request by the Administrative Agent, furnish or cause to be furnished
to the Administrative Agent, in such manner and in such detail as may be
reasonably requested by the Administrative Agent, additional information with
respect to the Pledged Collateral.

 

Section 4.14                                Third Party Consents
Relating to Intellectual Property Collateral.  Each Pledgor shall use reasonable commercial
efforts to obtain the consent of third parties to the extent such consent is
necessary or desirable to create a valid, perfected security interest in favor
of the Administrative Agent in any Intellectual Property Collateral, including,
without limitation, intent-to-use trademark applications.

 

ARTICLE V.

 

CERTAIN PROVISIONS
CONCERNING SECURITIES COLLATERAL

 

Section 5.1                                      Pledge of
Additional Securities Collateral. 
Each Pledgor shall, upon obtaining any additional Securities Collateral,
accept the same in trust for the benefit of the Administrative Agent and
forthwith deliver to the Administrative Agent a pledge amendment, duly executed
by such Pledgor, in substantially the form of Exhibit 2 annexed
hereto (each, a “Pledge Amendment”), and the certificates and other
documents to the extent required under Section 3.1 and Section 3.2
hereof in respect of the additional Pledged Securities or under Section 3.4(a) in
respect of additional Pledged Notes which are to be pledged pursuant to this
Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Pledged Notes.  Each Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Pledged Notes listed on any Pledge
Amendment delivered to the Administrative Agent or the Revolving Credit Agent
shall for all purposes hereunder be considered Pledged Collateral.

 

Section 5.2                                      Voting Rights;
Distributions; etc.

 

(a)                                                                                  So
long as no Event of Default shall have occurred and be continuing:

 

(i)                                     Each Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Securities Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof, the Credit Agreement or any other document evidencing
the Obligations.

 

(ii)                                  Each Pledgor shall be entitled to
receive and retain any and all Distributions, but only if and to the extent
made in accordance with the provisions of the Credit Agreement; provided,
however, that any and all such Distributions made at any time after the
payment in full of the Revolving Credit Indebtedness and the termination of the
Revolving Credit Documents and consisting of rights or interests in the form of
securities shall be forthwith delivered to the Administrative Agent to hold as
Pledged Collateral and shall, if received by any Pledgor, be received in trust
for the benefit of the Administrative Agent, be segregated from the

 

22

 

other
property or funds of such Pledgor and be forthwith delivered to the
Administrative Agent as Pledged Collateral in the same form as so received
(with any necessary endorsement).

 

(iii)                               The Administrative Agent shall be
deemed without further action or formality to have granted to each Pledgor all
necessary consents relating to voting rights and shall, if necessary, upon
written request of any Pledgor and at the sole cost and expense of the
Pledgors, from time to time execute and deliver (or cause to be executed and
delivered) to such Pledgor all such instruments as such Pledgor may reasonably
request in order to permit such Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 5.2(a)(i) hereof
and to receive the Distributions which it is authorized to receive and retain
pursuant to Section 5.2(a)(ii) hereof.

 

(b)                                                                                 Upon the occurrence and during the
continuance of any Event of Default at any time after the payment in full of
the Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents:

 

(i)                                     All rights of each Pledgor to
exercise the voting and other consensual rights it would otherwise be entitled
to exercise pursuant to Section 5.2(a)(i) hereof shall cease,
and all such rights shall thereupon become vested in the Administrative Agent,
which shall thereupon have the sole right to exercise such voting and other consensual
rights.

 

(ii)                                  All rights of each Pledgor to
receive Distributions which it would otherwise be authorized to receive and
retain pursuant to Section 5.2(a)(ii) hereof shall cease and
all such rights shall thereupon become vested in the Administrative Agent,
which shall thereupon have the sole right to receive and hold as Pledged
Collateral such Distributions;

 

provided, that, upon a waiver or cure, if any,
of such Event of Default, the rights of the Pledgor under such Sections
5.2(a)(i) and 5.2 (a)(ii) shall revert to such Pledgor.

 

(c)                                                                                  Each Pledgor shall, at its sole cost
and expense, from time to time execute and deliver to the Administrative Agent
appropriate instruments as the Administrative Agent may reasonably request in
order to permit the Administrative Agent to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 5.2(b)(i) hereof
and to receive all Distributions which it may be entitled to receive under Section 5.2(b)(ii) hereof.

 

(d)                                                                                 All Distributions which are received
by any Pledgor contrary to the provisions of Section 5.2(a)(ii) or
Section 5.2(b)(ii) hereof shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds of
such Pledgor and shall immediately be paid over to the Administrative Agent as
Pledged Collateral in the same form as so received (with any necessary endorsement).

 

Section 5.3                                      Operative
Agreements.  Each Pledgor has
delivered to the Administrative Agent true, correct and complete copies of the
Operative Agreements.  The Operative
Agreements are in full force and effect, have not as of the date hereof been
amended or modified except as disclosed to the Administrative Agent, and there
is no existing default by any party thereunder or any event which, with the giving
of notice or passage of time or both, would constitute a default by any party
thereunder.  Each Pledgor shall deliver
to the Administrative Agent a copy of any notice of default given or received
by it under any Operative

 

23

 

Agreement within ten (10) days after such Pledgor gives or receives
such notice.  No Pledgor will terminate
or agree to terminate any Operative Agreement or make any amendment or
modification to any Operative Agreement except as expressly permitted by the
terms of the Credit Agreement.

 

Section 5.4                                      Defaults, etc.  Such Pledgor is not in default in the payment
of any portion of any mandatory capital contribution, if any, required to be
made under any agreement to which such Pledgor is a party relating to the
Pledged Securities pledged by it, and such Pledgor is not in violation of any
other provisions of any such agreement to which such Pledgor is a party, or
otherwise in default or violation thereunder. 
No Securities Collateral pledged by such Pledgor is subject to any defense,
offset or counterclaim, nor have any of the foregoing been asserted or alleged
against such Pledgor by any Person with respect thereto, and as of the date
hereof, there are no certificates, instruments, documents or other writings
(other than the Operative Agreements and certificates, if any, delivered to the
Revolving Credit Agent) which evidence any Pledged Securities of such Pledgor.

 

Section 5.5                                      Certain
Agreements of Pledgors As Issuers and Holders of Equity Interests.

 

(i)                                     In the case of each Pledgor which is
an issuer of Securities Collateral, such Pledgor agrees to be bound by the
terms of this Agreement relating to the Securities Collateral issued by it and
will comply with such terms insofar as such terms are applicable to it.

 

(ii)                                  In the case of each Pledgor which is
a partner or member in a partnership, limited liability company or other
entity, such Pledgor hereby consents to the extent required by the applicable
Operative Agreement to the pledge by each other Pledgor, pursuant to the terms
hereof, of the Pledged Interests in such partnership, limited liability company
or other entity and, upon the occurrence and during the continuance of an Event
of Default, to the transfer of such Pledged Interests to the Administrative
Agent or its nominee and to the substitution of the Administrative Agent or its
nominee as a substituted partner or member in such partnership, limited
liability company or other entity with all the rights, powers and duties of a
general partner or a limited partner or member, as the case may be.

 

ARTICLE VI.

 

CERTAIN PROVISIONS
CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

 

Section 6.1                                      Grant of
License.  For the purpose of enabling
the Administrative Agent, during the continuance of an Event of Default, to
exercise rights and remedies under Article IX hereof at such time
as the Administrative Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, each Pledgor hereby grants to the
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation to such
Pledgor) to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located, including in such license access to all media in

 

24

 

which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout hereof.

 

Section 6.2                                      Registrations.  Except pursuant to Licenses that are listed
in Schedules 13(a) and 13(b) annexed to the Perfection
Certificate, and except as permitted by the Credit Agreement, on and as of the
date hereof (i) one Pledgor owns or at least one Pledgor possesses the
right to use any Copyright, Patent or Trademark listed in Schedules 13(a) and
13(b) annexed to the Perfection Certificate, (ii) no Pledgor
has granted permission to enable any other Person to use, any Copyright, Patent
or Trademark listed in Schedules 13(a) and 13(b) annexed
to the Perfection Certificate, and (iii) all registrations listed in Schedules
13(a) and 13(b) annexed to the Perfection Certificate are
valid and in full force and effect.

 

Section 6.3                                      No Violations
or Proceedings.  To each Pledgor’s
knowledge, on and as of the date hereof, there is no material violation by
others of any right of such Pledgor with respect to any Copyright, Patent or
Trademark listed in Schedules 13(a) and 13(b) annexed
to the Perfection Certificate, respectively, pledged by it under the name of
such Pledgor.

