Document:

revolve.htm

    EXHIBIT 10.2

    

    
      	
              $5,000,000 

            	 
      	
              As of October 11,
      2007

            

    

    New York, New York

    

    FOR VALUE RECEIVED, INDUSTRIAL
ENTERPRISES OF AMERICA, INC., a Nevada corporation, UNIFIDE INDUSTRIES, LIMITED
LIABILITY COMPANY, a New Jersey limited liability company, PITT PENN OIL CO.,
LLC, an Ohio limited liability company, EMC PACKAGING, INC., a Delaware
corporation, PITT PENN HOLDING CO., LLC, an Ohio limited liability company, and
TODAYS WAY MANUFACTURING LLC, an Ohio limited liability company (each a
“Borrower” and collectively the “Borrowers”) jointly and severally promise to
pay to the order of SOVEREIGN BANK (the “Lender”) on the earlier of the
Termination Date or the end of the Revolving Loan Period, or earlier, as set
forth in the Agreement, at the office of the Lender, in lawful money of the
United States of America and in immediately available funds the principal amount
of FIVE MILLION AND 00/100 ($5,000,000) DOLLARS or, if less than such principal
amount, the aggregate unpaid principal amount of all Revolving Credit Loans made
or deemed made by the Lender to the Borrowers pursuant to the Credit Agreement,
dated as of October 11, 2007 among the Borrowers and the Lender (as amended,
restated, supplemented or modified from time to time, the “Agreement”; terms and
phrases defined in the Agreement which are not defined in this Note shall have
their defined meanings in the Agreement when used in this Note). The Borrowers
further jointly and severally promise to pay interest in like money on the
unpaid principal balance of this Note from time to time outstanding at such
rates, and payable at such times, as are specified in the Agreement. All
Revolving Credit Loans made by the Lender pursuant to Section 2 of the Agreement
and all payments of principal thereon may but shall not be required to be
endorsed by the holder of this Note on the schedule annexed hereto, which holder
may add additional pages to such schedule. The aggregate net unpaid amount of
Revolving Credit Loans set forth in such schedule shall be presumed to be the
principal balance hereof but shall not limit Borrowers’ obligations to Lender.
Whenever the unpaid principal balance of any Revolving Credit Loan shall become
due and payable (whether at the stated maturity thereof, by acceleration or
otherwise) or an Event of Default shall have occurred, this Note shall bear
interest at such rates as are specified in the Agreement, payable on demand, but
in no event in excess of the maximum rate of interest permitted under applicable
law.

    

    This Note is the Revolving Credit Note
referred to in the Agreement, and is entitled to the benefits thereof and may be
prepaid in whole or in part as provided therein.

    

       Upon the occurrence of
any one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note may be declared to be or may become
immediately due and payable as provided in the Agreement.

    

    No delay or omission on the part of the
Lender or any holder hereof in exercising any right hereunder shall operate as a
waiver of such right or of any other rights of the Lender or such holder, nor
shall any delay, omission or waiver on any one occasion be deemed a bar or
waiver of the same or any other right on any future
occasion.

    

    The Borrowers and every endorser and
guarantor of this Note or the obligation represented hereby waives presentment,
demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note, and
assents to any extension or postponement of the time of payment or any other
indulgence, to any substitution, exchange or release of collateral and to the
addition or release of any other party or person primarily or secondarily
liable.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This Note and the joint and several
obligations of the Borrowers hereunder shall be construed in accordance with and
governed by the laws of the State of New York, excluding the laws applicable to
conflicts or choice of law.

    

    
      	
              Notice
      Addresses :

               

              CITIBANK, N.A.

              Hauppauge, NY
      11788

            	
              INDUSTRIAL ENTERPRISES
      OF

              AMERICA, INC.

              By:                                                      

              Name:

              Title:

            
	
                JPMORGAN CHASE BANK,
      N.A.

               

              Melville, NY
      11747

            	
              UNIFIDE INDUSTRIES, LIMITED
      LIABILITY COMPANY

               

              By:                                                      

              Name:

              Title:

               

            
	
               

               

              New York, NY
      10017

            	
              PITT PENN OIL CO.,
      LLC

               

              By:                                                      

              Name:

              Title:

               

            
	
              ANK OF AMERICA,
      N.A.

               

              New York, NY
      10036

            	
              EMC PACKAGING,
      INC.

               

              By:                                                      

              Name:

              Title:

               

              TODAYS WAY MANUFACTURING
      LLC

               

              By:                                                      

              Name:

              Title:

               

            
	 
      	
              PITT PENN HOLDING CO.,
      LLC

               

              By:                                                      

              Name:

              Title:security.htm

    EXHIBIT 10.3

    

    FIRST
CONTINUED, AMENDED AND RESTATED SECURITY AGREEMENT

     

    FIRST CONTINUED, AMENDED AND
RESTATED SECURITY
AGREEMENT, dated as of October 11, 2007 (this “Agreement”) made by INDUSTRIAL
ENTERPRISES OF AMERICA, INC., a Nevada corporation, having its principal office at 711 Third
Avenue, New York, New York 10017 (“Parent”), UNIFIDE INDUSTRIES, LIMITED LIABILITY
COMPANY, a New Jersey limited liability company, having its principal office at
121 Highway 36, Suite 125, West Long Branch, New Jersey 07764 (“Unifide”), PITT PENN OIL CO., LLC, an Ohio
limited liability company, having its principal office at 426 Freeport Road,
P.O. Box 296, Creighton, Pennsylvania 15030 (“Pitt
Penn”), EMC PACKAGING,
INC., a Delaware corporation, having its principal office at 550 James Street,
Lakewood, New Jersey 08701 (“EMC”), TODAYS WAY MANUFACTURING LLC, a New
Jersey limited liability company, having its principal office at 1081 Rosemary
Boulevard, Akron, Ohio 44306 (“Todays
Way”), and PITT PENN
HOLDING CO., LLC, an Ohio limited liability company having its principal office
at 426 Freeport Road, P.O. Box 296, Creighton, Pennsylvania 15030 (“Pitt
Holding”, together with
Parent, Unifide, Pitt Penn, EMC and Todays Way, each a “Debtor” or “Grantor” and collectively, the “Debtors or “Grantors”), in favor of SOVEREIGN BANK, a
federal savings bank (“Secured
Party”) and its successors and assigns.

     

    W I T N E S S E T H:

     

    WHEREAS,
each Debtor is entering into a Credit Agreement dated as of even date herewith
with Secured Party pursuant to which, inter alia, Secured Party
may provide loans and other financial accommodations to Debtors (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
and

     

    WHEREAS,
in order to induce Secured Party to enter into the Credit Agreement and the
other Loan Documents, (a) Debtors have agreed to grant to Secured Party a
first priority perfected security interest in the Collateral (defined below) as
collateral security for, inter alia, the payment and
performance of all Obligations and (b) Debtors have agreed to provide
Secured Party with other rights and remedies; and

     

    WHEREAS,
Debtors or certain of them have previously granted a security interest in
substantially all of their existing and future assets and properties to Secured
Party pursuant to a Security Agreement or Security Agreements dated in 2007
(collectively, the “Existing
Security Agreement”) and Debtors and Secured Party wish to continue,
amend and restate the Existing Security Agreement on the terms and conditions
hereinafter set forth; and

     

    WHEREAS,
the Grantors have determined that the execution, delivery and performance of
this Agreement directly benefits, and is in the best interest of, the
Grantors.

     

    NOW,
THEREFORE, in consideration of the premises, the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and in order to induce
the Secured Party to accept the Credit Agreement and the Loan Documents, the
Grantors hereby agree as follows in favor of Secured Party:

     

    SECTION
1. Definitions.

