Document:

Exhibit 10.6.1

 

 

 

SECOND LIEN GUARANTEE AND
COLLATERAL AGREEMENT

 

made by

 

GENERAC ACQUISITION CORP.

 

GPS CCMP MERGER CORP.

 

and certain Subsidiaries
of GPS CCMP MERGER CORP.

 

in favor of

 

WILMINGTON TRUST COMPANY,
as Collateral Agent

 

and

 

JPMORGAN CHASE BANK,
N.A., as Administrative Agent

 

Dated as of November 10,
2006

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINED
  TERMS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Definitions

  	
  2

  
	
  1.2.

  	
  Other Definitional
  Provisions

  	
  10

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  GUARANTEE

  	
  10

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Guarantee

  	
  10

  
	
  2.2.

  	
  Rights of
  Reimbursement, Contribution and Subrogation

  	
  11

  
	
  2.3.

  	
  Amendments, etc. with
  respect to the Borrower Obligations

  	
  13

  
	
  2.4.

  	
  Guarantee Absolute and
  Unconditional

  	
  14

  
	
  2.5.

  	
  Reinstatement

  	
  14

  
	
  2.6.

  	
  Payments

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  GRANT
  OF SECURITY INTEREST;  CONTINUING
  LIABILITY UNDER COLLATERAL

  	
  15

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Representations in
  Second Lien Credit Agreement

  	
  17

  
	
  4.2.

  	
  Title; No Other Liens

  	
  17

  
	
  4.3.

  	
  Perfected First
  Priority Liens

  	
  17

  
	
  4.4.

  	
  Name; Jurisdiction of
  Organization, etc.

  	
  18

  
	
  4.5.

  	
  Inventory and Equipment

  	
  18

  
	
  4.6.

  	
  Farm Products

  	
  18

  
	
  4.7.

  	
  Investment Property

  	
  18

  
	
  4.8.

  	
  Receivables

  	
  20

  
	
  4.9.

  	
  Intellectual Property

  	
  20

  
	
  4.10.

  	
  Letters of Credit and
  Letter of Credit Rights

  	
  22

  
	
  4.11.

  	
  Commercial Tort Claims

  	
  23

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  COVENANTS

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Covenants in Second
  Lien Credit Agreement

  	
  23

  
	
  5.2.

  	
  Delivery and Control of
  Certain Collateral

  	
  23

  
	
  5.3.

  	
  Maintenance of
  Insurance

  	
  25

  
	
  5.4.

  	
  Maintenance of
  Perfected Security Interest; Further Documentation

  	
  25

  
	
  5.5.

  	
  Changes in Locations, Name,
  Jurisdiction of Incorporation, etc.

  	
  25

  
	
  5.6.

  	
  Investment Property

  	
  25

  
	
  5.7.

  	
  Intellectual Property

  	
  27

  
	
  5.8.

  	
  Commercial Tort Claims

  	
  30

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REMEDIAL
  PROVISIONS

  	
  30

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Certain Matters
  Relating to Receivables

  	
  30

  
	
  6.2.

  	
  Communications with Obligors;
  Grantors Remain Liable

  	
  31

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.3.

  	
  Pledged Collateral

  	
  32

  
	
  6.4.

  	
  Proceeds to be Turned
  Over To Second Lien Administrative Agent

  	
  33

  
	
  6.5.

  	
  Application of Proceeds

  	
  33

  
	
  6.6.

  	
  Code and Other Remedies

  	
  34

  
	
  6.7.

  	
  Registration Rights

  	
  35

  
	
  6.8.

  	
  Deficiency

  	
  36

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  THE
  COLLATERAL AGENT

  	
  37

  
	
   

  	
   

  	
   

  
	
  7.1.

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

  	
  37

  
	
  7.2.

  	
  Duty of Second Lien
  Administrative Agent and the Collateral Agent

  	
  38

  
	
  7.3.

  	
  Execution of Financing
  Statements

  	
  39

  
	
  7.4.

  	
  Authority of Second
  Lien Administrative Agent and the Collateral Agent

  	
  39

  
	
  7.5.

  	
  Appointment of
  Co-Collateral Agents

  	
  40

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  MISCELLANEOUS

  	
  40

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Amendments in Writing

  	
  40

  
	
  8.2.

  	
  Notices

  	
  40

  
	
  8.3.

  	
  No Waiver by Course of
  Conduct; Cumulative Remedies

  	
  40

  
	
  8.4.

  	
  Enforcement Expenses;
  Indemnification

  	
  40

  
	
  8.5.

  	
  Successors and Assigns

  	
  41

  
	
  8.6.

  	
  Set-Off

  	
  41

  
	
  8.7.

  	
  Counterparts

  	
  42

  
	
  8.8.

  	
  Severability

  	
  42

  
	
  8.9.

  	
  Section Headings

  	
  42

  
	
  8.10.

  	
  Integration

  	
  42

  
	
  8.11.

  	
  APPLICABLE LAW

  	
  42

  
	
  8.12.

  	
  Submission to
  Jurisdiction; Waivers

  	
  42

  
	
  8.13.

  	
  Acknowledgments

  	
  43

  
	
  8.14.

  	
  Additional Grantors

  	
  43

  
	
  8.15.

  	
  Releases

  	
  43

  
	
  8.16.

  	
  WAIVER OF JURY TRIAL

  	
  44

  

 

ii

 

	
  SCHEDULE 4.3 — FILINGS;
  OTHER ACTIONS

  
	
   

  
	
  SCHEDULE 4.4 — NAME;
  JURISDICTION OF ORGANIZATION, ETC

  
	
   

  
	
  SCHEDULE 4.5 —
  INVENTORY AND EQUIPMENT

  
	
   

  
	
  SCHEDULE 4.7 —
  INVESTMENT PROPERTY

  
	
   

  
	
  SCHEDULE 4.9 —
  INTELLECTUAL PROPERTY

  
	
   

  
	
  SCHEDULE 4.10 — LETTERS
  OF CREDIT AND LETTERS OF CREDIT RIGHTS

  
	
   

  
	
  SCHEDULE 4.11 — COMMERCIAL
  TORT CLAIMS

  
	
   

  
	
  SCHEDULE 8.2 — NOTICES

  
	
   

  
	
  EXHIBIT A —
  ACKNOWLEDGEMENT AND CONSENT

  
	
   

  
	
  EXHIBIT B-1 —
  INTELLECTUAL PROPERTY SECURITY AGREEMENT

  
	
   

  
	
  EXHIBIT B-2 —
  AFTER-ACQUIRED INTELLECTUAL PROPERTY SECURITY AGREEMENT

  
	
   

  
	
  EXHIBIT C — CONTROL
  AGREEMENT (UNCERTIFICATED SECURITIES)

  
	
   

  
	
  EXHIBIT
  D — ASSUMPTION AGREEMENT

  

 

i

 

SECOND
LIEN GUARANTEE AND COLLATERAL AGREEMENT, dated as of November 10, 2006,
made by each of the signatories hereto (other than GSCP, but together with any
other entity that may become a party hereto as provided herein, the “Grantors”),
in favor of WILMINGTON TRUST COMPANY, as collateral agent (in such capacity and
together with its successors, the “Collateral Agent”) for (i) itself,
the Second Lien Administrative Agent and the banks and other financial
institutions or entities (the “Lenders”) from time to time parties to
the Credit Agreement, dated as of November 10, 2006 (as amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Second Lien Credit Agreement”), among Generac Acquisition Corp., a
Delaware corporation (“Holdings”), GPS CCMP Merger Corp., a Wisconsin
corporation (the “Borrower”), the Lenders party thereto, JPMorgan Chase
Bank, N.A. (“JPMorgan”), as Administrative Agent (in such capacity, the “Second
Lien Administrative Agent”), J.P. Morgan Securities Inc. and Goldman Sachs
Credit Partners L.P. (“GSCP”), as joint bookrunners and joint lead
arrangers (in each such capacity, the “Joint Lead Arrangers”), GSCP as
syndication agent (in such capacity, the “Syndication Agent”), and
Barclays Bank, PLC (“Barclays”), as Documentation Agent (in such
capacity and together with its successors, the “Documentation Agent”),
and (ii) the other Secured Parties (as hereinafter defined).

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower under the Second Lien Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Collateral Agent for its benefit and for the benefit of the other Secured
Parties;

 

WHEREAS,
as of the date hereof, Grantors have also entered into (a) that certain
Credit Agreement, dated as of the date hereof (as may be amended, supplemented
or otherwise modified from time to time, the “First Lien Credit Agreement”), by
and among Holdings, Borrower, the lenders party thereto from time to time,
GSCP, as joint bookrunner, joint lead arranger and administrative agent
(together with its permitted successors and assigns, in such capacity, the “First
Lien Administrative Agent”), JPMorgan, as joint bookrunner, joint lead arranger
and as syndication agent and Barclays as documentation agent and (b) that
certain First 

 

 

Lien Guarantee and Collateral Agreement, dated as of
the date hereof (as may be amended, supplemented or otherwise modified from
time to time, the “First Lien Security Agreement”), by and between each of the
Grantors and the First Lien Administrative Agent, pursuant to which each
Grantor has granted a first priority Lien to the First Lien Administrative
Agent for the benefit of the holders of First Lien Obligations (as defined in
the Intercreditor Agreement referred to below) on the Collateral to secure such
Grantor’s obligations under the Loan Documents (as defined in the First Lien
Credit Agreement); and

 

WHEREAS,
Holdings, Borrower, the First Lien Administrative Agent and the Collateral
Agent have entered into an Intercreditor Agreement, dated as of the date hereof
(as may be amended, supplemented or otherwise from time to time, the “Intercreditor
Agreement”).

 

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

 

SECTION 1.    DEFINED
TERMS

 

1.1. Definitions.  (a)  
Unless otherwise defined herein, terms defined in the Second Lien Credit
Agreement and used herein shall have the meanings given to them in the Second
Lien Credit Agreement, and the following terms are used herein as defined in
the New York UCC (and if defined in more than one Article of the New York
UCC, such terms shall have the meanings given in Article 9 thereof):
Accounts, Account Debtor, Certificated Security, Chattel Paper, Commercial Tort
Claim, Commodity Account, Commodity Contract, Commodity Intermediary,
Documents, Deposit Account, Electronic Chattel Paper, Equipment, Farm Products,
Financial Asset, Fixtures, Goods, Instruments, Inventory, Letter of Credit,
Letter of Credit Rights, Money, Payment Intangibles, Securities Account,
Securities Intermediary, Security, Security Entitlement, Supporting
Obligations, Tangible Chattel Paper and Uncertificated Security.

 

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

 

“After-Acquired
Intellectual Property” shall have the meaning assigned to such term in Section 5.9(k).

 

“Agreement”
shall mean this Second Lien Guarantee and Collateral Agreement, as the same may
be amended, amended and restated, restated, supplemented or otherwise modified
from time to time.

 

“Borrower”
shall have the meaning assigned to such term in the preamble.

 

“Borrower
Obligations” shall mean the collective reference to the unpaid principal of
and interest on (including interest accruing after the maturity of the Loans
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any Grantor, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other 

 

2

 

obligations and liabilities of the Borrower to the
Joint Lead Arrangers, to any Agent, Lender or other Secured Party, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with the Second Lien Credit Agreement, any other Loan Document or any other document
made, delivered or given in connection herewith or therewith, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to the Joint Lead Arrangers, to any Agent or to any Lender that are
required to be paid by any Grantor pursuant to the Second Lien Credit Agreement
or any other Loan Document) or otherwise.

 

“Co-Documentation
Agents” shall have the meaning assigned to such term in the preamble.

 

“Collateral”
shall have the meaning assigned to such term in Section 3.

 

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

 

“Collateral
Account Funds” shall mean, collectively, the following:  all funds (including all trust monies) and
investments (including all cash equivalents) credited to, or purchased with
funds from, any Collateral Account and all certificates and instruments from
time to time representing or evidencing such investments; all Money, notes,
certificates of deposit, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Second Lien Administrative
Agent or the Collateral Agent for or on behalf of any Grantor in substitution
for, or in addition to, any or all of the 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 Collateral.

 

“Collateral
Agent” shall have the meaning assigned to such term in the preamble.

 

“Contracts”
shall mean all contracts and agreements between any Grantor and any other
person (in each case, whether written or oral, or third party or intercompany)
as the same may be amended, assigned, extended, restated, supplemented,
replaced or otherwise modified from time to time including (i) all rights
of any Grantor to receive moneys due and to become due to it thereunder or in connection
therewith, (ii) all rights of any Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect thereto, (iii) all
rights of any Grantor to damages arising thereunder and (iv) all rights of
any Grantor to terminate and to perform and compel performance of, such
Contracts and to exercise all remedies thereunder.

 

“Copyright
Licenses” shall mean any agreement, whether written or oral, naming any
Grantor as licensor or licensee (including those listed in Schedule 4.9(a) (as
such schedule may be amended or supplemented from time to time)), granting any
right in, to or under any Copyright, including the grant of rights to
manufacture, print, publish, copy, import, export, distribute, exploit and sell
materials derived from any Copyright.

 

“Copyrights”  shall mean (i) all copyrights arising
under the laws of the United States, any other country, or union of countries,
or any political subdivision of any of the foregoing, whether registered or
unregistered and whether published or unpublished (including 

 

3

 

those listed in Schedule 4.9(a) (as such schedule
may be amended or supplemented from time to time)), all registrations and
recordings thereof, and all applications in connection therewith and rights
corresponding thereto throughout the world, including all registrations,
recordings and applications in the United States Copyright Office, and all Mask
Works (as defined in 17 USC 901), (ii) the right to, and to obtain, all
extensions and renewals thereof, and the right to sue for past, present
and future infringements of any of the foregoing, (iii) all proceeds of
the foregoing, including license, royalties, income, payments, claims, damages,
and proceeds of suit and (iv) all other rights of any kind whatsoever
accruing thereunder or pertaining thereto.

 

“dollars”
or “$” shall mean lawful money of the United States of America.

 

“Excluded
Assets” shall mean: (i) the Excluded Foreign Subsidiary Equity
Interests; (ii) any Equity Interests if, and to the extent that, and for
so long as doing so would violate applicable law or, other than in the case of
Wholly-Owned Subsidiaries, a contractual obligation binding on such Equity
Interests; (iii) any assets acquired after the Closing Date, to the extent
that, and for so long as, taking such actions would violate a contractual
obligation binding on such assets that existed at the time of the acquisition
thereof and was not created or made binding on such assets in contemplation or
in connection with the acquisition of such assets (except in the case of assets
acquired with Indebtedness permitted pursuant to Section 6.01(h) of
the Second Lien Credit Agreement that is secured by a Lien permitted pursuant
to Section 6.02(i) of the Second Lien Credit Agreement); (iv) any
lease, license, contract, property right or agreement to which any Grantor is a
party or any of its rights or interests thereunder if and only for so long as
the grant of a security interest hereunder shall constitute or result in a
breach, termination or default under any such lease, license, contract,
property right or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409
of the UCC of any relevant jurisdiction or any other applicable law or
principles of equity); provided, however, that such security
interest shall attach immediately to any portion of such lease, license,
contract, property rights or agreement that does not result in any of the
consequences specified above, (v) any property subject to a Lien permitted
under Section 6.02(i) or 6.02(j) of the Second Lien Credit
Agreement, (vi) Deposit Accounts, Securities Accounts and all cash, cash
equivalents and assets on deposit therein, (vii) vehicles and (viii) those
assets with respect to which the Second Lien Administrative Agent reasonably
determines that the costs of obtaining security interests in which are
excessive in relation to the value of the security afforded thereby.

 

“Excluded
Foreign Subsidiary Equity Interests” shall mean (A) Equity Interests
of any “first tier” Foreign Subsidiary owned by any Grantor in excess of 65% of
the issued and outstanding Equity Interests of such Foreign subsidiary and (B) any
issued and outstanding Equity Interests of any Foreign Subsidiary that is not a
“first tier” Foreign Subsidiary owned by any Grantor.

 

“Excluded
Perfection Assets” shall mean (i) Collateral for which the perfection
of Liens thereon requires filings in or other actions under the laws of jurisdictions
outside of the United States of America, any State, territory or dependency
thereof or the District of Columbia, (ii) goods included in Collateral
received by any Person from any Grantor for “sale or return” within the meaning
of Section 2-326 of the Uniform Commercial Code of the applicable
jurisdiction, to the extent of claims of creditors of such Person, (iii) Equipment
constituting 

 

4

 

Fixtures, (iv) Collateral as to which actions
required for perfection are permitted not to be taken pursuant to Section 5.02
hereof or Section 5.09(g) of the Second Lien Credit Agreement and (v) Deposit
Accounts, Securities Accounts (other than the filing of a financing statement
with respect thereto) and vehicles that are subject to the certificate of title
laws in any state.