 

Section 6.4                                      Protection of
Administrative Agent’s Security.  On
a continuing basis, each Pledgor shall, at its sole cost and expense, (a) promptly
following its becoming aware thereof, notify the Administrative Agent of (i) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office with respect to any
material Patent, Trademark or Copyright or (ii) the institution of any
proceeding or any adverse determination in any Federal, state or local court or
administrative body regarding such Pledgor’s claim of ownership in or right to
use any of the Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property, its right to
register such Intellectual Property Collateral or its right to keep and
maintain such registration in full force and effect, (b) maintain and
protect the Intellectual Property Collateral material to the use and operation
of the Pledged Collateral or Mortgaged Property as presently used and operated
and as contemplated by the Credit Agreement, (c) not permit to lapse or
become abandoned any Intellectual Property Collateral material to the use and
operation of the Pledged Collateral or Mortgaged Property as presently used and
operated and as contemplated by the Credit Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Intellectual Property Collateral, in each case except as shall
be consistent with commercially reasonable business judgment, (d) upon
such Pledgor obtaining knowledge thereof, promptly notify the Administrative
Agent in writing of any event which may be reasonably expected to materially
and adversely affect the value or utility of the Intellectual Property Collateral
or any portion thereof material to the use and operation of the Pledged
Collateral or Mortgaged Property, the ability of such Pledgor or the
Administrative Agent to dispose of the Intellectual Property Collateral or any
portion thereof or the rights and remedies of the Administrative Agent in
relation thereto including, without limitation, a levy or threat of levy or any
legal process against the Intellectual Property Collateral or any portion
thereof, (e) not license the Intellectual Property Collateral other than
licenses entered into by such Pledgor in, or incidental to, the ordinary course
of business, or amend or permit the amendment of any of the licenses in a
manner that materially and adversely affects the right to receive payments
thereunder, or in any manner that would materially impair the value of the
Intellectual Property Collateral or the Lien on and security interest in the
Intellectual Property Collateral intended to be granted to the Administrative
Agent for the benefit of the Secured

 

25

 

Parties, without the consent of the Administrative Agent, (f) until
the Administrative Agent exercises its rights to make collection, diligently
keep adequate records respecting the Intellectual Property Collateral and (g) furnish
to the Administrative Agent from time to time upon the Administrative Agent’s
reasonable request therefor detailed statements and amended schedules further
identifying and describing the Intellectual Property Collateral and such other
materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Administrative Agent may from time to time reasonably
request.  Notwithstanding the foregoing
nothing herein shall prevent any Pledgor from selling, disposing of or
otherwise using any Intellectual Property Collateral as permitted under the
Credit Agreement.

 

Section 6.5                                      After-Acquired
Property.  If any Pledgor shall, at
any time before the Obligations have been paid in full in cash, (a) obtain
any rights to any additional Intellectual Property Collateral or (b) become
entitled to the benefit of any additional Intellectual Property Collateral or
any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(a) or (b) of this Section 6.5 with respect to such
Pledgor shall automatically constitute Intellectual Property Collateral if such
would have constituted Intellectual Property Collateral at the time of execution
hereof and be subject to the Lien and security interest created by this
Agreement without further action by any party. 
Each Pledgor shall promptly (i) provide to the Administrative Agent
written notice of any of the foregoing and (ii) confirm the attachment of
the Lien and security interest created by this Agreement to any rights
described in clauses (a) and (b) of the immediately preceding
sentence of this Section 6.5 by execution of an instrument in form
reasonably acceptable to the Administrative Agent.

 

Section 6.6                                      Modifications.  Each Pledgor authorizes the Administrative
Agent to modify this Agreement by amending Schedules 13(a) and
13(b) annexed to the Perfection Certificate to include any Intellectual
Property Collateral acquired or arising after the date hereof of such Pledgor
including, without limitation, any of the items listed in Section 6.5
hereof.

 

Section 6.7                                      Litigation.  Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution, diminution
in value or other damage as are necessary to protect the Intellectual Property
Collateral.  Upon the occurrence and
during the continuance of any Event of Default, the Administrative Agent shall
have the right but shall in no way be obligated to file applications for
protection of the Intellectual Property Collateral in the name of the
appropriate Pledgor and/or bring suit in the name of any Pledgor, the
Administrative Agent or the Secured Parties to enforce the Intellectual
Property Collateral and any license thereunder. 
In the event of such suit, each Pledgor shall, at the reasonable request
of the Administrative Agent, do any and all lawful acts and execute any and all
documents reasonably requested by the Administrative Agent in aid of such enforcement
and the Pledgors shall promptly reimburse and indemnify the Administrative
Agent, as the case may be, for all costs and expenses reasonably incurred by
the Administrative Agent in the exercise of its rights under this Section 6.7
in accordance with Section 11.3 hereof.  In the event that the Administrative Agent
shall elect not to bring suit to enforce the Intellectual Property

 

26

 

Collateral, each Pledgor agrees, at the reasonable request of the Administrative
Agent, to take all commercially reasonable actions necessary, whether by suit,
proceeding or other action, to prevent the infringement, counterfeiting, unfair
competition, dilution, diminution in value of or other damage to any of the
Intellectual Property Collateral by others and for that purpose agrees to
diligently maintain any suit, proceeding or other action against any Person so
infringing necessary to prevent such infringement.

 

Section 6.8                                      U.S.
Intent-to-Use Trademark Applications. 
Notwithstanding the provisions of Section 2.1, Article VI
and Section 9.6, the Administrative Agent acquires no security
interest or other rights in the United States for any Trademark that is the
subject of an intent-to-use application before the U.S. Patent and Trademark
Office until such time as a verified amendment to allege use or verified
statement of use is filed with the U.S. Patent and Trademark Office for such
application or the Administrative Agent arranges for an assignment of such
Trademarks from the Administrative Agent to a purchaser that would satisfy the
requirements of Section 10 of the Lanham Act, 15 U.S.C. Section 1060.  At the time the Administrative Agent seeks to
transfer all other Trademarks pursuant to Section 6.1, it may also
transfer any U.S. intent-to-use applications provided that such applications
satisfy the conditions of the preceding sentence.  In Schedule 13(a) and 13(b) annexed
to the Perfection Certificate and in any reports produced under this Article VI,
each Pledgor shall clearly identify each U.S. intent-to-use trademark
application for which a verified amendment to allege use or statement of use
has not been filed.

 

ARTICLE VII.

 

CERTAIN PROVISIONS
CONCERNING ACCOUNTS

 

Section 7.1                                      Special
Representations and Warranties.  As
of the time when each of its Accounts arises, each Pledgor shall be deemed to
have represented and warranted that such Account and all records, papers and
documents relating thereto (a) are genuine and correct and in all material
respects what they purport to be, (b) represent the legal, valid and
binding obligation of the account debtor, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability, evidencing indebtedness unpaid and owed by such
account debtor, arising out of the performance of labor or services or the
sale, lease, license, assignment or other disposition and delivery of the goods
or other property listed therein or out of an advance or a loan, (c) are
in all material respects in compliance and conform with all applicable Federal,
state and local laws and applicable laws of any relevant foreign jurisdiction.

 

Section 7.2                                      Maintenance of
Records.  Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including, without
limitation, records of all payments received, all credits granted thereon, all
merchandise returned and all other documentation relating thereto.  Each Pledgor shall, at such Pledgor’s sole
cost and expense, upon the Administrative Agent’s demand made at any time after
the occurrence and during the continuance of any Event of Default at any time
after the payment in full of the Revolving Credit Indebtedness and the
termination of the Revolving Credit Documents, deliver all tangible evidence of
Accounts, including, without limitation, all documents evidencing Accounts and
any books and records relating thereto to the

 

27

 

Administrative Agent or to its representatives (copies of which
evidence and books and records may be retained by such Pledgor).  Upon the occurrence and during the
continuance of any Event of Default at any time after the payment in full of
the Revolving Credit Indebtedness and the termination of the Revolving Credit
Documents, the Administrative Agent may transfer a full and complete copy of
any Pledgor’s books, records, credit information, reports, memoranda and all
other writings relating to the Accounts to and for the use by any person that
has acquired or is contemplating acquisition of an interest in the Accounts or
the Administrative Agent’s security interest therein without the consent of any
Pledgor.

 

Section 7.3                                      Legend.  Each Pledgor shall legend, at the request of
the Administrative Agent, made at any time after the occurrence of any Event of
Default at any time after the payment in full of the Revolving Credit
Indebtedness and the termination of the Revolving Credit Documents and in form
and manner satisfactory to the Administrative Agent, the Accounts and the other
books, records and documents of such Pledgor evidencing or pertaining to the
Accounts with an appropriate reference to the fact that the Accounts have been
assigned to the Administrative Agent for the benefit of the Secured Parties and
that the Administrative Agent has a security interest therein.

 

Section 7.4                                      Modification
of Terms, etc.  No Pledgor shall
rescind or cancel any indebtedness evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or
renew any such indebtedness except in the ordinary course of business
consistent with prudent business practice or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto or sell any Account or
interest therein except in the ordinary course of business consistent with
prudent business practice without the prior written consent of the
Administrative Agent.  Each Pledgor shall
timely fulfill all obligations on its part to be fulfilled under or in connection
with the Accounts.

 

Section 7.5                                      Collection.  Each Pledgor shall cause to be collected from
the account debtor of each of the Accounts, as and when due in the ordinary
course of business consistent with prudent business practice (including,
without limitation, Accounts that are delinquent, such Accounts to be collected
in accordance with generally accepted commercial collection procedures), any
and all amounts owing under or on account of such Account, and apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding
balance of such Account, except that any Pledgor may, with respect to an
Account, allow in the ordinary course of business (i) a refund or credit
due as a result of returned or damaged or defective merchandise and (ii) such
extensions of time to pay amounts due in respect of Accounts and such other
modifications of payment terms or settlements in respect of Accounts as shall
be commercially reasonable in the circumstances, all in accordance with such
Pledgor’s ordinary course of business consistent with its collection practices
as in effect from time to time.  The
costs and expenses (including, without limitation, attorneys’ fees) of
collection, in any case, whether incurred by any Pledgor, the Administrative
Agent or any Secured Party, shall be paid by the Pledgors.

 

28

 

ARTICLE VIII.

 

TRANSFERS AND
OTHER LIENS

 

Section 8.1                                      Transfers of
and other Liens on Pledged Collateral. 
No Pledgor shall (i) sell, convey, assign or otherwise dispose of,
or grant any option with respect to, or (ii) grant, convey or permit to
exist any Lien on, any of the Pledged Collateral pledged by it hereunder
except, in each case, as permitted by the Credit Agreement.