     

    (a) All
capitalized terms and phrases used in this Agreement and the recitals hereto
without definition shall have the respective meanings set forth in the Credit
Agreement or, if not defined therein, as set forth in Articles 8 or 9 of the
Uniform Commercial Code as in effect in the State of New York on this date (the
“UCC” or the “Code”).  The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

     

    (b) Notwithstanding
the above or anything in this Agreement, the following terms shall have the
respective meanings provided for in the Code: “Accounts”, “Cash Proceeds”,
“Chattel Paper”, “Commercial Tort 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Claim”, “Commodity Account”, “Commodity Contracts”,
“Deposit Account”, “Documents”, “Electronic Chattel Paper”, “Equipment”,
“Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”,
“Investment Property”, “Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment
Intangibles”, “Proceeds”, “Promissory Notes”, “Security”, “Record”, “Security
Account”, “Software”, and “Supporting Obligations”.

    (c) As used
in this Agreement, the following terms shall have the respective meanings
indicated below, such meanings to be applicable equally to both the singular and
plural forms of such terms:

     

    “Affiliate” shall mean a
Person (1) which directly or indirectly controls, or is controlled by, or is
under common control with a Person or any of its Subsidiaries, (2) which
directly or indirectly beneficially owns or holds ten (10%) percent or more of
any class of voting stock of a Person or any of its Subsidiaries, or (3) ten
(10%) percent or more of the voting stock of which is directly or indirectly
beneficially owned or held by a Person or any of its
Subsidiaries.  The term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.

     

    “Capital Stock” means (i) with
respect to any Person that is a corporation, any and all shares, interests,
participations or other equivalents (however designated and whether or not
voting) of corporate stock, and (ii) with respect to any Person that is not a
corporation, any and all partnership, membership or other equity interests of
such Person.

     

    “Copyright Licenses” means all
licenses, contracts or other agreements, whether written or oral, naming any
Grantor as licensee or licensor and providing for the grant of any right to use
or sell any works covered by any Copyright (including, without limitation, all
Copyright Licenses set forth in Schedule II
hereto).

     

    “Copyrights” means all domestic
and foreign copyrights, whether registered or not, including, without
limitation, all copyright rights throughout the universe (whether now or
hereafter arising) in any and all media (whether now or hereafter developed), in
and to all original works of authorship fixed in any tangible medium of
expression, acquired or used by any Grantor (including, without limitation, all
copyrights described in Schedule II hereto),
all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.

     

    “Corporate Subsidiary” means
any Subsidiary which is treated as an association taxable as a corporation for
U.S. income tax purposes under the IRC.

     

    “Event of Default” shall have the
meaning set forth in the Credit Agreement.

     

    “Excluded Collateral” shall
mean all property of any Grantor not subject to Secured Party’s security
interest to the extent specified in the next to last paragraph of Section 2 of
this Agreement.

     

    “Governmental Authority” means
any nation or government, any Federal, state, city, town, municipality, county,
local or other political subdivision thereof or thereto and any department,
commission, board, bureau, instrumentality, agency or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.

     

    “Insolvency Proceeding” means
any proceeding commenced by or against any Person under any provision of the
Bankruptcy Code (Chapter 11 of Title 11 of the United States Code) or under
any other bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, or extensions generally
with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.

     

    “Intellectual Property” means
the Copyrights, Trademarks and Patents.

     

    “IRC” means the United States
Internal Revenue Code of 1986, as amended.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Licenses” means the Copyright
Licenses, the Trademark Licenses and the Patent Licenses.

     

    “Lien” means any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights).

     

    “Obligations” shall mean the
collective reference to the existing and future unpaid principal of and interest
and fees and drawings on or under or in connection with this Agreement, the
Credit Agreement, the Revolving Credit Note and the other Loan Documents and all
other existing and future debts, obligations and liabilities of the Debtors or
any of the Debtors to the Secured Party, its successors and assigns of any and
every kind (including, without limitation, interest accruing during or after any
Event of Default and interest accruing during or after any Event of Default
based on the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, any, certain or all of this Agreement, the Credit Agreement, the Revolving
Credit Note, the other Loan Documents or any other documents or transactions,
any replacements or refinancings of any of the foregoing, in each case whether
on account of principal, interest, reimbursement or other obligations, fees,
costs, expenses, damages, indemnities, covenants or otherwise (including,
without limitation, all fees and disbursements of counsel to the Secured Party
that are required to be paid by the Debtors or any of them pursuant to the terms
of this Agreement, the Credit Agreement, the Revolving Credit Note and/or the
other Loan Documents and all amounts advanced or spent by the Secured Party for
the maintenance or preservation of the Collateral and all other expenditures the
Secured Party may make under the provisions of this Agreement, the Credit
Agreement, the Revolving Credit Note and/or the other Loan Documents for the
benefit of Debtors or any of the Debtors).

     

    “Patent Licenses” means all
licenses, contracts or other agreements, whether written or oral, naming any
Grantor as licensee or licensor and providing for the grant of any right to
manufacture, use or sell any invention covered by any Patent (including, without
limitation, all Patent Licenses set forth in Schedule II
hereto).

     

    “Patents” means all domestic
and foreign letters patent, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques, processes,
proprietary information, technology, know-how, formulae, rights of publicity and
other general intangibles of like nature, now existing or hereafter acquired
(including, without limitation, all domestic and foreign letters patent, design
patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology,
know-how and formulae described in Schedule II hereto),
all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office, or in any similar office or agency of the United
States or any other country or any political subdivision thereof), and all
reissues, divisions, continuations, continuations in part and extensions or
renewals thereof.

     

    “Permitted Liens” shall mean
Liens on assets or properties of Debtors permitted by Section 7.2 of the Credit
Agreement.

     

    “Titled Collateral” means
motor vehicles or any asset in which ownership or Liens are evidenced by a
certificate of title or other similar evidence of title.

     

    “Trademark Licenses” means all
licenses, contracts or other agreements, of any and every kind and nature,
wherever located, including, without limitation, all of such Debtor’s present
and future right, title and interest in all of the following, whether now or
hereafter owned or existing or acquired or created, wherever located, all of
such collateral, whether written or oral, naming any Grantor as licensor or
licensee and providing for the grant of any right concerning any Trademark,
together with any goodwill connected with and symbolized by any such trademark
licenses, contracts or agreements and the right to prepare for sale or lease and
sell or lease any and all Inventory now or hereafter owned by any Grantor and
now or hereafter covered by such licenses (including, without limitation, all
Trademark Licenses described in Schedule II
hereto).

     

    “Trademarks” means all domestic
and foreign trademarks, service marks, collective marks, certification marks,
trade names, business names, d/b/a’s, Internet domain names, trade styles,
designs, logos

     

    
      
         

      

      
         

        
          

        

      

      
         
and other
source or business identifiers and all general intangibles of like nature, now
or hereafter owned, adopted, acquired or used by any Grantor (including, without
limitation, all domestic and foreign trademarks, service marks, collective
marks, certification marks, trade names, business names, d/b/a’s, Internet
domain names, trade styles, designs, logos and other source or business
identifiers described in Schedule II hereto),
all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings 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), and all reissues, extensions or renewals thereof, together with all
goodwill of the business symbolized by such marks and all customer lists,
formulae and other Records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are
used.

    

     

    SECTION
2. Continuation and Grant of
Security Interest.

     

    (a) Each
Debtor hereby covenants to and agrees with Secured Party that this Agreement
continues, amends and restates, in its entirety, without a breach in continuity,
the Existing Security Agreement, and shall not be construed as in any way
extinguishing or terminating the obligations (as defined under the Existing
Security Agreement) or the security interests granted under the Existing
Security Agreement or any other rights granted in favor of the Secured Party
thereunder.  Each Debtor also hereby represents, warrants and
covenants to the Secured Party that the Debtors party to the Existing Security
Agreement, pursuant to the Existing Security Agreement, granted to the Secured
Party a first priority perfected security interest in all of the collateral (as
defined in the Existing Security Agreement) as security for all of the
obligations (as defined in the Existing Security Agreement).

