Document:

EXHIBIT 10.4

 

Execution Copy

 

PARENT
PLEDGE AGREEMENT

 

THIS
PARENT PLEDGE AGREEMENT (this “Pledge
Agreement”), dated as of July 18, 2005, among UNITED INDUSTRIAL
CORPORATION, a Delaware corporation (the “Pledgor”), in favor of
SUNTRUST BANK, a Georgia banking corporation, as Administrative Agent (the “Administrative
Agent”), on its behalf and on behalf of the other banks and lending
institutions (the “Lenders”) from time to time party to the Revolving
Credit Agreement, dated as of the date hereof, by and among the Pledgor, AAI
Corporation, a Maryland corporation (the “Borrower”), the Administrative
Agent, the Lenders, and SunTrust Bank, as Issuing Bank and as Swingline Lender
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
pursuant to the Credit Agreement, the Lenders have agreed to establish a
revolving credit facility to the Borrower;

 

WHEREAS,
it is a condition precedent to the obligations of the Administrative Agent, the
Issuing Bank, the Swingline Lender, and the Lenders under the Credit Agreement
that the Pledgor grant to Administrative Agent a security interest in all of
its Pledged Collateral (as defined below), and the Pledgor wishes to fulfill
said condition precedent;

 

WHEREAS,
the Pledgor is the record and beneficial owners of all of the issued and
outstanding shares of common stock listed on Part A of Schedule I
attached hereto (the “Pledged Shares”) and are the record and beneficial
owners of all membership interests listed on Part B of Schedule I
attached hereto (the “Pledged Membership Interests”), such Pledged
Shares and Pledged Membership Interests being all of the Capital Stock of the
Pledgor’s Domestic Subsidiaries (excluding the Capital Stock of Detroit Stoker
Company, a Michigan corporation) and 65% of the voting Capital Stock and 100%
of the non-voting Capital Stock of the Pledgor’s Non-U.S. Subsidiaries;

 

WHEREAS, the
Pledgor is the record and beneficial owners of the promissory notes and
instruments described on Schedule II attached hereto (the “Pledged
Notes”); and

 

NOW,
THEREFORE, in order to induce Lenders to extend the Loans and
the Issuing Bank to issue Letters of Credit and to make the financial
accommodations as provided for in the Credit Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.  Defined Terms.  All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Credit Agreement.

 

 

2.  Pledge.  The Pledgor hereby pledges to the Administrative Agent, for its benefit
and the benefit of Lenders and each party to a Hedging Transaction incurred to
limit interest rate or fee fluctuation with respect to the Loans and Letters of
Credit if at the date of entering into such Hedging Transaction such
person was a Lender or an Affiliate of a Lender and such person executes and
delivers to the Administrative Agent a letter agreement in form and substance
acceptable to the Administrative Agent pursuant to which such person (i) appoints
the Administrative Agent as its agent under the applicable Loan Documents and (ii) agrees
to be bound by the provisions of Article IX and X of the Credit Agreement (each such person a “Specified Hedge Provider”,
the Administrative Agent, the Lenders and the Specified Hedge Providers,
collectively, referred to herein as the “Secured Parties” and each a “Secured
Party”) and grants to the Administrative Agent, for its benefit and the
benefit of the Secured Parties, a first priority security interest in all of
the Pledgor’s right, title and interest in, to and under the following
property, whether now owned by or owing to, or hereafter acquired by or arising
in favor of the Pledgor (collectively, the “Pledged Collateral”):

 

(a)                                  The
Pledged Shares and the certificates representing the Pledged Shares, and,
except as expressly provided for in Section 8 hereof, all
dividends, cash, instruments 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 the Pledged Shares;

 

(b)                                 Any
stock or other securities acquired by the Pledgor or its designees with respect
to, incident to or in lieu of the Pledged Shares or with respect to, incident
to or in lieu of the Pledged Collateral (x) due to any dividend, stock-split,
stock dividend or distribution on dissolution, or partial or total liquidation,
or for any other reason, (y) in connection with a reduction of capital, capital
surplus or paid-in-surplus or (z) in connection with any spin-off, split-off,
reclassification, readjustment, merger, consolidation, sale of assets,
combination of shares or any other plan of distribution affecting of the those
companies listed on Schedule I;

 

(c)                                  Any
subscription or other rights or options issued in connection with the Pledged
Shares, and, if exercised by the Pledgor, all new shares or other securities so
acquired by the Pledgor, which shall promptly be assigned and delivered to the
Administrative Agent and held under the terms of this Pledge Agreement in the
same manner as the Pledged Shares originally pledged hereunder;

 

(d)                                 Any
and all proceeds, monies, income and benefits arising from or by virtue of, and
all dividends and distributions (cash or otherwise) payable or distributable
with respect to, all or any of the Pledged Shares or other securities and
rights and interests described in this Section 2, except as
expressly provided for in Section 8 hereof;

 

(e)                                  The
Pledged Membership Interests, if any, and any certificates at any time
representing the Pledged Membership Interests, [it being
understood that the Pledged Membership Interests are, as of the date hereof,
uncertificated,] and all cash, securities, dividends, rights, and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Membership Interests;

 

2

 

(f)                                    All
of the Pledgor’s right, title and interest as a member in each limited
liability company listed on Part B of Schedule I (the “LLCs”),
whether now owned or hereafter acquired, including all of the Pledgor’s right,
title and interest in, to and under the limited liability company agreements
described on Part B of Schedule I (as such agreements have heretofore
been and may hereafter be amended, restated, supplemented or otherwise modified
from time to time, collectively, the “LLC Agreements”) to which it is a
party (including, the right to vote with respect to and to manage and
administer the business of such LLCs) together with all other rights,
interests, claims and other property of the Pledgor in any manner arising out
of or relating to its membership interest in the LLCs, whatever their
respective kind or character, whether they are tangible or intangible property,
and wheresoever they may exist or be located, and further including, without
limitation, (1) all rights of the Pledgor to receive distributions of any
kind, in cash or otherwise, due or to become due under or pursuant to each such
LLC Agreement or otherwise in respect of such LLCs, (2) all rights of the
Pledgor to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to each such LLCs, (3) all claims of the Pledgor for damages
arising out of, or for the breach of, or for a default under, each such LLC
Agreement, (4) any certificated or uncertificated security evidencing any
of the foregoing issued by such LLCs to the Pledgor, (5) any interest of
the Pledgor in the entries on the books of any financial intermediary
pertaining to the Pledgor’s interest as a member in the LLCs and (6) to
the extent not included in the foregoing, all proceeds of any and all of the
foregoing; provided, however, that notwithstanding anything
herein to the contrary;

 

(i)                                     The
Pledgor shall remain liable under the LLC Agreements to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Pledge Agreement had not been executed;

 

(ii)                                  The
exercise by the Administrative Agent of any of its rights hereunder shall not
release the Pledgor from any of its duties or obligations under the LLC
Agreements (other than to the extent the Pledgor is precluded from performing
such duties solely as a result of the Administrative Agent’s having exercised
such rights or remedies);

 

(iii)                               The Administrative Agent
shall not have any obligation or liability under the LLC Agreements by reason
of this Pledge Agreement, nor shall the Administrative Agent be obligated to
perform any of the obligations or duties of the Pledgor thereunder, to make any
payment, to make any inquiry as to the nature or sufficiency of any payment
received by the Pledgor or the sufficiency of any performance by any party
under any such LLC Agreement, or to take any action to collect or enforce any
claim for payment assigned hereunder; and

 

(iv)                              Without
limiting the generality of the foregoing, neither the grant of the security
interest in the Pledged Collateral in favor of the Administrative Agent as
provided herein nor the exercise by the Administrative Agent of any of its
rights hereunder nor any action by the Administrative Agent in connection with
a foreclosure on the Pledged Collateral shall be deemed to constitute the
Administrative Agent or any other Secured Party a member of any limited
liability company;

 

3

 

(g)                                 The
Pledged Notes and the instruments and other documents representing the Pledged
Notes, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for the Pledged Notes; and

 

(h)                                 All
additional promissory notes from time to time acquired by the Pledgor in any
manner and the instruments and other documents representing such promissory
notes and all interest, cash, instruments 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 promissory notes.

 

3.  Security For Secured Obligations.  This
Pledge Agreement and the Pledged Collateral secure the prompt payment, in full
when due, whether at stated maturity, by acceleration or otherwise, and
performance of (i) all obligations of the Pledgor under the Credit
Agreement, the Parent Guaranty Agreement and all other Loan Documents to which
the Pledgor is a party to (whether for principal, interest, fees, expenses,
indemnity or reimbursement payments, or otherwise, as provided in the Credit
Agreement or such other Loan Documents), (ii) all renewals, extensions,
refinancings and modifications thereof, and (iii) all interest, charges,
expenses, fees, attorneys’ fees and other sums required to be paid by the
Pledgor under the Credit Agreement, under this Pledge Agreement or under any of
the other Loan Documents (collectively, the “Secured Obligations”).

 

4.  Delivery Of Pledged Collateral.  All
certificates, promissory notes and instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on behalf of the
Administrative Agent pursuant hereto.  All Pledged Shares and Pledged Membership
Interests shall be accompanied by duly executed, undated instruments of
transfer or assignment endorsed in blank, all in form and substance
satisfactory to the Administrative Agent and, if the Administrative Agent so
requests, with signatures guaranteed by a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.
or by a commercial bank or trust company having an office or correspondent in
the United States.  All Pledged Notes
shall be endorsed by the Pledgor.  Upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have the right, at any time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of the
Administrative Agent or any of its nominees any or all of the Pledged Shares or
Pledged Membership Interests.  In
addition, the Administrative Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Shares or
Pledged Membership Interests for certificates or instruments of smaller or
larger denominations.

 

5.  Representations and Warranties.  The
Pledgor represents and warrants to the Secured Parties as follows:

 

(a)                                  The
Pledgor is, and at the time of delivery of the Pledged Shares and Pledged
Membership Interests to the Administrative Agent pursuant to Section 4
hereof will be, the sole holder of record and the sole beneficial owner of the
Pledged Collateral pledged by the

 

4

 

Pledgor, free and
clear of any Lien thereon or affecting the title thereto except for Permitted
Encumbrances.

 

(b)                                 All
of the Pledged Shares and Pledged Membership Interests have been duly
authorized, validly issued and are fully paid and non-assessable and all
documentary, stamp, or other taxes or fees owing in connection with the
issuance, transfer and/or pledge thereof hereunder have been paid and will be
hereafter paid by the Pledgor as same becomes due and payable.

 

(c)                                  No
dispute, counterclaim or defense exists with respect to all or any part of the
Pledged Collateral.

 

(d)                                 The
Pledgor has the requisite corporate authority to pledge, assign, transfer,
deliver, deposit and set over its Pledged Collateral to the Administrative
Agent as provided herein.

 

(e)                                  There
are no restrictions, other than applicable laws and regulations affecting the
offering and sales of securities generally, upon the transfer, hypothecation or
pledge of any of the Pledged Collateral.

 

(f)                                    None
of the Pledged Shares or Pledged Membership Interests have been issued or
transferred in violation of the securities registration, securities disclosure
or similar laws of any jurisdiction to which such issuance or transfer may be
subject.

 

(g)                                 Part A
of Schedule I hereto lists the authorized shares of common stock,
the par value thereof and the number of issued and outstanding shares of common
stock of each issuer of Pledged Shares. 
As of the date hereof, (i) no subscription, warrant, option or
other rights to purchase or acquire any shares of any class of capital stock of
any issuer of Pledged Shares is authorized and outstanding, and (ii) there
is no commitment by any issuer of Pledged Shares to issue any such shares,
warrants, options or other such rights or securities.