 

ARTICLE IX.

REMEDIES

 

Section 9.1                                      Remedies.  (a)  Upon
the occurrence and during the continuance of any Event of Default the
Administrative Agent may from time to time exercise the following rights and
remedies (alternatively, successively or concurrently on any one or more
occasions) in respect of the Pledged Collateral, in addition to the other
rights and remedies provided for herein or otherwise available to it:

 

(i)                                     Personally, or by agents or
attorneys, immediately take possession of the Pledged Collateral or any part
thereof, from any Pledgor or any other Person who then has possession of any
part thereof with or without notice or process of law, and for that purpose may
enter upon any Pledgor’s premises where any of the Pledged Collateral is
located, remove such Pledged Collateral, remain present at such premises to
receive copies of all communications and remittances relating to the Pledged
Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;

 

(ii)                                  Demand, sue for, collect or receive
any money or property at any time payable or receivable in respect of the
Pledged Collateral including, without limitation, instructing the obligor or
obligors on any agreement, instrument or other obligation constituting part of
the Pledged Collateral to make any payment required by the terms of such
agreement, instrument or other obligation directly to the Administrative Agent,
and in connection with any of the foregoing, compromise, settle, extend the
time for payment and make other modifications with respect thereto; provided,
however, that in the event that any such payments are made directly to
any Pledgor, prior to receipt by any such obligor of such instruction, such
Pledgor shall segregate all amounts received pursuant thereto in trust for the benefit
of the Administrative Agent and shall promptly (but in no event later than one (1) Business
Day after receipt thereof) pay such amounts to the Administrative Agent;

 

(iii)                               Sell, assign, grant a license to use
or otherwise liquidate, or direct any Pledgor to sell, assign, grant a license
to use or otherwise liquidate, any and all investments made in whole or in part
with the Pledged Collateral or any part thereof, and take possession of the
proceeds of any such sale, assignment, license or liquidation;

 

(iv)                              Take possession of the Pledged
Collateral or any part thereof, by directing any Pledgor in writing to deliver
the same to the Administrative Agent at any place or places so designated by
the Administrative Agent, in which event such Pledgor shall at its own expense:  (A) forthwith cause the same to be moved
to the place or places designated by the

 

29

 

Administrative
Agent and there delivered to the Administrative Agent, (B) store and keep
any Pledged Collateral so delivered to the Administrative Agent at such place
or places pending further action by the Administrative Agent and (C) while
the Pledged Collateral shall be so stored and kept, provide such security and
maintenance services as shall be necessary to protect the same and to preserve
and maintain them in good condition. 
Each Pledgor’s obligation to deliver the Pledged Collateral as
contemplated in this Section 9.1(a)(iv) is of the essence
hereof.  Upon application to a court of
equity having jurisdiction, the Administrative Agent shall be entitled to a
decree requiring specific performance by any Pledgor of such obligation;

 

(v)                                 Withdraw all moneys, instruments,
securities and other property in any bank, financial securities, deposit or
other account of any Pledgor constituting Pledged Collateral for application to
the Obligations as provided in Article X hereof;

 

(vi)                              Retain and apply the Distributions
to the Obligations as provided in Article X hereof;

 

(vii)                           Exercise any and all rights as beneficial
and legal owner of the Pledged Collateral, including, without limitation,
perfecting assignment of and exercising any and all voting, consensual and
other rights and powers with respect to any Pledged Collateral; and

 

(viii)                        Exercise all the rights and remedies
of a secured party under the UCC, and the Administrative Agent may also in its
sole discretion, without notice except as specified in Section 9.2
hereof, sell, assign or grant a license to use the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of the Administrative Agent’s offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and
upon such other terms as the Administrative Agent may deem commercially reasonable.  The Administrative Agent or any other Secured
Party or any of their respective Affiliates may be the purchaser, licensee,
assignee or recipient of any or all of the Pledged Collateral at any such sale
and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Pledged Collateral
sold, assigned or licensed at such sale, to use and apply any of the
Obligations owed to such Person as a credit on account of the purchase price of
any Pledged Collateral payable by such Person at such sale.  Each purchaser, assignee, licensee or
recipient at any such sale shall acquire the property sold, assigned or licensed
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives, to the fullest extent permitted by law, all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter
enacted.  The Administrative Agent shall
not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given.  The
Administrative Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.  Each Pledgor hereby waives,
to the fullest extent permitted by law, any claims against the Administrative
Agent arising by reason of the fact that the price at which any Pledged
Collateral may have been sold, assigned or licensed at such a private sale was
less than the price which might have been obtained at a public sale, even if
the Administrative Agent accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.

 

30

 

Section 9.2                                      Notice of Sale.  Each Pledgor acknowledges and agrees that, to
the extent notice of sale or other disposition of Pledged Collateral shall be
required by law, ten (10) days’ prior notice to such Pledgor of the time
and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters.  No
notification need be given to any Pledgor if it has signed, after the
occurrence of an Event of Default, a statement renouncing or modifying (as
permitted under law) any right to notification of sale or other intended disposition.

 

Section 9.3                                      Waiver of
Notice and Claims.  Each Pledgor
hereby waives, to the fullest extent permitted by applicable law, notice or
judicial hearing in connection with the Administrative Agent’s taking
possession or the Administrative Agent’s disposition of any of the Pledged
Collateral, including, without limitation, any and all prior notice and hearing
for any prejudgment remedy or remedies and any such right which such Pledgor
would otherwise have under law, and each Pledgor hereby further waives, to the
fullest extent permitted by applicable law: 
(a) all damages occasioned by such taking of possession, (b) all
other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Administrative Agent’s
rights hereunder and (c) all rights of redemption, appraisal, valuation,
stay, extension or moratorium now or hereafter in force under any applicable
law.  The Administrative Agent shall not
be liable for any incorrect or improper payment made pursuant to this Article IX
in the absence of gross negligence or willful misconduct.  Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate
to divest all right, title, interest, claim and demand, either at law or in
equity, of the applicable Pledgor therein and thereto, and shall be a perpetual
bar both at law and in equity against such Pledgor and against any and all
Persons claiming or attempting to claim the Pledged Collateral so sold, optioned
or realized upon, or any part thereof, from, through or under such Pledgor.

 

Section 9.4                                      Certain Sales
of Pledged Collateral.

 

(i)                                     Each Pledgor recognizes that, by
reason of certain prohibitions contained in law, rules, regulations or orders
of any Governmental Authority, the Administrative Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit
purchasers to those who meet the requirements of such Governmental
Authority.  Each Pledgor acknowledges
that any such sales may be at prices and on terms less favorable to the
Administrative Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Administrative Agent shall
have no obligation to engage in public sales.

 

(ii)                                  Each Pledgor recognizes that, by
reason of certain prohibitions contained in the Securities Act, and applicable
state securities laws, the Administrative Agent may be compelled, with respect
to any sale of all or any part of the Securities Collateral and Investment
Property, to limit purchasers to Persons who will agree, among other things, to
acquire such Securities Collateral or Investment Property for their own
account, for investment and not with a view to the distribution or resale
thereof.  Each Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable to the
Administrative Agent than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act), and,

 

31

 

notwithstanding
such circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Administrative Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Securities Collateral or Investment Property for the period of
time necessary to permit the issuer thereof to register it for a form of public
sale requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.

 

(iii)                               If the Administrative Agent
determines to exercise its right to sell any or all of the Securities
Collateral or Investment Property, upon written request, the applicable Pledgor
shall from time to time furnish to the Administrative Agent all such
information as the Administrative Agent may request in order to determine the
number of securities included in the Securities Collateral or Investment
Property which may be sold by the Administrative Agent as exempt transactions
under the Securities Act and the rules of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.

 

(iv)                              Each Pledgor further agrees that a
breach of any of the covenants contained in this Section 9.4 will
cause irreparable injury to the Administrative Agent and other Secured Parties,
that the Administrative Agent and the other Secured Parties have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 9.4 shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing.

 

Section 9.5                                      No Waiver;
Cumulative Remedies.

 

(i)                                     No failure on the part of the
Administrative Agent to exercise, no course of dealing with respect to, and no
delay on the part of the Administrative Agent in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy; nor shall the Administrative Agent be required to look first to,
enforce or exhaust any other security, collateral or guaranties.  The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law.

 

(ii)                                  In the event that the Administrative
Agent shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Administrative Agent, then and in every
such case, the Pledgors, the Administrative Agent and each other Secured Party
shall be restored to their respective former positions and rights hereunder
with respect to the Pledged Collateral, and all rights, remedies and powers of
the Administrative Agent and the other Secured Parties shall continue as if no
such proceeding had been instituted.

 

Section 9.6                                      Certain
Additional Actions Regarding Intellectual Property.  If any Event of Default shall have occurred
and be continuing, upon the written demand of Administrative Agent, each
Pledgor shall execute and deliver to Administrative Agent an

 

32

 

assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and such other documents as are necessary or appropriate to carry
out the intent and purposes hereof. 
Within five (5) Business Days of written notice thereafter from
Administrative Agent, each Pledgor shall make available to Administrative
Agent, to the extent within such Pledgor’s power and authority, such personnel
in such Pledgor’s employ on the date of the Event of Default as Administrative
Agent may reasonably designate to permit such Pledgor to continue, directly or
indirectly, to produce, advertise and sell the products and services sold by
such Pledgor under the registered Patents, Trademarks and/or Copyrights, and
such Persons shall be available to perform their prior functions on
Administrative Agent’s behalf.