     

    (b) As
collateral security for all of the Obligations, each Grantor hereby pledges and
assigns to the Secured Party and grants to the Secured Party a continuing
security interest in, all of such Grantor’s now or hereafter owned or existing
or acquired or created assets and properties of any and every kind and nature,
wherever located, including, without limitation, all of such Grantor’s present
and future right, title and interest in all of the following, whether now or
hereafter owned or existing or acquired or created, wherever located (all of
such collateral, collectively, the “Collateral”):

     

    (i) all
Accounts;

     

    (ii) all
Chattel Paper (whether tangible or electronic), including, without limitation,
Electronic Chattel Paper;

     

    (iii) the
Commercial Tort Claims specified on Schedule VI hereto;

     

    (iv) all
Deposit Accounts, all cash and other property from time to time deposited
therein and the monies and property in the possession or under the control of
the Secured Party or any Affiliate, representative, agent or correspondent of
the Secured Party; 

     

    (v) all
Documents;

     

    (vi) all
Equipment;

     

    (vii) all
Fixtures;

     

    (viii) all
General Intangibles (including, without limitation, all Payment Intangibles and
Software);

     

    (ix) all
Goods;

     

    (x) all
Instruments (including, without limitation, all Promissory Notes and each
certificated Security);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (xi) all
Inventory;

     

    (xii) all
Investment Property;

     

    (xiii) all
Copyrights, Patents and Trademarks, and all Licenses;

     

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

     

    (xv) all oil,
gas and minerals before extraction;

     

    (xvi) all
Supporting Obligations;

     

    (xvii) all other
tangible and intangible personal property of each Grantor (whether or not
subject to the Code), including, without limitation, all bank and other accounts
and all cash, money and all investments therein, all proceeds, products,
offspring, accessions, rents, profits, income, benefits, substitutions and
replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2(b) (including, without limitation, any
proceeds of insurance thereon and all causes of action, claims and warranties
now or hereafter held by each Grantor in respect of any insurance or any of the
items listed above), and all books, correspondence, files and other Records,
including, without limitation, all tapes, desks, cards, Software, data and
computer programs in the possession or under the control of any Grantor or any
other Person from time to time acting for any Grantor, in each case, to the
extent of such Grantors rights therein, that at any time evidence or contain
information relating to any of the property described in the preceding clauses
of this Section 2(b) or are otherwise necessary or helpful in the collection or
realization thereof; and

     

    (xviii) all
Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any
and all of the foregoing Collateral;

     

    in each
case howsoever any Grantor’s interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).

     

    Notwithstanding
anything herein to the contrary, the term “Collateral” shall not include
in the case of a Corporate Subsidiary of such Grantor organized under the laws
of a jurisdiction other than the United States, any of the states thereof or the
District of Columbia (a “Foreign Subsidiary”), more
than 65% (or such greater percentage that, due to a change in applicable law
after the date hereof, (i) would not reasonably be expected to cause the
undistributed earnings of such Foreign Subsidiary as determined for United
States federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary’s United States parent and (ii) would not reasonably be
expected to cause any material adverse tax consequences) of the issued and
outstanding shares of Capital Stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) (it being understood and agreed that the
Collateral shall include 100% of the issued and outstanding shares of Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) or other equity interest of such Foreign
Subsidiary).

     

    The
Grantors agree that the pledge of the shares of Capital Stock acquired by a
Grantor of any and all Persons now or hereafter existing who is a Foreign
Subsidiary may in Secured Party’s sole discretion be supplemented by one or more
separate pledge agreements, deeds of pledge, share charges, or other similar
agreements or instruments, executed and delivered by the relevant Grantors in
favor of the Secured Party, which pledge agreements will provide for the pledge
of such shares of Capital Stock in accordance with the laws of the applicable
foreign jurisdiction.  With respect to such shares of Capital Stock,
the Secured Party may, at any time and from time to time, in its sole
discretion, take actions and require Grantors to take actions in such foreign
jurisdictions that will result in a perfected first priority enforceable Lien
created in such shares of Capital Stock and/or enhanced rights respecting such
Liens or the enforceability, perfection or priority thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECTION
3. Security for
Obligations.  The security interest created hereby in the
Collateral constitutes continuing collateral security for the payment,
performance and observance of all existing and future Obligations.

     

    SECTION
4. Representations and
Warranties.  Each Grantor represents and warrants as of the
date of this Agreement as follows:

     

    (a) Schedule I hereto
sets forth (i) the exact legal name of each Grantor, and, if any such name has
changed within the last 5 years, all predecessor names of such Grantor, and if
such Grantor has consolidated or merged with any Person in the last 5 years, or
acquired substantially all or a substantial portion of the assets of a Person
within the last 5 years, the name of the Person with whom such Grantor merged or
consolidated, or whose assets or equity was purchased and from whom such assets
or equity was purchased, and (ii) the state of incorporation, organization or
formation and the organizational identification number of each Grantor in such
state.

     

    (b) There is
no pending or, to its knowledge, written notice threatening any action, suit,
proceeding or claim affecting any Grantor before any governmental authority or
any arbitrator, or any order, judgment or award issued by any governmental
authority or arbitrator, in each case, that may adversely affect the grant by
any Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or the exercise by the Secured Party of any of its
rights or remedies hereunder.

     

    (c) All
Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and
all Equipment, Fixtures, Goods and Inventory of each Grantor hereafter existing
will be, located and/or based at the addresses specified therefor in Schedule
III hereto.  Each Grantor will give the Secured Party written notice
of any change in the location of any such Collateral within 20 days of such
change, other than to locations set forth on Schedule III hereto (or a new
Schedule III delivered by the Grantors to the Secured Party from time to time)
and with respect to which the Secured Party has filed financing statements and
otherwise fully perfected its Liens thereon or will take such actions pursuant
to Section 5(a).  Each Grantor’s chief place of business and chief
executive office, the place where each Grantor keeps its Records concerning
Accounts and all originals of all Chattel Paper are located at the addresses
specified therefor in Schedule III hereto.  None of the Accounts is
evidenced by Promissory Notes or other Instruments.  Set forth in
Schedule IV hereto is a complete and accurate list, as of the date of this
Agreement, of (i) each Promissory Note, Security, Investment Property and other
Instrument owned by each Grantor and (ii) each Deposit Account, Securities
Account and Commodities Account of each Grantor, together with the name and
address of each institution at which each such account is maintained, the
account number for each such account and a description of the purpose of each
such account (not Account).  Set forth in Schedule II hereto is a
complete and correct list of each trade name used by each Grantor and the name
of, and each trade name used by, each Person from which each Grantor has
acquired any substantial part of the Collateral.

     

    (d) Each
Grantor has delivered to the Secured Party complete and correct copies of each
License described in Schedule II hereto, including all schedules and exhibits
thereto, which represents all of the Licenses existing on the date of this
Agreement.  Each such License sets forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof, and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby or the rights of such Grantor or any of
its affiliates in respect thereof.  Each material License now existing
is, and any material License entered into in the future will be, the legal,
valid and binding obligation of the parties thereto, enforceable against such
parties in accordance with its terms.  No default under any material
License by any such party has occurred, nor does any defense, offset, deduction
or counterclaim exist thereunder in favor of any such party.  No
License prevents, impairs or affects Secured Party’s right to dispose of the
Inventory utilizing or incorporating intellectual property of others and no
consent of any Person is required to be obtained under any  License
before Secured Party disposes of such Inventory utilizing or incorporating
intellectual property of others.