 

(h)                                 Part B
of Schedule I hereto lists all of the issued and outstanding
membership interests of each issuer of Pledged Membership Interests.  As of the date hereof, (i) no
subscription, warrant, option or other rights to purchase or acquire any
membership interests of any issuer of Pledged Membership Interests is
authorized and outstanding, and (ii) there is no commitment by any issuer
of Pledged Membership Interests to issue any such warrants, options or other
such rights or securities.

 

(i)                                     The
pledge by the Pledgor of its Pledged Collateral is not in contravention of any
law or of any agreement to which the Pledgor is party or by which the Pledgor
is otherwise bound, and no consent, approval, authorization or other order of,
or other action by, any Person or notice to or filing with, any Person is
required (x) for the pledge by the Pledgor of the Pledged Collateral pursuant to
this Pledge Agreement or for the execution, delivery or performance of this
Pledge Agreement by the Pledgor or (y) for the exercise by the Administrative
Agent of the voting or other rights provided for in this Pledge Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Pledge
Agreement (except as may be required in connection

 

5

 

with any
disposition of any portion of the Pledged Collateral by laws affecting the
offering and sale of securities generally).

 

(j)                                     The
pledge, assignment and delivery of the Pledged Collateral together with duly
executed, undated instruments of transfer or assignment endorsed in blank
pursuant to this Pledge Agreement will create a valid first priority Lien on
and a first priority perfected security interest in the Pledged Collateral and
the proceeds thereof, securing the payment of the Secured Obligations and no filing or other action is necessary to perfect or
protect such security interest, except that (i) the filing of a financing
statement, the taking of possession or some other action may be required under Section 9-315
of the Uniform Commercial Code as in effect in the State of New York (the “UCC”)
to perfect a security interest in certain proceeds of the Pledged Collateral
that do not constitute Pledged Shares or other securities or instruments and (ii) the
filing of a financing statement under Sections 9-312 and 9-314 of the UCC may
be required to perfect a security interest in any Pledged Collateral that
constitutes “investment property” (other than the Pledged Shares) with respect
to which the Administrative Agent does not have “control” (as such terms are
defined in the UCC).

 

(k)                                  All
of the representations and warranties contained in the Credit Agreement and the
other Loan Documents are true and correct in all material respects, are
incorporated herein by this reference and deemed to be made herein by the
Pledgor for purposes of this Pledge Agreement.

 

(l)                                     Each
of the Pledged Notes purported to be pledged hereunder is the legal, valid and
binding obligation of the obligor thereof, enforceable in accordance with its
terms; each of the Pledged Notes has been duly authorized, authenticated or
issued and delivered by the issuer thereof, and no such issuer is in default
thereunder.  Except as disclosed on Schedule II
hereto, none of the Pledged Notes are subordinated in right of payment to other
indebtedness (except for the Secured Obligations) or subject to the terms of an
indenture.

 

(m)                               This
Pledge Agreement has been duly authorized, executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of the Pledgor
enforceable against the Pledgor in accordance with its terms.

 

The representations and
warranties set forth in this Section 5 shall survive the execution
and delivery of this Pledge Agreement.

 

6.  Covenants.  The
Pledgor covenants and agrees that from and after the date of this Pledge
Agreement and until the payment and performance in full of all of the Secured
Obligations of the Pledgor:

 

(a)                                  The
Pledgor shall not sell, assign, transfer, pledge or otherwise encumber any of
its rights in or to its Pledged Collateral or any unpaid dividends or other
distributions or payments with respect thereto except pursuant to this Pledge
Agreement.

 

(b)                                 The
Pledgor will not cause or permit any issuer of Pledged Shares or Pledged
Membership Interests to issue or grant any warrants, stock options of any
nature or other

 

6

 

instruments convertible
into membership interests or shares of any class of capital stock or additional
membership interests or shares of capital stock or sell or transfer any
membership interests or treasury stock.

 

(c)                                  The
Pledgor will, at its own cost and expense, promptly execute, acknowledge and
deliver all such instruments and take all such action as the Administrative
Agent from time to time may reasonbly request in order to perfect and protect
the Lien granted or purported to be granted hereby or to enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder with respect to
the Pledged Collateral.

 

(d)                                 The
Pledgor has and will, at its own cost and expense, defend the title to its
Pledged Collateral and the Liens of the Administrative Agent thereon against
the claim of any Person and will maintain and preserve such Liens.

 

(e)                                  The
Pledgor will pay all taxes, assessments and charges levied, assessed or imposed
upon its Pledged Collateral before the same become delinquent or become Liens upon
any of its Pledged Collateral except where the same may be contested in good
faith by appropriate proceedings and as to which adequate reserves have been
provided.

 

7.  Adjustments and Distributions Concerning
Pledged Collateral.  Should the Pledged Collateral, or any part
thereof, ever be converted in any manner by the Pledgor into another type of
property or any money or other proceeds ever be paid or delivered to the
Pledgor as a result of the Pledgor’s rights in the Pledged Collateral, then in
any such event (except as expressly provided in Section 8 hereof),
all such property, money and other proceeds shall promptly be and become part
of the Pledged Collateral, and the Pledgor covenants and agrees to forthwith
pay and deliver all money so received to the Administrative Agent, for the
benefit of the Secured Parties, as Pledged Collateral hereunder in accordance
with the provisions of the Credit Agreement; and, if the Administrative Agent
deems it necessary and so requests, to properly endorse, assign or transfer any
and all such other proceeds to the Administrative Agent and to deliver to the
Administrative Agent any and all such other proceeds which require perfection
by possession under the UCC.  With
respect to any of such property of a kind requiring an additional security
agreement, financing statement or other writing to perfect a security interest
therein in favor of the Administrative Agent, the Pledgor will forthwith
execute and deliver to the Administrative Agent, or cause to be executed and delivered
to the Administrative Agent, whatever the Administrative Agent shall reasonably
deem necessary or proper for such purposes.

 

8.  Pledgor’s Rights; Termination Of Rights.

 

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

 

(i)                                     The
Pledgor shall have the right, from time to time, to vote and give consents with
respect to its Pledged Collateral or any part thereof for all purposes
permitted by the Credit Agreement or any other Loan Documents; provided,
that, without limitation of the foregoing, no vote shall be cast, and no
consent shall be given or action taken by the Pledgor without the prior written
consent of the Administrative Agent that

 

7

 

would authorize or effect (except if and to the extent expressly
permitted by the Credit Agreement): (A) the dissolution or liquidation, in
whole or in part, of any issuer of the Pledged Collateral, (B) the
consolidation or merger of any issuer of the Pledged Collateral with any other
Person (other than the Pledgor), (C) the sale, disposition or encumbrance
of any portion of the assets of any issuer of the Pledged Collateral or any
business or division thereof, (D) any change in the authorized number of
shares or membership interests, the stated capital or the authorized shares or
member interest capital of any issuer of the Pledged Collateral or the issuance
of any additional shares of capital stock or membership interests thereof, or (E) the
alteration of the voting rights with respect to the capital stock or membership
interests of any issuer of the Pledged Collateral;

 

(ii)                                  The
Pledgor shall be entitled, from time to time, to collect and receive for its
own use all dividends, distributions and other amounts paid in respect of its
Pledged Collateral to the extent not in violation of the Credit Agreement other
than any and all:  (A) dividends
paid or payable other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect of, or in exchange
for, any of its Pledged Collateral, (B) dividends and other distributions
paid or payable in cash in respect of any of its Pledged Collateral in
connection with a partial or total liquidation, dissolution or a reduction in
capital, capital surplus or paid in capital, and (C) cash paid, payable or
otherwise distributed in redemption of, or in exchange for, any of its Pledged
Collateral; provided, that until actually paid all rights to such
dividends shall remain subject to the Lien created by this Pledge Agreement.

 

(b)                                 All
dividends (other than such cash dividends as are permitted to be paid to the
Pledgor in accordance with Section 8(a)(ii) above) and all
other distributions in respect of any of the Pledged Shares, Pledged Membership
Interests or Pledged Notes, whenever paid or made, shall be delivered to the
Administrative Agent to hold as Pledged Collateral and shall, if received by
the Pledgor, be received in trust for the benefit of the Administrative Agent,
be segregated from the other property or funds of the Pledgor, and be forthwith
delivered promptly to the Administrative Agent as Pledged Collateral of the
Pledgor in the same form as so received (with any necessary endorsement or
assignment).

 

(c)                                  Upon
the occurrence of an Event of Default and during the continuation thereof, all
of Pledgor’s rights to exercise voting and other consensual rights pursuant to Section 8(a)(i) hereof
and all of Pledgor’s rights to receive any cash dividends and distributions
pursuant to Section 8(a)(ii) hereof shall cease and all such
rights shall thereupon become vested in the Administrative Agent, for the
benefit of the Secured Parties, who shall have the sole and exclusive right to
exercise the voting and other consensual rights which the Pledgor would otherwise
be authorized to exercise pursuant to Section 8(a)(i) hereof
and to receive and retain the dividends and distributions which the Pledgor
would otherwise be authorized to receive and retain pursuant to Section 8(a)(ii) hereof.  Upon the occurrence of an Event of Default
and during the continuation thereof, the Pledgor shall pay over to the
Administrative Agent, for the benefit of the Secured Parties, any dividends
received by the Pledgor with respect to its Pledged Collateral and any and all
money and other property paid over to or received by the Administrative Agent
shall be retained by the Administrative Agent, for the benefit of the

 

8

 

Secured Parties,
as Pledged Collateral hereunder and shall be applied in accordance with the
terms of the Credit Agreement.

 

9.  Default.  The
Pledgor shall be in default under this Pledge Agreement upon the happening of
any of the following events or conditions (hereinafter referred to as an “Event
of Default”):

 

(i)                                     The
occurrence of an Event of Default as defined in the Credit Agreement;

 

(ii)                                  The
filing of any financing statement with regard to the Pledged Collateral, other
than relating to or permitted by this Pledge Agreement, or the attachment of
any additional Lien or security interest to any portion of the Pledged
Collateral, for the benefit of any Person other than the Administrative Agent;
and

 

(iii)                               Failure
of the Pledgor to observe any of its respective covenants set forth in this
Pledge Agreement.

 

10.  Remedies Upon An Event Of Default.

 

(a)                                  Upon
the occurrence of an Event of Default and during the continuation thereof, the
Administrative Agent may exercise all rights of a secured party under the UCC
(whether or not the UCC applies to the affected collateral).  In addition, the Administrative Agent is
hereby authorized and empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral, exercise
the voting rights with respect thereto, collect and receive all cash dividends
and other distributions made thereon, sell in one or more sales after five (5) days’
notice of the time and place of any public sale or of the time after which a
private sale is to take place (which notice the Pledgor agrees is commercially
reasonable), but without any previous notice or advertisement, the whole or any
part of the Pledged Collateral and otherwise act with respect to the Pledged
Collateral as though the Administrative Agent was the legal and record owner
thereof.  The Pledgor hereby irrevocably
constitutes and appoints the Administrative Agent, for the benefit of the
Secured Parties, as the proxy and attorney-in-fact of the Pledgor with respect
to the Pledged Collateral, with full power of substitution to exercise any of the
rights provided in the preceding sentence; provided, that the
Administrative Agent shall not have any duty to exercise any such right or to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so.  Any sale shall be
made at a public or private sale at the Administrative Agent’s offices or
elsewhere to be named in the notice of sale, either for cash or upon credit or
for future delivery at such price as the Administrative Agent may deem fair,
and any Secured Party may be the purchaser of the whole or any part of the
Pledged Collateral so sold and hold the same thereafter in its own right free
from any claim of the Pledgor or any right of redemption, which the Pledgor
hereby waives to the extent permitted by applicable law.  Each sale shall be made to the highest
bidder, but the Administrative Agent reserves the right to reject any and all
bids at such sale which, in its discretion, it shall deem inadequate.  Demands of performance, except as otherwise
herein specifically provided for, notices of sale, advertisements and the
presence of property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of the Administrative Agent.