 

“First
Lien Administrative Agent” shall have the meaning assigned to such term in
the recitals.

 

“First
Lien Credit Agreement” shall have the meaning assigned to such term in the
preamble.

 

“First
Lien Security Agreement” shall have the meaning assigned to such term in
the recitals.

 

“General
Intangibles” shall mean all “general intangibles” as such term is defined
in Section 9-102(a)(42) of the New York UCC and, in any event, including
with respect to any Grantor, all rights of such Grantor to receive any tax
refunds, all Swap Agreements and all contracts, agreements, instruments and
indentures and all licenses, permits, concessions, franchises and
authorizations issued by Governmental Authorities in any form, and portions
thereof, to which such Grantor is a party or under which such Grantor has any
right, title or interest or to which such Grantor or any property of such
Grantor is subject, as the same may from time to time be amended, supplemented,
replaced or otherwise modified, including (i) all rights of such Grantor
to receive moneys due and to become due to it under or in connection with any
such general intangibles, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to any
such general intangibles, (iii) all rights of such Grantor to damages
arising under or in connection with any such general intangibles and (iv) all
rights of such Grantor to terminate and to perform and compel performance and
to exercise all remedies under any such general intangibles.

 

“Grantors”
shall have the meaning assigned to such term in the preamble.

 

“Guarantor
Obligations” shall mean with respect to any Guarantor, all obligations and
liabilities of such Guarantor which may arise under or in connection with (a) this
Agreement (including Section 2) or any other Loan Document to which such
Guarantor is a party to any Secured Party or (b) any Cash Management
Agreement to any Lender Counterparty, in each case whether on account of
guarantee obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including all fees and disbursements of counsel to any
Secured Party that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).

 

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

 

“Holdings”
shall have the meaning assigned to such term in the preamble.

 

“Insurance” shall mean (i) all insurance
policies covering any or all of the Collateral (regardless of whether the
Collateral Agent is the loss payee thereof)  and
(ii) any key man life insurance policies.

 

5

 

“Intellectual
Property” shall mean the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets and the Trade Secret Licenses, and all
rights to sue at law or in equity for any past, present and future infringement
or other impairment thereof, including the right to receive all proceeds and
damages therefrom.

 

“Intercompany
Note” shall mean any promissory note evidencing loans made by any Grantor
to Holdings, the Borrower or any of the Subsidiaries, including the Global
Intercompany Note.

 

“Intercreditor
Agreement” shall have the meaning assigned to such term in the recitals.

 

“Investment
Property” shall mean the collective reference to (i) all “investment
property” as such term is defined in Section 9-102(a)(49) of the New York
UCC (other than any such investment property which is an Excluded Asset)
including all Certificated Securities and Uncertificated Securities, all
Security Entitlements, all Securities Accounts, all Commodity Contracts and all
Commodity Accounts, (ii) security entitlements, in the case of any United
States Treasury book-entry securities, as defined in 31 C.F.R. section 357.2,
or, in the case of any United States federal agency book-entry securities, as
defined in the corresponding United States federal regulations governing such
book-entry securities, and (iii) whether or not otherwise constituting “investment
property,” all Pledged Notes, all Pledged Equity Interests, all Pledged
Security Entitlements and all Pledged Commodity Contracts.

 

“Issuers”
shall mean the collective reference to each issuer of Pledged Collateral that
is a Subsidiary.

 

“Joint
Lead Arrangers” shall have the meaning assigned to such term in the
preamble.

 

“Lenders”
shall have the meaning assigned to such term in the preamble.

 

“Licensed
Intellectual Property” shall have the meaning assigned to such term in Section 4.9(a).

 

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

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

 

“Owned
Intellectual Property” shall have the meaning assigned to such term in Section 4.9(a).

 

“Patent
License” shall mean all agreements, whether written or oral, providing for
the grant by or to any Grantor of any right to manufacture, use, import,
export, distribute or sell 

 

6

 

any invention covered in whole or in part by a Patent,
including any of the foregoing listed in Schedule 4.9(a) (as such schedule
may be amended or supplemented from time to time).

 

“Patents”
shall mean (i) all letters of patent of the United States, any other
country, union of countries or any political subdivision of any of the
foregoing, all reissues and extensions thereof and all goodwill associated
therewith, including any of the foregoing listed in Schedule 4.9(a) (as
such schedule may be amended or supplemented from time to time), (ii) all
applications for letters of patent of the United States or any other country or
union of countries or any political subdivision of any of the foregoing and all
divisions, continuations and continuations-in-part thereof, all improvements
thereof, including any of the foregoing listed in Schedule 4.9(a) (as such
schedule may be amended or supplemented from time to time), (iii) all
rights to, and to obtain, any reissues or extensions of the foregoing and (iv) all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.

 

“Pledged Alternative Equity Interests” shall
mean all interests (other than any such interests that are Excluded Assets) of
any Grantor in participation or other interests in any equity or profits of any
business entity and the certificates, if any, representing such interests and
all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such interests and any other warrant, right or option to acquire any of the
foregoing; provided, however, that Pledged Alternative Equity
Interests shall not include any Pledged Stock, Pledged LLC Interests, Pledged
Partnership Interests or Pledged Trust Interests.

 

“Pledged
Collateral” shall mean the collective reference to the Pledged Debt
Securities, the Pledged Notes and the Pledged Equity Interests.

 

“Pledged
Commodity Contracts” shall mean all commodity contracts listed on
Schedule 4.7(c) (as such schedule may be amended from time to time)
and all other commodity contracts to which any Grantor is party from time to
time.

 

“Pledged
Debt Securities” shall mean all debt securities now owned or hereafter
acquired by any Grantor, (other than any such debt securities that are Excluded
Assets), including the debt securities listed on Schedule 4.7(b), (as such
schedule may be amended or supplemented from time to time), together with any
other certificates, options, rights or security entitlements of any nature
whatsoever in respect of the debt securities of any person that may be issued
or granted to, or held by, any Grantor while this Agreement is in effect.

 

“Pledged
Equity Interests”  shall mean
all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests,
Pledged Trust Interests and Pledged Alternative Equity Interests.

 

“Pledged LLC Interests” shall mean all
interests of any Grantor now owned or hereafter acquired in any limited
liability company (other than any such interests that are Excluded Assets),
including all limited liability company interests listed on Schedule 4.7(a) hereto
under the heading “Pledged LLC Interests” (as such schedule may be amended or
supplemented from time to time) and the certificates, if any, representing such
limited 

 

7

 

liability company interests
and any interest of such Grantor on the books and records of such limited
liability company and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such limited liability company interests and any other
warrant, right or option to acquire any of the foregoing.

 

“Pledged
Notes” shall mean all promissory notes now owned or hereafter acquired by
any Grantor (other than any such promissory notes that are Excluded Assets),
including those listed on Schedule 4.7(b) (as such schedule may be amended
or supplemented from time to time) and all Intercompany Notes at any time
issued to or held by any Grantor.

 

“Pledged Partnership Interests”  shall mean all interests of any Grantor
now owned or hereafter acquired in any general partnership, limited
partnership, limited liability partnership or other partnership (other than any
such interests that are Excluded Assets), including all partnership interests
listed on Schedule 4.7(a) hereto under the heading “Pledged Partnership
Interests” (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such partnership interests and any
interest of such Grantor on the books and records of such partnership and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such partnership interests and any other warrant, right or option to acquire
any of the foregoing.

 

“Pledged
Security Entitlements” shall mean all security entitlements with respect to
the financial assets listed on Schedule 4.7(c) (as such schedule may
be amended from time to time) and all other security entitlements of any
Grantor.

 

“Pledged Stock” shall mean all shares of
capital stock (other than any such shares that are Excluded Assets) now owned
or hereafter acquired by any Grantor, including all shares of capital stock
listed on Schedule 4.7(a) hereto under the heading “Pledged Stock” (as
such schedule may be amended or supplemented from time to time), and the
certificates, if any, representing such shares and any interest of such Grantor
in the entries on the books of the issuer of such shares and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares and any
other warrant, right or option to acquire any of the foregoing.

 

“Pledged
Trust Interests”  shall mean
all interests of any Grantor now owned or hereafter acquired in a Delaware
business trust or other trust (other than any such interests that are Excluded
Assets), including all trust interests listed on Schedule 4.7(a) hereto
under the heading “Pledged Trust Interests” (as such schedule may be amended or
supplemented from time to time) and the certificates, if any, representing such
trust interests and any interest of such Grantor on the books and records of
such trust or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such trust interests and any other warrant, right or
option to acquire any of the foregoing.

 

8

 

“Proceeds”
shall mean all “proceeds” as such term is defined in Section 9-102(a)(64)
of the New York UCC and, in any event, shall include all dividends or other
income from the Investment Property, collections thereon or distributions or
payments with respect thereto.

 

“Receivable”
shall mean all Accounts and any other right to payment for goods or other
property sold, leased, licensed or otherwise disposed of or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper or classified as a Payment Intangible and whether or not it has been
earned by performance.  References
herein to Receivables shall include any Supporting Obligation or collateral
securing such Receivable.

 

“Second
Lien Administrative Agent” shall have the meaning assigned such term in the
preamble.

 

“Second
Lien Credit Agreement” shall have the meaning assigned such term in the
preamble.

 

“Secured
Parties” shall mean, collectively, the Joint Lead Arrangers, the Second
Lien Administrative Agent, the Collateral Agent and the Lenders.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“Syndication
Agent” shall have the meaning assigned to such term in the preamble.

 

“Trademark
License” shall mean any agreement, whether written or oral, providing for
the grant by or to any Grantor of any right in, to or under any Trademark,
including any of the foregoing referred to in Schedule 4.9(a) (as such
schedule may be amended or supplemented from time to time).

 

“Trademarks”
shall mean (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country, union of
countries, or any political subdivision of any of the foregoing, or otherwise,
and all common-law rights related thereto, including any of the foregoing
listed in Schedule 4.9(a) (as such schedule may be amended or supplemented
from time to time), (ii) the right to, and to obtain, all renewals
thereof, (iii) the goodwill of the business symbolized by the foregoing, (iv) other
source or business identifiers, designs and general intangibles of a like
nature and (v) the right to sue for past, present and future infringements
or dilution of any of the foregoing or for any injury to goodwill, and all
proceeds of the foregoing, including royalties, income, payments, claims,
damages and proceeds of suit.

 

“Trade
Secret License” shall mean any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right in, to or under any
Trade Secret.

 

9

 

“Trade
Secrets” shall mean all trade secrets and all other confidential or
proprietary information and know-how (all of the foregoing being collectively
called a “Trade Secret”), whether or not reduced to a writing or other
tangible form, including all documents and things embodying, incorporating or
describing such Trade Secret, the right to sue for past, present and
future infringements of any Trade Secret and all proceeds of the foregoing,
including royalties, income, payments, claims, damages and proceeds of suit.

 

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

 

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

 

(c)   Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to a Grantor, shall
refer to the property or assets such Grantor has granted as Collateral or the
relevant part thereof.

 

(d)   The expressions “payment in full,” “paid in
full” and any other similar terms or phrases when used herein with respect to
the Borrower Obligations or the Guarantor Obligations shall mean the payment in
full, in immediately available funds, of all of the Borrower Obligations or the
Guarantor Obligations, as the case may be, in each case, unless otherwise
specified, other than indemnification and other contingent obligations not then
due and payable.

 

(e)   The words “include,” “includes” and “including,”
and words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase “without limitation.”

 

(f)   Notwithstanding anything herein to the
contrary, the Liens and security interest granted to the Collateral Agent
pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder are subject to the provisions of the Intercreditor
Agreement.

 

SECTION 2.    GUARANTEE

 

2.1. Guarantee.

 

(a)   Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the Collateral
Agent for its benefit and for the ratable benefit of the other Secured Parties
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations.

 

(b)   If and to the extent required in order
for the Obligations of any Guarantor to be enforceable under applicable
federal, state and other laws relating to the 

 

10

 

insolvency of debtors,
the maximum liability of such Guarantor hereunder shall be limited to the
greatest amount which can lawfully be guaranteed by such Guarantor under such
laws, after giving effect to any rights of contribution, reimbursement and
subrogation arising under Section 2.2. 
Each Guarantor acknowledges and agrees that, to the extent not
prohibited by applicable law, (i) such Guarantor (as opposed to its
creditors, representatives of creditors or bankruptcy trustee, including such
Guarantor in its capacity as debtor in possession exercising any powers of a
bankruptcy trustee) has no personal right under such laws to reduce, or request
any judicial relief that has the effect of reducing, the amount of its
liability under this Agreement, (ii) such Guarantor (as opposed to its
creditors, representatives of creditors or bankruptcy trustee, including such
Guarantor in its capacity as debtor in possession exercising any powers of a
bankruptcy trustee) has no personal right to enforce the limitation set forth
in this Section 2.1(b) or to reduce, or request judicial relief
reducing, the amount of its liability under this Agreement, and (iii) the
limitation set forth in this Section 2.1(b) may be enforced only to
the extent required under such laws in order for the obligations of such
Guarantor under this Agreement to be enforceable under such laws and only by or
for the benefit of a creditor, representative of creditors or bankruptcy
trustee of such Guarantor or other person entitled, under such laws, to enforce
the provisions thereof.

 

(c)   Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time be incurred or permitted in
an amount exceeding the maximum liability of such Guarantor under Section 2.1(b) without,
to the extent permitted by applicable law, impairing the guarantee contained in
this Section 2 or affecting the rights and remedies of any Secured Party
hereunder.

 

(d)   The guarantee contained in this Section 2
shall remain in full force and effect until payment in full of the Obligations,
notwithstanding that from time to time during the term of the Second Lien
Credit Agreement the Borrower may be free from any Borrower Obligations.

 

(e)   No payment made by the Borrower, any of
the Guarantors, any other guarantor or any other person or received or
collected by any Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full, no letter of credit shall be outstanding under the Second Lien Credit
Agreement and all commitments to extend credit under the Second Lien Credit
Agreement shall have been terminated or have expired.

 

2.2. Rights of Reimbursement, Contribution and Subrogation. 
In case any payment is made on account of the Obligations by any Grantor
or is received or collected on account of the Obligations from any Grantor or
its property:

 

11

 

(a)   If such payment is made by the Borrower or
from its property, then, if and to the extent such payment is made on account
of Obligations arising from or relating to a Loan or other extension of credit
made to the Borrower or a Letter of Credit issued for the account of the
Borrower, the Borrower shall not be entitled (i) to demand or enforce
reimbursement or contribution in respect of such payment from any other Grantor
or (ii) to be subrogated to any claim, interest, right or remedy of any
Secured Party against any other person, including any other Grantor or its
property.

 

(b)   If such payment is made by a Guarantor or
from its property, such Guarantor shall be entitled, subject to and upon
payment in full of the Obligations, (i) to demand and enforce
reimbursement for the full amount of such payment from the Borrower and (ii) to
demand and enforce contribution in respect of such payment from each other
Guarantor that has not paid its fair share of such payment, as necessary to
ensure that (after giving effect to any enforcement of reimbursement rights
provided hereby) each Guarantor pays its fair share of the unreimbursed portion
of such payment. For this purpose, the fair share of each Guarantor as to any
unreimbursed payment shall be determined based on an equitable apportionment of
such unreimbursed payment among all Guarantors based on the relative value of
their assets and any other equitable considerations deemed appropriate by a
court of competent jurisdiction.

 

(c)   Until all amounts owing to the Second Lien
Administrative Agent and the other Secured Parties by the Borrower on account
of the Obligations are paid in full, no Letter of Credit shall be outstanding
and the Commitments are terminated, notwithstanding Sections 2.2(a) and
2.2(b), no Grantor shall be entitled, to be subrogated (equally and ratably
with all other Grantors entitled to reimbursement or contribution from any
other Grantor as set forth in this Section 2.2) to any security interest
that may then be held by the Second Lien Administrative Agent or the Collateral
Agent upon any Collateral granted to it in this Agreement nor shall any Grantor
seek or be entitled to seek any contribution or reimbursement from the Borrower
or any other Grantor in respect of payments made by any Grantor hereunder.  Such right of subrogation shall be
enforceable solely against the Grantors, and not against the Secured Parties,
and neither the Second Lien Administrative Agent, the Collateral Agent nor any
other Secured Party shall have any duty whatsoever to warrant, ensure or
protect any such right of subrogation or to obtain, perfect, maintain, hold,
enforce or retain any Collateral for any purpose related to any such right of
subrogation.  If subrogation is demanded
by any Grantor, then (and only after payment in full of the Obligations) the
Second Lien Administrative Agent or the Collateral Agent, as the case may be,
shall deliver to the Grantors making such demand, or to a representative of
such Grantors or of the Grantors generally, an instrument reasonably
satisfactory to the Second Lien Administrative Agent or the Collateral Agent,
as the case may be, transferring, on a quitclaim basis without any recourse,
representation, warranty or obligation whatsoever, whatever security interest
the Second Lien Administrative Agent or the Collateral Agent, as the case may
be, then may hold in whatever Collateral may then exist that was not previously
released or disposed of by the Second Lien Administrative Agent or the
Collateral Agent, as the case may be.