     

    (e) Each
Grantor owns and controls, or otherwise possesses adequate rights to use, all
Trademarks, Patents and Copyrights, which are the only trademarks, patents,
copyrights, inventions, trade secrets, proprietary information and technology,
know-how, formulae, rights of publicity necessary to conduct its business in

     

    
      
         

      

      
         

        
          

        

      

      
         
substantially
the same manner as conducted as of the date hereof.  Schedule II
hereto sets forth a true and complete list of all registered Copyrights, issued
Patents, Trademarks, and Licenses owned or used by each Grantor as of the date
hereof.  To the best knowledge of each Grantor, all such Intellectual
Property of each Grantor is subsisting and in full force and effect, has not
been adjudged invalid or unenforceable, is valid and enforceable and has not
been abandoned in whole or in part.  Except as set forth in Schedule
II, no such Intellectual Property is the subject of any licensing or franchising
agreement.  Each Grantor has no knowledge of any conflict with the
rights of others to any such Intellectual Property and, to the best knowledge of
each Grantor, each Grantor is not now infringing or in conflict with any such
rights of others in any material respect, and to the best knowledge of each
Grantor, no other Person is now infringing or in conflict in any material
respect with any such properties, assets and rights owned or used by each
Grantor.  No Grantor has received any notice that it is violating or
has violated the trademarks, patents, copyrights, inventions, trade secrets,
proprietary information and technology, know-how, formulae, rights of publicity
or other intellectual property rights of any third party.

    

     

    (f) Each
Grantor is and will be at all times the sole and exclusive owner of, or
otherwise has and will have adequate rights in, the Collateral free and clear of
any Liens, except for Permitted Liens.  No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording or filing office except such as (i) may
have been filed in favor of the Secured Party relating to this Agreement and
(ii) the Permitted Liens.

     

    (g) The
exercise by the Secured Party of any of its rights and remedies hereunder will
not contravene any law, rule or regulation or any contractual restriction
binding on or otherwise affecting each Grantor or any of its properties and will
not result in or require the creation of any Lien, upon or with respect to any
of its properties.

     

    (h) No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or other regulatory body, is required for
(i) the grant by each Grantor, or the perfection, of the security interest
purported to be created hereby in the Collateral, or (ii) the exercise by
the Secured Party of any of its rights and remedies hereunder, except (except
(A) for the filing under the Uniform Commercial Code as in effect in the
applicable jurisdiction of the financing statements described in Schedule V hereto (or
a new Schedule
V delivered by the Grantors to the Secured Party from time to time), all
of which financing statements have been duly filed and are in full force and
effect or will be duly filed and in full force and effect, (B) with respect to
Deposit Accounts, and all cash and other property from time to time deposited
therein, for the execution of a control agreement with the depository
institution with which such account is maintained, as provided in Section 5(i),
(C) with respect to Commodity Contracts, for the execution of a control
agreement with the commodity intermediary with which such commodity contract is
carried, as provided in Section 5(i),
(D) with respect to the perfection of the security interest created hereby
in the United States Intellectual Property and Licenses, for the recording of
the appropriate Assignment for Security, substantially in the form of Exhibit A hereto in
the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, (E) with respect to the perfection of the security
interest created hereby in foreign Intellectual Property and Licenses, for
registrations and filings in jurisdictions located outside of the United States
and covering rights in such jurisdictions relating to such foreign Intellectual
Property and Licenses, (F) with respect to the perfection of the security
interest created hereby in Titled Collateral, for the submission of an
appropriate application requesting that the Lien of the Secured Party be noted
on the Certificate of Title or certificate of ownership, completed and
authenticated by the applicable Grantor, together with the Certificate of Title
or certificate of ownership, with respect to such Titled Collateral, to the
appropriate governmental authority, (G) with respect to the perfection of the
security interest created hereby in any Letter-of-Credit Rights, for the consent
of the issuer of the applicable letter of credit to the assignment of proceeds
as provided in the Uniform Commercial Code as in effect in the applicable
jurisdiction, (H) with respect to any action that may be necessary to obtain
control of Collateral constituting Deposit Accounts, Commodity Contracts,
Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights, the
taking of such actions, and (I) the Secured Party having possession of all
Documents, Chattel Paper, Instruments and cash constituting Collateral
(subclauses (A), (B), (C), (D), (E), (F), G), (H) and (I), each a “Perfection
Requirement” and collectively, the “Perfection
Requirements”).

     

    (i) This
Agreement creates in favor of the Secured Party a legal, valid and enforceable
security interest in the Collateral, as security for the
Obligations.  The Perfection Requirements result in the perfection of
such security interests.  Such security interests are, or in the case
of Collateral in which each Grantor

     

    
      
         

      

      
         

        
          

        

      

      
         
obtains
rights after the date hereof, will be, perfected, first priority security
interests, subject only to Permitted Liens and the Perfection Requirements and
the financing statements described in Schedule
4(g).  Such recordings and filings and all other action
necessary to perfect and protect such security interest have been duly taken or
will be taken pursuant to Section 5(n), and, in the case of Collateral in which
each Grantor obtains rights after the date hereof, will be duly taken, except
for the Secured Party’s having possession of all Documents, Chattel Paper,
Instruments and cash constituting Collateral after the date hereof and the other
actions, filings and recordations described above, including the Perfection
Requirements.

    

     

    (j) As of the
date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any
pending Commercial Tort Claims, except for such Commercial Tort Claims described
in Schedule
VI.

     

    (k) No
Grantor owns any interest in real property except as set forth on Schedule VII and
Schedule VII
accurately reflects the name, address and contact information of all landlords
that lease real property to any Grantor.

     

    (l) Schedule
VIII contains a true, correct and complete list of all insurance policies owned
by any, certain or all Grantors indicating the insurance company, a summary of
the coverage, the policy numbers of said policies, and an indication as to the
name of all additional insureds and loss payees in respect of such
policies.  Schedule IX contains a true, correct and complete list of
all guarantees and insurance provided by EXIM Bank and which Account Debtor’s
Accounts are guaranteed or insured by EXIM Bank and whether and to what extent
there has been an assignment or transfer of or loss payees or additional
insureds designated in respect of any such guarantees and
insurance.

     

    SECTION
5. Covenants as to the
Collateral.  So long as any of the Obligations shall remain
outstanding, and also for as long as any Letter of Credit is outstanding or the
Revolving Credit Line Facility has not been terminated, unless the Secured Party
shall otherwise consent in writing:

     

    (a) Further
Assurances.  Each Grantor will at its expense, at any time and
from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Secured Party may reasonably
request in order to:  (i) perfect and protect the security interest
purported to be created hereby; (ii) enable the Secured Party to exercise and
enforce its rights and remedies hereunder in respect of the Collateral; or (iii)
otherwise effect the purposes of this Agreement, including, without
limitation:  (A) marking conspicuously all Chattel Paper and each
License and, at the request of the Secured Party, each of its Records pertaining
to the Collateral with a legend, in form and substance satisfactory to the
Secured Party, indicating that such Chattel Paper, License or Collateral is
subject to the security interest created hereby, (B) delivering and pledging to
the Secured Party each Promissory Note, Security, Chattel Paper or other
Instrument, now or hereafter owned by any Grantor, duly endorsed and accompanied
by executed instruments of transfer or assignment, all in form and substance
satisfactory to the Secured Party, (C) executing and filing (to the extent, if
any, that any Grantor’s signature is required thereon) or authenticating the
filing of, such financing or continuation statements, or amendments thereto, as
may be necessary or  that the Secured Party may reasonably request in
order to perfect and preserve the security interest purported to be created
hereby, (D) furnishing to the Secured Party from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral in each case as the Secured Party may
reasonably request, all in reasonable detail, (E) if any Collateral shall be in
the possession of a third party, or in premises of a third party, notifying such
Person of the Secured Party’s security interest created hereby and obtaining a
written agreement in form and substance satisfactory to the Secured Party from
such Person providing access to such Collateral in order to remove such
Collateral from such premises during an Event of Default and acknowledging that
such Person holds possession of the Collateral for the benefit of the Secured
Party, and agreeing to such other matters as Secured Party may reasonably
require; (F) if at any time after the date hereof, any Grantor acquires or holds
any Commercial Tort Claim, promptly notifying the Secured Party in a writing
signed by such Grantor setting forth a brief description of such Commercial Tort
Claim and granting to the Secured Party a security interest therein and in the
proceeds thereof, which writing shall incorporate the provisions hereof and
shall be in form and substance satisfactory to the Secured Party, (G) upon the
acquisition after the date hereof by any Grantor of any motor vehicle or other
Equipment subject to a certificate of title or ownership (other than a Motor
Vehicle or Equipment that is subject to a purchase money security interest),
causing the Secured Party to be listed as the lienholder on such certificate of
title or ownership and delivering evidence of the same to the 

     

    
      
         

      

      
         

        
          

        

      

      
         
Secured
Party in accordance with Section 5(j) hereof; and (H) taking all actions
required by any earlier versions of the Uniform Commercial Code or by other law,
as applicable, in any relevant Uniform Commercial Code jurisdiction, or by other
law as applicable in any foreign jurisdiction (I) fulfilling the Perfection
Requirements; and (J) obtaining consents from licensors under any Licenses so
that the Secured Party can dispose of Inventory incorporating or utilizing
intellectual property of others, in form and substance satisfactory to Secured
Party.