 

9

 

(b)                                 If,
at the original time or times appointed for the sale of the whole or any part
of the Pledged Collateral, the highest bid, if there be but one sale, shall be
inadequate to discharge in full all the Secured Obligations, or if the Pledged
Collateral be offered for sale in lots, if at any of such sales, the highest
bid for the lot offered for sale would indicate to the Administrative Agent, in
its discretion, the unlikelihood of the proceeds of the sales of the whole of
the Pledged Collateral being sufficient to discharge all the Secured
Obligations, the Administrative Agent may, on one or more occasions and in its
discretion, postpone any of said sales by public announcement at the time of
sale or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, that any sale or sales made after such
postponement shall be after five (5) days’ notice from the Administrative
Agent to any the Pledgor.

 

(c)                                  If,
at any time that the Administrative Agent shall determine to exercise its
rights to sell the whole or any part of the Pledged Collateral hereunder, such
Pledged Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act of 1933, as
amended (the “Act”), the Administrative Agent may, in its discretion
(subject only to applicable requirements of law), sell such Pledged Collateral
or part thereof by private sale in such manner and under such circumstances as
the Administrative Agent may deem necessary or advisable, but subject to the
other requirements of this Section 9, and shall not be required to
effect such registration or to cause the same to be effected.  Without limiting the generality of the
foregoing, in any such event the Administrative Agent in its discretion (i) may,
in accordance with applicable securities laws, proceed to make such private
sale notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or part thereof could be or shall have been filed under
said Act (or similar statute), (ii) may approach and negotiate with a
single possible purchaser to effect such sale, (iii) may restrict such
sale to a purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment and not with a view to the
distribution or sale of such Pledged Collateral or part thereof, and (iv) may
place all or any part of the Pledged Collateral with an investment banking firm
for private placement, which firm shall be entitled to purchase all or any part
of the Pledged Collateral for its own account. 
If any of the Pledged Collateral shall not be freely distributable to
the public without registration under the Act (or similar statute), then the
Administrative Agent shall not be required to effect such registration or cause
the same to be effected but, in its discretion (subject to applicable
requirements of law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions (i) as to the financial
sophistication and ability of any Person permitted to bid or purchase at any
such sale, (ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale, including
restrictions on future transfer thereof, (iii) as to the representations
required to be made by each Person bidding or purchasing at such sale relating
to that Person’s access to financial information about the Pledgor or any of
its subsidiaries so sold and such Person’s intentions as to the holding of the
Pledged Collateral so sold for investment, for its own account, and not with a
view to the distribution thereof, and (iv) as to such other matters as the
Administrative Agent may, in its discretion, deem necessary or appropriate in
order that such sale (notwithstanding any failure so to register) may be
effected in compliance with the UCC and other laws affecting the enforcement of
creditors’ rights and the Act and all applicable state securities laws.

 

10

 

(d)                                 The
Pledgor acknowledges that, notwithstanding the legal availability of a private
sale or a sale subject to the restrictions described above in paragraph (c),
the Administrative Agent may, in its discretion, elect to register any or all
the Pledged Collateral under the Act (or any applicable state securities
law).  The Pledgor, however, recognizes
that the Administrative Agent may be unable to effect a public sale of any or
all the Pledged Collateral and may be compelled to resort to one or more
private sales thereof.  The Pledgor also
acknowledges that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no obligation
to delay a sale of any of the Pledged Collateral for the period of time
necessary to permit the registrant to register such securities for public sale
under the Act, or under applicable state securities laws, even if the Pledgor
would agree to do so.

 

(e)                                  Any
cash held by the Administrative Agent as Pledged Collateral and all cash
proceeds received by the Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time thereafter
be applied (after payment of any amounts payable to the Administrative Agent
pursuant to Section 12 hereof) in whole or in part by the
Administrative Agent for the benefit of the Secured Parties in their individual
and various agency capacities and any other holder of any Secured Obligations
against, all or any part of the Secured Obligations in accordance with the
terms hereof.  Any surplus of such cash
or cash proceeds held by the Administrative Agent and remaining after payment
in full of all the Secured Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.

 

(f)                                    The
Pledgor agrees that following the occurrence and during the continuation of an
Event of Default it will not at any time plead, claim or take the benefit of
any appraisal, valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement of this Pledge
Agreement, or the absolute sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder,
and the Pledgor waives the benefit of all such laws to the extent it lawfully
may do so.  The Pledgor agrees that it
will not interfere with any right, power and remedy of the Administrative Agent
provided for in this Pledge Agreement or now or hereafter existing at law or in
equity or by statute or otherwise, or the exercise or beginning of the exercise
by the Administrative Agent of any one or more of such rights, powers, or
remedies.  No failure or delay on the
part of the Administrative Agent to exercise any such right, power or remedy
and no notice or demand which may be given to or made upon the Pledgor by the
Administrative Agent with respect to any such remedies shall operate as a
waiver thereof, or limit or impair the Administrative Agent’s right to take any
action or to exercise any power or remedy hereunder, without notice or demand, or
prejudice its rights as against the Pledgor in any respect.  Except for gross negligence or willful
misconduct, the Pledgor waives all claims, damages and demands against the
Administrative Agent arising out of the repossession, retention or sale of the
Pledged Collateral.

 

11

 

11.  Power Of Attorney.  The
Pledgor appoints the Administrative Agent, or any other Person whom the
Administrative Agent may designate, as the Pledgor’s true and lawful
attorney-in-fact, with, upon the occurrence of an Event of Default, power to
endorse the Pledgor’s name on any checks, notes, acceptances, money orders,
drafts or other form of payment or security representing a portion of the
Pledged Collateral that may come into the Administrative Agent’s possession and
to do all things necessary to carry out the terms of this Pledge
Agreement.  The Pledgor ratifies and
approves all such acts of such attorney-in-fact.  Except gross negligence or willful
misconduct, neither the Administrative Agent nor any other Person designated by
the Administrative Agent as attorney-in-fact hereunder will be liable for any
acts or omissions, nor for any errors of judgment or mistakes of fact or
law.  This power, coupled with an
interest, is irrevocable until the payment if full of all Secured Obligations
of the Pledgor.

 

12.  Administrative Agent’s Right To Take
Action.  In the event that the Pledgor fails or
refuses promptly to perform any of its obligations set forth herein, including,
without limitation, its obligation pursuant to Section 6(e) hereof
to pay taxes, assessments and other charges levied, assessed or imposed on the
Pledged Collateral, or otherwise fails or refuses to pay any amount necessary
for the preservation and protection of the Pledged Collateral, the
Administrative Agent shall have the right, without obligation, by notice to the
Pledgor, to do all things it deems necessary or advisable to discharge the same
(including, without limitation, to pay any such taxes, assessments, charges or
other sums, together with interest and penalties thereon) and any sums paid by
the Administrative Agent, or the cost thereof, including, without limitation,
reasonable attorneys’ fees, shall be reimbursed by the Pledgor, to the
Administrative Agent on demand and, until so reimbursed, shall bear interest at
the highest rate chargeable under Section 2.12(c) of the Credit
Agreement.

 

13.  Expenses.  The
Pledgor shall pay (i) all reasonable costs, expenses, taxes and fees
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of this Pledge Agreement and all
certificates, opinions and other documents relating to these transactions,
including, without limitation, the reasonable disbursements and professional
fees of King & Spalding LLP, counsel to the Administrative Agent, in
all cases whether or not the transaction contemplated hereby shall be
consummated; (ii) all costs, expenses, taxes and fees incurred by the
Administrative Agent in connection with the perfection, registration,
maintenance, administration, custody and preservation of the Pledged
Collateral, including, without limitation, with respect to any and all stamp,
intangible or other taxes that may be payable or determined in the future to be
payable in connection with this Pledge Agreement and all other documents
executed or delivered in connection herewith, and relating to releases and
consents; and (iii) all costs, expenses, taxes and fees incurred by any of
the Secured Parties in connection with or after the occurrence of any Event of
Default, including, without limitation, in connection with (a) the
negotiation, preparation, execution and delivery of any waiver, amendment or
consent by the Secured Parties, (b) the negotiation of any restructuring
or workout transaction, and the preparation, execution and delivery of any
documents prepared in connection therewith, and (c) enforcement or
foreclosure with respect to this Pledge Agreement, in all such cases such
costs, expenses, taxes and fees shall include, without limitation, the
reasonable disbursements and reasonable professional fees actually incurred of
counsel to any Secured Party.  To the
extent that any such fees and expenses are subject to value added taxes, such
taxes will be paid by the Pledgor.  To
the extent reimbursement is sought pursuant to this

 

12

 

Section 13 or
any other document executed pursuant hereto, the Secured Parties shall submit
to the Pledgor a statement of expenses to be paid by the Pledgor.  Such expenses shall be due and payable within
thirty (30) days of the date of the original statement to the extent that such
Secured Party is entitled to such reimbursement.

 

14.  Indemnity.  The
Pledgor will indemnify and hold harmless each of the Secured Parties and each
of their respective employees, representatives, officers and directors from and
against any and all claims, liabilities, investigations, losses, damages,
actions, and demands by any party against the Secured Parties or any of them
resulting from any breach or alleged breach by the Pledgor of any
representation or warranty made hereunder, or otherwise arising out of this
Pledge Agreement, unless, with respect to any of the above, any of the Secured
Parties are finally judicially determined to have acted or failed to act with
gross negligence or willful misconduct. 
This Section 14 shall survive termination of this Pledge
Agreement.

 

15.  Limitation On the Administrative Agent’s
Duty In Respect Of Pledged Collateral.  The
Administrative Agent shall use reasonable care with respect to the Pledged
Collateral in its possession or under its control.  The powers conferred on the Administrative
Agent hereunder are solely to protect its interest in the Pledged Collateral
and shall not impose any duty upon it to exercise any such powers.  Except for the safe custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Pledged
Collateral or any income thereon, as to ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not the Administrative Agent, or
any other Secured Party has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to any Pledged Collateral.  The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property.

 

16.  Security Interest Absolute.  All
rights of the Administrative Agent and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:

 

(a)                                  any
lack of validity or enforceability of the Loan Documents;

 

(b)                                 any
change in the time, manner or place of payment of, or in any other term of, all
or any of the obligations, or any other amendment or waiver of or any consent
to any departure from the Loan Documents including, without limitation, any
increase in the Secured Obligations resulting from the extension of additional
credit to the Pledgor or any of its Subsidiaries or otherwise;

 

(c)                                  any
taking, exchange, release or non-perfection of any other collateral, or any
taking, release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Obligations;

 

13

 

(d)                                 any
manner of application of collateral, or proceeds thereof, to all or any of the
Secured Obligations, or any manner of sale or other disposition of any
collateral for all or any part of the Secured Obligations or any other assets
of the Pledgor or any of its Subsidiaries;

 

(e)                                  any
change, restructuring or termination of the corporate structure or existence of
the Pledgor or any of its Subsidiaries; or

 

(f)                                    any
other circumstance which might otherwise constitute a defense available to, or
a discharge of, the Pledgor or a third party pledgor.