 

ARTICLE X.

 

PROCEEDS OF
CASUALTY EVENTS AND COLLATERAL

DISPOSITIONS/APPLICATION OF PROCEEDS

 

Section 10.1                                Proceeds of Casualty
Events and Collateral Dispositions. 
The Pledgors shall take all actions required by the Credit Agreement
with respect to any Net Cash Proceeds of any Casualty Event or from the sale or
disposition of any Pledged Collateral.

 

Section 10.2                                Application of
Proceeds.  The proceeds received by
the Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Administrative Agent of its remedies shall be applied, together with any
other sums then held by the Administrative Agent pursuant to this Agreement, in
accordance with and as set forth in Section 8.02 of the Credit Agreement.

 

ARTICLE XI.

 

MISCELLANEOUS

 

Section 11.1                                Concerning
Administrative Agent.

 

(i)                                     The Administrative Agent has been
appointed as Administrative Agent pursuant to the Credit Agreement.  The actions of the Administrative Agent
hereunder are subject to the provisions of the Credit Agreement.  The Administrative Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including,
without limitation, the release or substitution of the Pledged Collateral), in
accordance with this Agreement and the Credit Agreement.  The Administrative Agent may employ agents
and attorneys-in-fact in connection herewith and shall not be liable for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.  The Administrative Agent
may resign and a successor Administrative Agent may be appointed in the manner
provided in the Credit Agreement.  Upon
the acceptance of any appointment as the Administrative Agent by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent under this Agreement, and the retiring
Administrative Agent shall thereupon be discharged from its duties and
obligations under this Agreement.  After
any retiring Administrative Agent’s resignation, the provisions hereof shall

 

33

 

inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was the Administrative Agent.

 

(ii)                                  The Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which the Administrative Agent, in
its individual capacity, accords its own property consisting of similar
instruments or interests, it being understood that neither the Administrative
Agent nor any of the Secured Parties shall have responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Securities Collateral, whether or not
the Administrative Agent or any other Secured Party has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve
rights against any Person with respect to any Pledged Collateral.

 

(iii)                               The Administrative Agent shall be
entitled to rely upon any written notice, statement, certificate, order or
other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person, and, with respect
to all matters pertaining to this Agreement and its duties hereunder, upon
advice of counsel selected by it.

 

(iv)                              If any item of Pledged Collateral
also constitutes collateral granted to Administrative Agent under any other
deed of trust, mortgage, security agreement, pledge or instrument of any type,
in the event of any conflict between the provisions hereof and the provisions
of such other deed of trust, mortgage, security agreement, pledge or instrument
of any type in respect of such collateral, Administrative Agent, in its sole
discretion, shall select which provision or provisions shall control.

 

Section 11.2                                Administrative Agent
May Perform; Administrative Agent Appointed Attorney-in-Fact.  If any Pledgor shall fail to perform any
covenants contained in this Agreement or in the Credit Agreement (including,
without limitation, such Pledgor’s covenants to (a) pay the premiums in
respect of all required insurance policies hereunder, (b) pay Claims, (c) make
repairs, (d) discharge Liens or (e) pay or perform any obligations of
such Pledgor under any Pledged Collateral) or if any warranty on the part of
any Pledgor contained herein shall be breached, the Administrative Agent may
(but shall not be obligated to) do the same or cause it to be done or remedy
any such breach, and may expend funds for such purpose; provided, however,
that Administrative Agent shall in no event be bound to inquire into the
validity of any tax, lien, imposition or other obligation which such Pledgor
fails to pay or perform as and when required hereby and which such Pledgor does
not contest in accordance with the provisions of Section 4.12
hereof.  Any and all amounts so expended
by the Administrative Agent shall be paid by the Pledgors in accordance with
the provisions of Section 11.3 hereof.  Neither the provisions of this Section 11.2
nor any action taken by Administrative Agent pursuant to the provisions of this
Section 11.2 shall prevent any such failure to observe any covenant
contained in this Agreement nor any breach of warranty form constituting an
Event of Default.  Each Pledgor hereby
appoints the Administrative Agent its attorney-in-fact, with full authority in
the place and stead of such Pledgor and in the name of such Pledgor, or
otherwise, from time to time in the Administrative Agent’s discretion to take
any action and to execute any instrument consistent with the terms of the
Credit Agreement and the other Security Documents which the Administrative
Agent may

 

34

 

deem necessary or advisable to accomplish the purposes hereof.  The foregoing grant of authority is a power
of attorney coupled with an interest and such appointment shall be irrevocable
for the term hereof.  Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.

 

Section 11.3                                Expenses.

 

(a)                                  Each Pledgor will upon demand pay to
the Administrative Agent the amount of any and all costs and expenses,
including the reasonable fees and expenses of its counsel and the reasonable
fees and expenses of any experts and agents which the Administrative Agent may
incur in connection with (i) any action, suit or other proceeding
affecting the Pledged Collateral or any part thereof commenced, in which
action, suit or proceeding the Administrative Agent is made a party or
participates or in which the right to use the Pledged Collateral or any part
thereof is threatened, or in which it becomes necessary in the judgment of the
Administrative Agent to defend or uphold the Lien hereof (including, without
limitation, any action, suit or proceeding to establish or uphold the
compliance of the Pledged Collateral with any requirements of any Governmental
Authority or law), (ii) the collection of the Obligations, (iii) the
enforcement and administration hereof, (iv) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Collateral, (v) the exercise or enforcement of any of the rights
of the Administrative Agent or any Secured Party hereunder or (vi) the
failure by any Pledgor to perform or observe any of the provisions hereof.  All amounts expended by the Administrative
Agent and payable by any Pledgor under this Section 11.3 shall be
due upon demand therefor (together with interest thereon accruing at the
highest rate then in effect under the Credit Agreement during the period from
and including the date on which such funds were so expended to the date of
repayment) and shall be part of the Obligations.

 

(b)                                 The Pledgors agree, jointly and
severally, to indemnify the Administrative Agent, each Lender, each other
Secured Party, each Affiliate of any of the foregoing Persons and each of their
respective directors, officers, trustees, employees and agents (each such
Person being called an “Indemnitee”), against, and to hold each
Indemnitee harmless from, all reasonable out-of-pocket costs and any and all
losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges, expenses and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result of this Agreement, the Credit Agreement, any other Loan Document or any
other document evidencing the Obligations (including, without limitation, any
misrepresentation by any Pledgor in this Agreement, the Credit Agreement, other
Loan Document or any other document evidencing the Obligations); provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct or bad faith of such
Indemnitee.

 

(c)                                  The provisions of this Section 11.3
shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the repayment of any of the Loans,
the expiration of the Commitments, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Agents or any Lender.  All amounts due under this Section 11.3
shall be

 

35

 

payable
promptly (but in any event no more than 10 days following) upon written demand
therefor accompanied by reasonable documentation with respect to any
reimbursement, indemnification or other amount requested.

 

Section 11.4                                Continuing Security
Interest; Assignment.  This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(a) be binding upon the Pledgors, their respective successors and assigns
and (b) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and the other
Secured Parties and each of their permitted respective successors, transferees
and assigns.  No other Persons
(including, without limitation, any other creditor of any Pledgor) shall have
any interest herein or any right or benefit with respect hereto.  Without limiting the generality of the foregoing
clause (b), any Secured Party may assign or otherwise transfer any indebtedness
held by it secured by this Agreement to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party, herein or otherwise, subject however, to the provisions
of the Credit Agreement and any Lender Hedging Agreement.

 

Section 11.5                                Termination; Release.  The Pledged Collateral shall be released from
the Lien of this Agreement in accordance with the provisions of the Credit
Agreement.  Upon termination hereof or
any release of Pledged Collateral in accordance with the provisions of the
Credit Agreement, the Administrative Agent shall, upon the request and at the
sole cost and expense of the Pledgors, assign, transfer and deliver to Pledgor,
against receipt and without recourse to or warranty by the Administrative Agent
except as to the fact that the Administrative Agent has not encumbered the
released assets, such of the Pledged Collateral to be released (in the case of
a release) as may be in possession of the Administrative Agent and as shall not
have been sold or otherwise applied pursuant to the terms hereof, and, with
respect to any other Pledged Collateral, proper documents and instruments
(including UCC-3 termination statements or releases) acknowledging the
termination hereof or the release of such Pledged Collateral, as the case may
be.

 

Section 11.6                                Modification in
Writing.  No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same
shall be made in accordance with the terms of the Credit Agreement and unless
in writing and signed by the Administrative Agent and the Pledgors.  Any amendment, modification or supplement of
or to any provision hereof, any waiver of any provision hereof and any consent
to any departure by any Pledgor from the terms of any provision hereof shall be
effective only in the specific instance and for the specific purpose for which
made or given.  Except where notice is
specifically required by this Agreement or any other document evidencing the
Obligations, no notice to or demand on any Pledgor in any case shall entitle
any Pledgor to any other or further notice or demand in similar or other circumstances.

 

Section 11.7                                Notices.  Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrowers set forth in the Credit Agreement and as to the Administrative Agent,
addressed to it at the address set forth in the Credit Agreement, or

 

36

 

in each case at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 11.7.

 

Section 11.8                                GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.