    

     

    (b) Location of Equipment and
Inventory.  Each Grantor will keep the Equipment and Inventory
(i) at the locations specified therefor on Schedule III hereto, or (ii) at such
other locations set forth on Schedule III (or a new Schedule III delivered by
the Grantors to Secured Party from time to time) and with respect to which the
Secured Party has filed financing statements and otherwise fully perfected its
Liens thereon, or (iii) at such other locations in the United States, provided
that within 20 days following the relocation of Equipment or Inventory to such
other location or the acquisition of Equipment or Inventory, such Grantor shall
deliver to the Secured Party a new Schedule III indicating such new
locations.

     

    (c) Provisions Concerning the
Accounts and the Licenses.

     

    (i) Each
Grantor will (A) give the Secured Party at least 30 days’ prior written notice
of any change in such Grantor’s name, identity or organizational structure, (B)
maintain its jurisdiction of incorporation, organization or formation as set
forth in Schedule I hereto, and (C) immediately notify the Secured Party upon
obtaining an organizational identification number, if on the date hereof such
Grantor did not have such identification number.

     

    (ii) Each
Grantor will, except as otherwise provided in this subsection (c), continue to
collect, at its own expense, all amounts due or to become due under the Accounts
for deposit into the Lockbox Account.  In connection with such
collections, any Grantor may (and, at the Secured Party’s direction, will) take
such action as any Grantor or the Secured Party may deem necessary or advisable
to enforce collection or performance of the Accounts; provided, however, that
the Secured Party shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default, to notify the account debtors or
obligors under any Accounts of the assignment of such Accounts to the Secured
Party and to direct such account debtors or obligors to make payment of all
amounts due or to become due to any Grantor thereunder directly to the Secured
Party or its designated agent and, upon such notification and at the expense of
any Grantor and to the extent permitted by law, to enforce collection of any
such Accounts and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as any Grantor might have
done.  After receipt by any Grantor of a notice from the Secured Party
that the Secured Party has notified, intends to notify, or has enforced or
intends to enforce any Grantor’s rights against the account debtors or obligors
under any Accounts as referred to in the proviso to the immediately preceding
sentence, (A) all amounts and proceeds (including Instruments) received by any
Grantor in respect of the Accounts shall be received in trust for the benefit of
the Secured Party hereunder, shall be segregated from other funds of any Grantor
and shall be forthwith paid over to the Secured Party in the same form as so
received (with any necessary endorsement) to be applied as specified in Section
7(b) hereof, and (B) no Grantor will adjust, settle or compromise the amount or
payment of any Account or release wholly or partly any account debtor or obligor
thereof or allow any credit or discount thereon.  In addition, upon
the occurrence and during the continuance of an Event of Default, the Secured
Party may (in its sole and absolute discretion) direct any or all of the banks
and financial institutions with which any Grantor either maintains a Deposit
Account or a lockbox or deposits the proceeds of any Accounts to send
immediately to the Secured Party by wire transfer (to such account as the
Secured Party shall specify, or in such other manner as the Secured Party shall
direct) all or a portion of such securities, cash, investments and other items
held by such institution.  Any such securities, cash, investments and
other items so received by the Secured Party shall be applied as specified in
accordance with Section 7(b) hereof.

     

    (iii) Upon the
occurrence and during the continuance of any breach or default under any
material License referred to in Schedule II hereto by any party thereto other
than any Grantor, each Grantor party thereto will, promptly after obtaining
knowledge thereof, give the Secured Party written notice of the nature and
duration thereof, specifying what action, if any, it has taken and proposes to
take with respect thereto and thereafter will take reasonable steps to protect
and preserve its rights and remedies in respect of such breach or default, or
will obtain or acquire an appropriate substitute License.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iv) Each
Grantor will, at its expense, promptly deliver to the Secured Party a copy of
each notice or other communication received by it by which any other party to
any material License referred to in Schedule II hereto purports to exercise any
of its rights or affect any of its obligations thereunder, together with a copy
of any reply by such Grantor thereto.

     

    (v) Each
Grantor will exercise promptly and diligently each and every right which it may
have under each material License (other than any right of termination) and will
duly perform and observe in all respects all of its obligations under each
material License and will take all action reasonably necessary to maintain such
Licenses in full force and effect.  No Grantor will, without the prior
written consent of the Secured Party, cancel, terminate, amend or otherwise
modify in any respect, or waive any provision of, any material License referred
to in Schedule II hereto.

     

    (d) Transfers and Other
Liens.  No Grantor will sell, assign (by operation of law or
otherwise), lease, license, exchange or otherwise transfer or dispose of any of
the Collateral, except as specifically permitted by the Credit
Agreement.

     

    (e) Intellectual
Property.

     

    (i) If
applicable, any Grantor shall, upon the Secured Party’s written request, duly
execute and deliver the applicable Assignment for Security in the form attached
hereto as Exhibit A.  Each Grantor (either itself or through
licensees) will, and will cause each licensee thereof to, take all action
necessary to maintain all of the Intellectual Property in full force and effect,
including, without limitation, using the proper statutory notices and markings
and using the Trademarks on each applicable trademark class of goods in order to
so maintain the Trademarks in full force and free from any claim of abandonment
for non-use, and each Grantor will not (nor permit any licensee thereof to) do
any act or knowingly omit to do any act whereby any Intellectual Property may
become invalidated; provided, however, that so long as no Event of Default has
occurred and is continuing, no Grantor shall have an obligation to use or to
maintain any Intellectual Property (A) that relates solely to any product or
work, that has been, or is in the process of being, discontinued, abandoned or
terminated, (B) that is being replaced with Intellectual Property substantially
similar to the Intellectual Property that may be abandoned or otherwise become
invalid, so long as the failure to use or maintain such Intellectual Property
does not materially adversely affect the validity of such replacement
Intellectual Property and so long as such replacement Intellectual Property is
subject to the Lien created by this Agreement or (C) that is substantially the
same as another Intellectual Property that is in full force, so long the failure
to use or maintain such Intellectual Property does not materially adversely
affect the validity of such replacement Intellectual Property and so long as
such other Intellectual Property is subject to the Lien and security interest
created by this Agreement.  Each Grantor will cause to be taken all
necessary steps in any proceeding before the United States Patent and Trademark
Office and the United States Copyright Office or any similar office or agency in
any other country or political subdivision thereof to maintain each registration
of the Intellectual Property (other than the Intellectual Property described in
the proviso to the immediately preceding sentence), including, without
limitation, filing of renewals, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings and
payment of maintenance fees, filing fees, taxes or other governmental
fees.  If any Intellectual Property (other than Intellectual Property
described in the proviso to the first sentence of subsection (i) of this clause
(h)) is infringed, misappropriated, diluted or otherwise violated in any
material respect by a third party, each Grantor shall (x) upon learning of such
infringement, misappropriation, dilution or other violation, promptly notify the
Secured Party and (y) to the extent any Grantor shall deem appropriate under the
circumstances, promptly sue for infringement, misappropriation, dilution or
other violation, seek injunctive relief where appropriate and recover any and
all damages for such infringement, misappropriation, dilution or other
violation, or take such other actions as such Grantor shall deem appropriate
under the circumstances to protect such Intellectual Property.  Each
Grantor shall furnish to the Secured Party from time to time upon its request
statements and schedules further identifying and describing the Intellectual
Property and Licenses and such other reports in connection with the Intellectual
Property and Licenses as the Secured Party may reasonably request, all in
reasonable detail and promptly upon request of the Secured Party, following
receipt by the Secured Party of any such statements, schedules or reports, each
Grantor shall modify this Agreement by amending Schedule II hereto, as the case
may be, to include any Intellectual Property and License, as the case may be,
which becomes part of the Collateral under this Agreement and shall execute and
authenticate such documents and do such acts as shall be necessary or, in the
reasonable judgment of the Secured Party, desirable to subject such Intellectual

     

    
      
         

      

      
         

        
          

        

      

      
         
Property
and Licenses to the Lien and security interest created by this
Agreement.  Notwithstanding anything herein to the contrary, upon the
occurrence and during the continuance of an Event of Default, no Grantor may
abandon or otherwise permit any Intellectual Property to become invalid without
the prior written consent of the Secured Party, and if any Intellectual Property
is infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, each Grantor will take such action as the Secured
Party shall deem appropriate under the circumstances to protect such
Intellectual Property.