 

17.  Reinstatement.  This
Pledge Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Pledgor for
liquidation or reorganization, should the Pledgor become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of the Pledgor’s assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a “voidable preference,” “fraudulent conveyance,” “fraudulent
transfer” or otherwise, all as though such payment or performance had not been
made.  In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

 

18.  Successors And Assigns.  This
Pledge Agreement and all obligations of the Pledgor hereunder shall be binding
upon the successors and assigns of the Pledgor (including any
debtor-in-possession on behalf of the Pledgor) and shall, together with the
rights and remedies of the Administrative Agent, for the benefit of the Secured
Parties, hereunder, inure to the benefit of the Administrative Agent, the other
Secured Parties, all future holders of any instrument evidencing any of the
Secured Obligations and their respective successors and assigns.  No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Secured Obligations or any portion thereof or
interest therein shall in any manner affect the Lien granted to the
Administrative Agent, for the benefit of the Secured Parties, hereunder.  The Pledgor may not assign, sell, hypothecate
or otherwise transfer any interest in or obligation under this Pledge
Agreement.

 

19.  Waivers; Amendment.

 

(a)                                  No
failure or delay by any Secured Party of any kind in exercising any power,
right or remedy hereunder and no course of dealing between the Pledgor on the
one hand and the administrative Agent or the holder of any Note on the other hand
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy hereunder or under any other Loan Document, or
any abandonment or discontinuance of steps to enforce such a power, right or
remedy, preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.  The rights
and of the Secured Parties hereunder and of the Lenders under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have.  No waiver of
any provision of this Pledge

 

14

 

Agreement or consent to any departure by the Pledgor
therefrom shall in any event be effective unless the same shall be permitted by
subsection (b) below, and then such waiver and consent shall be
effective only in the specific instance and for the purpose for which
given.  No notice or demand on the
Pledgor in any case shall entitle the Pledgor to any other or further notice in
similar or other circumstances.

 

(b)                                 Neither this Pledge Agreement nor any provision
hereof may be waived, amended or modified except pursuant to a written
agreement entered into between the Pledgor with respect to which such waiver,
amendment or modification relates and the Administrative Agent, with the prior
written consent of the Required Lenders (except as otherwise provided in the
Credit Agreement).

 

20.  Severability.  Any
provision of this Pledge Agreement held to be illegal, invalid or unenforceable
in any jurisdiction, shall, as to such jurisdiction, be ineffective to the
extent of such illegality, invalidity or unenforceability without affecting the
legality, validity or enforceability of the remaining provisions hereof or
thereof; and the illegality, invalidity or unenforceability of a particular
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

21.  Notices.  All
notices, requests and other communications to the Pledgor or Administrative
Agent hereunder shall be delivered in the manner required by the Credit
Agreement and shall be sufficiently given to Administrative Agent or the
Pledgor if addressed or delivered to them at, in the case of the Administrative
Agent, its address and telecopier number specified in the Credit Agreement and
in the case of the Pledgor, at its address and telecopier number provided in
the Parent Guaranty Agreement.  All such
notices and communications shall be deemed to have been duly given at the times
set forth in the Credit Agreement.

 

22.  Counterparts; Integration.  This
Pledge Agreement may be executed by one or more of the parties to this Pledge
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  This Pledge
Agreement constitutes the entire agreement among the parties hereto regarding
the subject matters hereof and supersedes all prior agreements and
understandings, oral or written, regarding such subject matter.

 

23.  Governing Law; Jurisdiction; Consent to
Service of Process.

 

(a)                                  This
Pledge Agreement shall be construed in accordance with and be governed by the
law of the State of New York.

 

(b)                                 Each
party to this Pledge Agreement hereby irrevocably and unconditionally submits,
for itself and its property, to the non-exclusive jurisdiction of the United
States courts located within the Southern
district in the State of New York, and of any state court of the State of New
York located in New York county and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Pledge Agreement or
any other Loan Document or the transactions contemplated hereby or thereby, 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

 

15

 

and determined in
such New York state court or, to the extent permitted by applicable law, 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 Pledge Agreement shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Pledge Agreement against the
Pledgor or its properties in the courts of any jurisdiction.

 

(c)                                  Each
party to this Pledge Agreement irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding described in paragraph (b) of this Section and
brought in any court referred to in paragraph (b) of this Section.  Each party hereto irrevocably waives, to the
fullest extent permitted by applicable law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(d)                                 Each
party to this Pledge Agreement irrevocably consents to the service of process
in the manner provided for notices in Section 10.1 of the Credit
Agreement.  Nothing in this Pledge
Agreement will affect the right of the Administrative Agent or any Lender to
serve process in any other manner permitted by law.

 

24.  WAIVER OF JURY TRIAL.  EACH
PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF THIS PLEDGE AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

25.  Benefit of Secured Parties.  All Liens
granted or contemplated hereby shall be for the benefit of the Secured Parties,
and all proceeds or payments realized from Pledged Collateral in accordance
herewith shall be applied to the Secured Obligations in accordance with Section 8.2
of the Credit Agreement.

 

26.  Termination of this Pledge Agreement.  No
termination or cancellation (regardless of cause or procedure) of the Credit
Agreement shall in any way affect or impair the powers, obligations, duties,
rights and liabilities of the parties hereto in any way with respect to (i) any
transaction or event occurring prior to such termination or cancellation, (ii) the
Pledged Collateral, or (iii) the Pledgor’s undertakings, agreements,
covenants, warranties and representations contained in this Pledge Agreement
and all such undertakings, agreements, covenants, warranties and
representations shall survive such termination or cancellation until the
payment and performance, in full, of all Secured Obligations of the Pledgor and
the termination

 

16

 

of all commitments to lend or issue letters of credit under the Credit
Agreement.  Subject to Section 17  hereof, this Pledge Agreement and
the security interests granted hereunder shall terminate when all of the
Secured Obligations (other than those Secured Obligations relating to the
Hedging Obligations) have been paid in full in cash and the Lenders have no
further commitment to lend under the Credit Agreement, the LC Exposure has been
reduced to zero and the Issuing Bank has no further obligation to issue Letters
of Credit under the Credit Agreement.  Upon such termination, Administrative Agent
shall return all Pledged Collateral in its possession to the Pledgor and will,
at the sole cost and expense of the Pledgor, execute such documents, without
recourse or warranty, as Pledgor deems reasonably necessary to release any
interests held by Administrative Agent or the Secured Parties in the Pledged
Collateral.

 

27.  Additional Pledged Collateral.  In the
event that the Pledgor is required, under the terms of any Loan Document or
otherwise, to pledge and hypothecate any Collateral after the Closing Date, the
Pledgor shall pledge and hypothecate such Collateral, and be bound with respect
to such Collateral by all of the terms and conditions hereof, by delivery to
the Administrative Agent of an executed counterpart of a Supplement to Parent
Pledge Agreement in the form of Exhibit A attached hereto.

 

[Signature Pages Follow]

 

17

 

IN WITNESS WHEREOF, the
Pledgor has caused this Pledge Agreement to be executed and delivered by its
duly authorized officer as of the date first set forth above.

 

 

	
   

  	
  UNITED INDUSTRIAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[SIGNATURE
PAGE TO PLEDGE AGREEMENT]

 

 

	
  Acknowledged and Agreed
  to:

  
	
   

  
	
  SUNTRUST BANK,

  
	
  as Administrative Agent

  
	
   

  
	
   

  
	
  By:

  	
  /s/

  	
   

  
	
  Name:

  
	
  Title:EXHIBIT 10.5

 

Execution Copy

 

SECURITY AGREEMENT 

 

THIS
SECURITY AGREEMENT (this “Agreement”), dated as of July
18, 2005, among AAI CORPORATION, a Maryland corporation (the
“Borrower”), UNITED INDUSTRIAL CORPORATION, a Delaware corporation (“UIC”),
the Subsidiaries of the Borrower signatory hereto and each other subsidiary of
the Borrower hereafter a party hereto (Borrower, UIC, each Subsidiary of the
Borrower a party hereto and each other Subsidiary of the Borrower hereafter
becoming a party hereto shall be collectively known as the “Grantors”,
and individually as a “Grantor”), in favor of SUNTRUST BANK, a Georgia
banking corporation, as the Administrative Agent (the “Administrative Agent”),
on its behalf and on behalf of the other banks and lending institutions (the “Lenders”)
from time to time party to the Revolving Credit Agreement, dated as of the date
hereof, by and among the Borrower, UIC, the Administrative Agent, the Lenders,
and SunTrust Bank, as Issuing Bank and as Swingline Lender (as amended, restated,
supplemented, or otherwise modified from time to time, the “Credit Agreement”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
pursuant to the Credit Agreement, the Lenders have agreed to establish a
revolving credit facility in favor of the Borrower; and

 

WHEREAS,
it is a condition precedent to the obligations of the Administrative Agent, the
Issuing Bank, the Swingline Lender, and the Lenders under the Credit Agreement
that the Grantors enter into this Agreement to (i) secure all obligations
of the Borrower under the Credit Agreement, (ii) secure the obligations of
each Subsidiary of the Borrower under the Subsidiary Guaranty Agreement and all
other Loan Documents to which each such Subsidiary is a party, (iii) secure
all obligations of UIC under the Parent Guaranty Agreement and all other Loan
Documents to which UIC is a party and (iv) secure all Hedging Obligations
owed to the Administrative Agent, any Lender or any of their affiliates to the
extent expressly permitted by the Credit Agreement, and the Grantors desire to
satisfy such condition precedent.

 

NOW,
THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

Section 1.01.  Definitions. 
Capitalized terms defined in the Credit Agreement and not otherwise
defined herein, when used in this Agreement shall have the respective meanings
provided for in the Credit Agreement. 
The following additional terms, when used in this Agreement, shall have
the following meanings:

 

“Account Debtor”
shall mean any person or entity that is obligated under an Account.

 

 

“Accounts” shall
mean all “accounts” (as defined in the UCC) now owned or hereafter acquired by
any Grantor or in which any Grantor has or acquires any rights, and, in any
event, shall mean and include, without limitation, (a) all accounts
receivable, contract rights, book debts, notes, drafts and other obligations or
indebtedness owing to any Grantor arising from the sale or lease of goods or
other property by any Grantor or the performance of services by any Grantor
(including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible under the UCC
in effect in any jurisdiction), (b) all of each Grantor’s rights in, to
and under all purchase and sales orders for goods, services or other property,
and all of each Grantor’s rights to any goods, services or other property
represented by any of the foregoing (including returned or repossessed goods
and unpaid sellers’ rights of rescission, replevin, reclamation and rights to
stoppage in transit), (c) all monies due to or to become due to any
Grantor under all contracts for the sale, lease or exchange of goods or other
property or the performance of services by any Grantor (whether or not yet
earned by performance on the part of such Grantor), and (d) all collateral
security and guarantees of any kind given to any Grantor with respect to any of
the foregoing.

 

“Chattel Paper”
shall mean all “chattel paper” (as defined in the UCC) owned or acquired by any
Grantor or in which any Grantor has or acquires any rights.

 

“Collateral” shall
mean, collectively, all of the following:

 

(i)                                     all
Accounts;

 

(ii)                                  all
Chattel Paper;

 

(iii)                               all
Deposit Accounts;

 

(iv)                              all
Documents;

 

(v)                                 all
Equipment;

 

(vi)                              all
Fixtures;

 

(vii)                           all
General Intangibles;

 

(viii)                        all
Instruments;

 

(ix)                                all
Inventory;

 

(x)                                   all
Investment Property;

 

(xi)                                all
money, cash or cash equivalents;

 

(xii)                             all
other goods and personal property, whether tangible or  intangible;

 

2

 

(xiii)                          all
Supporting Obligations and Letter-of-Credit Rights of            any Grantor;

 

(xiv)                         all books
and records pertaining to any of the Collateral (including, without limitation,
credit files, Software, computer programs, printouts and other computer
materials and records but excluding customer lists); and

 

(xv)                            All
products and Proceeds of all or any of the Collateral described in clauses (i) through
(xiv) hereof.