 

(d)   All rights and claims arising under this Section 2.2
or based upon or relating to any other right of reimbursement, indemnification,
contribution or subrogation 

 

12

 

that may at any time
arise or exist in favor of any Grantor as to any payment on account of the
Obligations made by it or received or collected from its property shall be
fully subordinated in all respects to the prior payment in full of all of the
Obligations.  Until payment in full of
the Obligations, no Grantor shall demand or receive any collateral security,
payment or distribution whatsoever (whether in cash, property or securities or
otherwise) on account of any such right or claim.  If any such payment or distribution is made
or becomes available to any Grantor in any bankruptcy case or receivership,
insolvency or liquidation proceeding, such payment or distribution shall be
delivered by the person making such payment or distribution directly to the
Second Lien Administrative Agent, for application to the payment of the Obligations.  If any such payment or distribution is
received by any Grantor, it shall be held by such Grantor in trust, as trustee
of an express trust for the benefit of the Secured Parties, and shall forthwith
be transferred and delivered by such Grantor to the Second Lien Administrative
Agent, in the exact form received and, if necessary, duly endorsed.

 

(e)   The obligations of the Grantors under the
Loan Documents, including their liability for the Obligations and the
enforceability of the security interests granted thereby, are not contingent
upon the validity, legality, enforceability, collectibility or sufficiency of
any right of reimbursement, contribution or subrogation arising under this Section 2.2
and the provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of any Guarantor to the Second Lien Administrative
Agent and Secured Parties, and each Guarantor shall remain liable to the Second
Lien Administrative Agent and the Secured Parties for the full amount
guaranteed by such Guarantor hereunder. 
The invalidity, insufficiency, unenforceability or uncollectibility of
any such right shall not in any respect diminish, affect or impair any such
obligation or any other claim, interest, right or remedy at any time held by
any Secured Party against any Guarantor or its property.  The Secured Parties make no representations
or warranties in respect of any such right and shall have no duty to assure,
protect, enforce or ensure any such right or otherwise relating to any such
right.

 

(f)   Each Grantor reserves any and all other
rights of reimbursement, contribution or subrogation at any time available to
it as against any other Grantor, but (i) the exercise and enforcement of
such rights shall be subject to Section 2.2(d) and (ii) neither
the Second Lien Administrative Agent nor any other Secured Party shall ever
have any duty or liability whatsoever in respect of any such right, except as
provided in the last sentence of Section 2.2(c).

 

2.3. Amendments, etc. with respect to the Borrower
Obligations.  Each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand
for payment of any of the Borrower Obligations made by any Secured Party may be
rescinded by such Secured Party and any of the Borrower Obligations continued,
and the Borrower Obligations, or the liability of any other person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, increased, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by any Secured Party, and the Second Lien
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith 

 

13

 

may be amended, modified,
supplemented or terminated, in whole or in part, as the parties thereto may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by any Secured Party for the payment of the
Borrower Obligations may be sold, exchanged, waived, surrendered or released.  No Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this Section 2
or any property subject thereto.

 

2.4. Guarantee Absolute and Unconditional.  Each Guarantor waives, to the extent
permitted by applicable law, any and all notice of the creation, renewal,
extension or accrual of any of the Borrower Obligations and notice of or proof
of reliance by any Secured Party upon the guarantee contained in this Section 2
or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Secured Parties, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon the guarantee contained in this Section 2.  Each Guarantor waives, to the extent
permitted by applicable law, diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any of
the Guarantors with respect to the Borrower Obligations.  Each Guarantor understands and agrees, to the
extent permitted by applicable law, that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment and performance without regard to (a) the validity or
enforceability of the Second Lien Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Secured Party, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance hereunder) which may at any
time be available to or be asserted by the Borrower or any other person against
any Secured Party, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in any
other instance.  When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, any Secured Party may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as it may have
against the Borrower, any other Guarantor or any other person or against any
collateral security or guarantee for the Borrower Obligations or any right of
offset with respect thereto, and any failure by any Secured Party to make any
such demand, to pursue such other rights or remedies or to collect any payments
from the Borrower, any other Guarantor or any other person or to realize upon
any such collateral security or guarantee or to exercise any such right of
offset, or any release of the Borrower, any other Guarantor or any other person
or any such collateral security, guarantee or right of offset, shall not
relieve any Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of any Secured Party against any Guarantor.  For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

 

2.5. Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any 

 

14

 

of the Borrower
Obligations is rescinded or must otherwise be restored or returned by any
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

2.6. Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Second Lien Administrative Agent without
set-off or counterclaim in Dollars in immediately available funds at the office
of the Second Lien Administrative Agent as specified in the Second Lien Credit
Agreement.

 

SECTION 3.    GRANT
OF SECURITY INTEREST;

CONTINUING LIABILITY UNDER
COLLATERAL

 

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

 

(i)            all Accounts;

 

(ii)           all Chattel Paper;

 

(iii)          all Collateral Accounts and all
Collateral Account Funds;

 

(iv)          all Commercial Tort Claims from time
to time specifically described on Schedule 4.11;

 

(v)           all Contracts;

 

(vi)          all Documents;

 

(vii)         all Equipment;

 

(viii)        all Fixtures;

 

(ix)           all General Intangibles;

 

(x)            all Goods;

 

(xi)           all Instruments;

 

(xii)          all Insurance;

 

(xiii)         all Intellectual Property;

 

15

 

(xiv)        all Inventory;

 

(xv)         all Investment Property;

 

(xvi)        all Letters of Credit and Letter of
Credit Rights;

 

(xvii)       all Money;

 

(xviii)      all books, records, ledger
cards, files, correspondence, customer lists, blueprints, technical
specifications, manuals, computer software, computer printouts, tapes, disks
and other electronic storage media and related data processing software and
similar items that at any time pertain to or evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon; and

 

(xix)         to the extent not otherwise included,
all other personal property, whether tangible or intangible, of the Grantor and
all Proceeds, products, accessions, rents and profits of any and all of the
foregoing and all collateral security, Supporting Obligations and guarantees
given by any person with respect to any of the foregoing;

 

provided that, notwithstanding any other provision set forth
in this Section 3, Collateral shall not include, and this Agreement shall
not, at any time, constitute a grant of a security interest in any property
that is, at such time, an Excluded Asset. 

 

(b)  
Notwithstanding anything herein to the contrary, (i) each Grantor
shall remain liable for all obligations under and in respect of the Collateral
and nothing contained herein is intended or shall be a delegation of duties to
the Second Lien Administrative Agent, the Collateral Agent or any other Secured
Party, (ii) each Grantor shall remain liable under and each of the
agreements included in the Collateral, including any Receivables, any Contracts
and any agreements relating to Pledged Partnership Interests or Pledged LLC
Interests, to perform all of the obligations undertaken by it thereunder all in
accordance with and pursuant to the terms and provisions thereof and none of
the Second Lien Administrative Agent, the Collateral Agent nor any other
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related hereto nor shall the Second Lien Administrative Agent, the Collateral
Agent nor any other Secured Party have any obligation to make any inquiry as to
the nature or sufficiency of any payment received by it or have any obligation
to take any action to collect or enforce any rights under any agreement
included in the Collateral, including any agreements relating to any
Receivables, any Contracts or any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests and (iii) the exercise by the Second
Lien Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral, including any agreements relating to any
Receivables, any Contracts and any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests.

 

(c)   Notwithstanding anything herein to the
contrary, it is the understanding of the parties that the Liens granted
pursuant to Section 3(a) herein shall, prior to the Discharge of
First Lien Obligations (as defined in the Intercreditor Agreement), be subject 

 

16

 

and subordinate (pursuant to the terms and conditions
of the Intercreditor Agreement) to the Liens granted to the First Lien
Administrative Agent for the benefit of the holders of the First Lien
Obligations to secure the First Lien Obligations pursuant to the First Lien
Security Agreement.  Notwithstanding
anything herein to the contrary, the Liens and security interest granted to the
Collateral Agent pursuant to this Agreement and the exercise of any right or
remedy by the Second Lien Administrative Agent or the Collateral Agent
hereunder are subject in all instances to the provisions of the Intercreditor
Agreement.  In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control.  In the event of any conflict between the
terms of this Agreement and the terms of the First Lien Collateral Documents,
the terms of the First Lien Collateral Documents shall control.

 

(d)   Each
of the parties hereto (including the Collateral Agent) acknowledges and agrees
that any provision of this Agreement to the contrary notwithstanding, until the
Discharge of First Lien Obligations (as defined in the Intercreditor
Agreement), the Grantors shall not be required to act or refrain from acting
under this Agreement with respect to the Collateral in any manner that would be
contrary to or would otherwise result in a Default or Event of Default under
the terms and provisions of the First Lien Loan Documents (as defined in the
Intercreditor Agreement) and no such failure to act or refrain from acting
shall constitute a Default or Event of Default under the Loan Documents.

 

SECTION 4.    REPRESENTATIONS
AND WARRANTIES

 

To
induce the Joint Lead Arrangers, the Second Lien Administrative Agent, the
Collateral Agent, the Syndication Agent, the Co-Documentation Agents and the
Lenders to enter into the Second Lien Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby represents and warrants to the Secured Parties
that:

 

4.1. Representations in Second Lien Credit
Agreement.  In the case of each
Guarantor (other than Holdings), the representations and warranties set forth
in Article III of the Second Lien Credit Agreement as they relate to such
Guarantor or to the Loan Documents to which such Guarantor is a party, each of
which is hereby incorporated herein by reference, are true and correct as of
the date hereof in all material respects, and the Secured Parties shall be
entitled to rely on each of them as if they were fully set forth herein.

 

4.2. Title; No Other Liens.  Such Grantor owns each item of the Collateral
free and clear of any and all Liens, including Liens arising as a result of
such Grantor becoming bound (as a result of merger or otherwise) as grantor
under a security agreement entered into by another person, except for Liens
permitted by Section 6.02 of the Second Lien Credit Agreement.

 

4.3. Perfected First Priority Liens.
  The security interests (other than security interests in Excluded
Perfection Assets) granted pursuant to this Agreement (a) upon completion
of the filings and other actions specified on Schedule 4.3 (all of which, in
the case of all filings and other documents referred to on such Schedule have
been delivered to the Second Lien Administrative 

 

17

 

Agent or the Collateral
Agent, and in the case of all Instruments, Chattel Paper and certificated
Pledged Equity Interests and Pledged Debt, to the First Lien Administrative
Agent in accordance with the Intercreditor Agreement, in duly completed and
duly executed form, as applicable, and may be filed by the Second Lien
Administrative Agent or the Collateral Agent at any time) and payment of all
filing fees, will constitute valid fully perfected security interests in all of
the Collateral in favor of the Collateral Agent, for its benefit and for the
ratable benefit of the other Secured Parties, as collateral security for such
Grantor’s Obligations and (b) are prior to all other Liens on the
Collateral, except for Liens expressly permitted by Section 6.02 of the
Second Lien Credit Agreement.  Without
limiting the foregoing but subject to the Intercreditor Agreement, each  Grantor has taken all actions necessary
(except with respect to Excluded Perfection Assets), including those specified
in Section 5.2 to (i) establish the Collateral Agent’s “control”
(within the meanings of Sections 8-106 and 9-106 of the New York UCC) over
any portion of the Investment Property constituting Certificated Securities,
Uncertificated Securities, Securities Entitlements or Commodity Accounts (each
as defined in the New York UCC), (ii) establish the Collateral Agent’s “control”
(within the meaning of Section 9-107 of the New York UCC) over all Letter
of Credit Rights, (iii) establish the Collateral Agent’s control (within
the meaning of Section 9-105 of the New York UCC) over all Electronic
Chattel Paper and (iv) establish the Collateral Agent’s “control” (within
the meaning of Section 16 of the Uniform Electronic Transaction Act as in
effect in the applicable jurisdiction “UETA”) over all “transferable records”
(as defined in UETA).

 

4.4. Name; Jurisdiction of Organization, etc.  On the date hereof, such Grantor’s exact
legal name (as indicated on the public record of such Grantor’s jurisdiction of
formation or organization), jurisdiction of organization, organizational
identification number, if any, and the location of such Grantor’s chief
executive office or sole place of business are specified on Schedule 4.4.  On the date hereof, each Grantor is organized
solely under the law of the jurisdiction so specified and has not filed any
certificates of domestication, transfer or continuance in any other
jurisdiction.  On the date hereof, except
as specified on Schedule 4.4, no such Grantor has changed its name,
jurisdiction of organization, chief executive office or sole place of business
in any way (e.g. by merger, consolidation, change in corporate form or
otherwise) within the past five years and has not within the last five years
become bound (whether as a result of merger or otherwise) as a grantor under a
security agreement (other than in respect of a Lien permitted by Section 6.02
of the Second Lien Credit Agreement) entered into by another person, which has
not heretofore been terminated.

 

4.5. Inventory
and Equipment.  None of the Inventory
or Equipment that is included in the Collateral is in the possession of an
issuer of a negotiable document (as defined in Section 7-104 of the New
York UCC) therefor or is otherwise in the possession of any bailee or
warehouseman.

 

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

 

4.7. Investment
Property.  (a)   Schedule 4.7(a) hereto (as such schedule
may be amended or supplemented from time to time by notice from one or more
Grantors to the Second Lien Administrative Agent) sets forth under the headings
“Pledged Stock,” “Pledged LLC Interests,” “Pledged Partnership Interests” and “Pledged
Trust Interests,” respectively, all of the Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests owned by
any Grantor and such Pledged Equity Interests 

 

18

 

constitute the percentage
of issued and outstanding shares of stock, percentage of membership interests,
percentage of partnership interests or percentage of beneficial interest of the
respective issuers thereof indicated on such schedule.  Schedule 4.7(b) (as such schedule may be
amended or supplemented from time to time by notice from one or more Grantors
to the Second Lien Administrative Agent) sets forth under the heading “Pledged
Debt Securities” or “Pledged Notes” all of the Pledged Debt Securities and
Pledged Notes owned by any Grantor, and except as set forth on Schedule 4.7(b) (as
such schedule may be amended or supplemented from time to time by notice from
one or more Grantors to the Second Lien Administrative Agent and the Collateral
Agent) all of such Pledged Debt Securities and Pledged Notes have been duly
authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law and constitutes all of the issued and outstanding
inter-company indebtedness evidenced by an instrument or certificated security
of the respective issuers thereof owing to such Grantor; provided, however,
that representations set forth in this sentence shall be limited in the case of
Pledged Equity Interests or Pledged Debt Securities not issued by Loan Parties
to the knowledge of such Grantor. 
Schedule 4.7(c) hereto (as such schedule may be amended from time
to time by notice from one or more Grantors to the Second Lien Administrative
Agent and the Collateral Agent) sets forth under the heading “Commodities
Accounts” all of the “Commodities Accounts” in which each  Grantor has an interest and in which the
value of each such account is in excess of $1,000,000.  Each  Grantor
is the sole entitlement holder or customer of each such account, and no Grantor
has consented to or is otherwise aware of any person having “control” (within
the meanings of Sections 8-106, 9-106 and 9-104 of the New York UCC) over, or
any other interest in, Commodity Account, in each case in which such Grantor
has an interest, or any commodities or other property credited thereto other
than the First Lien Administrative Agent.

 

(b)   The shares of Pledged Equity Interests
pledged by such Grantor hereunder constitute all of the issued and outstanding
shares of all classes of Equity Interests in each Issuer owned by such Grantor
(other than any Equity Interests that are Excluded Assets).

 

(c)   The Pledged Equity Interests issued by any
Subsidiary have been duly and validly issued and are fully paid and
nonassessable (except for shares of any unlimited liability company which are
assessable in certain circumstances).

 

(d)   None of the terms of any uncertificated
Pledged LLC Interests and Pledged Partnership Interests expressly provide that
they are securities governed by Article 8 of the Uniform Commercial Code
in effect from time to time in the “issuer’s jurisdiction” of each Issuer
thereof (as such term is defined in the Uniform Commercial Code in effect in
such jurisdiction).