    

     

    (ii) In no
event shall any Grantor, either itself or through any agent, employee, licensee
or designee, file an application for the registration of any Trademark or
Copyright or the issuance of any Patent with the United States Patent and
Trademark Office or the United States Copyright Office, as applicable, or in any
similar office or agency of the United States or any country or any political
subdivision thereof unless it gives the Secured Party prior written notice
thereof.  Upon request of the Secured Party, any Grantor shall
execute, authenticate and deliver any and all assignments, agreements,
instruments, documents and papers as the Secured Party may reasonably request to
evidence the Secured Party’s security interest hereunder in such Intellectual
Property and the General Intangibles of any Grantor relating thereto or
represented thereby, and each Grantor hereby appoints the Secured Party its
attorney-in-fact to execute and/or authenticate and file all such writings for
the foregoing purposes, all acts of such attorney being hereby ratified and
confirmed, and such power (being coupled with an interest) shall be irrevocable
until the indefeasible payment in full in cash of all of the Obligations in
full.

     

    (iii) All
Intellectual Property owned by one Grantor and licensed (or where permission of
use is provided) to another Grantor may be sold or disposed of or used by
Secured Party during an Event of Default without regard to any such license or
other agreement.

     

    (f) Deposit, Commodities and
Securities Accounts.  Upon the Secured Party’s written request
each Grantor shall cause each bank and other financial institution where an
account referred to in Schedule IV hereto is
maintained to execute and deliver to the Secured Party a control agreement, in
form and substance reasonably satisfactory to the Secured Party, duly executed
by each Grantor and such bank or financial institution, or enter into other
arrangements in form and substance satisfactory to the Secured Party, pursuant
to which such institution shall irrevocably agree, inter alia, that
(i) it will comply at any time with the instructions originated by the
Secured Party to such bank or financial institution directing the disposition of
cash, Commodity Contracts, securities, Investment Property and other items from
time to time credited to such account, without the consent of the applicable
Grantor, which instructions the Secured Party will not give to such bank or
other financial institution in the absence of a continuing Event of Default,
(ii) all Commodity Contracts, securities, Investment Property and other items of
each Grantor deposited with such institution shall be subject to a perfected,
first priority security interest in favor of the Secured Party, (iii) any
right of set off (other than recoupment of standard fees), banker’s Lien or
other similar Lien, security interest or encumbrance shall be fully waived as
against the Secured Party, and (iv) upon receipt of written notice from the
Secured Party during the continuance of an Event of Default, such bank or
financial institution shall immediately send to the Secured Party by wire
transfer (to such account as the Secured Party shall specify, or in such other
manner as the Secured Party shall direct) all such cash, the value of any
Commodity Contracts, securities, Investment Property and other items held by
it.  Without the prior written consent of the Secured Party, each
Grantor shall not make or maintain any Deposit Account, Commodity Account or
Securities Account except for the accounts set forth in Schedule IV
hereto.  The provisions of this paragraph 5(f) shall not apply to (i)
Deposit Accounts for which the Secured Party is the depositary and (ii) Deposit
Accounts specially and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of each Grantor’s
salaried or hourly employees.

     

    (g) Motor
Vehicles.  Upon the Secured Party’s written request, each
Grantor shall deliver to the Secured Party originals of the certificates of
title or ownership for all motor vehicles with a value in excess of $50,000,
owned by it with the Secured Party listed as lienholder.

     

    (h) Control.  Each
Grantor hereby agrees to take any or all action that may be necessary or that
the Secured Party may reasonably request in order for the Secured Party to
obtain control in accordance with Sections 9-105 – 9-107 of the Code with
respect to the following Collateral:  (i) Electronic Chattel
Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i) Inspection and
Reporting.  Each Grantor shall permit the Secured Party, or any
agent or representatives thereof or such professionals or other Persons as the
Secured Party may designate to discuss such Grantor’s affairs, finances and
accounts with any of its directors, officers, managerial employees, independent
accountants or any of its other representatives.

     

    SECTION
6. Additional Provisions
Concerning the Collateral.

     

    (a) To the
maximum extent permitted by applicable law, and for the purpose of taking any
action that the Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, each Grantor hereby (i) authorizes the Secured Party
to execute any agreements, instruments or other documents in such Grantor’s name
and to file such agreements, instruments or other documents in such Grantor’s
name and in any appropriate filing office, (ii) authorizes the Secured Party at
any time and from time to time to file, one or more financing or continuation
statements, and amendments thereto, relating to the Collateral (including,
without limitation, any such financing statements that (A) describe the
Collateral as “all assets” or “all personal property” (or words of similar
effect) or that describe or identify the Collateral by type or in any other
manner as the Secured Party may determine regardless of whether any particular
asset of such Grantor falls within the scope of Article 9 of the Uniform
Commercial Code or whether any particular asset of such Grantor constitutes part
of the Collateral, and (B) contain any other information required by Part 5 of
Article 9 of the Code for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment, including, without
limitation, whether such Grantor is an organization, the type of organization
and any organizational identification number issued to such Grantor) and (iii)
ratifies such authorization to the extent that the Secured Party has filed any
such financing or continuation statements, or amendments thereto, prior to the
date hereof.  A photocopy or other reproduction of this Agreement or
any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

     

    (b) Each
Grantor hereby irrevocably appoints the Secured Party as its attorney-in-fact
and proxy, with full authority in the place and stead of such Grantor and in the
name of such Grantor or otherwise, from time to time in the Secured Party’s
discretion, so long as an Event of Default shall have occurred and is
continuing, to take any action and to execute any instrument which the Secured
Party may reasonably deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, (i) to obtain and adjust
insurance required to be paid to the Secured Party pursuant to any of the Loan
Documents, (ii) to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any Collateral, (iii) to receive, endorse, and collect any drafts or
other Instruments, Documents and Chattel Paper in connection with clause (i) or
(ii) above, (iv) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for the
collection of any Collateral or otherwise to enforce the rights of the Secured
Party with respect to any Collateral, and (v) to execute assignments, licenses
and other documents to enforce the rights of the Secured Party with respect to
any Collateral.  This power is coupled with an interest and is
irrevocable until all of the Obligations are indefeasibly paid in full in cash
and all Letters of Credit are no longer outstanding and the Revolving Credit
Line Facility is terminated.