 

“Copyright License”
shall mean any and all rights of any Grantor under any written agreement
granting any right to use any Copyright or Copyright registration.

 

“Copyrights” shall
mean all of the following now owned or hereafter acquired by any Grantor or in
which any Grantor now has or hereafter acquires any rights: (a) all
copyrights and general intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications
in connection therewith, including all registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues,
extensions or renewals thereof.

 

“Deposit Accounts”
shall mean all “deposit accounts” (as defined in the UCC) now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
rights, or other receipts, of any Grantor covering, evidencing or representing
rights or interest in such deposit accounts.

 

“Documents” shall
mean all “documents” (as defined in the UCC) now owned or hereafter acquired by
any Grantor or in which any Grantor has or acquires any rights, or other
receipts, of any Grantor covering, evidencing or representing goods.

 

“Equipment” shall
mean all “equipment” (as defined in the UCC) now owned or hereafter acquired by
any Grantor and wherever located, and, in any event, shall include without
limitation all machinery, furniture, furnishings, processing equipment,
conveyors, machine tools, engineering processing equipment, manufacturing
equipment, materials handling equipment, trade fixtures, trucks, trailers,
forklifts, vehicles, computers and other electronic data processing and other
office equipment of any Grantor, and any and all additions, substitutions and
replacements of any of the foregoing, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto, all fuel therefore and all manuals, drawings, instructions, warranties
and rights with respect thereto.

 

“Event of Default”
shall have the meaning set forth for such term in Section 7 hereof.

 

“General Intangibles”
shall mean all “general intangibles” (as defined in the UCC) now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires

 

3

 

any rights and, in any
event, shall include all right, title and interest in or under all contracts,
all customer lists, Licenses, Copyrights, Trademarks, Patents, and all
applications therefor and reissues, extensions or renewals thereof, rights in
Intellectual Property, interests in partnerships, joint ventures and other
business associations, licenses, permits, copyrights, trade secrets,
proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processes, models,
drawings, materials and records, goodwill (including the goodwill associated
with any Trademark or Trademark License), all rights and claims in or under
insurance policies (including insurance for fire, damage, loss and casualty,
whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, choses in action,
deposit, checking and other bank accounts, rights to receive tax refunds and
other payments, rights of indemnification, all books and records,
correspondence, credit files, invoices, tapes, cards, computer runs, domain
names, prospect lists, customer lists and other papers and documents.

 

“Instruments”
shall mean all “instruments” (as defined in the UCC) now owned or hereafter
acquired by any Grantor or in which any Grantor has or acquires any rights and,
in any event, shall include all promissory notes, all certificates of deposit
and all letters of credit evidencing, representing, arising from or existing in
respect of, relating to, securing or otherwise supporting the payment of, any
of the Accounts or other obligations owed to any Grantor.

 

“Intellectual Property”
shall mean all of the following now owned or hereafter acquired by any Grantor
or in which any Grantor has or acquires any rights: (a) all Patents,
patent rights and patent applications, Copyrights and copyright applications,
Trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights, applications for registration of trademarks, trade names
and service marks, fictitious names registrations and trademark, trade name and
service mark registrations, and all derivations thereof; and (b) Patent
Licenses, Trademark Licenses, Copyright Licenses and other licenses to use any
of the items described in the preceding clause (a), and any other items
necessary to conduct or operate the business of each Grantor.

 

“Inventory” shall
mean all “inventory” (as defined in the UCC) now owned or hereafter acquired by
any Grantor or in which any Grantor has or acquires any rights and, in any
event, shall include all goods owned or held for sale or lease to any other
Persons.

 

“Investment Property”
shall mean all “investment property” (as defined in the UCC) now owned or
hereafter acquired by any Grantor or in which any Grantor has or acquires any
rights and, in any event, shall include all “certificated securities”, “uncertificated
securities”, “security entitlements”, “securities accounts”, “commodity
contracts” and “commodity accounts” (as all such terms are defined in the UCC)
of each Grantor; provided, that Investment Property shall not include
any securities of Detroit Stoker Company, a Michigan corporation, now or
hereafter owned by UIC.

 

“Letter-of-Credit
Rights” shall mean “letter-of-credit rights” (as defined in the UCC), now
owned or hereafter acquired by any Grantor, including rights to payment or

 

4

 

performance under a
letter of credit, whether or not any Grantor, as beneficiary, has demanded or
is entitled to demand payment or performance.

 

“License” shall
mean any Copyright License, Patent License, Trademark License or other license
of rights or interests of each Grantor in Intellectual Property.

 

“Patent License”
shall mean any written agreement now owned or hereafter acquired by any Grantor
or in which any Grantor has or acquires any rights granting any right with
respect to any property, process or other invention on which a Patent is in
existence.

 

“Patents” shall
mean all of the following now owned or hereafter acquired by any Grantor or in
which any Grantor has or acquires any rights: (a) all letters patent of
the United States or any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or any
other country, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State or Territory thereof, or any other country; and (b) all
reissues, continuations, continuations-in-part and extensions thereof.

 

“Proceeds” shall
mean all “proceeds” (as defined in the UCC) of, and all other profits, rentals
or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or realization upon,
the Collateral, and, in any event, shall mean and include all claims against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of any Collateral, and any condemnation or requisition payments with respect to
any Collateral and the following types of property acquired with cash
proceeds:  Accounts, Inventory, General
Intangibles, Documents, Instruments and Equipment.

 

“Secured Obligations”
shall mean (i) all Obligations of the Borrower under the Credit Agreement
and the other Loan Documents (whether for principal, interest, fees, expenses,
indemnity or reimbursement payments, or otherwise as provided therein), (ii) all
obligations of the Borrower, monetary or otherwise, pursuant to any Hedging
Transaction incurred to limit interest rate or fee fluctuation with respect to
the Loans and Letters of Credit entered into with a Specified Hedge Provider, (iii) all
obligations of each other Grantor under the Subsidiary Guaranty Agreement or
the Parent Guaranty Agreement, as applicable, and all other Loan Documents to
which such other Grantor is a party to (whether for principal, interest, fees,
expenses, indemnity or reimbursement payments, or otherwise), (iv) all
renewals, extensions, refinancings and modifications thereof, and (v) all
reasonable costs and expenses incurred by the Administrative Agent in
connection with the exercise of its rights and remedies hereunder (including
reasonable attorneys’ fees).  Where the
context requires, any affiliate of a Lender which is party to a Hedging
Transaction entered into to limit interest rate or fee fluctuations with
respect to the Loans and Letters of Credit shall be deemed to be a “Lender” for
purposes of this Agreement and such affiliate shall only be required to be an
affiliate of a Lender at the time the relevant Hedging Transaction is entered
into in order for such Hedging Transaction to be eligible to be designated as a
“Secured Obligation”.

 

5

 

“Secured
Parties” shall mean, collectively, the Administrative Agent, the Lenders
and the Specified Hedge Providers.

 

“Security Interests”
shall mean the security interests granted to the Administrative Agent on its
behalf and on behalf of the Secured Parties pursuant to Section 3,
as well as all other security interests created or assigned as additional
security for the Secured Obligations pursuant to the provisions of this
Agreement.

 

“Software” shall mean all “software” (as
defined in the UCC), now owned or hereafter acquired by any Grantor, including
all computer programs and all supporting information provided in connection
with a transaction related to any program.

 

“Specified Hedge Provider” shall mean each party
to a Hedging Transaction entered into to limit interest rate or fee
fluctuations with respect to the Loans and Letters of Credit if at the date of
entering into such Hedging Transaction such person was a Lender or an Affiliate
of a Lender and such person executes and delivers to the Administrative Agent a
letter agreement in form and substance acceptable to the Administrative Agent
pursuant to which such person (i) appoints the Administrative Agent as its
agent under the applicable Loan Documents and (ii) agrees to be bound by
the provisions of Article IX and X of the Credit Agreement.

 

“Supporting
Obligations” means all “supporting obligations” (as defined in the UCC),
including letters of credit and guaranties issued in support of Accounts,
Chattel Paper, Documents, General Intangibles, Instruments, or Investment
Property.

 

“Trademark License”
shall mean any written agreement now owned or hereafter acquired by any Grantor
or in which any Grantor has or acquires any such rights granting to any Grantor
any right to use any Trademark.

 

“Trademarks” shall
mean all of the following now owned or hereafter acquired by any Grantor or in
which any Grantor has or acquires any such rights: (i) all trademarks,
trade names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature (whether registered or
unregistered), now owned or existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country
or any political subdivision thereof, (ii) all reissues, extensions or
renewals thereof and (iii) all goodwill associated with or symbolized by
any of the foregoing.

 

“UCC” shall mean
the Uniform Commercial Code as in effect, from time to time, in the State of
New York; provided that if by reason of mandatory provisions of law, the
perfection or the effect of perfection or non-perfection of the Security
Interests in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, “UCC” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for

 

6

 

purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.

 

“United States” or
“U.S.” shall mean the United States of America, any of the fifty states
thereof, and the District of Columbia.

 

SECTION 2.  Representations and
Warranties.  Each Grantor
represents and warrants to the Administrative Agent, for the benefit of Secured
Parties, as follows:

 

(a)                                  Such Grantor has rights in and the power
to transfer each item of the Collateral upon which it purports to grant a Lien
hereunder and has good and marketable title to all of its Collateral, free and
clear of any Liens other than Liens expressly permitted under Section 7.2
of the Credit Agreement.

 

(b)                                 Other than financing statements, security
agreements, or other similar or equivalent documents or instruments with
respect to Liens expressly permitted under Section 7.2 of the Credit
Agreement, no financing statement, mortgage, security agreement or similar or
equivalent document or instrument evidencing a Lien on all or any part of the
Collateral is on file or of record in any jurisdiction.  None of the Collateral is in the possession
of a Person (other than any Grantor) asserting any claim thereto or security
interest therein, except that the Administrative Agent or its designee may have
possession of Collateral as contemplated hereby.

 

(c)                                  When UCC financing statements in
appropriate form are filed in the offices specified on Schedule I
attached hereto, the Security Interests shall constitute valid and perfected
security interests in the Collateral, prior to all other Liens and rights of
others therein except for the Liens expressly permitted under Section 7.2
of the Credit Agreement, to the extent that a security interest therein may be
perfected by filing pursuant to the UCC, assuming the proper filing and
indexing thereof.

 

(d)                                 All Inventory and Equipment is insured in
accordance with the requirements of the Credit Agreement.

 

(e)                                  None of the Collateral constitutes, or is
the Proceeds of, “farm products” (as defined in the UCC).

 

(f)                                    Schedule II correctly sets forth each Grantor’s
state of incorporation, taxpayer identification number, organizational
identification number and correct legal name indicated on the public record of
such Grantor’s jurisdiction of organization which shows such Grantor to be
organized.

 

(g)                                 The Perfection Certificate, which is
attached hereto as Schedule III, correctly sets forth (i) all
names and tradenames that each Grantor has used within the last five years and
the names of all Persons that have merged into or been acquired by each
Grantor, (ii) the chief executive offices of each Grantor over the last
five years, (iii) all other locations in which tangible assets of each
Grantor have been located in the last five years, (iv) the name of each
bank at which each Grantor maintains Deposit Accounts, the state of
organization of each

 

7

 

such bank, and the account numbers for each Deposit
Account, (v) all letters of credit under which each Grantor is a
beneficiary, (vi) all third parties with possession of any Inventory or
Equipment of each Grantor and (vii) each Grantor’s mailing address.