 

19

 

(e)   All other certificated Pledged LLC Interests
and Pledged Partnership Interests, if any, do not expressly provide that they
are “securities” for purposes of Section 8-103(c) of the Uniform
Commercial Code as in effect in any relevant jurisdiction.

 

(f)   Such Grantor is the record and beneficial
owner of, and has good and marketable title to, the Investment Property pledged
by it hereunder, free of any and all Liens or options in favor of, or claims
of, any other person, except Liens permitted by Section 6.02 of the Second
Lien Credit Agreement, and there are no outstanding warrants, options or
other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any Pledged Equity Interests.

 

(g)   Each Issuer that is not a Grantor hereunder
has executed and delivered to the Collateral Agent an Acknowledgment and
Consent, in substantially the form of Exhibit A, to the pledge of the
Pledged Collateral pursuant to this Agreement.

 

4.8. Receivables.  (a)  No amount payable to such
Grantor under or in connection with any Receivable that is included in the
Collateral is evidenced by any Instrument or Tangible Chattel Paper with a
value in excess of $1,000,000 which has not been delivered to the First Lien
Administrative Agent or constitutes Electronic Chattel Paper that has not
been subjected to the control (within the meaning of Section 9-105 of the
New York UCC) of the Collateral Agent.

 

4.9. Intellectual
Property.  (a)  Schedule
4.9(a) lists all material Intellectual Property which is registered with a
Governmental Authority or is the subject of an application for registration and
all material unregistered Intellectual Property (other than unregistered
Copyrights), in each case which is owned by such Grantor in its own name on the
date hereof (collectively, the “Owned Intellectual Property”).  Except as set forth in Schedule 4.9(a) and
except as would not reasonably be expected to have a Material Adverse Effect,
such Grantor is the exclusive owner of the entire and unencumbered right, title
and interest in and to all such Owned Intellectual Property and is otherwise
entitled to use, and grant to others the right to use, all such Owned Intellectual
Property subject only to the license terms of the licensing or franchise
agreements referred to in paragraph (c) below.  Such Grantor has the right to use all
Intellectual Property which it uses in its business, but does not own
(collectively, the “Licensed Intellectual Property”).

 

(b)   On the date hereof, all Owned Intellectual
Property and, to such Grantor’s knowledge, all Licensed Intellectual Property
(collectively, the “Material Intellectual Property”), is subsisting,
unexpired and has not been abandoned, except as would not reasonably be
expected to have a Material Adverse Effect. 
Neither the operation of such Grantor’s business as currently conducted
or as contemplated to be conducted nor the use of the Intellectual Property in
connection therewith conflicts with, infringes, misappropriates, dilutes, misuses or
otherwise violates the intellectual property rights of any other person, except
in each case as would not reasonably be expected to have a Material Adverse
Effect.

 

20

 

(c)   Except as set forth in Schedule 4.9(c), on
the date hereof (i) none of the Material Intellectual Property is the
subject of any licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor and (ii) there are no other agreements,
obligations, orders or judgments which materially affect the use of any
Material Intellectual Property.

 

(d)   The rights of such Grantor in or to the
Material Intellectual Property do not conflict with or infringe upon the rights
of any third party, and no claim has been asserted that the use of such
Intellectual Property does or may infringe upon the rights of any third party
except in each case as would not reasonably be expected to have a Material
Adverse Effect.

 

(e)   No action or proceeding is pending, or, to
such Grantor’s knowledge, threatened, on the date hereof (i) seeking to
limit, cancel or question any Owned Intellectual Property, (ii) alleging
that any services provided by, processes used by, or products manufactured or
sold by such Grantor infringe any patent, trademark, copyright, or any other
right of any other person or (iii) alleging that any Material Intellectual
Property is being licensed, sublicensed or used in violation of any
intellectual property or any other right of any other person, in each case,
which would reasonably be expected to have a material adverse effect on the
value of the Collateral, taken as a whole. 
On the date hereof, to such Grantor’s knowledge, except as set forth on
Schedule 4.9(f) no person is engaging in any activity that infringes upon,
or is otherwise an unauthorized use of, any Material Intellectual Property or
upon the rights of such Grantor therein. 
Except as set forth in Schedule 4.9(f) as of the date hereof, such
Grantor has not granted any license, release, covenant not to sue,
non-assertion assurance, or other right to any person with respect to any part
of the Material Intellectual Property. 
The consummation of the transactions contemplated by this Agreement
(including the enforcement of remedies) will not result in the termination or
impairment of any of the Material Intellectual Property the loss of which would
be reasonably likely to have a Material Adverse Effect.

 

(f)   To such Grantor’s knowledge, with respect to
each Copyright License, Trademark License, Trade Secret License and Patent
License which relates to Material Intellectual Property or the loss of which
could otherwise have a Material Adverse Effect: 
(i) such license is in full force and effect and represents the
entire agreement between the respective licensor and licensee with respect to
the subject matter of such license; (ii) such license will not cease to be
valid and binding and in full force and effect on terms identical to those
currently in effect as a result of the rights and interests granted herein, nor
will the grant of such rights and interests constitute a breach or default
under such license or otherwise give the licensor or licensee a right to
terminate such license; (iii) such Grantor has not received any notice of
termination or cancellation under such license; (iv) such Grantor has not
received any notice of a breach or default under such license, which breach or
default has not been cured; (v) such Grantor has not granted to any other
person any rights, adverse or otherwise, under such license; and (vi) such
Grantor is not in breach or default in any material respect, and no event has
occurred that, with notice and/or lapse of time, would constitute such a breach
or default or permit termination, modification or acceleration under such
license, except in each case as would not have a material adverse effect on the
value of the Collateral, taken as a whole.

 

21

 

(g)   Except in each case as would not reasonably
be expected to have a Material Adverse Effect, (i) none of the Trade
Secrets of such Grantor that are material to its business have been used,
divulged, disclosed or appropriated to the detriment of such Grantor for the
benefit of any other person; (ii) no employee, independent contractor or
agent of such Grantor has misappropriated any trade secrets of any other person
in the course of the performance of his or her duties as an employee,
independent contractor or agent of such Grantor; and (iii) no employee,
independent contractor or agent of such Grantor is in default or breach of any
term of any employment agreement, non-disclosure agreement, assignment of
inventions agreement or similar agreement or contract relating in any way to
the protection, ownership, development, use or transfer of such Grantor’s
Intellectual Property.

 

(h)   Such Grantor has made all filings and
recordations necessary to adequately protect (in its reasonable business
judgment) its interest in its Material Intellectual Property, including
recordation of its interests in the Patents and Trademarks with the United
States Patent and Trademark Office and in corresponding national and
international patent offices, and recordation of any of its interests in the
Copyrights with the United States Copyright Office and in corresponding
national and international copyright offices.

 

(i)   Except as would not reasonably be expected to
have a Material Adverse Effect, such Grantor has taken all commercially
reasonable steps to use consistent standards of quality in the manufacture,
distribution and sale of all products sold and provision of all services
provided under or in connection with any item of Intellectual Property and has
taken all reasonable steps to ensure that all licensed users of any kind of
Intellectual Property use such consistent standards of quality.

 

(j)   Except as would not reasonably be expected to
have a Material Adverse Effect, no Grantor is subject to any settlement or
consents, judgment, injunction, order, decree, covenants not to sue,
non-assertion assurances or releases that would impair the validity or
enforceability of, or such Grantor’s rights in, any Material Intellectual
Property.

 

4.10.        Letters
of Credit and Letter of Credit Rights. 
No Grantor is a beneficiary or assignee under any letter of credit with
a face amount in excess of $1,000,000 (including any “Letter of Credit”) other
than the letters of credit described on Schedule 4.10 (as such schedule may be
amended or supplemented from time to time). 
With respect to any letters of credit in excess of $1,000,000 in face
amount that are by their terms transferable, each Grantor has caused (or, in
the case of the letters of credit that are specified on Schedule 4.10 on the
date hereof in excess of $1,000,000 in face amount, will use commercially
reasonable efforts to cause) all issuers and nominated persons under letters of
credit in which the Grantor is the beneficiary or assignee to consent to the
assignment of such letter of credit to the First Lien Administrative Agent or
the Second Lien Administrative Agent, as applicable in accordance with the
Intercreditor Agreement, and has agreed that upon the occurrence of an Event of
Default it shall cause all payments thereunder to be made to the Collateral
Account or an account designated by the First Lien Administrative Agent, as
applicable in accordance with the Intercreditor Agreement.  With respect to any letters of credit in
excess of $1,000,000 in face amount that are not transferable, each Grantor
shall obtain (or, in the case of the letters of credit that are specified 

 

22

 

on Schedule 4.10 on the
date hereof in excess of $1,000,000 in face amount, use commercially reasonable
efforts to obtain) the consent of the issuer thereof and any nominated person
thereon to the assignment of the proceeds of the released letter of credit to
the First Lien Administrative Agent or the Second Lien Administrative Agent, as
applicable in accordance with the Intercreditor Agreement, in accordance with Section 5-114(c) of
the New York UCC.

 

4.11.        Commercial
Tort Claims.  No Grantor has any
Commercial Tort Claims as of the date hereof in excess of $1,000,000 and,
except as specifically described on Schedule 4.11 (as such schedule may be
amended or supplemented from time to time), no Grantor has any Commercial Tort
Claims after the date hereof in excess of $1,000,000.

 

SECTION 5.  COVENANTS

 

Each
Grantor covenants and agrees with the Secured Parties that, from and after the
date of this Agreement until the Obligations shall have been paid in full, and
all commitments to extend credit under the Second Lien Credit Agreement shall
have expired or been terminated:

 

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

 

5.2. Delivery
and Control of Certain Collateral.  (a)  If
any of the Collateral is or shall become evidenced or represented by any
Certificated Security or Tangible Chattel Paper, such Certificated Security or
Tangible Chattel Paper shall be delivered promptly to the First Lien
Administrative Agent or the Collateral Agent, as applicable in accordance with
the Intercreditor Agreement, duly endorsed, if applicable, in a manner
reasonably satisfactory to the Second Lien Administrative Agent, to be held as
Collateral pursuant to this Agreement, and all of such property owned by any
Grantor as of the Closing Date shall be delivered on the Closing Date.  Any Pledged Collateral evidenced or
represented by any Instrument or Negotiable Document shall be delivered
promptly to the First Lien Administrative Agent or the Collateral Agent, as
applicable in accordance with the Intercreditor Agreement, duly endorsed, if
applicable, in a manner reasonably satisfactory to such Collateral Agent, to be
held as Collateral pursuant to this Agreement, and all of such property owned
by any Grantor as of the Closing Date shall be delivered on the Closing Date.
Notwithstanding the foregoing, no Instrument, Tangible Chattel Paper, Pledged
Debt Security constituting a Certificated Security or Negotiable Document shall
be required to be delivered to the First Lien Administrative Agent or the
Collateral Agent, as applicable in accordance with the Intercreditor Agreement,
pursuant to this clause (a) if the value thereof is less than $1,000,000
individually or $5,000,000 in the aggregate.

 

(b)   If any of the Collateral is or shall
constitute “Electronic Chattel Paper” (under Article 9 of the UCC) such
Grantor shall ensure (to the Second Lien Administrative Agent’s reasonable
satisfaction) that (i) a single authoritative copy exists which is unique,

 

23

 

identifiable, unalterable
(except as provided in clauses (iii), (iv) and (v) of this paragraph),
(ii) such authoritative copy identifies the First Lien Administrative
Agent or the Collateral Agent, as applicable in accordance with the
Intercreditor Agreement, as the assignee and is communicated to and maintained
by the Collateral Agent or its designee, (iii) copies or revisions that
add or change the assignee of the authoritative copy can only be made with the
participation of the First Lien Administrative Agent or the Collateral Agent,
as applicable in accordance with the Intercreditor Agreement, (iv) each
copy of the authoritative copy and any copy of a copy is readily identifiable
as a copy and not the authoritative copy and (v) any revision of the
authoritative copy is readily identifiable as an authorized or unauthorized
revision; provided that such actions shall not be required to be taken until
the aggregate face amount of the Electronic Chattel Paper included in the
Collateral exceeds $1,000,000.

 

(c)   If any Collateral with a value in excess of
$1,000,000 shall become evidenced or represented by an Uncertificated Security,
such Grantor shall cause the Issuer thereof either (i) to register the
First Lien Administrative Agent or the Collateral Agent, as applicable in
accordance with the Intercreditor Agreement, as the registered owner of such
Uncertificated Security, upon original issue or registration of transfer or (ii) to
agree in writing with such Grantor and the Second Lien Administrative Agent
that such Issuer will comply with instructions with respect to such
Uncertificated Security originated by the Second Lien Administrative Agent or
the Collateral Agent, subject to the Intercreditor Agreement, without further
consent of such Grantor, such agreement to be in substantially the form of Exhibit C,
or such other form as may be reasonably agreed to by the Second Lien
Administrative Agent, and such actions shall be taken on or prior to the
Closing Date with respect to any Uncertificated Securities owned as of the
Closing Date by any Grantor.

 

(d)   If any of the Collateral is or shall become
evidenced or represented by a Commodity Contract, such Grantor shall cause the
Commodity Intermediary with respect to such Commodity Contract to agree in
writing with such Grantor and the Second Lien Administrative Agent that such
Commodity Intermediary will apply any value distributed on account of such
Commodity Contract as directed by the Second Lien Administrative Agent or the
Collateral Agent without further consent of such Grantor, such agreement to be
in the form reasonably agreed to by the Second Lien Administrative Agent
subject to the Intercreditor Agreement.

 

(e)   In the case of any transferable letters of
credit with a face amount in excess of $1,000,000, such Grantor shall use
commercially reasonable efforts to obtain the consent of any issuer thereof to
the transfer of such letter of credit to the First Lien Administrative Agent or
the Collateral Agent, as applicable in accordance with the Intercreditor
Agreement.  In the case of any other
letter of credit rights in excess of $1,000,000 such Grantor shall use
commercially reasonable efforts to obtain the consent of the issuer thereof and
any nominated person thereon to the assignment of the proceeds of the related
letter of credit to the First Lien Administrative Agent or the Collateral Agent,
as applicable in accordance with the Intercreditor Agreement, in accordance
with Section 5-114(c) of the New York UCC.

 

24

 

5.3. Maintenance
of Insurance.    Such
Grantor will maintain insurance on all its property in compliance with Section 5.02
of the Second Lien Credit Agreement.

 

5.4. Maintenance
of Perfected Security Interest; Further Documentation.   Such Grantor shall maintain each of the
security interests created by this Agreement as a security interest having at
least the perfection and priority described in Section 4.3 and shall
defend such security interest against the claims and demands of all persons
whomsoever except as otherwise permitted by Section 6.02 of the First Lien
Credit Agreement, subject to the provisions of Section 8.15.

 

(b)   At any time and from time to time, upon the
written request of the Second Lien Administrative Agent, subject to the
Intercreditor Agreement, and at the sole expense of such Grantor, such Grantor
shall promptly and duly authorize, execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the Second
Lien Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby and (ii) in
the case of Investment Property subject to the requirements of Section 5.2
and any other relevant Collateral, taking any actions necessary to enable the
Collateral Agent to obtain “control” (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.

 

5.5. Changes in Locations, Name, Jurisdiction
of Incorporation, etc.  Such Grantor
shall give 10 days’ written notice to the Second Lien Administrative Agent and
delivery to the Second Lien Administrative Agent of duly authorized and, where
required, executed copies of all additional financing statements and other
documents reasonably requested by the Second Lien Administrative Agent to
maintain the validity, perfection and priority of the security interests
provided for herein after any of the following:

 

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

 

(ii)           a change in its legal name, identity
or structure to such an extent that any financing statement filed by the Second
Lien Administrative Agent in connection with this Agreement would become
misleading.