 

Section 11.9                                CONSENT TO
JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
PLEDGOR OR SECURED PARTY WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN
THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
AND APPELLATE COURTS OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH
PLEDGOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT.  EACH PLEDGOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A
COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO THE BORROWERS AT ITS ADDRESS SET FORTH IN THE CREDIT
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE
BEEN NOTIFIED PURSUANT THERETO.  IF ANY
AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH PLEDGOR HEREBY
AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.  NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT TO BRING PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF
ANY OTHER JURISDICTION.  THE PLEDGORS
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

Section 11.10                          Severability of Provisions.  Any provision hereof 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section 11.11                          Execution in Counterparts.  This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or by email in PDF format
shall be as effective as a delivery of a manually executed counterpart of this
Agreement.

 

37

 

Section 11.12                          Business Days.  In the event any time period or any date provided
in this Agreement ends or falls on a day other than a Business Day, then such
time period shall be deemed to end and such date shall be deemed to fall on the
next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.

 

Section 11.13                          No Credit for Payment of
Taxes or Imposition.  Such Pledgor
shall not be entitled to any credit against the principal, premium, if any, or
interest payable under the Credit Agreement, and such Pledgor shall not be
entitled to any credit against any other sums which may become payable under
the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.

 

Section 11.14                          No Claims Against
Administrative Agent.  Nothing
contained in this Agreement shall constitute any consent or request by the
Administrative Agent, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Pledged Collateral or any part thereof, nor as giving any Pledgor any right, power
or authority to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Administrative Agent in respect
thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the Lien hereof.

 

Section 11.15                          No Release.  Nothing set forth in this Agreement shall
relieve any Pledgor from the performance of any term, covenant, condition or
agreement on such Pledgor’s part to be performed or observed under or in
respect of any of the Pledged Collateral or from any liability to any Person
under or in respect of any of the Pledged Collateral or shall impose any
obligation on the Administrative Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on such Pledgor’s part
to be so performed or observed or shall impose any liability on the
Administrative Agent or any other Secured Party for any act or omission on the
part of such Pledgor relating thereto or for any breach of any representation
or warranty on the part of such Pledgor contained in this Agreement, the Credit
Agreement or the other Loan Documents, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith.  The obligations of each Pledgor contained in
this Section 11.15 shall survive the termination hereof and the
discharge of such Pledgor’s other obligations under this Agreement, the Credit
Agreement and the other Loan Documents.

 

Section 11.16                          Obligations Absolute.  All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

 

(i)                                     any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or the like
of any Pledgor;

 

(ii)                                  any lack of validity or
enforceability of the Credit Agreement, any Lender Hedging Agreement or any
other Loan Document, or any other agreement or instrument relating thereto;

 

38

 

(iii)                               any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any Lender Hedging Agreement or any other Loan Document or
any other agreement or instrument relating thereto;

 

(iv)                              any pledge, exchange, release or
non-perfection of any other collateral, or any release or amendment or waiver
of or consent to any departure from any guarantee, for all or any of the Obligations;

 

(v)                                 any exercise, non-exercise or waiver
of any right, remedy, power or privilege under or in respect hereof, the Credit
Agreement, any Lender Hedging Agreement or any other Loan Document except as
specifically set forth in a waiver granted pursuant to the provisions of Section 11.6
hereof; or

 

(vi)                              any other circumstances which might
otherwise constitute a defense available to, or a discharge of, any Pledgor.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 

39

 

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

 

 

	
   

  	
  PLEDGORS:

  
	
   

  	
   

  
	
   

  	
  D 56, INC.

  
	
   

  	
  DEPARTMENT 56 RETAIL, INC.

  
	
   

  	
  TIME TO CELEBRATE, INC.

  
	
   

  	
  DEPARTMENT 56, INC.

  
	
   

  	
  DEPARTMENT 56 SALES, INC.

  
	
   

  	
  CAN 56, INC.

  
	
   

  	
  FL 56 INTERMEDIATE CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan E Engel

  	
   

  
	
   

  	
   

  	
  Name: Susan E Engel

  
	
   

  	
   

  	
  Title:  
  Chairwoman & Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  LENOX, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James G. Berwick

  	
   

  
	
   

  	
   

  	
  Name: James G. Berwick

  
	
   

  	
   

  	
  Title:  
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  DID, INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward Paolella

  	
   

  
	
   

  	
   

  	
  Name: Edward Paolella

  
	
   

  	
   

  	
  Title:  
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
  UBS AG, STAMFORD BRANCH,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wilfred V. Saint

  	
   

  
	
   

  	
   

  	
  Name:
  Wilfred V. Saint

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
  Banking
  Products Services, US

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sulloz Sikka

  	
   

  
	
   

  	
   

  	
  Name: Sulloz
  Sikka

  
	
   

  	
   

  	
  Title:   Associate Director

  
	
   

  	
   

  	
  Banking
  Products Services, US

  

 

 

EXHIBIT 1

 

[Form of]

 

ISSUERS ACKNOWLEDGMENT

 

The
undersigned hereby (i) acknowledges receipt of a copy of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of [                ],
made by [                ],
a [                ]
(the “Borrower”), and the Guarantors party thereto in favor of [                                ],
as Administrative Agent (in such capacity and together with any successors in
such capacity, the “Administrative Agent”), (ii) agrees promptly to
note on its books the security interests granted to the Administrative Agent
and confirmed under the Security Agreement, (iii) agrees that it will
comply with instructions of the Administrative Agent with respect to the
applicable Securities Collateral without further consent by the applicable
Pledgor, (iv) agrees to notify the Administrative Agent upon obtaining
knowledge of any interest in favor of any Person in the applicable Securities
Collateral that is adverse to the interest of the Administrative Agent therein
and (v) waives any right or requirement at any time hereafter to receive a
copy of the Security Agreement in connection with the registration of any
Securities Collateral thereunder in the name of the Administrative Agent or its
nominee or the exercise of voting rights by the Administrative Agent or its nominee.

 

	
   

  	
  [                                                     ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT 2

 

[Form of]

 

SECURITIES PLEDGE AMENDMENT

 

This Security
Pledge Amendment, dated as of [                ],
is delivered pursuant to Section 5.1 of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of [                             ],
made by [                             ],
a
[                ]
(the “Borrower”), and the Guarantors party thereto in favor of [                                                ],
as Administrative Agent (in such capacity and together with any successors in
such capacity, the “Administrative Agent”).  The undersigned hereby agrees that this
Pledge Amendment may be attached to the Security Agreement and that the Pledged
Securities and/or Pledged Notes listed on this Pledge Amendment shall be deemed
to be and shall become part of the Pledged Collateral and shall secure all
Obligations.

 

PLEDGED SECURITIES

 

 

	
  ISSUER

  	
   

  	
  CLASS OF

  STOCK OR

  INTERESTS

  	
   

  	
  PAR

  VALUE

  	
   

  	
  CERTIFICATE

  NO(S).

  	
   

  	
  NUMBER

  OF SHARES

  OR

  INTERESTS

  	
   

  	
  PERCENTAGE OF

  ALL ISSUED

  CAPITAL OR OTHER

  EQUITY INTERESTS

  OF ISSUER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

PLEDGED NOTES

 

	
  ISSUER

  	
   

  	
  PRINCIPAL

  AMOUNT

  	
   

  	
  DATE OF

  ISSUANCE

  	
   

  	
  INTEREST RATE

  	
   

  	
  MATURITY DATE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Pledgor

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  [

  	
   

  	
  ],

  	
   

  
	
  as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
										

 

 

 

EXHIBIT 3

 

[Form of]

 

JOINDER AGREEMENT

 

[Name of New Pledgor]

[Address of New Pledgor]

 

[Date]

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

Ladies and
Gentlemen:

 

Reference is
made to that certain security agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement;”
capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of
[                    ],
made by [                    ],
a [                                 ]
(the “Borrower”), and the Guarantors party thereto in favor of [                                                            ],
as Administrative Agent (in such capacity and together with any successors in
such capacity, the “Administrative Agent”).

 

This letter
supplements the Security Agreement and is delivered by the undersigned, [                      ] (the “New Pledgor”),
pursuant to Section 3.5 of the Security Agreement.  The New Pledgor hereby agrees to be bound as
a [Borrower]  [Guarantor] and as a Pledgor by all of the terms,
covenants and conditions set forth in the Security Agreement to the same extent
that it would have been bound if it had been a signatory to the Security
Agreement on the execution date of the Security Agreement.  Without limiting the generality of the
foregoing, the New Pledgor hereby grants and pledges to the Administrative
Agent, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Obligations, a Lien on and security interest in, all of its right, title
and interest in, to and under the Pledged Collateral and expressly assumes all
obligations and liabilities of a [Borrower]  [Guarantor] and Pledgor thereunder.  The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable
to the Pledgors contained in the Security Agreement.

 

The New
Pledgor is executing and delivering to the Administrative Agent a Perfection
Certificate with respect to itself on and as of the date hereof.

 

This agreement
and any amendments, waivers, consents or supplements hereto may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and the
same agreement.

 

 

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

 

 

IN WITNESS
WHEREOF, the New Pledgor has caused this letter agreement to be executed and
delivered by its duly authorized officer as of the date first above written.

 

	
   

  	
  [NEW PLEDGOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  [

  	
   

  	
  ],

  	
   

  
	
  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
								

 

 

EXHIBIT 4

 

FORM OF CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS

 

This Control
Agreement Concerning Securities Accounts (this “Control Agreement”),
dated as of
[                              ],
by and among                               
(the “Company”), [                              ],
as Administrative Agent for the Lenders and the Agents (the “Administrative
Agent”) and [              ]
(the “Securities Intermediary”), is delivered pursuant to Section 3.4(c) of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security  Agreement”),
dated as of [                              ], made by and among [                                              ]  [(the
“Borrower”)]  [the Company],(1) each of the Guarantors listed on the signature pages thereto
(together with [the Borrower]  [the
Company], the “Pledgors”),
in favor of the Administrative Agent for the benefit of the Lenders and the
Agents.  This Control Agreement is for
the purpose of perfecting the security interests of the Secured Parties granted
by the Pledgor in the Designated Securities Accounts described below.  Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Security Agreement.