 

(h)                                 With respect to the Accounts, except as
specifically disclosed to the Administrative Agent, (i) they represent
bona fide sales of Inventory or rendering of services to Account Debtors in the
ordinary course of such Grantor’s business and are not evidenced by a judgment,
Instrument or Chattel Paper; (ii) there are no setoffs, claims or disputes
existing or asserted with respect thereto except as have arisin in the ordinary
course of business and such Grantor has not made any agreement with any Account
Debtor for any extension of time for the payment thereof, any compromise or
settlement for less than the full amount thereof, any release of any Account
Debtor from liability therefor, or any deduction therefrom except a discount or
allowance allowed by such Grantor in the ordinary course of its business for
prompt payment; (iii) to such Grantor’s knowledge, there are no facts,
events or occurrences which in any way impair the validity or enforceability
thereof or could reasonably be expected to reduce the amount payable thereunder
as shown on such Grantor’s books and records and any invoices, statements and
other reports delivered to the Administrative Agent with respect thereto; (iv) such
Grantor has not received any notice of proceedings or actions which are
threatened or pending against any Account Debtor which might result in any
adverse change in such Account Debtor’s financial condition; and (v) such
Grantor has no knowledge that any Account Debtor is unable generally to pay its
debts as they become due.  Further with
respect to the Accounts (i) the amounts shown on such records and all
invoices, statements and collateral reports which may be delivered to the
Administrative Agent with respect thereto are actually and absolutely owing to
such Grantor as indicated thereon and are not in any way contingent; and (ii) to
such Grantor’s knowledge, all Account Debtors have the capacity to contract.

 

(i)                                     With respect to any Inventory, (i) such
Inventory is located at one of the Grantor’s locations set forth on the
Perfection Certificate, (ii) no Inventory is now, or shall at any time or
times hereafter be stored at any other location without the Administrative
Agent’s prior consent, and if the Administrative Agent gives such consent, such
Grantor will concurrently therewith obtain, to the extent required by the
Credit Agreement, bailee, landlord and mortgagee agreements, (iii) such
Grantor has good, indefeasible and merchantable title to such Inventory and
such Inventory is not subject to any Lien or security interest or document
whatsoever except for the Lien granted to the Administrative Agent and except
for Permitted Encumbrances, (iv) except as specifically disclosed to the
Administrative Agent, such Inventory is of good and merchantable quality, free
from any defects, (v) such Inventory is not subject to any licensing,
patent, royalty, trademark, trade name or copyright agreements with any third
parties which would require any consent of any third party upon sale or
disposition of that Inventory or the payment of any monies to any third party
upon such sale or other disposition, and (vi) the completion of
manufacture, sale or other disposition of such Inventory by the Administrative
Agent following an Event of Default shall not require the consent of any Person
and shall not constitute a breach or default under any contract or agreement to
which such Grantor is a party or to which such property is subject.

 

(j)                                     Such Grantor does not have any interest
in, or title to, any Patent, Trademark or Copyright except as set forth in the
Perfection Certificate.  This Security

 

8

 

Agreement is effective to create a valid and
continuing Lien on and, upon filing of the Copyright Security Agreements with
the United States Copyright Office and filing of the Patent Security Agreements
and the Trademark Security Agreements with the United State Patent and
Trademark Office, perfected security interests in favor of the Administrative
Agent in such Grantor’s Patents, Trademarks and Copyrights and such perfected
security interests are enforceable as such as against any and all creditors of
and purchasers from such Grantor.  Upon
filing of the Copyright Security Agreements with the United States Copyright
Office and filing of the Patent Security Agreements and the Trademark Security
Agreements with the United States Patent and Trademark Office and the filing of
appropriate financing statements listed on Schedule I hereto, all
action necessary or desirable to protect and perfect the Administrative Agent’s
Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly
taken.

 

SECTION 3.  The Security Interests.  In order to secure the full and punctual
payment and performance of the Secured Obligations in accordance with the terms
thereof, each Grantor hereby pledges, assigns, hypothecates, sets over and
conveys to the Administrative Agent on its behalf and on behalf of the Secured
Parties and grants to the Administrative Agent on its behalf and on behalf of
the Secured Parties a continuing security interest in and to, all of its rights
in and to all Collateral now or hereafter owned or acquired by such Grantor or
in which such Grantor now has or hereafter has or acquires any rights, and
wherever located.  The Security Interests
are granted as security only and shall not subject the Administrative Agent or
any other Secured Party to, or transfer to the Administrative Agent or any
other Secured Party, or in any way affect or modify, any obligation or
liability of the Grantor with respect to any Collateral or any transaction in
connection therewith.

 

SECTION 4.
 Further Assurances;
Covenants.

 

(a)                                  General.

 

(i)                                     No Grantor shall change the location of its
chief executive office or principal place of business unless it shall have
given the Administrative Agent thirty (30) days prior notice thereof, as well
as executed and delivered to the Administrative Agent all financing statements
and financing statement amendments which the Administrative Agent may
reasonably request in connection therewith. 
No Grantor shall change the locations, or establish new locations, where
it keeps or holds any of the Collateral or any records relating thereto from
the applicable locations described in the Perfection Certificate attached
hereto as Schedule III unless such Grantor shall have given the
Administrative Agent thirty (30) days prior notice of such change of location.  The foregoing covenant shall not apply to any
Collateral (including trucks) perfected by recordation of the Administrative
Agent’s Lien on the appropriate certificate of title.

 

(ii)                                  No Grantor shall change its name,
organizational identification number, identity, jurisdiction of organization,
or corporate structure in any manner unless it shall have given the
Administrative Agent thirty (30) days prior written notice thereof, and
executed and delivered to the Administrative Agent all

 

9

 

financing
statements and financing statement amendments which the Administrative Agent
may reasonably request in connection therewith. 
No Grantor shall merge or consolidate into, or transfer any of the
Collateral to, any other Person other than another Grantor, without the prior
written consent of the Required Lenders.

 

(iii)                               Each Grantor hereby authorizes the
Administrative Agent, its counsel or its representative, at any time and from
time to time, to file financing statements and amendments that describe the
collateral covered by such financing statements as “all assets of the Grantor”,
“all personal property of the Grantor” or words of similar effect, in such
jurisdictions as the Administrative Agent may deem necessary or desirable in
order to perfect the security interests granted by such Grantor under this
Agreement.  Each Grantor will, from time
to time, at its expense, execute, deliver, file and record any statement,
assignment, instrument, document, agreement or other paper and take any other
action (including, without limitation, any filings with the United States
Patent and Trademark Office, Copyright or Patent filings and any filings of
financing or continuation statements under the UCC) that from time to time may
be necessary, or that the Administrative Agent may reasonably request, in order
to create, preserve, upgrade in rank (to the extent required hereby), perfect,
confirm or validate the Security Interests or to enable the Administrative
Agent to obtain the full benefits of this Agreement, or to enable the Administrative
Agent to exercise and enforce any of its rights, powers and remedies hereunder
with respect to any of its Collateral. 
Each Grantor hereby authorizes the Administrative Agent to execute and
file financing statements, financing statement amendments or continuation
statements on behalf of such Grantor. 
Each Grantor agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement.  Grantors shall pay
the costs of, or incidental to, any recording or filing of any financing
statements, financing statement amendments or continuation statements necessary
in the sole discretion of the Administrative Agent, to perfect the
Administrative Agent and Secured Parties’ security interest in the Collateral.

 

(iv)                              Except as set forth in the Perfection
Certificate attached hereto as Schedule III, no Grantor shall
permit any of its tangible assets, including without limitation, its Inventory
and Equipment, to be in the possession of any other Person unless pursuant to
an agreement in form and substance satisfactory to the Administrative Agent (A) such
Person has acknowledged that (1) it holds possession of such Inventory,
Equipment and other tangible assets, as the case may be, for the Administrative
Agent’s benefit, subject to the Administrative Agent’s instructions, and (2) such
Person does not have a Lien in such Inventory, Equipment or other tangible
assets, (B) such Person agrees not to hold such Inventory, Equipment or
other tangible assets on behalf of any other Person and (C) such Person
agrees that, after the occurrence and during the continuance of an Event of
Default and upon request by the Administrative Agent to issue and deliver to
the Administrative Agent warehouse receipts, bills of lading or any

 

10

 

similar documents
relating to such Collateral in the Administrative Agent’s name and in form and
substance acceptable to the Administrative Agent.

 

(v)                                 No Grantor shall (A) sell, transfer,
lease, exchange, assign or otherwise dispose of, or grant any option, warrant
or other right with respect to, any of its Collateral other than sales of
assets permitted under Section 7.6 of the Credit Agreement; or (B) create,
incur or suffer to exist any Lien with respect to any Collateral, except for
the Liens expressly permitted under Section 7.2 of the Credit Agreement.

 

(vi)                              Each Grantor will, promptly upon request,
provide to the Administrative Agent all information and evidence it may
reasonably request concerning the Collateral, to enable the Administrative
Agent to enforce the provisions of this Agreement.

 

(vii)                           Each Grantor shall take all actions
necessary or reasonably requested by the Administrative Agent in order to
maintain the perfected status of the Security Interests.

 

(viii)                        Execept as otherwise provided in Section 14
herein, no Grantor shall file any amendment to or termination of a financing
statement naming any Grantor as debtor and the Administrative Agent as secured
party, or any correction statement with respect thereto, in any jurisdiction
until such time as the Secured Obligations have been satisfied and the
Administrative Agent and the Secured Parties have released their security
interests granted hereunder.

 

(ix)                                Each Grantor shall take all steps
reasonably necessary to grant the Administrative Agent control of all
electronic chattel paper in accordance with the UCC and all “transferable
records” as defined in each of the Uniform Electronic Transactions Act and the
Electronic Signatures in Global and National Commerce Act.

 

(b)                                 Accounts, Etc.

 

(i)                                     Each Grantor shall use all reasonable
efforts consistent with prudent business practice to cause to be collected from
its Account Debtors, as and when due, any and all amounts owing under or on
account of each Account (including, without limitation, Accounts which are
delinquent, such Accounts to be collected in accordance with lawful collection
procedures) and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Account.  The costs and expenses (including, without
limitation, reasonable attorneys’ fees actually incurred) of collection of
Accounts incurred by such Grantor or the Administrative Agent shall be borne by
the Grantors.

 

(ii)                                  Upon the occurrence and during the
continuance of any Event of Default, upon request of the Administrative Agent,
each Grantor will promptly

 

11

 

notify (and each
Grantor hereby authorizes the Administrative Agent so to notify) each Account
Debtor in respect of any Account or Instrument that such Collateral has been
assigned to the Administrative Agent hereunder, and that any payments due or to
become due in respect of such Collateral are to be made directly to the
Administrative Agent or its designee.

 

(iii)                               Each Grantor will perform and comply in
all material respects with all of its obligations in respect of Accounts,
Instruments and General Intangibles.

 

(c)                                  Equipment, Etc. 
Each Grantor shall, (i) within ten (10) days after a written
request by the Administrative Agent, in the case of Equipment now owned, and (ii) following
a request by the Administrative Agent pursuant to subclause (i) above,
within ten (10) days after acquiring any other Equipment, deliver to the
Administrative Agent, any and all certificates of title, and applications
therefor, if any, of such Equipment and shall cause the Administrative Agent to
be named as lienholder on any such certificate of title and applications.  No Grantor shall permit any such items to
become a fixture to real estate or an accession to other personal property
unless such real estate or personal property is the subject of a fixture filing
(as defined in the UCC) creating a first priority perfected Lien in favor of
the Administrative Agent.

 

(d)                                 Patents, Trademarks, Etc. 
Each Grantor shall notify the Administrative Agent promptly upon the
occurrence of each of the following (i) such Grantor’s acquisition after
the date of this Agreement of any material Intellectual Property and (ii) such
Grantor’s obtaining knowledge, that any application or registration relating to
any material Intellectual Property owned by or licensed to such Grantor is
reasonably likely to become abandoned or dedicated, or of any material adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Copyright Office, the United States Patent and Trademark Office or any
court) regarding such Grantor’s ownership of any material Intellectual
Property, its right to register the same, or to keep and maintain the same.