     

    (c) For the
purpose of enabling the Secured Party to exercise rights and remedies hereunder,
at such time as the Secured Party shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose, each Grantor hereby grants to the
Secured Party, to the extent assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to
use, assign, license or sublicense any Intellectual Property now owned or
hereafter acquired by such Grantor, wherever the same may be located, including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout thereof.  Notwithstanding anything contained
herein to the contrary, so long as no Event of Default shall have occurred and
be continuing, any Grantor may exploit, use, enjoy, protect, license,
sublicense, assign, sell, dispose of or take other actions with respect to the
Intellectual Property in the ordinary course of its business.  In
furtherance of the foregoing, unless an Event of Default shall have occurred and
be continuing, the Secured Party shall from time to time, upon the request of
any Grantor, execute and deliver any instruments, certificates or other
documents, in the form so requested, which such Grantor shall have certified are
appropriate (in such Grantor’s judgment) to allow it to take any action
permitted above (including relinquishment of the license provided pursuant to
this clause (c) as to any Intellectual Property).  Further, upon the
indefeasible payment in full in cash of all of the Obligations, if no Letter of
Credit is outstanding

     

    
      
         

      

      
         

        
          

        

      

      
         
 and
the Revolving Credit Line Facility has been terminated, the Secured Party
(subject to Section 10(e) hereof) shall release and reassign to any Grantor all
of the Secured Party’s right, title and interest in and to the Intellectual
Property, and the Licenses, all without recourse, representation or warranty
whatsoever.  The exercise of rights and remedies hereunder by the
Secured Party shall not terminate the rights of the holders of any licenses or
sublicenses theretofore granted by each Grantor in accordance with the second
sentence of this clause (c).  Each Grantor hereby releases the Secured
Party from any claims, causes of action and demands at any time arising out of
or with respect to any actions taken or omitted to be taken by the Secured Party
under the powers of attorney granted herein other than actions taken or omitted
to be taken through the Secured Party’s gross negligence or willful misconduct,
as determined by a final determination of a court of competent
jurisdiction.

    

     

    (d) If any
Grantor fails to perform any agreement or obligation contained herein, the
Secured Party may itself perform, or cause performance of, such agreement or
obligation, in the name of such Grantor or the Secured Party, and the expenses
of the Secured Party incurred in connection therewith shall be payable by such
Grantor pursuant to the Loan Documents and shall be secured by the
Collateral.

     

    (e) The
powers conferred on the Secured Party hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers.  Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.

     

    (f) Anything
herein to the contrary notwithstanding (i) each Grantor shall remain liable
under the Licenses and otherwise with respect to any of the Collateral to the
extent set forth therein to perform all of its obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Secured Party of any of its rights hereunder shall not release any Grantor from
any of its obligations under the Licenses or otherwise in respect of the
Collateral, and (iii) the Secured Party shall not have any obligation or
liability by reason of this Agreement under the Licenses or with respect to any
of the other Collateral, nor shall the Secured Party be obligated to perform any
of the obligations or duties of any Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

     

    SECTION
7. Remedies Upon Event of
Default.  If any Event of Default shall have occurred and be
continuing:

     

    (a) The
Secured Party may exercise in respect of the Collateral, in addition to any
other rights and remedies provided for herein or otherwise available to it, all
of the rights and remedies of a secured party upon default under the Code
(whether or not the Code applies to the affected Collateral) or other applicable
Uniform Commercial Code and any other applicable law, and also may (i) take
absolute control of the Collateral, including, without limitation, transfer into
the Secured Party’s name or into the name of its nominee or nominees (to the
extent the Secured Party has not theretofore done so) and thereafter receive,
for the benefit of the Secured Party, all payments made thereon, give all
consents, waivers and ratifications in respect thereof and otherwise act with
respect thereto as though it were the outright owner thereof, (ii) require each
Grantor to, and each Grantor hereby agrees that it will at its expense and upon
request of the Secured Party forthwith, assemble all or part of its respective
Collateral as directed by the Secured Party and make it available to the Secured
Party at a place or places to be designated by the Secured Party that is
reasonably convenient to both parties, and the Secured Party may enter into and
occupy any premises owned or leased by any Grantor where the Collateral or any
part thereof is located or assembled for a reasonable period in order to
effectuate the Secured Party’s rights and remedies hereunder or under law,
without obligation to any Grantor in respect of such occupation, and (iii)
without notice except as specified below and without any obligation to prepare
or process the Collateral for sale, (A) sell the Collateral or any part thereof
in one or more parcels at public or private sale, at any of the Secured Party’s
offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Secured Party may deem
commercially reasonable and/or (B) lease, license or dispose of the Collateral
or any part thereof upon such terms as the Secured Party may deem commercially
reasonable.  Each Grantor agrees that, to the extent notice of sale or
any other disposition of its respective Collateral shall be required by law, at
least ten (10) days’ notice to any Grantor of the time and place of any public
sale or the time after which any private sale or other disposition of its
respective Collateral is to be made shall constitute reasonable
notification.  The Secured Party shall not be obligated to make

     

    
      
         

      

      
         

        
          

        

      

      
         
any sale
or other disposition of any Collateral regardless of notice of sale having been
given.  The Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.  Each Grantor hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which its respective
Collateral may have been sold at a private sale was less than the price which
might have been obtained at a public sale or was less than the aggregate amount
of the Obligations, even if the Secured Party accepts the first offer received
and does not offer such Collateral to more than one offeree, and waives all
rights that any Grantor may have to require that all or any part of such
Collateral be marshaled upon any sale (public or private)
thereof.  Each Grantor hereby acknowledges that (i) any such sale of
its respective Collateral by the Secured Party shall be made without warranty,
(ii) the Secured Party may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like, and (iii) such actions set forth in
clauses (i) and (ii) above shall not adversely affect the commercial
reasonableness of any such sale of Collateral.  In addition to the
foregoing, (1) upon written notice to any Grantor from the Secured Party after
and during the continuance of an Event of Default, such Grantor shall cease any
use of the Intellectual Property or any trademark, patent or copyright similar
thereto for any purpose described in such notice; (2) the Secured Party may, at
any time and from time to time after and during the continuance of an Event of
Default, upon 10 days’ prior notice to such Grantor, license, whether general,
special or otherwise, and whether on an exclusive or non-exclusive basis, any of
the Intellectual Property, throughout the universe for such term or terms, on
such conditions, and in such manner, as the Secured Party shall in its sole
discretion determine; and (3) the Secured Party may, at any time, pursuant to
the authority granted in Section 6 hereof (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and
deliver on behalf of such Grantor, one or more instruments of assignment of the
Intellectual Property (or any application or registration thereof), in form
suitable for filing, recording or registration in any
country.

    

     

    (b) Any cash
held by the Secured Party as Collateral and all Cash Proceeds received by the
Secured Party in respect of any sale of or collection from, or other realization
upon, all or any part of the Collateral shall be applied (after payment of any
amounts payable to or for the benefit of the Secured Party pursuant to the Loan
Documents) by the Secured Party against, all or any part of the Obligations in
such order as the Secured Party shall elect, consistent with the
UCC.  Any surplus of such cash or Cash Proceeds held by the Secured
Party and remaining after the indefeasible payment in full in cash of all of the
Obligations shall be paid over to whomsoever shall be lawfully entitled to
receive the same or as a court of competent jurisdiction shall
direct.

     

    (c) In the
event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Secured Party is legally entitled,
each Grantor shall be liable for the deficiency, together with interest thereon
at the Default Rate, together with the costs of collection and the reasonable
fees, costs, expenses and other client charges of any attorneys or agents
employed by the Secured Party to collect such deficiency.

     

    (d) Each
Grantor hereby acknowledges that if the Secured Party complies with any
applicable state, provincial, or federal law requirements in connection with a
disposition of the Collateral, such compliance will not adversely affect the
commercial reasonableness of any sale or other disposition of the
Collateral.

     

    (e) The
Secured Party shall not be required to marshal any present or future collateral
security (including, but not limited to, this Agreement and the Collateral) for,
or other assurances of payment of, the Obligations or any of them or to resort
to such collateral security or Collateral or other assurances of payment in any
particular order, and all of the Secured Party’s rights hereunder and in respect
of such collateral security or Collateral and other assurances of payment shall
be cumulative and in addition to all other rights, however existing or
arising.  To the extent that any Grantor lawfully may, each Grantor
hereby agrees that it will not invoke any law relating to the marshaling of
collateral which might cause delay in or impede the enforcement of the Secured
Party’s rights under this Agreement or under any other instrument creating or
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.