 

Section 1.                                            Confirmation of Establishment and Maintenance of Designated  Accounts.  The Securities Intermediary hereby confirms
that (i) the Securities Intermediary has established for the Company and
maintains the securities account(s) listed in Schedule 1 annexed
hereto (such account(s), together with each such other securities account
maintained by the Company with the Securities Intermediary collectively, the “Designated
Accounts” and each a “Designated Account”), (ii) each of the
Designated Accounts is a “securities account” as such term is defined in Section 8-501(a) of
the UCC, (iii) the Securities Intermediary shall, subject to the terms of
this Control Agreement and the Security Agreement, treat the Administrative
Agent as entitled to exercise the rights that comprise any financial asset
which is Investment Property and which is credited to a Designated Account and (iv) all
securities or other property underlying any financial assets which constitute
Investment Property and which are credited to any Designated Account shall be
registered in the name of the Securities Intermediary, indorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
financial asset credited to any Designated Account be registered in the name of
the Company, payable to the order of the Company or specially endorsed to the
Company, except to the extent the foregoing have been specially endorsed to the
Securities Intermediary or in blank.  For
avoidance of doubt, it is noted that the term “Designated Accounts” as used in
any security agreement or collateral agreement means both the Designated
Accounts hereunder and the “Designated Accounts” in the comparable agreement
entered into with respect to any other Pledgor.

 

Section 2.                                            “Financial Assets” Election.  The Securities Intermediary hereby agrees
that each item of Investment Property (whether investment property, financial
asset,

 

(1) Use “the Company” if Borrower owns
the Designated Account(s).  If a Subsidiary owns the Designated Account(s), use [                                          ].
(the “Borrower”)”.

 

 

security, instrument or cash) credited to
any Designated Account shall be treated as a “financial asset” within the
meaning of Section 8-102(a)(9) of the UCC.

 

Section 3.                                            Entitlement Order. 
If at any time the Securities Intermediary shall receive an “entitlement
order” (within the meaning of Section 8-102(a)(8) of
the UCC) issued by the Administrative Agent and relating to Investment
Collateral or other Investment Property maintained in one or more of the
Designated Accounts, the Securities Intermediary shall comply with such
entitlement order without further consent by the Company or any other Person.

 

Section 4.                                            Subordination of Lien; Waiver of Set-Off.  In the event that the Securities Intermediary
has or subsequently obtains by agreement, operation of law or otherwise a
security interest in any Designated Account or any Investment Property, the
Securities Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Administrative Agent.  The financial assets and other items
deposited to any Designated Account will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any Person other than the Secured
Parties (except that the Securities Intermediary may set off (i) all
amounts due to the Securities Intermediary in respect of its customary fees and
expenses for the routine maintenance and operation of the Designated Accounts,
including overdraft fees and amounts advanced to settle authorized
transactions, and (ii) the face amount of any checks or other items which
have been credited to any Designated Account but are subsequently returned
unpaid because of uncollected or insufficient funds).

 

Section 5.                                            Choice of Law. 
Both this Control Agreement and the Designated Accounts shall be
governed by the laws of the State of New York. 
Regardless of any provision in any other agreement, for purposes of the
UCC, New York shall be deemed to be the Securities Intermediary’s location and
the Designated Accounts (as well as the security entitlements related thereto)
shall be governed by the laws of the State of New York.

 

Section 6.                                            Conflict with Other Agreements; Amendments.  As of the date hereof, there are no other
agreements entered into between the Securities Intermediary and the Company
with respect to any Designated Account or any security entitlements or other
financial assets credited thereto (other than standard and customary
documentation with respect to the establishment and maintenance of such
Designated Accounts).  The Securities
Intermediary and the Company will not enter into any other agreement with
respect to any Designated Account unless the Administrative Agent shall have
received prior written notice thereof. 
The Securities Intermediary and the Company will not enter into any
other agreement with respect to creation or perfection of any security interest
in, or control of security entitlements maintained in any of the Designated
Accounts without the prior written consent of the Administrative Agent acting in
its sole discretion.  In the event of any
conflict with respect to “control” over any Designated Account between this
Control Agreement (or any portion hereof) and any other agreement now existing
or hereafter entered into, the terms of this Control Agreement shall
prevail.  No amendment or modification of
this Control Agreement or waiver of any rights hereunder shall be binding on
any party hereto unless it is in writing and is signed by all the parties
hereto.

 

 

Section 7.                                            Certain Agreements.

 

(i)                                     The
Securities Intermediary acknowledges receipt of a copy of the Security
Agreement.

 

(ii)                                  The
Securities Intermediary has furnished to the Administrative Agent and the
Company the most recent account statement issued by the Securities Intermediary
with respect to each of the Designated Accounts and the financial assets and
cash balances held therein.  The account
statement for each Designated Account identifies the Investment Collateral held
therein in the manner set forth on Exhibit B annexed hereto.  The Securities Intermediary represents and
warrants to the Administrative Agent that each such statement accurately reflects
the assets held in such Designated Account as of the date thereof.

 

(iii)                               The
Securities Intermediary will, upon its receipt of each supplement to the
Security Agreement signed by the Company and identifying one or more security
entitlements or other financial assets as “Investment Collateral,” enter into
its records, including computer records, with respect to each Designated
Account a notation with respect to Investment collateral so that such records
and reports generated with respect thereto identify the Investment Collateral
as “Pledged.”

 

(iv)                              The
Administrative Agent has delivered to the Securities Intermediary a list,
signed by an authorized representative (the “Authorized Representative”),
of the officers of the Administrative Agent authorized to give approvals or
instructions under this Control Agreement (including notices and other
instructions under Section 9 hereof) and
the Securities Intermediary shall be entitled to rely on communications from
such authorized officers until the earlier of (A) the termination of this
Control Agreement in accordance with the terms hereof, (B) notification by
the Authorized Representative of a change in the officers authorized to give
approvals or instructions and (C) the assignment of the rights of the Secured
Parties in accordance with Section 11 hereof.

 

Section 8.                                            Notice of Adverse Claims.  Except for the claims and interest of the
Administrative Agent and of the Company in the Investment Collateral and other
Investment Property, the Securities Intermediary on the date hereof does not
know of any claim to, or security interest in, any Designated Account or in any
“financial asset” (as defined in Section 8-102(a) of the UCC)
credited thereto and does not know of any claim that any Person other than the
Administrative Agent has been given “control” of any Designated Account or any
such financial asset.  If any Person
asserts any lien, encumbrance or adverse claim (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process and any claim of “control”)
against any of the Investment Collateral or in any financial asset carried in
any Designated Account constituting Investment Property, the Securities
Intermediary will promptly notify the Administrative Agent and the Company
thereof.

 

Section 9.                                            Maintenance of Designated Accounts.  In addition to, and not in lieu of, the
obligation of the Securities Intermediary to honor entitlement orders as agreed
in Section 3 hereof, the
Securities Intermediary agrees to maintain the Designated Accounts as follows:

 

(i)                                     Notice
of Sole Control.  If at any time the
Administrative Agent delivers to the Securities Intermediary a notice of sole
control in substantially the form set forth in

 

 

Exhibit A
attached hereto (the “Notice of Sole Control”) with respect to any Designated
Account, the Securities Intermediary agrees that,
after receipt of such notice, it will take all instructions with respect to
such Designated Account solely from the Administrative Agent.  Permitting settlement of trades pending at
the time of receipt of such notice shall not constitute a violation of the
immediately preceding sentence.  Without
limiting the generality of the first sentence of this paragraph, upon receipt
of a Notice of Sole Control, the Securities Intermediary shall (x) no
longer permit any trading with respect to the applicable Investment Collateral
to be initiated by the Company or any representative of, or investment manager
appointed by, the Company and the Securities Intermediary shall follow all
instructions given by an authorized officer of the Administrative Agent,
including without limitation instructions for distribution or transfer of any
Investment Collateral or other Investment Property in any Designated Account to
be made to the Administrative Agent and (y) follow all instructions given
by an authorized officer of the Administrative Agent, including, without
limitation, instructions for distribution or transfer of any funds in any
Designated Account to be made to the Administrative Agent.

 

(ii)                                  Voting
Rights.  Until such time as the
Securities Intermediary receives a Notice of Sole Control pursuant to clause (i) of
this Section 9, the Company, or an investment manager on behalf of
the Company, shall direct the Securities Intermediary with respect to the
voting of any Investment Collateral or other financial assets constituting
Investment Property credited to any Designated Account.

 

(iii)                               Permitted
Dispositions.  Until such time as the
Securities Intermediary receives either a Notice of Sole Control signed by the
Administrative Agent with respect to some or all of the Investment Collateral
and other Investment Property or a notice signed by the Administrative Agent
that a proposed sale, exchange or transfer of certain Investment Collateral by
or on behalf of the Company will violate the Security Agreement, the  Company, or any representative of, or
investment manager appointed by, the Company, may direct the Securities
Intermediary with respect to the sale, exchange or transfer of such Investment
Collateral held in a Designated Account.