 

5.6. Investment
Property.   (a)  If such
Grantor shall become entitled to receive or shall receive any stock or other
ownership certificate (including any certificate representing a stock dividend
or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Equity Interests in any
issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of or other ownership interests in the Pledged Equity
Interests, or otherwise in respect thereof, such Grantor shall accept the same
as the agent of the Secured Parties, hold the same in trust for the Secured
Parties and deliver the same forthwith to the First Lien Administrative Agent
or the Collateral Agent, as applicable in accordance with the Intercreditor
Agreement, in the exact 

 

25

 

form received, duly
endorsed by such Grantor to the Collateral Agent, if required, together with an
undated stock power or similar instrument of transfer covering such certificate
duly executed in blank by such Grantor and with, if such First Lien
Administrative Agent or Collateral Agent so requests, signature guaranteed, to
be held by such First Lien Administrative Agent or Collateral Agent, subject to
the terms hereof, as additional collateral security for the Obligations.  If an Event of Default shall occur and be
continuing, (i) any sums paid upon or in respect of the Pledged Equity
Interests upon the liquidation or dissolution of any Issuer shall be paid over
to the First Lien Administrative Agent or the Collateral Agent, as applicable
in accordance with the Intercreditor Agreement, to be held by it hereunder as
additional collateral security for the Obligations and (ii) in case any
distribution of capital shall be made on or in respect of the Pledged Equity
Interests or any property shall be distributed upon or with respect to the
Pledged Equity Interests pursuant to the recapitalization or reclassification
of the capital of any issuer thereof or pursuant to the reorganization thereof,
the property so distributed shall, unless otherwise subject to a perfected
security interest in favor of the Second Lien Administrative Agent, be
delivered to the First Lien Administrative Agent or the Collateral Agent, as
applicable in accordance with the Intercreditor Agreement, to be held by it
hereunder as additional collateral security for the Obligations.  If any sums of money or property so paid or
distributed in respect of the Pledged Equity Interests shall be received by
such Grantor, such Grantor shall, until such money, to the extent required
pursuant to (i) above, or property is paid or delivered to such First Lien
Administrative Agent or Collateral Agent, hold such money or property in trust
for the Secured Parties, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.

 

(b)   Without the prior written consent of the
First Lien Administrative Agent or the Second Lien Administrative Agent, as
applicable in accordance with the Intercreditor Agreement, such Grantor shall
not (i) vote to enable, or take any other action to permit, any issuer of
Pledged Equity Interests to issue any stock, partnership interests, limited
liability company interests or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase
or exchange for any stock, partnership interests, limited liability company
interests or other equity securities of any nature of any such issuer (except,
in each case, pursuant to a transaction expressly permitted by the Second Lien
Credit Agreement), (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, any of the Investment Property
constituting Collateral or Proceeds thereof or any interest therein (except, in
each case, pursuant to a transaction permitted by the Second Lien Credit
Agreement), (iii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any person with respect to, any of the Investment
Property or Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement or any Lien permitted thereon pursuant to Section 6.02
of the Second Lien Credit Agreement, (iv) enter into any agreement or
undertaking (other than the Intercreditor Agreement or any replacement thereof)
restricting the right or ability of such Grantor or the Collateral Agent to
sell, assign or transfer any of the Investment Property or Proceeds thereof or
any interest therein or except as permitted by the First Lien Credit Agreement,
or (v) cause or permit any Issuer of any Pledged Partnership Interests or
Pledged LLC Interests which are not securities (for purposes of the New York
UCC) on the date hereof to elect or otherwise take any action to cause such
Pledged Partnership Interests or Pledged LLC Interests to be treated as 

 

26

 

securities for purposes
of the New York UCC; provided, however, notwithstanding the
foregoing, if any Issuer of any Pledged Partnership Interests or Pledged LLC
Interests takes any such action in violation of the provisions in this clause
(v), such Grantor shall promptly notify the Second Lien Administrative Agent
and the Collateral Agent in writing of any such election or action and, in such
event, shall take all steps necessary or advisable to establish the Collateral
Agent’s “control” thereof.

 

(c)   In the case of each Grantor which is an
Issuer, such Issuer agrees that (i) it shall be bound by the terms of this
Agreement relating to the Pledged Collateral issued by it and shall comply with
such terms insofar as such terms are applicable to it, (ii) it shall
notify the Second Lien Administrative Agent concurrently with delivery of the
financial statements required under Section 5.04(b) of the First Lien
Credit Agreement in writing of the occurrence of any of the events described in
Section 5.7(a) with respect to the Pledged Collateral issued by it
and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) or 6.7 with respect to the Pledged
Collateral issued by it.  In addition,
each Grantor which is either an Issuer or an owner of any Pledged Collateral
hereby consents to the grant by each other Grantor of the security interest
hereunder in favor of the Collateral Agent and to the transfer of any Pledged
Collateral to the Collateral Agent or its nominee following an
Event of Default and to the substitution of the Collateral Agent or its nominee
as a partner, member or shareholder of the Issuer of the related Pledged
Collateral.

 

5.7. Intellectual
Property. Except as would not reasonably be expected to have a Material
Adverse Effect (a)  Such Grantor (either itself or through licensees)
shall (i) to the extent commercially reasonable, continue to use each
Trademark material to its business on each and every trademark class of goods
applicable to its current line as reflected in its current catalogs, brochures
and price lists in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) maintain as in the past the quality
of products and services offered under such Trademark and take all necessary
steps to ensure that all licensed users of such Trademark maintain as in the
past such quality, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable
Requirements of Law, (iv) not adopt or use any mark which is confusingly
similar or a colorable imitation of such Trademark unless the Collateral Agent,
for its benefit and for the ratable benefit of the other Secured Parties, shall
obtain a perfected security interest in such mark pursuant to this Agreement
and the Intellectual Property Security Agreement, and (v) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark could reasonably be expected to become
invalidated or impaired in any way.

 

(b)   Such Grantor (either itself or through
licensees) shall not do any act, or omit to do any act, whereby any Patent
owned by such Grantor material to its business could reasonably be expected to
become forfeited, abandoned or dedicated to the public.

 

(c)   Such Grantor (either itself or through
licensees) (i) shall employ each Copyright material to its business and (ii) shall
not (and shall not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of such Copyrights
could reasonably be expected to become invalidated or 

 

27

 

otherwise impaired.  Such Grantor shall not (either itself or
through licensees) do any act whereby any material portion of such Copyrights
could reasonably be expected to fall into the public domain.

 

(d)   Such Grantor (either itself or through
licensees) shall not knowingly do any act that uses any Material Intellectual
Property to infringe, misappropriate or violate the intellectual property
rights of any other person in any material respect.

 

(e)   Such Grantor (either itself or through
licensees) shall use proper statutory notice in connection with the use of the
Material Intellectual Property.

 

(f)   Such Grantor shall notify the Second Lien
Administrative Agent and the Collateral Agent promptly if it knows, or has
reason to know, that any application or registration relating to any Material
Intellectual Property may become forfeited, abandoned or dedicated to the
public, or of any material adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor’s
ownership of, or the validity of, any Material Intellectual Property or such
Grantor’s right to register the same or to own and maintain the same.

 

(g)   Promptly upon such Grantor’s
acquisition or creation of any copyrightable work, invention, trademark or
other similar property that is material to the business of such Grantor, apply
for registration thereof with the United States Copyright Office, the United
States Patent and Trademark Office and any other appropriate office.  Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property that is material to the business of
such Grantor with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, such Grantor shall report such filing to the
Second Lien Administrative Agent within 45 days after the last day of the
fiscal quarter in which such filing occurs (or 110 days if such filing occurs
in the fourth fiscal quarter of a fiscal year). 
Upon request of the Second Lien Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Second Lien Administrative Agent may reasonably
request to evidence the Secured Parties’ security interest in any Copyright,
Patent, Trademark or other Intellectual Property of such Grantor and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby.

 

(h)   Such Grantor shall take all reasonable and
necessary steps, including in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to
maintain and pursue each application (and to obtain the relevant registration)
and to maintain each registration of Intellectual Property material to its
business, including the payment of required fees and taxes, the filing of
responses to office actions issued by the United States Patent and Trademark
Office and the United States Copyright Office, the filing of applications for
renewal or extension, the filing of affidavits 

 

28

 

of use and affidavits of
incontestability, the filing of divisional, continuation, continuation-in-part,
reissue, and renewal applications or extensions, the payment of maintenance
fees, and the participation in interference, reexamination, opposition,
cancellation, infringement and misappropriation proceedings.

 

(i)   Such Grantor (either itself or through
licensees) shall not, without the prior written consent of the Second Lien
Administrative Agent, discontinue use of or otherwise abandon any of its
Intellectual Property, or abandon any application or any right to file an
application for letters patent, trademark, or copyright, unless such Grantor
shall have previously determined that such use or the pursuit or maintenance of
such Intellectual Property is no longer desirable in the conduct of such
Grantor’s business and that the loss thereof could not reasonably be expected
to have a Material Adverse Effect and, in which case, such Grantor shall give
prompt notice of any such abandonment to the Second Lien Administrative Agent
in accordance herewith.

 

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

 

(k)   Such Grantor agrees that, should it obtain an
ownership interest in any item of intellectual property which is not, as of the
Closing Date, a part of the Intellectual Property Collateral (the “After-Acquired
Intellectual Property”), (i) the provisions of Section 3 shall
automatically apply thereto, (ii) any such After-Acquired Intellectual
Property, and in the case of trademarks, the goodwill of the business connected
therewith or symbolized thereby, shall automatically become part of the
Intellectual Property Collateral, (iii) it shall give, within 45 days
after the last day of the fiscal quarter in which such Grantor acquires such
ownership interest (or 110 days if such filing occurs in the fourth fiscal
quarter of a fiscal year), written notice thereof to the Second Lien
Administrative Agent in accordance herewith, and (iv) it shall provide the
Second Lien Administrative Agent within 45 days after the last day of the
fiscal quarter in which such Grantor acquires such ownership interest (or 90
days if such filing occurs in the fourth fiscal quarter of a fiscal year) with
an amended Schedule 4.9(a) and take the actions specified in 5.8(m).

 

(l)   Such Grantor agrees to execute an
Intellectual Property Security Agreement with respect to its Intellectual
Property in substantially the form of Exhibit B-1 in order to record the
security interest granted herein to the Collateral Agent for its benefit and
for the ratable benefit of the other Secured Parties with the United States
Patent and Trademark Office, the United States Copyright Office, and any other
applicable Governmental Authority.

 

29

 

(m)   Such Grantor agrees to execute an
After-Acquired Intellectual Property Security Agreement with respect to its
After-Acquired Intellectual Property in substantially the form of Exhibit B-2
in order to record the security interest granted herein to the Collateral Agent
for its benefit and for the ratable benefit of the other Secured Parties with
the United States Patent and Trademark Office, the United States Copyright
Office and any other applicable Governmental Authority.

 

(n)   Such Grantor shall take all steps
reasonably necessary to protect the secrecy of all Trade Secrets material to
its business, including entering into confidentiality agreements with employees
and labeling and restricting access to secret information and documents.

 

5.8. Commercial Tort Claims.  Such Grantor shall advise the Second Lien
Administrative Agent concurrently with delivery of the financial statements
required under Section 5.04(b) of the First Lien Credit Agreement of
any Commercial Tort Claim held by such Grantor in excess of $1,000,000 and
shall promptly execute a supplement to this Agreement in form and substance
reasonably satisfactory to the Second Lien Administrative Agent to grant a
security interest in such Commercial Tort Claim to the Collateral Agent for its
benefit and for the ratable benefit of the other Secured Parties.

 

SECTION 6.  REMEDIAL
PROVISIONS

 

6.1. Certain
Matters Relating to Receivables.  (a)  Upon
the occurrence and during the continuance of any Event of Default, the Second
Lien Administrative Agent shall have the right (but shall in no way be
obligated) to make test verifications of the Receivables that are included in
the Collateral in any manner and through any medium that it reasonably
considers advisable, and each Grantor shall furnish all such assistance and
information as the Second Lien Administrative Agent may reasonably require in
connection with such test verifications. 
At any time and from time to time following the occurrence and during
the continuance of any Event of Default, upon the Second Lien Administrative
Agent’s request and at the expense of the relevant Grantor, such Grantor shall
cause independent public accountants or others reasonably satisfactory to the
Second Lien Administrative Agent to furnish to the Second Lien Administrative
Agent, the Collateral Agent or any other Secured Party reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.

 

(b)   The Second Lien Administrative Agent hereby
authorizes each Grantor to collect such Grantor’s Receivables, subject to the
Second Lien Administrative Agent’s direction and control and subject to the
terms of the Intercreditor Agreement, and each Grantor hereby
agrees to continue to collect all amounts due or to become due to such Grantor
under the Receivables and any Supporting Obligation and diligently exercise
each material right it may have under any Receivable and any Supporting
Obligation, in each case, at its own expense; provided, however,
that the Second Lien
Administrative Agent may curtail or terminate said authority at any time after
the occurrence and during the continuance of an Event of Default.  If required by the Second Lien Administrative
Agent at any time after the occurrence and during the continuance of an Event
of Default, any payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any 

 

30

 

event, within two
Business Days) deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Second Lien Administrative Agent if required,
in a Collateral Account maintained under the sole dominion and control of the
Collateral Agent, subject to withdrawal by the Collateral Agent or the Second
Lien Administrative Agent for the account of the Secured Parties only as
provided in Section 6.5, and (ii) until so turned over, shall be held
by such Grantor in trust for the Secured Parties, segregated from other funds
of such Grantor.  Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the
deposit.

 

(c)   At the Second Lien Administrative Agent’s
reasonable request (and subject to the terms of the Intercreditor Agreement)
after the occurrence and during the continuance of any Event of Default, each
Grantor shall deliver to the Second Lien Administrative Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables that are included in the Collateral,
including all original orders, invoices and shipping receipts.

 

6.2. Communications with Obligors; Grantors
Remain Liable.

 

(a)   The Second Lien Administrative Agent or the
Collateral Agent each in their own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the Second Lien Administrative Agent’s satisfaction the
existence, amount and terms of any Receivables or Contracts.

 

(b)   At any time after the occurrence and during
the continuance of any Event of Default, the Second Lien Administrative Agent
or the Collateral Agent may at any time notify, or require any Grantor to so
notify, the Account Debtor or counterparty on any Receivable or Contract of the
security interest of the Collateral Agent therein.  In addition, after the occurrence and during
the continuance of an Event of Default, the Second Lien Administrative Agent,
subject to the terms of the Intercreditor Agreement, may upon written notice to
the applicable Grantor, notify, or require any Grantor to notify, the Account
Debtor or counterparty to make all payments under the Receivables and/or
Contracts directly to the Collateral Agent;

 

(c)   Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Receivables
and Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto.  No
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) or Contract by reason of or arising out of
this Agreement or the receipt by any Secured Party of any payment relating
thereto, nor shall any Secured Party be obligated in any manner to perform any
of the obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto) or Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to 

 

31

 

enforce any performance
or to collect the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.

 

6.3. Pledged
Collateral.  (a)  Unless an
Event of Default shall have occurred and be continuing and the Second Lien
Administrative Agent shall have given notice to the relevant Grantor of the
Second Lien Administrative Agent’s intent to exercise its corresponding rights
pursuant to Section 6.3(b), each Grantor shall be permitted to receive all
cash dividends paid in respect of the Pledged Equity Interests and all payments
made in respect of the Pledged Notes, to the extent permitted in the Second
Lien Credit Agreement, and to exercise all voting and corporate rights with
respect to the Pledged Collateral.

 

(b)   If an Event of Default shall occur and be
continuing and the Second Lien Administrative Agent shall have given notice to
the relevant Grantor of the Second Lien Administrative Agent’s intent to
exercise its rights pursuant to this Section 6.3(b):  (i)  all rights of each  Grantor to exercise or refrain from
exercising the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in the First Lien Administrative Agent or the Second
Lien Administrative Agent, as applicable in accordance with the Intercreditor
Agreement, who shall thereupon have the sole right, but shall be under no
obligation, to exercise or refrain from exercising such voting and other
consensual rights, (ii) the First Lien Administrative Agent or the
Collateral Agent, as applicable in accordance with the Intercreditor Agreement,
shall have the right, without notice to any Grantor, to transfer all or any
portion of the Investment Property to its name or the name of its nominee or
agent and (iii) the Second Lien Administrative Agent shall have the right
to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the Obligations
in such order as the Second Lien Administrative Agent may determine.  In addition, the First Lien Administrative
Agent or the Collateral Agent, as applicable in accordance with the
Intercreditor Agreement, shall have the right at any time after the occurrence
and during the continuance of any Event of Default, without notice to any
Grantor, to exchange any certificates or instruments representing any
Investment Property for certificates or instruments of smaller or larger
denominations.  In order to permit
the Second Lien Administrative Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto after the occurrence and during the
continuance of any Event of Default and to receive all
dividends and other distributions which it may be entitled to receive hereunder
each  Grantor shall promptly
execute and deliver (or cause to be executed and delivered) to the Second Lien
Administrative Agent all proxies, dividend payment orders and other instruments
as the Second Lien Administrative Agent may from time to time reasonably
request, subject to the terms of the Intercreditor Agreement and each  Grantor acknowledges that the Second Lien
Administrative Agent may utilize the power of attorney set forth herein.

 

(c)   Each Grantor hereby authorizes and instructs
each Issuer of any Pledged Collateral pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Second Lien Administrative Agent
in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this
Agreement and the Intercreditor Agreement, without any other or further

 

32

 

instructions from such
Grantor, and each Grantor agrees that each Issuer shall be fully protected in
so complying, and (ii) upon any such instruction following the occurrence
and during the continuance of an Event of Default, pay any dividends or other
payments with respect to the Investment Property, including Pledged Collateral,
directly to the Second Lien Administrative Agent.