 

(e)                                  Deposit Accounts, Chattel Paper,
Investment Property and Letters of Credit.

 

(i)                                     No Grantor shall open or maintain any
Deposit Accounts other than those listed on the Perfection Certificate attached
hereto as Schedule III and such other Deposit Accounts as such
Grantor shall open and maintain prior notice to and if required under the
Credit Agreement, subject to control agreements, in form and substance
reasonably acceptable to the Administrative Agent.

 

(ii)                                  No Grantor shall become the beneficiary
of any Letters of Credit, unless the issuer of the Letter of Credit has
consented to the assignment of the proceeds of such Letter of Credit to the
Administrative Agent which consent shall not be unreasonably withheld, such
assignment to be in form and substance reasonably acceptable to the
Administrative Agent.

 

(iii)                               Each Grantor, at any time and from time
to time, will (a) take such

 

12

 

steps as the
Administrative Agent may reasonably request from time to time for the
Administrative Agent to obtain “control” of any Investment Property or
electronic Chattel Paper, with any agreements establishing control to be in
form and substance reasonably satisfactory to the Administrative Agent, and (b) otherwise
to insure the continued perfection and priority of the Administrative Agent’s
security interest in any of the Collateral and of the preservation of its
rights therein.

 

(f)                                    Commercial Tort Claims. 
If any Grantor shall at any time acquire a “commercial tort claim” (as
such term is defined in the UCC) with a claim for damages that could reasonably
be expected to be in excess of $100,000, such Grantor shall promptly notify the
Administrative Agent thereof in a writing, providing a reasonable description
and summary thereof, and shall execute a supplement to this Agreement granting
a security interest in such commercial tort claim to the Administrative Agent.

 

SECTION 5.  Reporting and
Recordkeeping.  Each
Grantor covenants and agrees with the Administrative Agent that from and after
the date of this Agreement and until the Secured Obligations have been
indefeasibly paid in full in cash:

 

(a)                                  Maintenance
of Records Generally.  Each Grantor
will keep and maintain at its own cost and expense records of its Collateral,
complete in all material respects, including, without limitation, a record of
all payments received and all credits granted with respect to the Collateral
and all other dealings with its Collateral. 
Each Grantor will mark its books and records pertaining to its
Collateral to evidence this Agreement and the Security Interests.  All Chattel Paper will be marked with the following
legend:  “This writing and the
obligations evidenced or secured hereby are subject to the security interest of
SunTrust Bank, as Administrative Agent.” 
For the Administrative Agent’s further security, each Grantor agrees
that the Administrative Agent shall have a security interest in all of such
Grantor’s books and records pertaining to its Collateral and, upon the
occurrence and during the continuation of any Event of Default, such Grantor
shall deliver and turn over full and complete copies of any such books and
records to the Administrative Agent or to its representatives at any time on
demand of the Administrative Agent.  Upon
reasonable notice from the Administrative Agent, each Grantor shall permit any representative
of the Administrative Agent, to inspect such books and records and will provide
photocopies thereof to the Administrative Agent subject to the limitations as
provided in the Credit Agreement.

 

(b)                                 Special
Provisions Regarding Maintenance of Records and Reporting Re: Accounts, Inventory
and Equipment;

 

(i)                                     Each Grantor shall keep complete and
accurate records of its Accounts.  Upon
the reasonable request of the Administrative Agent, and prior to an Event of
Default no more frequently than one time per calendar quarter, such Grantor shall
deliver to the Administrative Agent all documents, including, without
limitation, repayment histories and present status reports, relating to its
Accounts so scheduled and such other matters and information relating to the
status of its then existing Accounts as the Administrative Agent shall
reasonably

 

13

 

request.

 

(ii)                                  In the event any amounts due and owing in
excess of $250,000 in the aggregate are in dispute between any Account Debtor
and any Grantor, such Grantor shall provide the Administrative Agent with
written notice thereof promptly after such Grantor’s learning thereof
explaining in detail the reason for the dispute, all claims related thereto and
the amount in controversy.

 

(iii)                               Each Grantor shall maintain itemized
records, accurate in all material respects, itemizing and describing the kind,
type, quality, quantity, location and book value of its Inventory and Equipment
and shall, upon request by the Administrative Agent, furnish the Administrative
Agent with a current schedule containing the foregoing information.

 

(iv)                              Each Grantor will promptly upon, but in
no event later than twenty (20) Business Days after:

 

(A) 
Such Grantor’s learning thereof, inform the Administrative Agent, in writing,
of any material delay in such Grantor’s performance of any of its obligations
to any Account Debtor and of any assertion of any claims, offsets or
counterclaims by any Account Debtor and of any allowances, credits or other
monies granted by such Grantor to any Account Debtor, in each case involving
amounts in excess of $250,000 in the aggregate for all Accounts of such Account
Debtor; and

 

(B) 
Such Grantor’s receipt or learning thereof, furnish to and inform the
Administrative Agent of all material adverse information relating to the
financial condition of any Account Debtor with respect to Accounts exceeding
$250,000 in the aggregate; and

 

(v)                                 Such Grantor will promptly notify the
Administrative Agent in writing if any Account, the face value of which exceeds
$250,000, arises out of a contract with the United States of America, or any
department, agency, subdivision or instrumentality thereof, or of any state (or
department, agency, subdivision or instrumentality thereof) where such state
has a state assignment of claims act or other law comparable to the Federal
Assignment of Claims Act, and will take any action required or reasonably
requested by the Administrative Agent to give notice of the Administrative
Agent’s security interest in such Accounts under the provisions of the Federal
Assignment of Claims Act or any comparable law or act enacted by any state or
local governmental authority; and

 

(vi)                              Such Grantor at its expense will cause
independent public accountants from KPMG or any nationally recognized firm or
reasonably satisfactory to the Administrative Agent to prepare and deliver to
the Administrative Agent at any time and from time to time promptly upon the
Administrative Agent’s request made when any Event of Default exists, the

 

14

 

following reports:
(A) a reconciliation of all of its Accounts, (B) an aging of all of
its Accounts, (C) trial balances, and (D) a test verification of such
Accounts.

 

(c)                                  Further
Identification of Collateral.  Each Grantor
will if so requested by the Administrative Agent furnish to the Administrative
Agent, as often as the Administrative Agent reasonably requests but in no event
more frequently than once per calendar quarter, statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.

 

(d)                                 Notices.  In addition to the notices required by Section 5(b) hereof,
each Grantor will advise the Administrative Agent promptly, but in no event
later than thirty (30) days after the occurrence thereof, in reasonable detail,
(i) of any Lien or claim made or asserted against any of the Collateral
that is not expressly permitted by the terms of the Credit Agreement, and (ii) of
the occurrence of any other event which would have a material adverse effect on
the aggregate value of the Collateral or on the validity, perfection or
priority of the Security Interests.

 

SECTION 6.  General Authority.  Each Grantor hereby irrevocably appoints the
Administrative Agent its true and lawful attorney, with full power of
substitution, in the name of such Grantor, the Administrative Agent or
otherwise, for the sole use and benefit of the Administrative Agent on its
behalf and on behalf of the Secured Parties, but at such Grantor’s expense, to
exercise, at any time (subject to the proviso below) all or any of the
following powers:

 

(i)                                     to
file the financing statements, financing statement amendments and continuation
statements referred to in Section 4(a)(iii),

 

(ii)                                  to
demand, sue for, collect, receive and give acquittance for any and all monies
due or to become due with respect to any Collateral or by virtue thereof,

 

(iii)                               to
settle, compromise, compound, prosecute or defend any action or proceeding with
respect to any Collateral,

 

(iv)                              to
sell, transfer, assign or otherwise deal in or with the Collateral or the
proceeds or avails thereof, as fully and effectually as if the Administrative
Agent were the absolute owner thereof, and

 

(v)                                 to
extend the time of payment of any or all thereof and to make any allowance and
other adjustments with reference to the Collateral.

 

provided,
however, that the powers described in clauses (ii), (iii), (iv) and
(v) above may be exercised by the Administrative Agent only if an Event of
Default then exists.

 

SECTION 7.  Events of Default.  Each of the following specified events shall
constitute an Event of Default under this Agreement:

 

15

 

(a)                                  The
existence or occurrence of any “Event of Default” as provided under the terms
of the Credit Agreement;

 

(b)                                 Any
representation or warranty made by or on behalf of any Grantor under or
pursuant to this Agreement shall have been false or misleading in any material
respect when made; or

 

(c)                                  Any
Grantor shall fail to observe or perform any covenant or agreement set forth in
this Agreement other than those referenced in paragraphs (a) and (b) above,
and if such failure is capable of being remedied, such failure shall remain
unremedied for thirty (30) days.

 

SECTION 8.  Remedies upon Event of
Default.

 

(a)                                  If
any Event of Default has occurred and is continuing, the Administrative Agent
may, without further notice, exercise all rights and remedies under this
Agreement or any other Loan Document or that are available to a secured
creditor under the UCC or that are otherwise available at law or in equity, at
any time, in any order and in any combination, including to collect any and all
Secured Obligations from the Grantors, and, in addition, the Administrative
Agent may sell the Collateral or any part thereof at public or private sale,
for cash, upon credit or for future delivery, and at such price or prices as
the Administrative Agent may deem satisfactory. 
The Administrative Agent shall give the Borrower not less than ten days’
prior written notice of the time and place of any sale or other intended
disposition of Collateral, except any Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market.  Each Grantor agrees
that any such notice constitutes “reasonable notification” within the meaning
of Section 9-611 of the UCC (to the extent such Section or any
successor provision under the UCC is applicable).

 

(b)                                 The
Administrative Agent may be the purchaser of any or all of the Collateral so
sold at any public sale (or, if such Collateral is of a type customarily sold
in a recognized market or is of a type which is the subject of widely
distributed standard price quotations or if otherwise permitted under
applicable law, at any private sale) and thereafter hold the same, absolutely,
free from any right or claim of whatsoever kind.  Each Grantor agrees during an Event of
Default to execute and deliver such documents and take such other action as the
Administrative Agent deems necessary or advisable in order that any such sale
may be made in compliance with law.  Upon
any such sale the Administrative Agent shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold.  Each purchaser at any such sale shall hold
the Collateral so sold to it absolutely, free from any claim or right of any
kind, including any equity or right of redemption of the Grantors.  To the extent permitted by law, each Grantor
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter adopted.  The notice (if any) of such sale shall (1) in
case of a public sale, state the time and place fixed for such sale, and (2) in
the case of a private sale, state the day after which such sale may be
consummated.  Any such public sale shall
be held at such time or times within ordinary business hours and at such place or
places as the Administrative Agent may fix in the notice of such sale.  At any such sale Collateral may

 

16

 

be sold in one lot as an
entirety or in separate parcels, as the Administrative Agent may determine.  The Administrative Agent shall not be
obligated to make any such sale pursuant to any such notice.  The Administrative Agent may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be
so adjourned.  In case of any sale of all
or any part of the Collateral on credit or for future delivery, such Collateral
so sold may be retained by the Administrative Agent until the selling price is
paid by the purchaser thereof, but the Administrative Agent shall not incur any
liability in case of the failure of such purchaser to take up and pay for such
Collateral so sold and, in case of any such failure, such Collateral may again
be sold upon like notice.  The
Administrative Agent, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.  The Grantors shall remain liable for any
deficiency.