 

(iv)                              Statements
and Confirmations.  The Securities
Intermediary will send copies of all statements and other correspondence
(excluding routine confirmations) concerning any Designated Account or any
financial assets constituting Investment Property credited thereto
simultaneously to the Company and the Administrative Agent at the address set
forth in Section 12 hereof. 
The Securities Intermediary will provide to the Administrative Agent and
to the Company, upon the Administrative Agent’s request therefor from time to
time (which may be as frequent as daily and is expected to be at least as
frequent as weekly) and, in any event as of the last business day of each calendar
month, a statement of the market value of each item of the Investment
Collateral in each Designated Account.

 

(v)                                 Bailee
for Perfection.  The Securities
Intermediary acknowledges that, in the event that it should come into
possession of any certificate representing any security or other assets held as
Investment Collateral in any of the Designated Accounts, the Securities
Intermediary shall retain possession of the same for the benefit of the Administrative
Agent (and such act shall cause the Securities Intermediary to be deemed

 

 

a
bailee for the Administrative Agent, if necessary) to perfect the
Administrative Agent’s security interest in such securities or assets.  The Securities Intermediary hereby
acknowledges its receipt of a copy of the Security Agreement as notice to the
Securities Intermediary regarding notice of a security interest in collateral
held by a bailee.

 

(vi)                              Certain
Matters Relating to Interest, Dividends, etc.  Until receipt of a Notice of Sole Control
with respect to some or all of the Investment Collateral (or of a notice from
the Administrative Agent, making reference to this Section 9(vi),
that an Event of Default, as defined in the Security Agreement, has occurred
and is continuing), the Securities Intermediary shall have no responsibility to
furnish reports to the Administrative Agent with respect to, or to segregate or
otherwise account to the Administrative Agent for, dividends, interest or other
amounts received in Designated Accounts with respect to Investment Collateral.

 

Section 10.                                      Representations, Warranties and Covenants of the Securities Intermediary.  The Securities Intermediary hereby makes the
following representations, warranties and covenants:

 

(i)                                     The
Designated Accounts have been established as set forth in Section 1
hereof and each Designated Account will be maintained in the manner set forth
herein until termination of this Control Agreement.  The Securities Intermediary shall not change
the name or account number of any Designated Account without the prior written
consent of the Administrative Agent.

 

(ii)                                  No
financial asset constituting Investment Collateral is or will be registered in
the name of the Company, payable to its order or specially indorsed to it,
except to the extent such financial asset has been indorsed to the Securities
Intermediary or in blank.

 

(iii)                               This
Control Agreement is the valid and legally binding obligation of the Securities
Intermediary.

 

(iv)                              The
Securities Intermediary has not entered into any agreement with any other
Person pursuant to which it has agreed to comply with entitlement orders (as
defined in Section 8-102(a)(8) of the UCC) with respect to financial
assets credited to any Designated Account. 
Until the termination of this Control Agreement the Securities Intermediary
will not, without the written approval of the Administrative Agent, enter into
any agreement with any Person pursuant to which it agrees to comply with entitlement
orders with respect to Investment Collateral. 
Until the termination of this Control Agreement, the Securities
Intermediary will not, without the written approval of the Administrative Agent
(which shall not be unreasonably withheld), enter into any agreement with any
Person relating to any Designated Account or any financial assets credited
thereto pursuant to which it agrees to comply with entitlement orders of such
Person.

 

(v)                                 The
Securities Intermediary is a “securities intermediary” as defined in Article 8-102(a)(14) of the UCC.

 

 

(vi)                              The
Securities Intermediary has not entered into any other agreement with the
Company or Administrative Agent purporting to limit or condition the obligation
of the Securities Intermediary to comply with entitlement orders with respect
to financial assets credited to any Designated Account as set forth in Section 3 hereof.

 

Section 11.                                      Successors; Assignment.  The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors and permitted assignees.

 

Section 12.                                      Notices.  Any
notice, request or other communication required or permitted to be given under
this Control Agreement shall be in writing and deemed to have been properly
given when delivered in person, or when sent by telecopy or other electronic
means and electronic confirmation of error free receipt is received or
two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Pledgors:                                              [                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
copy to:

 

[                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

Securities

Intermediary:                        [                                  ]

[Address]

Attention:

Telecopy: 

Telephone:

 

Administrative

Agent:                                                           [                                  ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
a copy to:

 

 

Winston & Strawn LLP

200 Park Avenue

New York, NY 10166

Attention:                      William D.
Brewer

Telecopy.:                     (212) 294-4700

 

Any party may
change its address for notices in the manner set forth above.

 

Section 13.                                      Termination. 
The rights and powers granted herein to the Administrative Agent have
been granted in order to perfect the security interests of the Secured Parties
in the Investment Collateral and other Investment Property maintained in the
Designated Accounts, are powers coupled with an interest and will be affected
neither by the bankruptcy of the Company nor by the lapse of time.  The obligations of the Securities
Intermediary hereunder shall continue in effect until the security interests of
the Secured Parties with respect to the Investment Collateral and other
Investment Property have been terminated and an Authorized Representative has
notified the Securities Intermediary of such termination in writing.

 

Section 14.                                      Definitions. 
The following terms shall have the following meanings:

 

“Investment
Collateral” shall mean, all “investment property,” as such term is used in
the UCC, of the Company and, in any event, shall include, without limitation, (i) the
Designated Account, (ii) all financial assets, cash, checks, drafts,
securities and instruments deposited or held or required to be deposited or
held in the Designated Account and all security entitlements relating thereto, (iii) all
investments and all certificates and instruments, if any, from time to time
representing or evidencing any other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing items listed in clauses (i) and (ii) of this
definition and (iv) each consent, control or other agreement, including,
without limitation, this Control Agreement, entered into by the Company with
the Securities Intermediary and all rights, if any, and interests of the
Company in, to and under each such consent, control or other agreement; provided,
however, that Investment Collateral shall in no event include the
Securities Collateral.

 

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

 

Section 15.                                      Severability. 
If any term or provision set forth in this Agreement shall be invalid or
unenforceable, the remainder of this Agreement, other than those provisions
held invalid or unenforceable, shall be construed in all respects as if such
invalid or unenforceable term or provision were omitted.

 

 

Section 16.                                      Counterparts. 
This Control Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

 

	
   

  	
  [                                                               ],

  
	
   

  	
  as Pledgor

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                               ],

  
	
   

  	
  as
  Securities Intermediary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

 

SCHEDULE I

 

Designated Account(s)

 

 

EXHIBIT A

 

[Letterhead of [                           ]]

 

[Date]

 

[Securities Intermediary]

[Address]

 

Attention:

 

Re:                               Notice
of Sole Control

 

Ladies and
Gentlemen:

 

As referenced
in Section 9(i) of the Control Agreement Concerning Designated
Accounts dated as of
[                      ],
by and among [                      ]
(the “Company”), us and you (the “Control Agreement;” capitalized terms
used but not defined herein shall have the meanings assigned to such terms in
the Control Agreement) (a copy of which is attached) we hereby give you notice
of our sole control over the Investment Collateral and other financial assets
constituting Investment Property maintained in the securities accounts, account
numbers                       
(the “Specified Designated Accounts”). 
You are hereby instructed not to accept any direction, instruction or
entitlement order with respect to Investment Collateral maintained in the
Specified Designated Accounts or the financial assets constituting Investment
Property credited thereto from any Person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.

 

You are
instructed to deliver a copy of this notice by facsimile transmission to
[Company].

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  cc: [Name of Company]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

 

EXHIBIT 5

 

FORM OF CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS

 

This CONTROL
AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this “Control Agreement”), dated
as of [                           ],
by and among [                           ]
(the “Company”), UBS AG, STAMFORD BRANCH, as Administrative Agent for
the Lenders and the Agents (the “Administrative Agent”), and [                           ]
(the “Bank”), is delivered pursuant to Section 3.4(b) of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”),
dated as of [                           ],
made by [                           ]  [(the
“Borrower”)]  [the Company],(1) and each of the Guarantors listed on the signature pages thereto
(together with [the Borrower]  [the
Company], the “Pledgors”),
in favor of the Administrative Agent for the benefit of the Lenders and the
Agents.  This Control Agreement is for
the purpose of perfecting the security interests of the Administrative Agent
granted by the Company in the Designated Accounts described below.  All references herein to the “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the State of New
York.  Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Security
Agreement.

 

Section 1.                                            Confirmation of Establishment and Maintenance of Designated  Accounts.  The Bank hereby confirms that (i) the
Bank has established for the Company and maintains the deposit account(s)
listed in Schedule 1 annexed hereto (such deposit account(s),
collectively, the “Designated Accounts” and each a “Designated
Account”) and (ii) each Designated Account is a “deposit account” as
such term is defined in Article 9 of the UCC.  For avoidance of doubt, it is noted that the
term “Designated Accounts” as used in any security agreement means both the
Designated Accounts hereunder and the “Designated Accounts” in the comparable
agreement entered into with respect to any other Pledgor.

 

Section 2.                                            Control.  The
Administrative Agent shall at all times (i) have “control” (as defined in Section 9-104
of the UCC) of any Designated Account and (ii) be authorized to direct the
Bank to comply, without further consent of the Company or any Person acting or
purporting to act for the Company being required, with all instructions
originated by the Administrative Agent directing disposition of the funds in
the Designated Account.  The Company, the
Administrative Agent, and the Bank agree that the Bank will comply with
instructions originated by the Administrative Agent directing the disposition
of the funds in the Designated Account without further consent by the
Company.  The Bank shall also comply with
instructions directing the disposition of funds in the Designated Accounts
originated by the Company or its authorized representatives until such time as
the Administrative Agent delivers a Notice of Sole Control pursuant to Section 8(i) hereof
to the Bank.