 

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

 

6.5. Application of Proceeds.  At such intervals as may be agreed upon by
the Borrower and the Second Lien Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Second Lien
Administrative Agent’s election, the Second Lien Administrative Agent may apply
all or any part of the net Proceeds (after deducting fees and expenses as
provided in Section 6.6) constituting Collateral realized through the exercise
by the Second Lien Administrative Agent of its remedies hereunder, whether or
not held in any Collateral Account, and any proceeds of the guarantee set forth
in Section 2, in payment of the Obligations in the following order:

 

First, to the Collateral Agent, for payment of its fees and
expenses (including, without limitation, all fees and expenses of its counsel)
under the Loan Documents;

 

Second, to the Second Lien Administrative
Agent, to pay incurred and unpaid fees and expenses of the Secured Parties
under the Loan Documents;

 

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

 

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

 

Fifth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full and the Commitments under the Second
Lien Credit Agreement shall 

 

33

 

have terminated or expired shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.

 

6.6. Code
and Other Remedies.  (a)  If
an Event of Default shall occur and be continuing, the Second Lien Administrative
Agent or the Collateral Agent, on behalf of the Secured Parties, subject to the
terms and conditions set forth in the Intercreditor Agreement, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New York UCC
(whether or not the New York UCC applies to the affected Collateral) or its
rights under any other applicable law or in equity.  Without limiting the generality of the
foregoing, each of the Second Lien Administrative Agent and the Collateral
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may, subject
to the terms and conditions set forth in the Intercreditor Agreement, in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, license,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit
risk.  Each Secured Party shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released.  Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or right on the part of any
Grantor, and each  Grantor hereby
waives (to the extent permitted by applicable 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.  Each  Grantor
agrees that, to the extent notice of sale shall be required by law, at least
ten days notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall, to the extent permitted
by law, constitute reasonable notification. 
The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given.  The Collateral 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.  The
Collateral Agent may sell the Collateral without giving any warranties as to
the Collateral.  The Collateral Agent may
specifically disclaim or modify any warranties of title or the like.  This procedure will not be considered to
adversely effect the commercial reasonableness of any sale of the Collateral.  Each  Grantor
agrees that it would not be commercially unreasonable for the Collateral Agent
to dispose of the Collateral or any portion thereof by using Internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets.  Each  Grantor hereby waives any claims against
the Collateral Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less 

 

34

 

than the price which
might have been obtained at a public sale, even if the Collateral Agent accepts
the first offer received and does not offer such Collateral to more than one offeree.  Each Grantor further agrees, at the
Collateral Agent’s request, to assemble the Collateral and make it available to
the Collateral Agent at places which the Collateral Agent shall reasonably
select, whether at such Grantor’s premises or elsewhere upon the occurrence and
during the continuance of any Event of Default. 
The Collateral Agent shall have the right, subject to the terms and
conditions set forth in the Intercreditor Agreement, to enter onto the property
where any Collateral is located and take possession thereof with or without
judicial process.

 

(b)   The Collateral Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of the Secured Parties
hereunder, including reasonable attorneys’ fees and disbursements to the extent
required to be paid in accordance with the First Lien Credit Agreement, to the
payment in whole or in part of the Obligations and only after such application
and after the payment by the Collateral Agent of any other  required by any provision of law, including Section 9-615(a) of
the New York UCC, need the Collateral Agent account for the surplus, if any, to
any Grantor.  If the Collateral Agent
sells any of the Collateral upon credit, the Grantor will be credited only with
payments actually made by the purchaser and received by the Collateral Agent
and applied to indebtedness of the purchaser. 
In the event the purchaser fails to pay for the Collateral, the
Collateral Agent may resell the Collateral and the Grantor shall be credited with
proceeds of the sale.  To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against any Secured Party arising out of the exercise by them of any
rights hereunder.

 

(c)   Upon the occurrence and during the
continuance of any Event of Default, in the event of any disposition of any of
the Intellectual Property, the goodwill of the business connected with and
symbolized by any Trademarks subject to such disposition shall be included, and
the applicable Grantor shall supply the Collateral Agent or its designee with
such Grantor’s know-how and expertise, and with documents and things embodying
the same, relating to the manufacture, distribution, advertising and sale of
products or the provision of services relating to any Intellectual Property
subject to such disposition, and such Grantor’s customer lists and other
records and documents relating to such Intellectual Property and to the
manufacture, distribution, advertising and sale of such products and services.

 

6.7. Registration
Rights.  (a)  If the
Collateral Agent shall determine to exercise its right to sell any or all of
the Pledged Equity Interests or the Pledged Debt Securities pursuant to Section 6.6,
and if in the opinion of the Collateral Agent it is necessary or advisable to
have the Pledged Equity Interests or the Pledged Debt Securities, or that
portion thereof to be sold, registered under the provisions of the Securities
Act, the relevant Grantor shall use commercially reasonable efforts to cause
the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
reasonable opinion of the Collateral Agent, necessary or advisable to register
the 

 

35

 

Pledged Equity Interests
or the Pledged Debt Securities, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) cause the registration statement
relating thereto to become effective and to remain effective for a period of
one year from the date of the first public offering of the Pledged Equity
Interests or the Pledged Debt Securities, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Collateral Agent, are reasonably necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the SEC applicable thereto.  Each Grantor agrees to use commercially
reasonable efforts to cause such Issuer to comply with the provisions of the
securities or “Blue Sky” laws of any and all jurisdictions which the Collateral
Agent shall designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which will
satisfy the provisions of Section 11(a) of the Securities Act.

 

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

 

(c)   Each Grantor agrees to use its commercially
reasonable efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Pledged
Equity Interests or the Pledged Debt Securities pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law.  Each Grantor
further agrees that a breach of any of the covenants contained in this Section 6.7
will cause irreparable injury to the Secured Parties, that the Secured Parties
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees, to the extent permitted by applicable law, 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 under the
Second Lien Credit Agreement or a defense of payment.

 

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

 

36

 

SECTION 7.  THE
COLLATERAL AGENT

 

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

 

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

 

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

 

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

 

(iv)          execute, in connection with any sale
provided for in Section 6.7 or 6.8, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and

 

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

 

37

 

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

 

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

 

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

 

(c)   The expenses of the Second Lien
Administrative Agent incurred in connection with actions undertaken as provided
in this Section 7.1, together with interest thereon at a rate per annum
equal to the rate per annum at which interest would then be payable on past due
Revolving Loans that are ABR Loans under the Second Lien Credit Agreement, from
the date of payment by the Second Lien Administrative Agent to the date reimbursed
by the relevant Grantor, shall be payable by such Grantor to the Second Lien
Administrative Agent on demand; provided, however, that unless an
Event of Default has occurred and is continuing, the Second Lien Administrative
Agent shall not exercise this power without first making demand on such Grantor
and the Grantor failing to immediately comply therewith.

 

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

 

7.2. Duty of Second Lien Administrative Agent
and the Collateral Agent.  The Second
Lien Administrative Agent’s and the Collateral Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be
to deal with it in the same manner as the 

 

38

 

Second Lien
Administrative Agent or the Collateral Agent, as the case may be, deals with
similar property for its own account. 
None of the Second Lien Administrative Agent, the Collateral Agent, nor
any other Secured Party nor any of their respective officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be liable for failure to demand, collect or realize upon any of
the Collateral or be responsible for the perfection of the Secured Parties’
security interests in such Collateral (including, without limitation, the
filing or renewal of any UCC financing statements) or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Secured Parties
hereunder are solely to protect the Secured Parties’ interests in the
Collateral and shall not impose any duty upon any Secured Party to exercise any
such powers.  The Secured Parties shall
be accountable only for amounts that they actually receive as a result of the exercise
of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except to the extent that any such act or failure to act is found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted primarily from their own gross negligence or willful misconduct in
breach of a duty owed to such Grantor.

 

7.3. Execution of Financing Statements.  Each Grantor acknowledges that pursuant to Section 9-509(b) of
the New York UCC and any other applicable law, each Grantor authorizes the
Second Lien Administrative Agent to file or record financing or continuation statements,
and amendments thereto, and other filing or recording documents or instruments
with respect to the Collateral, in such form and in such offices as the Second
Lien Administrative Agent reasonably determines appropriate to perfect or
maintain the perfection of the security interests of the Collateral Agent or
the Second Lien Administrative Agent under this Agreement.  Each Grantor agrees that such financing
statements may describe the collateral in the same manner as described in the
Security Documents or as “all assets” or “all personal property,” whether now
owned or hereafter existing or acquired or such other description as the Second
Lien Administrative Agent, in its sole judgment, determines is necessary or
advisable.  A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.

 

7.4. Authority of Second Lien Administrative
Agent and the Collateral Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Second Lien
Administrative Agent and the Collateral Agent under this Agreement with respect
to any action taken by the Second Lien Administrative Agent or the Collateral
Agent, as the case may be, or the exercise or non-exercise by the Second Lien
Administrative Agent or the Collateral Agent, as the case may be, of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Second Lien Administrative Agent and the Collateral Agent, on the one hand, and
the other Secured Parties, on the other hand, be governed by the Second Lien
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Second Lien Administrative
Agent and the Collateral Agent on the one hand, and the Grantors, on the other
hand, the Second Lien Administrative Agent and the Collateral Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority 

 

39

 

so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.

 

7.5. Appointment of Co-Collateral Agents.  At any
time or from time to time, in order to comply with any applicable requirement
of law, the Second Lien Administrative Agent and the Collateral Agent may
appoint another bank or trust company or one of more other persons, either to
act as co-agent or agents on behalf of the Secured Parties with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and which may be specified in the instrument of appointment (which may,
in the discretion of the Second Lien Administrative Agent or the Collateral
Agent, as the case may be, include provisions for indemnification and similar
protections of such co-agent or separate agent).

 

SECTION 8.  MISCELLANEOUS

 

8.1. Amendments in Writing.  None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by
a written instrument executed by each affected Grantor, the Second Lien
Administrative Agent and the Collateral Agent (which shall execute any such
waiver, amendment, supplement or modification upon the request of the Required
Lenders), subject to any consents required under Section 9.08 of the
Second Lien Credit Agreement; provided that any provision of this
Agreement imposing obligations on any Grantor may be waived by the Second Lien
Administrative Agent in a written instrument executed by the Second Lien
Administrative Agent.

 

8.2. Notices.  All notices, requests and demands to or upon
the Second Lien Administrative Agent, the Collateral Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 9.01 of
the Second Lien Credit Agreement; provided that any such notice, request
or demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 8.2.

 

8.3. No Waiver by Course of Conduct;
Cumulative Remedies.  No Secured
Party shall by any act (except by a written instrument pursuant to Section 8.1),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in
exercising, on the part of any Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. 
No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  A
waiver by any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which such
Secured Party would otherwise have on any future occasion.  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

8.4. Enforcement
Expenses; Indemnification.  (a)  Each
Grantor agrees to pay or reimburse each Secured Party for all its reasonable
costs and expenses incurred in collecting against such Grantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such Grantor
is a party, including the fees and disbursements of counsel to each 

 

40

 

Secured Party and of
counsel to the Second Lien Administrative Agent and the Collateral Agent.

 

(b)   Each Grantor agrees to pay, and to hold the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to, or resulting from any delay
in paying, any and all stamp, excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.

 

(c)   Each Grantor agrees to pay, and to hold the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to Section 9.05 of the Second
Lien Credit Agreement.

 

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

 

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

 

8.6. Set-Off.  Each Grantor hereby irrevocably authorizes
each Secured Party at any time and from time to time while an Event of Default
shall have occurred and be continuing, without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such
Grantor, or any part thereof in such amounts as such Secured Party may elect,
against and on account of the obligations and liabilities of such Grantor to
such Secured Party hereunder and claims of every nature and description of such
Secured Party against such Grantor, in any currency, whether arising hereunder,
under the Second Lien Credit Agreement, any other Loan Document or otherwise,
as such Secured Party may elect, whether or not any Secured Party has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured.  Each Secured
Party shall notify such Grantor promptly of any such set-off and the application
made by such Secured Party of the proceeds thereof, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.  The rights of each Secured
Party under this Section are in addition to other rights and remedies
(including other rights of set-off) which such Secured Party may have.

 

41

 

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

 

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

 

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

 

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

 

8.11.        APPLICABLE LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

8.12.        Submission
to Jurisdiction; Waivers.  Each
Grantor, the Collateral Agent  and the
Second Lien Administrative Agent hereby irrevocably and unconditionally:

 

(a)   submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such federal court.  Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
Nothing in this Agreement shall affect any right that any Lender, the
Collateral Agent or the Second Lien Administrative Agent may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against Holdings, the Borrower or any Loan Party or their properties
in the courts of any jurisdiction;

 

(b)    waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or federal
court.  Each of the parties hereto hereby
irrevocably waives, to 

 

42

 

the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court; and

 

(c)    agrees that service of all process in any
such proceeding  in any such court may be
made by registered or certified mail, return receipt requested at its address
provided in Section 9.01 agrees that service as so provided in is
sufficient to confer personal jurisdiction over the applicable credit party in
any such proceeding in any such court, and otherwise constitutes effective and
binding service in every respect; and agrees that agents and lenders retain the
right to serve process in any other manner permitted by law or to bring
proceedings against any credit party in the courts of any other jurisdiction.

 

8.13.        Acknowledgments.  Each Grantor hereby acknowledges that:

 

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

 

(b)   no Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

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

 

8.14.        Additional
Grantors.  Each Subsidiary of the
Borrower that is required to become a party to this Agreement pursuant to Section 5.09
of the Second Lien Credit Agreement shall become a Grantor for all purposes of
this Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Exhibit D hereto.

 

8.15.        Releases.  (a)  At such time as the Loans and the
other Obligations (other than contingent reimbursement or indemnification
obligations) shall have been paid in full, the commitments under the Second
Lien Credit Agreement have been terminated or expired and no letter of credit
issued under the Second Lien Credit Agreement shall be outstanding, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Second Lien Administrative Agent, the Collateral Agent and each Grantor
hereunder shall automatically terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors.  At the request
and sole expense of any Grantor following any such termination, the Second Lien
Administrative Agent or the Collateral Agent, as the case may be, shall deliver
to such Grantor any Collateral held by the Second Lien Administrative Agent or
the Collateral Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.

 

43

 

(b)   The obligations of Guarantors that are
Subsidiaries and the security interests created hereunder shall be subject to
release in accordance with Section 9.17 of the Second Lien Credit
Agreement.

 

(c)   Each Grantor acknowledges that it is not
authorized to file any financing statement or amendment or termination
statement with respect to any financing statement originally filed in connection
herewith without the prior written consent of the Second Lien Administrative
Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
the New York UCC.

 

8.16.        WAIVER OF JURY TRIAL.  EACH GRANTOR, THE
COLLATERAL AGENT AND THE SECOND LIEN ADMINISTRATIVE AGENT HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS.  EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS.  EACH PARTY HERETO
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 8.16 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

8.17  Authority
Subject to Credit Agreement

 

(a)  Wilmington Trust Company has been appointed
the Collateral Agent hereunder pursuant to Section 8.12 of the Second Lien
Credit Agreement.  It is expressly
understood and agreed by the parties to this Agreement that any authority
conferred upon the Collateral Agent hereunder is subject to the terms of the
delegation of authority made by the Secured Parties (other than the Collateral
Agent) to the Collateral Agent pursuant to the Second 

 

44

 

Lien Credit Agreement and
that the Collateral Agent has agreed to act (and any successor Collateral Agent
shall act) as such hereunder only on the express conditions contained in the
Second Lien Credit Agreement (including, without limitation, Section 8.09
thereof). Any successor Collateral Agent appointed in accordance with Section 8.09
of the Second Lien Credit Agreement shall be entitled to all the rights,
interests and benefits of the Collateral Agent hereunder.

 

(b) 
In the event of a conflict between this Agreement and the Second Lien Credit
Agreement, the Second Lien Credit Agreement will govern and control.