 

(c)                                  For
the purpose of enforcing any and all rights and remedies under this Agreement,
the Administrative Agent may (i) require any Grantor to, and each Grantor
agrees that it will, at the joint and several expense of the Grantors, and upon
the request of the Administrative Agent, forthwith assemble all or any part of
its Collateral as directed by the Administrative Agent and make it available at
a place designated by the Administrative Agent which is, in the Administrative
Agent’s opinion, reasonably convenient to the Administrative Agent and such
Grantor, whether at the premises of such Grantor or otherwise, (ii) to the
extent permitted by applicable law, enter, with or without process of law and
without breach of the peace, any premise where any such Collateral is or may be
located and, without charge or liability to the Administrative Agent, seize and
remove such Collateral from such premises, (iii) have access to and use
such Grantor’s books and records, computers and software relating to the
Collateral, and (iv) prior to the disposition of any of the Collateral,
store or transfer such Collateral without charge in or by means of any storage
or transportation facility owned or leased by such Grantor, process, repair or
recondition such Collateral or otherwise prepare it for disposition in any
manner and to the extent the Administrative Agent deems appropriate and, in
connection with such preparation and disposition, use without charge any
trademark, trade name, copyright, patent or technical process used such
Grantor.

 

(d)                                 Without
limiting the generality of the foregoing, if any Event of Default has occurred
and is continuing:

 

(i)                                     the
Administrative Agent may (without assuming any obligations or liability
thereunder), at any time and from time to time, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee all rights and
remedies of any Grantor in, to and under any Licenses and take or refrain from
taking any action under any thereof, and each Grantor hereby releases the
Administrative Agent from, and agrees to hold the Administrative Agent free and
harmless from and against any claims arising out of, any lawful action so taken
or omitted to be taken with respect thereto except  for the
Administrative Agent’s gross negligence or willful misconduct as determined by
a final and nonappealable decision of a court of competent jurisdiction; and

 

17

 

(ii)                                  upon
request by the Administrative Agent, each Grantor agrees to execute and deliver
to the Administrative Agent powers of attorney, in form and substance satisfactory
to the Administrative Agent, for the implementation of any lease, assignment,
license, sublicense, grant of option, sale or other disposition of any
Intellectual Property.  In the event of
any such disposition pursuant to this Section, each Grantor shall supply its
know-how and expertise relating to the manufacture and sale of the products
bearing Trademarks or the products or services made or rendered in connection
with Patents or Copyrights, and its customer lists and other records relating to
such Intellectual Property and to the distribution of said products, to the
Administrative Agent.

 

SECTION 9.  Limitation on Duty of
Administrative Agent in Respect of Collateral.  Beyond reasonable care in the custody
thereof, the Administrative Agent shall have no duty as to any Collateral of
any Grantor in its possession or control or in the possession or control of any
agent or bailee or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.  The Administrative Agent shall be deemed to
have exercised reasonable care in the custody of the Collateral of the Grantors
in its possession if such Collateral is accorded treatment substantially equal
to that which it accords its own property, and the Administrative Agent shall
not be liable or responsible for any loss or damage to any of the Grantors’
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Administrative Agent in good faith.

 

SECTION 10.  Application of Proceeds.
 The proceeds of any sale of, or other
realization upon, all or any part of the Collateral of the Grantors shall be
applied by the Administrative Agent in the manner set forth in Section 8.2 of the Credit Agreement.

 

SECTION 11.  Concerning the
Administrative Agent.  The
provisions of Article IX of the Credit Agreement shall inure to the
benefit of the Administrative Agent in respect of this Agreement and shall be
binding upon the parties to the Credit Agreement in such respect.  In furtherance and not in derogation of the
rights, privileges and immunities of the Administrative Agent therein set
forth:

 

(a)                                  The
Administrative Agent is authorized to take all such action as is provided to be
taken by it as the Administrative Agent hereunder or otherwise permitted under
the Credit Agreement and all other action reasonably incidental thereto.  As to any matters not expressly provided for
herein or therein, the Administrative Agent may request instructions from the
Lenders and shall act or refrain from acting in accordance with written
instructions from the Required Lenders or, in the absence of such instructions,
in accordance with its discretion.

 

(b)                                 The
Administrative Agent shall not be responsible for the existence, genuineness or
value of any of the Grantors’ Collateral or for the validity, perfection,
priority or enforceability of the Security Interests, whether impaired by
operation of law or by reason of any action or omission to act on its
part.  The Administrative Agent shall
have no duty to ascertain or inquire as to the performance or observance of any
of the terms of this Agreement by the

 

18

 

Grantors.

 

SECTION 12.  Appointment of
Co-Administrative Agents. 
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Administrative Agent may appoint another bank or trust
company or one or more other Persons reasonably acceptable to the Required
Lenders and, so long as no Event of Default has occurred or is continuing, the
Borrower, either to act as co-agent or co-agents, jointly with the
Administrative Agent, or to act as separate agent or agents on behalf of the Administrative
Agent and the Secured Parties with such power and authority as may be necessary
for the effectual operation of the provisions hereof and specified in the
instrument of appointment (which may, in the discretion of the Administrative
Agent, include provisions for the protection of such co-agent or separate agent
similar to the provisions of Section 10).

 

SECTION 13.  Expenses.  In the event that any Grantor fails to comply
with the provisions of the Credit Agreement, this Agreement or any other Loan
Document, such that the value of any of its Collateral or the validity,
perfection, rank or value of the Security Interests are thereby diminished or
potentially diminished or put at risk in any material way, the Administrative
Agent may, but shall not be required to, effect such compliance on behalf of
such Grantor, and the Grantors shall jointly and severally reimburse the
Administrative Agent for the reasonable and actual costs thereof on
demand.  All insurance expenses and all
expenses of protecting, storing, warehousing, appraising, insuring, handling,
maintaining and shipping such Collateral, any and all excise, stamp,
intangibles, transfer, property, sales, and use taxes imposed by any state,
federal, or local authority or any other governmental authority on any of such
Collateral, or in respect of periodic appraisals and inspections of such
Collateral, or in respect of the sale or other disposition thereof, shall be
borne and paid by the Grantors jointly and severally; and if the Grantors fail
promptly to pay any portion thereof when due, the Administrative Agent may, at
its option, but shall not be required to, pay the same and charge the Grantors’
accounts therefor, and the Grantors agree jointly and severally to reimburse
the Administrative Agent therefor on demand. 
All sums so paid or incurred by the Administrative Agent for any of the
foregoing and any and all other sums for which the Grantors may become liable
hereunder and all costs and expenses (including reasonable attorneys’ fees,
legal expenses and court costs) incurred by the Administrative Agent in
enforcing or protecting the Security Interests or any of its rights or remedies
thereon shall be payable by the Grantors on demand and shall bear interest
(after as well as before judgment) until paid at the default rate of interest
set forth in the Credit Agreement and shall be additional Secured Obligations
hereunder.

 

SECTION 14.  Termination of Security
Interests; Release of Collateral.  Upon the repayment in full in cash
of all Secured Obligations (other than those Secured Obligations relating to
the Hedging Obligations), termination of all commitments of the Lenders under
the Credit Agreement and the cash collateralization of the LC Exposure, the
Security Interests shall terminate and all rights to the Collateral shall
revert to the Grantors.  Upon any such
termination of the Security Interests or release of such Collateral, the
Administrative Agent will, at the expense of the Borrower, execute and deliver
to the Borrower such documents as the Grantors shall reasonably request, but
without recourse or warranty to the Administrative Agent, including but not
limited to written authorization to file termination statements to evidence the
termination of the Security Interests in such Collateral.

 

19

 

SECTION 15.  Notices.  All notices, requests and other
communications to the Grantors or the Administrative Agent hereunder shall be
delivered in the manner required by the Credit Agreement and shall be
sufficiently given to the Administrative Agent or any Grantor if addressed or
delivered to them at, in the case of the Administrative Agent and the Borrower,
its addresses and telecopier numbers specified in the Credit Agreement and in
the case of any other Grantors, at their respective addresses and telecopier
numbers provided in the Subsidiary Guaranty Agreement or the Parent Guaranty
Agreement, as applicable.  All such
notices and communications shall be deemed to have been duly given at the times
set forth in the Credit Agreement.

 

SECTION 16.  No Waiver; Remedies
Cumulative.

 

(a)                                  No
failure or delay of the Administrative Agent of any kind in exercising any
power, right or remedy hereunder and no course of dealing between any Grantor
on the one hand and the Administrative Agent or any holder of any Note on the
other hand shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy hereunder or under any other Loan
Document, or any abandonment or discontinuance of steps to enforce such a
power, right or remedy, preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. 
The rights of the Administrative Agent hereunder and of the Lenders
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by subsection (b) below,
and then such waiver and consent shall be effective only in the specific
instance and for the purpose for which given. 
No notice or demand on any Grantor in any case shall entitle such
Grantor to any other or further notice in similar or other circumstances.

 

(b)                                 Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to a written agreement entered into between the Grantors with
respect to which such waiver, amendment or modification relates and the
Administrative Agent, with the prior written consent of the Required Lenders
(except as otherwise provided in the Credit Agreement).

 

SECTION 17.  Successors and Assigns.  This Agreement is for the benefit of the
Administrative Agent and the Secured Parties and their permitted successors and
assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness.  This Agreement shall be binding on the
Grantors and their successors and assigns; provided,
however, that no Grantor may assign any of
its rights or obligations hereunder without the prior written consent of the
Administrative Agent and the Lenders.

 

SECTION 18.  Governing Law;
Jurisdiction; Consent to Service of Process.

 

(a)                                  This Agreement shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of New York.

 

20

 

(b)                                 Each party to this Agreement hereby
irrevocably and unconditionally submits, for itself and its property, to the
non-exclusive jurisdiction of the United States courts located within the
Southern District in the State of New York, and of any state court of the State
of New York located in New York county and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated hereby or
thereby, 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 court or, to the extent permitted by applicable law, 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 the Administrative
Agent, the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Grantor or its properties in
the courts of any jurisdiction.

 

(c)                                  Each party to this Agreement irrevocably
and unconditionally waives any objection which it may now or hereafter
have to the laying of venue of any such suit, action or proceeding described in
paragraph (b) of this Section and brought in any court referred to in
paragraph (b) of this Section.  Each
party hereto irrevocably waives, to the fullest extent permitted by applicable
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(d)                                 Each
party to this Agreement irrevocably consents to the service of process in the
manner provided for notices in Section 10.1 of the Credit
Agreement.  Nothing in this Agreement
will affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by law.

 

SECTION 19.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,
AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 20.  Severability.  Any provision of this Agreement held to be
illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without affecting the legality, validity or

 

21

 

enforceability of the remaining
provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

SECTION 21.  Counterparts; Integration.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.  This Agreement constitutes the entire
agreement among the parties hereto regarding the subject matters hereof and
supersedes all prior agreements and understandings, oral or written, regarding
such subject matter.

 

SECTION 22.  Additional Grantors.
 Pursuant to Section 5.10 of the
Credit Agreement, each Subsidiary that is required to become a Subsidiary Loan
Party after the date of the Credit Agreement is required to enter into this
Agreement as a Grantor upon becoming such a Subsidiary Loan Party.  Upon execution and delivery after the date
hereof by the Administrative Agent and such Subsidiary of an instrument in the
form of Exhibit A, such Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor herein.  The execution and delivery of any instrument
adding an additional Grantor as a party to this Agreement shall not require the
consent of any other Grantor hereunder. 
The rights and obligations of each Grantor hereunder shall remain in
full force and effect notwithstanding the addition of any new Grantor as a
party to this Agreement.

 

[Signature Page Follows]

 

22

 

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

 

 

	
   

  	
  AAI
  SERVICES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AAI/ACL
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNITED
  INDUSTRIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AAI
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[SIGNATURE
PAGE TO SECURITY AGREEMENT]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]