 

(1) Use “the Company” if Borrower owns
the Designated Account(s).  If a Subsidiary owns the Designated Account(s), use [                                  ].
(the “Borrower”)”.

 

 

Section 3.                                            Subordination of Lien; Waiver of Set-Off.  In the event that the Bank has or
subsequently obtains by agreement, operation of law or otherwise a security interest
in any Designated Account, the Bank hereby agrees that such security interest
shall be subordinate to that of the Secured Parties.  The funds deposited into any Designated
Account will not be subject to deduction, set-off, banker’s lien, or any other
right in favor of any Person other than the Secured Parties (except that the
Bank may set off (i) all amounts due to the Bank in respect of its
customary fees and expenses for the routine maintenance and operation of the
Designated Accounts, including overdraft fees, and (ii) the face amount of
any checks or other items which have been credited to any Designated Account
but are subsequently returned unpaid because of uncollected or insufficient
funds).

 

Section 4.                                            Choice of Law. 
Both this Control Agreement and the Designated Accounts shall be
governed by the law of the State of New York. 
Regardless of any provision in any other agreement, for purposes of the
UCC, New York shall be deemed to be the Bank’s jurisdiction and the Designated
Accounts shall be governed by the law of the State of New York.

 

Section 5.                                            Conflict with Other Agreements; Amendments.  As of the date hereof, there are no other
agreements entered into between the Bank and the Company with respect to any
Designated Account or any funds credited thereto (other than standard and customary
documentation with respect to the establishment and maintenance of such
Designated Accounts).  The Bank and the
Company will not enter into any other agreement with respect to any Designated
Account, other than standard and customary documentation with respect to the
establishment and maintenance of such Designated Accounts, unless the
Administrative Agent shall have received prior written notice thereof.  The Bank and the Company will not enter into
any other agreement with respect to control of the Designated Accounts without
the prior written consent of the Administrative Agent acting in its sole
discretion.  In the event of any conflict
with respect to “control” over any Designated Account between this Control
Agreement (or any portion hereof) and any other agreement now existing or
hereafter entered into, the terms of this Control Agreement shall prevail.  No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.

 

Section 6.                                            Certain Agreements.

 

(i)                                     The
Bank has furnished to the Administrative Agent and the Company the most recent
account statement issued by the Bank with respect to each of the Designated
Accounts and the cash balances held therein. 
The Bank represents and warrants to the Administrative Agent that such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.

 

(ii)                                  The
Administrative Agent has delivered to the Bank a list, signed by an authorized
representative (the “Authorized Representative”), of the officers of the
Administrative Agent authorized to give approvals or instructions under this
Control Agreement (including notices and other instructions under Section 8
hereof) and the Bank shall be entitled to rely on communications from such
authorized officers until the earlier of (A) the termination of this
Control Agreement in accordance with the terms hereof, (B)

 

 

the
notification by the Authorized Representative of a change and (C) the
assignment of the rights of the Secured Parties in accordance with Section 11
hereof.

 

Section 7.                                            Notice of Adverse Claims.  Except for the claims and interest of the
Administrative Agent and of the Company in the Designated Accounts, the Bank on
the date hereof does not know of any claim to, or security interest in, any
Designated Account or in any funds credited thereto and does not know of any
claim that any Person other than the Administrative Agent has been given “control”
of any Designated Account or any such funds. 
If any Person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process and any claim of “control”) against any funds in any Designated
Account, the Bank will promptly notify the Administrative Agent and the Company
thereof.

 

Section 8.                                            Maintenance of Designated Accounts.  In addition to, and not in lieu of, the
obligation of the Bank agreed in Section 2 hereof, the Bank agrees
to maintain the Designated Accounts as follows:

 

(i)                                     Notice
of Sole Control.  If at any time the
Administrative Agent delivers to the Bank a notice of sole control in
substantially the form set forth in Exhibit A attached hereto (the “Notice
of Sole Control”) with respect to any Designated Account, the Bank agrees
that, after receipt of such notice, it will take all instruction with respect
to such Designated Account solely from the Administrative Agent.  Without limiting the generality of the first
sentence of this paragraph, upon receipt of a Notice of Sole Control, the Bank
shall follow all instructions given by an authorized officer of the
Administrative Agent, including, without limitation, instructions for distribution
or transfer of any funds in any Designated Account to be made to the
Administrative Agent.

 

(ii)                                  Permitted
Dispositions.  Until such time as the
Bank receives a Notice of Sole Control signed by the Administrative Agent with
respect to a Designated Account, the Company, or any representative of the
Company, may direct the Bank with respect to the transfer of the funds held in
such Designated Account.  Until such time
as the Bank receives a Notice of Sole Control, the Company shall be entitled to
write checks against amounts in each Designated Account, and make withdrawals,
transfers, and other dispositions of the funds in each Designated Account.

 

(iii)                               Statements
and Confirmations.  The Bank will
promptly send copies of all statements and other correspondence (excluding
routine confirmations) concerning any Designated Account to the Company and the
Administrative Agent at the addresses set forth in Section 11
hereof.  The Bank will promptly provide
to the Administrative Agent and to the Company, upon the Administrative Agent’s
request therefor from time to time and in any event as of the last business day
of each calendar month, a statement of the cash balance in each Designated Account.

 

Section 9.                                            Representations, Warranties and Covenants of the Bank.  The Bank hereby makes the following
representations, warranties and covenants:

 

 

(i)                                     The
Designated Accounts have been established as set forth in Section 1
hereof and each Designated Account will be maintained in the manner set forth
herein until termination of this Control Agreement.  The Bank shall not change the name or account
number of any Designated Account without the prior written consent of the
Administrative Agent.

 

(ii)                                  The
Bank is a “bank,” as such term is defined in the UCC.

 

(iii)                               This
Control Agreement is the valid and legally binding obligation of the Bank.

 

(iv)                              The
Bank has not entered into any agreement with any other Person pursuant to which
it has agreed to comply with any orders or instructions with respect to any
Designated Account.  Until the
termination of this Control Agreement, the Bank will not, without the written
approval of the Administrative Agent, enter into any agreement with any Person
pursuant to which it agrees to comply with any orders or instructions of such
Person with respect to any Designated Account.

 

(v)                                 The
Bank has not entered into any other agreement with the Company or the
Administrative Agent purporting to limit or condition the obligation of the
Bank to comply with any orders or instructions with respect to any Designated Account
as set forth in Section 2 hereof.

 

Section 10.                                      Successors; Assignment.  The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors and permitted assignees.

 

Section 11.                                      Notices.  Any
notice, request or other communication required or permitted to be given under
this Control Agreement shall be in writing and deemed to have been properly
given when delivered in person, or when sent by telecopy or other electronic
means and electronic confirmation of error free receipt is received or
two (2) days after being sent by certified or registered United
States mail, return receipt requested, postage prepaid, addressed to the party
at the address set forth below.

 

Company:                                        [                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
copy to:

 

[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

 

Bank:                                                                [                                         ]

[Address]

Attention:

Telecopy: 

Telephone:

 

Administrative

Agent:                                                           [                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

with
a copy to:

 

[                                         ]

[Address]

Attention:

Telecopy:

Telephone:

 

Any party may
change its address for notices in the manner set forth above.

 

Section 12.                                      Termination. 
The rights and powers granted herein to the Administrative Agent have
been granted in order to perfect the security interests of the Secured Parties
in the Designated Accounts, are powers coupled with an interest and will be
affected neither by the bankruptcy of the Company nor by the lapse of
time.  The obligations of the Bank hereunder
shall continue in effect until the termination of the security interests of the
Secured Parties (including, without limitation, by virtue of the notice
pursuant to Section 11 hereof) with respect to the Designated
Accounts have been terminated and an Authorized Representative has notified the
Bank of such termination in writing.

 

Section 13.                                      Severability. 
If any term or provision set forth in this Agreement shall be invalid or
unenforceable, the remainder of this Agreement, other than those provisions
held invalid or unenforceable, shall be construed in all respects as if such
invalid or unenforceable term or provision were omitted.

 

Section 14.                                      Counterparts. 
This Control Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Control Agreement by signing and delivering one or more counterparts.

 

[Signature Page Follows]

 

 

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

 

 

	
   

  	
  [                                                                ],

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                     ],

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                                ],

  
	
   

  	
  as Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

SCHEDULE 1

 

Designated Accounts

 

 

EXHIBIT A

 

Letterhead of UBS AG, Stamford Branch

 

[Date]

 

[Bank]

[Address]

 

Attention:  

 

Re:                               Notice
of Sole Control

 

Ladies and
Gentlemen:

 

As referenced
in Section 8(i) of the Control Agreement Concerning Deposit
Accounts dated as of                            ,
2005, by and among D 56, Inc., a Minnesota corporation and Lenox,
Incorporated, a New Jersey corporation (collectively, the “Company”), us
and you (the “Control Agreement”; capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Control Agreement)
(a copy of which is attached) we hereby give you notice of our sole control
over the Designated Account(s), account number(s):                                                                                   
(the “Specified Designated Accounts”). 
You are hereby instructed not to accept any direction or instructions
with respect to the Specified Designated Accounts or any funds credited thereto
from any Person other than the undersigned, unless otherwise ordered by a court
of competent jurisdiction.

 

You are
instructed to deliver a copy of this notice by facsimile transmission to the
Company.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  UBS AG, Stamford Branch,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

cc:  D 56, Inc., and Lenox,
Incorporated

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]