 

[Remainder of page intentionally
left blank]

 

45

 

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

 

 

	
   

  	
  GENERAC ACQUISITION
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aaron P. Jagdfeld

  
	
   

  	
   

  	
  Name: Aaron P. Jagdfeld

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GPS CCMP MERGER CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aaron P. Jagdfeld

  
	
   

  	
   

  	
  Name: Aaron P. Jagdfeld

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer

  

 

46

 

	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James A. Hanley

  
	
   

  	
   

  	
  Name: James A. Hanley

  
	
   

  	
   

  	
  Title:
  Assistant Vice President

  

 

47Exhibit 10.7

 

ADVISORY SERVICES AND MONITORING AGREEMENT

 

This
Advisory Services and Monitoring Agreement (this “Agreement”)
is entered into as of November 10, 2006, by and among GPS CCMP ACQUISITION
CORP. (the “Company”), GENERAC
ACQUISITION  CORP. (“Holding”),
GENERAC POWER SYSTEMS, INC., a Wisconsin corporation (“Generac”),
CCMP CAPITAL ADVISORS, LLC (“Capital Advisors”),
and CCMP CAPITAL ASIA PTE. LTD. (“CCMP Asia Pte.”)
and CCMP CAPITAL ASIA CONSULTING COMPANY LTD. (“CCMP Asia
Consulting”, together with CCMP Asia Pte., “CCMP Asia”;
and together with CCMP Asia Pte. and Capital Advisors, “CCMP”).

 

WHEREAS, the Company and Holding acquired all of
the issued and outstanding capital stock of Generac on November 10, 2006
pursuant to an Agreement and Plan of Merger, dated September 13, 2006, by
and among the Company, Generac Power Systems, Inc., a Wisconsin
corporation (“Merger Sub”), and Generac
(the “Acquisition”);

 

WHEREAS, in connection with the Acquisition,
Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting (together with any
investment funds managed or advised by any of them, the “Funds”)
provided advice and analysis including assistance with due diligence and other
investigatory matters to the Company, Holding and Merger Sub related to Generac
and the industry in which it operates, advice with respect to senior debt
facilities and related arrangements for the debt financing of the Acquisition,
advice with respect to the syndication of equity funding with respect to the
Acquisition, and other ancillary matters in respect thereof (collectively, “Advisory Services”);

 

WHEREAS, each of Capital Advisors, CCMP Asia
Pte. and CCMP Asia Consulting has a staff specially skilled in corporate
finance, strategic corporate planning, and other management skills and advisory
and business monitoring services (the “Management Professionals”);

 

WHEREAS, each of the Company, Holding and
Generac (collectively, the “Company Group”)
will require such skills and services from Capital Advisors, CCMP Asia Pte. and
CCMP Asia Consulting in connection with their business operations and execution
of their strategic plan, and the members of the Company Group desire to engage
Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting utilize such skills
and perform such services; and

 

WHEREAS, each of Capital Advisors, CCMP Asia
Pte. and CCMP Asia Consulting is willing to and shall provide the Management
Services (as hereinafter defined) to each of the members of the Company Group,
and in connection therewith, may make available to the members of the Company
Group, the Management Professionals.

 

NOW,
THEREFORE, in
consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and 

 

 

sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:

 

1.                                      Definitions.

 

“Shareholders Agreement”
means the Shareholders Agreement, dated the date hereof, by and among the
Company, CCMP Capital Investors II, L.P., CCMP Capital Investors (Cayman),
L.P., AOF II Employee Co-Invest Fund, L.P. 
Asia Opportunity Fund II, L.P., CCMP Generac Co-Invest, L.P., the
management shareholders party thereto and the other parties from time to time
party thereto, as the same may be amended from time to time.

 

2.                                      Appointment; Management Services.

 

(a)                                  Each of the Company, Holding and Generac
hereby appoints each of Capital Advisors, CCMP Asia Pte. and CCMP Asia
Consulting, or their respective designees, as its financial advisors with
respect to the following services (the “Management Services”)
(and each of Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting agrees
to perform the Management Service, to the extent appropriate and requested by
any member of the Company Group):  (i) assisting
each of the Company, Holding and Generac in analyzing their operations and
historical performance; (ii) assisting each of the Company, Holding and
Generac in analyzing future prospects; (iii) assisting each of the
Company, Holding and Generac with respect to future proposals for tender
offers, acquisitions, sales, mergers, financings (other than with respect to
any registered public offering of any securities of the Company or Generac),
exchange offers, recapitalizations, restructurings or other similar
transactions; and (iv) providing financial and business monitoring
services, including with respect to assisting each of the Company, Holding and
Generac in preparing a strategic plan.

 

(b)                                 None of Capital Advisors, CCMP Asia Pte.
or CCMP Asia Consulting, nor any of their respective designees, makes any
representations or warranties, express or implied, in respect of the services
to be provided by any of them or their designee hereunder.  In no event shall any of Capital Advisors,
CCMP Asia Pte. or CCMP Asia Consulting or their respective affiliates be liable
to any of the Company, Generac or any of their respective affiliates for any
act, alleged act, omission or alleged omission that does not constitute gross
negligence or willful misconduct of Capital Advisors, CCMP Asia Pte. or CCMP
Asia Consulting or their respective designee (as applicable) as determined by a
final, non-appealable determination of a court of competent jurisdiction.

 

(c)                                  Each of Capital Advisors, CCMP Asia Pte.
and CCMP Asia Consulting shall perform the Management Services, and shall
devote such time and efforts to the performance of such Management Services
contemplated hereby as it deems reasonably necessary or appropriate (including,
without limitation, by making the Management Professionals employed or engaged
by it available in connection therewith); provided, however, that no minimum number of hours shall be required
to be devoted by 

 

2

 

any of Capital Advisors, CCMP Asia Pte. or CCMP Asia
Consulting on a weekly, monthly, annual or other basis.  The Company, Holding and Generac acknowledge
that the Management Services to be performed by any of Capital Advisors, CCMP
Asia Pte. or CCMP Asia Consulting are not exclusive to the members of the
Company Group and that any of them may render similar services to other persons
and entities.

 

3.                                      Term and Termination.

 

(a)                                  This Agreement shall continue in full
force and effect for a term of five (5) years.  Prior to the expiration of the term of this
Agreement, and provided that the members of the Company Group and CCMP shall
discuss and consider, in good faith, the renewal of this Agreement on terms
mutually acceptable to each of the parties hereto; provided,
however, that this Agreement may only be renewed by written
agreement of each of the parties hereto, and in such case, only upon the
consent or approval of a majority of Independent Directors (as defined in the
Shareholders Agreement) of the Company.

 

(b)                                 This Agreement (i) may be terminated
by Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting (acting together)
at any time prior to the consummation of an IPO (as such term is defined in the
Shareholders Agreement), (ii) shall terminate automatically upon the
consummation of an IPO, (iii) shall be terminated if, following a material
breach of this Agreement by any of Capital Advisors, CCMP Asia Pte. or CCMP
Asia Consulting, both (x) CCMP shall have failed to cure such breach
within 30 business days after receipt of written notice thereof from the
Company, and (y) during the continuation of any such breach (and prior to
any cure, waiver or satisfaction thereof), a majority of Independent Directors
(as defined in the Shareholders Agreement) of the Company shall elect to
terminate this Agreement, or (iv) shall terminate automatically on the
date that CCMP and all of the Funds cease to own at least 25% of the voting
capital stock of the Company owned by CCMP and the Funds on the date hereof.

 

(c)                                  Upon any termination of this Agreement,
Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting will be entitled to
prompt payment of all fees (including under Sections 3(b) and 4)
and reimbursement of all out-of-pocket expenses as described herein.  No termination of CCMP’s engagement hereunder
shall affect any of the Company’s or Generac’s obligations under this
Agreement, including, without limitation, each of the Company’s or Generac’s
indemnity obligations as set forth herein.

 

(d)                                 The terms and provisions of Sections 5,
6 and Annex A shall survive any termination of this Agreement.

 

4.                                      Payment of Fees.

 

(a)                                  In consideration of the Advisory Services
provided by Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting in
connection with the transactions related to the consummation of the
Acquisition, and subject to the terms of 

 

3

 

Section 4(a)(i) and (ii) below), the Company,
Holding and Generac, jointly and severally, agree to pay to CCMP a one-time
transaction fee equal to $30,000,000, which shall be payable as follows:

 

(i)                                     an amount equal to $15,000,000
($11,250,000 of which shall be for the benefit and account of Capital Advisors,
$2,750,000 of which shall be for the benefit and account of CCMP Asia Pte and
$1,000,000 of which shall be for the benefit and account of CCMP Asia
Consulting) shall be payable to CCMP upon the consummation of the Acquisition;
and

 

(ii)                                  in the event
that, during any fifteen (15) consecutive day period after January 1,
2007, the Net Liquidity Amount is greater than $180,000,000, then the Company,
Holding and Generac, jointly and severally, shall promptly pay to CCMP an
aggregate amount equal to $15,000,000 ($11,250,000 of which shall be for the
benefit and account of Capital Advisors, $2,750,000 of which shall be for the
benefit and account of CCMP Asia Pte and $1,000,000 of which shall be for the
benefit and account of CCMP Asia Consulting). 
Upon the first payment of the amount set forth in this Section 4(a)(ii),
the provisions of this Section 4(a)(ii) shall cease to have
any further force or effect, and neither the Company nor Generac shall have any
further obligation to make any subsequent payments hereunder.

 

For
purposes of this Section 4(a):

 

“Net Liquidity Amount “ means, at any
time, an amount equal to the sum of: (a) the positive difference (if any)
between (i) the maximum aggregate principal amount that may be borrowed
under any revolving credit or other similar credit facility under the First
Lien Facility, and (ii) the
aggregate principal amount of loans outstanding under such revolving credit or
other similar credit facility, plus
(b) the aggregate amount of cash and cash equivalents (determined in
accordance with United States generally accepted accounting principles) held,
at such time, by the Company, Holding and Generac (determined on a consolidated
basis), plus (c) the
aggregate amount of principal payments made by Holding or Generac under or in
respect of any term loan or other similar credit facility under the First Lien
Credit Facility or the Second Lien Credit Facility, from and after the date
hereof.

 

“First Lien Facility” means the Credit
Agreement, dated as of November 10, 2006, among Generac (as successor by
merger to Merger Sub), Holding, the lenders party thereto from time to time,
Goldman Sachs Credit Partners L.P., as administrative agent, and the other
agents named therein (as the same may be amended, modified, restated or
refinanced from time to time).

 

4

 

“Second Lien Facility” means the Credit
Agreement, dated as of November 10, 2006, among Generac (as successor by
merger to Merger Sub), Holding, the lenders party thereto from time to time,
JPMorgan Chase Bank, N.A., as administrative agent, and the other agents named
therein (as the same may be amended, modified, restated or refinanced from time
to time).

 

(b)                                 In consideration of Capital Advisors’,
CCMP Asia Pte.’s and CCMP Asia Consulting’s performance of the Management
Services and agreements to make the Management Professionals available in
connection therewith, the Company, Holding and Generac, jointly and severally,
agree to pay to CCMP, a quarterly advisory fee in an amount equal to $125,000
($93,750 of which shall be for the benefit and account of Capital Advisors,
$22,917 of which shall be for the benefit and account of CCMP Asia Pte and
$8,333 of which shall be for the benefit and account of CCMP Asia Consulting)
(the “Quarterly Fee”), payable on the
first business day of each calendar quarter (January 1, April 1, July 1
and September 1), and upon the termination of this Agreement, the final
installment shall be paid on the effective date of such termination and
prorated for any final period consisting of less than ninety (90) days; provided, that the first Quarterly Fee shall be paid on January 1,
2006, in a pro-rated amount to reflect the period from November 10, 2006,
through December 31, 2006, and shall be divided among Capital Investors,
CCMP Asia Pte. and CCMP Asia Consulting in the same proportion as the other
Quarterly Fees shall be divided between such persons in accordance with the
terms and provisions above.

 

(c)                                  All payments and reimbursements made
pursuant to Sections 3, 4 and 5 will be paid by wire
transfer of immediately available U.S. Dollars to the accounts specified by
Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting in writing to the
Company, Holding and Generac.

 

(d)                                 Any payments required to be made to any
of Capital Advisors, CCMP Asia Pte. or CCMP Asia Consulting shall, upon the
written request of such person to Company, Holding and Generac, be made to such
person’s designee, as set forth in such notice.

 

5.                                      Expenses; Indemnification.

 

(a)                                  Expenses. 
In addition to the compensation to be paid pursuant to Sections 3(b),
4(a), (b) and (c) above, promptly upon request
by any of Capital Advisors, CCMP Asia Pte. or CCMP Asia Consulting from time to
time, the Company, Holding and Generac agree, jointly and severally, to
reimburse Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting (as
applicable) for (i) all reasonable out-of-pocket expenses incurred by each
director appointed to the board of directors of any member of the Company Group
in connection with attending regular and special meetings of such board of
directors and any committee thereof and (ii) all reasonable out-of-pocket
expenses incurred in connection with the provision of services hereunder to any
member of the Company Group, including, without limitation, the reasonable fees
and disbursements of 

 

5

 

their legal counsel, if any, and of any other advisors
retained by any of Capital Advisors, CCMP Asia Pte. or CCMP Asia Consulting, in
connection with the enforcement, preservation or analysis of rights or taking
of actions under this Agreement or otherwise resulting from or arising out of
this engagement.

 

(b)                                 Indemnification. 
As Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting will be
acting on behalf of each of the Company, Holding and Generac in connection with
its engagement hereunder, and as further consideration for such CCMP’s services
hereunder, each of the Company, Generac, Capital Advisors, CCMP Asia Pte. and
CCMP Asia Consulting agree to the indemnity provisions and other matters set
forth in Annex A hereto, which Annex A is incorporated herein by
reference and made an integral part hereof.

 

6.                                      No Exclusive Duty to the Company
Group.  In recognition that (i) each of Capital
Advisors, CCMP Asia Pte. and CCMP Asia Consulting currently has, and will in
the future have or will consider acquiring, investments in numerous companies
with respect to which Capital Advisors, CCMP Asia Pte. or CCMP Asia Consulting
(as applicable) may serve as an advisor, consultant or in some other capacity, (ii) each
of Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting may have a myriad
of duties to various investors and partners, (iii) each of Capital
Advisors, CCMP Asia Pte. and CCMP Asia Consulting (or one or more affiliates,
associated investment funds or portfolio companies) may engage in the same or
similar activities or lines of business as the Company or Generac and may have
an interest in the same areas of corporate opportunities, (iv) the
Company, Holding and Generac will derive certain benefits hereunder and (v) each
of Capital Advisors, CCMP Asia Pte. and CCMP Asia Consulting, in connection
with its endeavors to fully to satisfy its duties, may confront difficulties in
determining the full scope of such duties in any particular situation, the
provisions of this Section 6 are set forth to regulate, define and
guide the conduct of certain affairs of the Company, Holding and Generac as
they may involve each of Capital Advisors, CCMP Asia Pte. and CCMP Asia
Consulting.

 

(a)                                  Each of Capital Advisors, CCMP Asia Pte.
and CCMP Asia Consulting shall have the right:

 

(i)                                     to directly or indirectly engage in any
business (including, without limitation, any business activities or lines of
business that are the same as or similar to those pursued by, or competitive
with, the Company, Generac or their subsidiaries or affiliates),

 

(ii)                                  to directly or indirectly do business
with any client or customer of the Company, Generac or their subsidiaries or
affiliates,

 

(iii)                               to take any other action that it believes
in good faith is necessary or appropriate to fulfill its duties and
obligations, and

 

6

 

(iv)                              not to communicate or present potential
transactions, matters or business opportunities to the Company, Generac or
their subsidiaries or affiliates, and to pursue, directly or indirectly, any
such opportunity for itself, and to direct any such opportunity to another
person.

 

(b)                                 None of Capital Advisors, CCMP Asia Pte.
or CCMP Asia Consulting nor any of its affiliates shall have any duty
(contractual or otherwise) to communicate or present any corporate
opportunities to the Company, Generac or any of their affiliates or to refrain
from any actions specified in Section 6(a), and the Company, Holding and
Generac, on their own behalf and on behalf of their affiliates, hereby renounce
and waive any right to require any of Capital Advisors, CCMP Asia Pte. or CCMP
Asia Consulting or any of its affiliates to act in a manner inconsistent with
the provisions of Section 6(a).

 

(c)                                  None of Capital Advisors, CCMP Asia Pte.
or CCMP Asia Consulting nor any of its affiliates shall be liable to the
Company, Generac or any of their affiliates for breach of any duty (contractual
or otherwise) by reason of any activities or omissions of the types referred to
in Section 6(a) or its or its affiliates’ participation
therein.

 

7.                                      Amendments and Waivers. 
No amendment or waiver of any term, provision or condition of this
Agreement shall be effective, unless in writing and executed by each of the
parties hereto.  No waiver on any one
occasion shall extend to or effect or be construed as a waiver of any right or
remedy on any future occasion.  No course
of dealing of any person nor any delay or omission in exercising any right or
remedy shall constitute an amendment of this Agreement or a waiver of any right
or remedy of any party hereto.