     

    (f) Secured
Party has no obligation to clean-up or otherwise prepare the Collateral for
sale.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g) Secured
Party has no obligation to attempt to satisfy the Obligations by collecting them
from any other Person liable for them and Secured Party may release, modify or
waive any collateral provided by any other Person to secure any of the
Obligations, all without affecting Secured Party’s rights against
Grantors.  Each Grantor waives any right it may have to require
Secured Party to pursue any third Person for any of the
Obligations.

     

    (h) In the
event the Secured Party seeks to take possession of all or any portion of the
Collateral by judicial process, each Grantor irrevocably waives (i) the posting
of any bond, surety or security with respect thereto which might otherwise be
required, (ii) any demand for possession prior to the commencement of any suit
or action to recover the Collateral, and (iii) any requirement that the Secured
Party retain possession and not dispose of any Collateral until after trial or
final judgment.

     

    (i) The
Secured Party shall have the right, in addition to any rights and remedies
provided hereunder, and at law, without prior notice to the Grantors after or
during the occurrence of an Event of Default, to set-off and appropriate and
apply any and all deposits and any other credits, indebtedness or claims,
whether direct or indirect, absolute or contingent, matured or unmatured, at any
time held or owing by the Secured Party to or for the credit or the account of
any, certain or all of the Grantors.  No right of set-off shall be
deemed to have been waived by any act or conduct on the part of the Secured
Party or the Grantors, or by any neglect to exercise such right of set-off, or
by any delay in doing so.  Every right of set-off shall continue in
full force and effect until specifically waived or released by an instrument in
writing executed by the Secured Party.

     

    (j) The
Secured Party is hereby authorized by Grantor to appoint a liquidator(s) or
agent(s) to exercise any of Secured Party’s rights and remedies in respect of
any Collateral.

     

    (k) The
enumeration of the foregoing rights and remedies is not intended to be
exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies the Secured Party may have under the
UCC or other applicable law or any of the Loan Documents.  The Secured
Party shall have the right, in its sole discretion, to determine which rights
and remedies, and in which order any of the same, are to be exercised, and to
determine which Collateral is to be proceeded against and in which order and the
exercise of any right or remedy shall not preclude the exercise of any others,
all of which shall be cumulative.

     

    SECTION
8. Notices,
Etc.  All notices and other communications provided for
hereunder shall be in writing and shall be given in accordance with the
requirements of the Credit Agreement and shall be effective on the terms set
forth therein and, to the extent notices are required to be given to the
Grantors, such notices may be provided in care of the Parent at the two
addresses for the Parent determined in accordance with the Credit
Agreement.

     

    SECTION
9. Miscellaneous.

     

    (a) No
amendment of any provision of this Agreement shall be effective unless it is in
writing and signed by each Grantor and the Secured Party, and no waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
therefrom, shall be effective unless it is in writing and signed by the Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

     

    (b) No
failure on the part of the Secured Party to exercise, and no delay in
exercising, any right hereunder or under any of the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.  The rights and remedies of the Secured Party provided
herein and in the other Loan Documents are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law.  The
rights of the Secured Party under any of the other Loan Documents against any
party thereto are not conditional or contingent on any attempt by such Person to
exercise any of its rights under any of the other Loan Documents against such
party or against any other Person, including but not limited to, any
Grantor.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction or with respect to any Grantor shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction or with respect to
any other Grantor.

     

    (d) This
Agreement shall create a continuing security interest in the Collateral and
shall (i) remain in full force and effect until the indefeasible payment in full
in cash of the Obligations, the termination of the Revolving Credit Line
Facility and the termination of all outstanding Letters of Credit, and (ii) be
binding on each Grantor and all other Persons who become bound as debtor to this
Agreement in accordance with Section 9-203(d) of the Code and shall inure,
together with all rights and remedies of the Secured Party hereunder, to the
Secured Party and its successors, transferees and assigns.  Without
limiting the generality of clause (ii) of the immediately preceding sentence,
without notice to any Grantor, the Secured Party may assign or otherwise
transfer their rights and obligations under this Agreement and any of the other
Loan Documents, to any other Person and such other Person shall thereupon become
vested with all of the benefits in respect thereof granted to the Secured
Party.  Upon any such assignment or transfer, all references in this
Agreement to the Secured Party shall mean the assignee of the Secured
Party.  None of the rights or obligations of any Grantor hereunder may
be assigned or otherwise transferred without the prior written consent of the
Secured Party, and any such assignment or transfer without the consent of the
Secured Party shall be null and void.

     

    (e) Upon the
indefeasible payment in full in cash of the Obligations, the termination of the
Revolving Credit Line Facility and the termination of all outstanding Letters of
Credit (i) this Agreement and the security interests created hereby shall
terminate and all rights to the Collateral shall revert to the respective
Grantor that granted such security interests hereunder, and (ii) the Secured
Party will, upon any Grantor’s request and at such Grantor’s expense, (A) return
to such Grantor such of the Collateral as shall not have been sold or otherwise
disposed of or applied pursuant to the terms hereof, and (B) execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination, all without any representation, warranty or recourse
whatsoever.

     

    (f) THIS
AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE
EXTENT THAT THE PERFECTION OR THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE
SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE REQUIRED TO BE GOVERNED BY THE LAW OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.

     

    (g) EACH OF
THE DEBTORS AND THE SECURED PARTY MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WIAVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR THE SECURED PARTY TO ACCEPT THIS AGREEMENT AND MAKE ANY
REVOLVING CREDIT LOAN.

     

    (h) Except as
prohibited by law, each party hereto hereby waives any right it may have to
claim or recover in any litigation referred to in Section 9(g) any special,
exemplary or punitive damages.

     

    (i) Each
party hereto (i) certifies that no representative, agent or attorney of the
Secured Party has represented, expressly or otherwise, that the Secured Party
would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that it has been induced to enter into this Agreement or the
other Loan Documents, as applicable, by, among other things, the mutual waivers
and certifications herein.

     

    (j) Any legal
action or proceeding with respect to this Agreement or the Revolving Credit Note
or any other Loan Document may be brought in the courts of New York County in
the State of New York or of 

     

    
      
         

      

      
         

        
          

        

      

      
         
the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, each of the Debtors hereby accepts for
themselves and in respect of their property, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts.

    

     

    (k) Each of
the Debtors hereby irrevocably waives, in connection with any such action or
proceeding, any objection, including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens, which they may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.

     

    (l) Each of
the Debtors hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to each such person,
as the case may be, at its address set forth in the Credit
Agreement.

     

    (m) Nothing
herein shall affect the right of the Secured Party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Debtor in any other jurisdiction.

     

    (n) Section
headings herein are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

     

    (o) This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together constitute one in the same
Agreement.

     

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    IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized, as of the date first above
written.

     

    
      	
              Notice
      Addresses :

               

              CITIBANK, N.A.

               

              Hauppauge, NY
      11788

            	
              INDUSTRIAL ENTERPRISES
      OF

              AMERICA, INC.

               

              By:
      ____________________________

              Name:

              Title:

               

            

    

     

    
      	
               

               

              New York, NY
      10017

            	
              UNIFIDE INDUSTRIES, LIMITED
      LIABILITY COMPANY

               

              By:
      ____________________________

              Name:

              Title:

               

            

    

       

    
      	
               

               

              New York, NY
      10017

            	
              PITT PENN OIL CO.,
      LLC

               

              By:
      ____________________________

              Name:

              Title:

               

            
	
                  BANK OF AMERICA,
      N.A.

               

              New York, NY
      10036

            	
              EMC PACKAGING,
      INC.

               

              By:
      ____________________________

              Name:

              Title:

               

              TODAYS WAY MANUFACTURING
      LLC

               

              By:
      ____________________________

              Name:

              Title:

               

              PITT PENN HOLDING CO.,
      LLC

               

              By:
      ____________________________

              Name:

              Title:

               

            
	 
      	
              SOVEREIGN BANK

               

              By:
      ____________________________

              Name:

              Title:

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