 

8.                                      Miscellaneous.

 

(a)                                  Choice of Law. 
This Agreement shall be governed by and construed in accordance with the
domestic substantive laws of the State of New York without giving effect to any
choice or conflict of law provision or rule that would cause the
application of the domestic substantive laws of any other jurisdiction.

 

(b)                                 Consent to Jurisdiction. 
Each of the parties agrees that all actions, suits or proceedings
arising out of or based upon this Agreement or the subject matter hereof shall
be brought and maintained exclusively in the federal and state courts of the
State of New York.  Each of the parties
hereto by execution hereof (i) hereby irrevocably submits to the
jurisdiction of the federal and state courts in the State of New York for the
purpose of any action, suit or proceeding arising out of or based upon this
Agreement or the subject matter hereof and (ii) hereby waives to the
extent not prohibited by applicable law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such action, suit or proceeding, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that it is immune from extraterritorial injunctive relief or other
injunctive relief, that its property is exempt or immune from attachment or
execution, that 

 

7

 

any such action, suit or proceeding may not be brought
or maintained in one of the above-named courts, that any such action, suit or
proceeding brought or maintained in one of the above-named courts should be
dismissed on grounds of forum  non conveniens, should be transferred to any court other
than one of the above-named courts, should be stayed by virtue of the pendency
of any other action, suit or proceeding in any court other than one of the
above-named courts, or that this Agreement or the subject matter hereof may not
be enforced in or by any of the above-named courts.  Each of the parties hereto hereby consents to
service of process in any such suit, action or proceeding in any manner
permitted by the laws of the State of New York, agrees that service of process
by registered or certified mail, return receipt requested, at the address
specified in or pursuant to Section 13 is reasonably calculated to
give actual notice and waives and agrees not to assert by way of motion, as a
defense or otherwise, in any such action, suit or proceeding any claim that
service of process made in accordance with Section 13 does not
constitute good and sufficient service of process.  The provisions of this Section 8(b) shall
not restrict the ability of any party to enforce in any court any judgment
obtained in a federal or state court of the State of New York.

 

(c)                                  Waiver of Jury Trial. 
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED,
EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN
ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, CAUSE OF ACTION, ACTION, SUIT
OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT
HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN
CONTRACT OR TORT OR OTHERWISE.  Each of
the parties hereto acknowledges that it has been informed by each other party
that the provisions of this Section 8(c) constitute a material
inducement upon which such party is relying and will rely in entering into this
Agreement and the transactions contemplated hereby.  Any of the parties hereto may file an
original counterpart or a copy of this Agreement with any court as written
evidence of the consent of each of the parties hereto to the waiver of its
right to trial by jury.

 

(d)                                 Authority to Enter Agreement. 
Each party to this Agreement represents and warrants to the other
parties hereto that it has all requisite power and authority to enter into this
Agreement and the transactions contemplated hereby, that this Agreement has
been duly and validly authorized by all necessary action on the part of such party
and that when duly executed and delivered by such party, this Agreement shall
constitute a legal, valid and binding agreement of such party, enforceable
against it in accordance with its terms.

 

9.                                      Independent Contractor. 
The parties agree and understand that each of Capital Advisors, CCMP
Asia Pte. and CCMP Asia Consulting is and shall act as an independent
contractor of each of the Company, Holding and Generac in the performance of
its duties hereunder.  None of Capital
Advisors, CCMP Asia Pte. or CCMP Asia Consulting is, and in the performance of
their respective duties hereunder 

 

8

 

will not hold themselves out as, employees, agents or
partners of any of the Company or Generac.

 

10.                               Information. 
Each of the Company, Holding and Generac shall furnish and make
available to CCMP all financial and other information as CCMP deems appropriate
in connection with the performance of the services contemplated by this
engagement and, in connection therewith, will provide CCMP with reasonable
access to its officers, directors, employees, agents, accountants, counsel and
other representatives.  Each of the
Company, Holding and Generac acknowledges and confirms that CCMP (i) will
rely solely on such information and information that is available from public
sources in the performance of the services contemplated by this Agreement
without assuming any responsibility for independent investigation or
verification thereof, (ii) assume no responsibility for the accuracy or
completeness of such information or any other information regarding the Company
or Generac and (iii) will not make any appraisal of any assets of the
Company or Generac.

 

11.                               Confidentiality. 
No advice rendered by CCMP, whether formal or informal, may be
disclosed, in whole or in part, or summarized, excerpted from or otherwise
referred to without CCMP’s prior written consent.  To the extent consistent with legal
requirements, all information given to one party of this Agreement (the “Recipient Party”) by another party
(the “Providing Party”), including,
without limitation, this Agreement, unless publicly available or otherwise
available to the Recipient Party without restriction or breach of any
confidentiality agreement, will be held by the Recipient Party in confidence
and will not, without the Providing Party’s prior approval, be disclosed to
anyone other than the Recipient’s agents and advisors who require such
information to perform services for the Providing Party as contemplated by this
Agreement (and who agree to use such information only in connection with such
services) or used by such person for any purpose other than those contemplated
by this Agreement.  Each party hereto
shall be responsible for violations of its respective agents and advisors of
the obligations set forth in this Section 11.  Notwithstanding anything to the contrary set
forth herein or in any other agreement to which the parties hereto are parties
or by which they are bound, the obligations of confidentiality contained herein
and therein, as they relate to the services to be provided hereunder, shall not
apply to the tax structure or tax treatment of the transactions subject to the
services to be provided hereunder, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
persons, without limitation of any kind, the tax structure and tax treatment of
the transaction subject to the services to be provided hereunder and all
materials of any kind (including opinions or other tax analysis) that are
provided to such party relating to such tax treatment and tax structure; provided, however, that
such disclosure shall not include the name (or other identifying information
not relevant to the tax structure or tax treatment) of any person and shall not
include information for which nondisclosure is reasonably necessary in order to
comply with applicable securities laws.

 

12.                               Merger/Entire Agreement. 
This Agreement and the other agreements referred to herein (including,
without limitation, the Shareholders 

 

9

 

Agreement), contain the entire understanding of the
parties with respect to the specific subject matter hereof and supersede any
prior communication or agreement with respect thereto.

 

13.                               Notice. 
All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written instrument
delivered in person or sent by telecopy, nationally-recognized overnight
courier or first class registered or certified mail, return receipt requested,
postage prepaid, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by such party to the
other parties:

 

If to
any of the Company or Generac, to:

 

GPS
CCMP Acquisition Corp.

c/o
CCMP Capital Advisors, LLC

245
Park Avenue, 16th Floor

New
York, NY  10167

Attention:  Stephen Murray

 

If to
CCMP, to:

 

CCMP Capital Advisors, LLC

245 Park Avenue

16th Floor

New York, New York 10167

Attn:  Stephen Murray

Facsimile:  (917) 464-9200

 

All such notices, requests, consents and other communications shall be
deemed to have been delivered (a) in the case of personal delivery or
delivery by telecopy, on the date of such delivery, (b) in the case of
dispatch by nationally-recognized overnight courier, on the next business day
following such dispatch and (c) in the case of mailing, on the third
business day after the posting thereof.

 

14.                               Severability. 
If in any judicial or arbitral proceedings a court or arbitrator shall
refuse to enforce any provision of this Agreement, then such unenforceable
provision shall be deemed eliminated from this Agreement for the purpose of
such proceedings to the extent necessary to permit the remaining provisions to
be enforced.  To the full extent,
however, that the provisions of any applicable law may be waived, they are
hereby waived to the end that this Agreement be deemed to be a valid and
binding agreement enforceable in accordance with its terms, and in the event
that any provision hereof shall be found to be invalid or unenforceable, such
provision shall be construed by limiting it so as to be valid and enforceable
to the maximum extent consistent with and possible under applicable law.

 

10

 

15.          Counterparts. 
This Agreement may be executed in any number of counterparts and by each
of the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which together shall constitute
one and the same agreement.

 

16.          Descriptive
Headings.  All descriptive headings in this Agreement
are inserted for convenience only and shall be disregarded in construing or
applying any provision of this Agreement.

 

17.          Prevailing
Party.  If any legal action or other proceedings is
brought for a breach of this Agreement, the prevailing party shall be entitled
to recover its reasonable attorneys’ fees and other costs incurred in bringing
such action or proceeding, in addition to any other relief to which such party
may be entitled.

 

18.          Non-Recourse. 
No past, present or future director, officer, employee, incorporator,
member, partner, stockholder, affiliate, agent, attorney or representative of
any of Capital Advisors, CCMP Asia Pte. or CCMP Asia Consulting, any member of
the Company Group or any of their respective affiliates shall have any
liability for any obligations or liabilities of Capital Advisors, CCMP Asia
Pte. or CCMP Asia Consulting, any member of the Company Group or any of their
respective affiliates under this Agreement or for any claim based on, in
respect of, or by reason of, the transactions or other matters contemplated
hereby.

 

11

 

IN
WITNESS WHEREOF,
each of the parties has caused this Agreement to be executed on its behalf by
its duly authorized officer or representative as of the date first above
written.

 

	
   

  	
   

  	
  GPS CCMP ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark McFadden

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Mark McFadden

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GENERAC ACQUISITION CORP.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark McFadden

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Mark McFadden

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GENERAC POWER SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William Treffert

  
	
   

  	
   

  	
   

  	
  Name:

  	
  William Treffert

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCMP CAPITAL ADVISORS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCMP CAPITAL ASIA PTE. LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen King

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Stephen King

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CCMP CAPITAL ASIA CONSULTING
  COMPANY LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Simon Bell

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Simon Bell

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  

 

A-1

 

ANNEX
A

 

This Annex A is a part of and is incorporated into that certain
Advisory Services and Monitoring Agreement (the “Agreement”)
dated November 10, 2006, by and among GPS CCMP ACQUISITION CORP. (“Parent”), GENERAC ACQUISITION  CORP. (“Holding”),
GENERAC POWER SYSTEMS, INC. (together with Holding and Parent, the “Companies”), CCMP Capital Advisors,
LLC (“Capital Advisors”) and CCMP CAPITAL ASIA
PTE. LTD. and CCMP CAPITAL ASIA CONSULTING COMPANY LTD. (collectively, “CCMP Asia”, and together with
Capital Advisors, the “Sponsors”).

 

In further consideration of the engagement by each of the Companies of
the Sponsors to act in the capacities set forth in the Agreement, in the event
that Sponsors or any affiliates, the directors, officers, partners, agents or
employees of any Sponsor, or any of their respective affiliates, or any other
person controlling any Sponsor or any of their respective affiliates
(collectively, “Indemnified Persons”)
becomes involved in any capacity in any action, claim, suit, investigation or
proceeding, actual or threatened, brought by or against any person, including
stockholders of such Company or any other member of the Company Group, in
connection with or as a result of the Agreement or any matter referred to in
the Agreement, the Companies will reimburse such Indemnified Person for its
reasonable legal and other expenses (including, without limitation, the costs
and expenses incurred in connection with investigating, preparing for and
responding to third party subpoenas or enforcing this Annex or the Agreement)
incurred in connection therewith as such expenses are incurred.  The Companies shall also, jointly and
severally, indemnify and hold harmless any Indemnified Person from and against,
and the Companies agree that no Indemnified Person shall have any liability to
any such Company or its owners, parents, affiliates, security holders or
creditors for, any losses, claims, damages or liabilities (including actions or
proceedings in respect thereof) (collectively, “Losses”)
related to or arising out of the Agreement or the Sponsors’ performance
thereof, except that this provision shall not apply to any Losses that are finally
determined by a court or arbitral tribunal to have resulted primarily from the
bad faith or gross negligence of the Sponsors.

 

If such indemnification is for any reason not available or insufficient
to hold an Indemnified Person harmless, the Companies agree to contribute to
the Losses involved in such proportion as is appropriate to reflect the
relative benefits received (or anticipated to be received) by the Companies, on
the one hand, and by the Sponsors, on the other hand, with respect to the Agreement
or, if such allocation is determined by a court or arbitral tribunal to be
unavailable, in such proportion as is appropriate to reflect other equitable
considerations such as the relative fault of the Companies, on the one hand,
and the Sponsors, on the other hand; provided, however, that, to the extent permitted by applicable law,
the Indemnified Persons shall not be responsible for amounts which in the
aggregate are in excess of the amount of all fees actually received by the
Sponsors from each of the Companies in connection with the Agreement.  Relative benefits to the Companies, on the
one hand, and to the Sponsors, on the other hand, with respect to the Agreement
shall be deemed to be in the same proportion as (i) the total value
received or proposed to be received by each of the Companies in connection with
the transactions 

 

A-2

 

contemplated by this Agreement, whether or not consummated, bears to (ii) all
fees actually received by the Sponsors in connection with the Agreement.  Relative fault shall be determined, in the
case of Losses arising out of or based on any untrue statement or any alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact, by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Companies to
the Sponsors and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act of 1933, as amended) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

 

Upon receipt by an Indemnified Person of actual notice of any pending
or threatened action claim, suit, investigation or proceeding (an “Action”) against such Indemnified Person
with respect to which indemnity may be sought under this Agreement, such
Indemnified Person shall promptly notify the Companies in writing; provided that failure to so notify the Companies shall not
relieve the Companies from any liability which the Companies may have on
account of this indemnity or otherwise, except to the extent the Companies
shall have been materially prejudiced by such failure.  The Companies shall, if requested by a
Sponsor, assume the defense of any such Action including the employment of
counsel reasonably satisfactory to such Sponsor.  Any Indemnified Person shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless:  (i) one
of the Companies has failed promptly to assume the defense and employ counsel
or (ii) the named parties to any such Action (including any impleaded
parties) include such Indemnified Person and the Companies, and such
Indemnified Person shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or in addition to
those available to the Companies.  No
Company will, without the prior written consent of the Sponsors, settle,
compromise, or consent to the entry of any judgment in or otherwise seek to
terminate any Action in respect of which indemnification may be sought
hereunder (whether or not any Indemnified Person is a party therein) unless the
Companies have given the Sponsors reasonable prior written notice thereof and
such settlement, compromise, consent or termination includes an unconditional
release of each Indemnified Person from any liabilities arising out of such
Action.  No Company will permit any such
settlement, compromise, consent or termination to include a statement as to, or
an admission of, fault, culpability or a failure to act by or on behalf of an
Indemnified Person, without such Indemnified Person’s prior written
consent.  No Indemnified Person seeking
indemnification, reimbursement or contribution under this agreement will,
without the Companies’ prior written consent, settle, compromise, consent to
the entry of any judgment in or otherwise seek to terminate any Action referred
to herein.

 

Prior to entering into any agreement or arrangement with respect to, or
effecting, any merger, statutory exchange or other business combination or
proposed sale or exchange, 

 

A-3

 

dividend or other distribution or liquidation of all or a significant
portion of its assets in one or a series of transactions or any significant
recapitalization or reclassification of its outstanding securities that does
not directly or indirectly provide for the assumption of the obligations of the
Companies set forth herein, the Companies will promptly notify the Sponsors in
writing thereof and, if requested by the Sponsors, shall arrange in connection
therewith alternative means of providing for the obligations of the Companies
set forth herein, including the assumption of such obligations by another
party, insurance, surety bonds or the creation of an escrow, in each case in an
amount and on terms and conditions satisfactory to the Sponsors.

 

Each of the Companies’ obligations hereunder shall be in addition to
any rights that any Indemnified Person may have at common law or
otherwise.  Each of the Companies
acknowledges that in connection with the Agreement, the Sponsors are acting as
independent contractors and not in any other capacity with duties owing solely
to the Companies.  This Annex and any
other agreements relating to the Agreement shall be governed by and construed
in accordance with the laws of the State of New York, applicable to contracts
made and to be performed therein and, in connection therewith, the parties
hereto consent to the exclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County or the United States District Court for
the Southern District of New York and the respective appellate courts
thereof.  Notwithstanding the foregoing,
solely for the purpose of enforcing each of the Companies’ obligations
hereunder, each of the Companies consents to personal jurisdiction, service and
venue in any court proceeding in which any claim subject to this agreement is
brought by or against any Indemnified Person. 
THE SPONSORS HEREBY AGREES, AND EACH OF THE COMPANIES HEREBY AGREES ON
ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS
SECURITY HOLDERS, TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF THE ENGAGEMENT, THE SPONSORS’
PERFORMANCE THEREOF OR THIS AGREEMENT.

 

The provisions of this agreement shall apply to the services provided
to each of the Companies by the Sponsors (including related activities prior to
the date hereof) and any modification thereof and shall remain in full force
and effect regardless of the completion or termination of the Agreement.  If any term, provision, covenant or restriction
herein is held by a court of competent jurisdiction to be invalid, void or
unenforceable or against public policy, the remainder of the terms, provisions
and restrictions contained herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.

 

A-4

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