Document:

Exhibit
10.1

SYMYX TECHNOLOGIES, INC. 1997 STOCK PLAN

RESTRICTED STOCK UNIT AGREEMENT

1.             Issuance
of Units.  Symyx Technologies, Inc.,
a Delaware corporation (the “Company”), hereby issues to the Grantee (the “Grantee”)
named in the Notice of Restricted Stock Unit Award (the “Notice”) an award (the
“Award”) of the Total Number of Restricted Stock Units Awarded set forth in the
Notice (the “Units”), subject to the Notice, this Restricted Stock Unit
Agreement (the “Agreement”) and the terms and provisions of the Company’s 1997
Stock Plan, as amended from time to time (the “Plan”), which is incorporated
herein by reference.  Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Agreement.

2.             Transfer Restrictions.  The Units may not be transferred in any
manner other than by will or by the laws of descent and distribution.

3.             Conversion of Units and Issuance of Shares.

(a)           General.  Subject to Section 3(b), upon the
vesting of a Unit, one share of Common Stock shall be issuable for each Unit
that vests on a particular date (the “Shares”), subject to the terms and
provisions of the Plan and this Agreement.  Thereafter, the Company will transfer such
Shares to the Grantee upon satisfaction of any required tax or other withholding
obligations.  Any fractional Unit
remaining after the Award is fully vested shall be discarded and shall not be
converted into a fractional Share.

(b)           Delay of Conversion.  The conversion of the Units to Common Stock
upon the vesting of a Unit shall be delayed in the event the Company reasonably
anticipates that the issuance of Common Stock would constitute a violation of federal
securities laws or other applicable law. If the conversion of the Units to
Common Stock is delayed by the provisions of this Section 3(b), the conversion
of the Units to Common Stock shall occur at the earliest date at which the
Company reasonably anticipates issuing the Common Stock will not cause a
violation of federal securities laws or other applicable law.  For purposes of this Section 3(b), the
issuance of Common Stock that would cause inclusion in gross income or the
application of any penalty provision or other provision of the Code is not
considered a violation of applicable law.

(c)           Delay of Issuance of Shares.  The Company shall have the authority to delay
the issuance of any shares of Common Stock under this Section 2 to the extent
it deems necessary or appropriate to comply with Section 409A(a)(2)(B)(i) of
the Code (relating to payments made to certain “key employees” of certain
publicly-traded companies); in such event, any shares of Common Stock to which
the Grantee would otherwise be entitled during the six (6) month period
following the date the Grantee ceases to be a Service Provider will be issued on
the first business day following the expiration of such six (6) month period.

 1
 

 

4.             Change in Control.

(a)           Notwithstanding Section 14 of
the Plan, in the event of a Change in Control, the Award shall automatically
become fully vested with respect to all of the Units at the time represented by
the Award, immediately prior to the specified effective date of such Change in
Control, provided that the Grantee has not ceased to be a Service Provider
prior to such date.  Effective upon the
consummation of a Change in Control, the Award shall terminate.  ]

(b)           “Change in Control” means the
occurrence of any change in ownership of the Company, change in effective
control of the Company, or change in the ownership of a substantial portion of
the assets of the Company, applied in a manner consistent with those terms as
defined in Code Section 409A(a)(2)(A)(v), the regulations thereunder, and any
other published interpretive authority, as issued or amended from time to time.

5.             Right to Shares.  The Grantee shall not have any right
in, to or with respect to any of the Shares (including any voting rights or
rights with respect to dividends paid on the Common Stock) issuable under the
Award until the Award is settled by the issuance of such Shares to the Grantee.

6.             Taxes.

(a)           Tax Liability.  The Grantee is ultimately liable and
responsible for all taxes owed by the Grantee in connection with the Award,
regardless of any action the Company or
any Parent or Subsidiary of the Company takes with respect to any tax
withholding obligations that arise in connection with the Award.  Neither the Company nor any Parent or Subsidiary of the
Company makes any representation or undertaking regarding the treatment of any
tax withholding in connection with the grant or vesting of the Award or the
subsequent sale of Shares subject to the Award. 
The Company does not commit and is under no obligation to structure the
Award to reduce or eliminate the Grantee’s tax liability.

(b)           Payment of Withholding Taxes.  Prior to any event in connection with the
Award (e.g., vesting) that the Company determines may result in any tax
withholding obligation, whether United States federal, state, local or
non-U.S., including any employment tax obligation (the “Tax Withholding
Obligation”), the Grantee must arrange for the satisfaction of the minimum
amount of such Tax Withholding Obligation in a manner acceptable to the
Company.

(i)            By Share Withholding.  The
Grantee authorizes the Company to, upon the exercise of its sole discretion,
withhold from those Shares issuable to the Grantee the whole number of Shares
sufficient to satisfy the minimum applicable Tax Withholding Obligation.  The Grantee acknowledges that the withheld
Shares may not be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation.  Accordingly, the Grantee
agrees to pay to the Company or any Parent or Subsidiary of the Company as soon
as practicable, including through additional payroll withholding, any amount of
the Tax Withholding Obligation that is not satisfied by the withholding of
Shares described above.

(ii)           By Sale of Shares.  Unless the Grantee determines to satisfy the
Tax Withholding Obligation by some other means in accordance with clause (iii)
below, the Grantee’s acceptance of this Award constitutes the Grantee’s instruction
and authorization to the Company and any brokerage firm determined acceptable
to the Company for such purpose to sell

 2
 

 

on the Grantee’s
behalf a whole number of Shares from those Shares issuable to the Grantee as
the Company determines to be appropriate to generate cash proceeds sufficient
to satisfy the minimum applicable Tax Withholding Obligation.  Such Shares will be sold on the day such Tax
Withholding Obligation arises (e.g., a vesting date) or as soon thereafter as
practicable.  The Grantee will be
responsible for all broker’s fees and other costs of sale, and the Grantee
agrees to indemnify and hold the Company harmless from any losses, costs,
damages, or expenses relating to any such sale. 
To the extent the proceeds of such sale exceed the Grantee’s minimum Tax
Withholding Obligation, the Company agrees to pay such excess in cash to the
Grantee.  The Grantee acknowledges that
the Company or its designee is under no obligation to arrange for such sale at
any particular price, and that the proceeds of any such sale may not be
sufficient to satisfy the Grantee’s minimum Tax Withholding Obligation.  Accordingly, the Grantee agrees to pay to the
Company or any Parent or Subsidiary of the Company as soon as practicable,
including through additional payroll withholding, any amount of the Tax
Withholding Obligation that is not satisfied by the sale of Shares described
above.

(iii)          By Check, Wire Transfer or Other Means. At
any time not less than five (5) business days (or such fewer number of business
days as determined by the Administrator) before any Tax Withholding Obligation
arises (e.g., a vesting date), the Grantee may elect to satisfy the Grantee’s
Tax Withholding Obligation by delivering to the Company an amount that the
Company determines is sufficient to satisfy the Tax Withholding Obligation by
(x) wire transfer to such account as the Company may direct,
(y) delivery of a certified check payable to the Company, or (z) such
other means as specified from time to time by the Administrator.

7.             Entire Agreement: Governing Law.  The Notice, the Plan and this Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by
means of a writing signed by the Company and the Grantee.  These agreements are to be construed in
accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of California to the rights and duties of the parties.  Should any provision of the Notice or this
Agreement be determined to be illegal or unenforceable, the other provisions
shall nevertheless remain effective and shall remain enforceable.

8.             Construction. 
The captions used in the Notice and this Agreement are inserted for
convenience and shall not be deemed a part of the Award for construction or
interpretation.  Except when otherwise
indicated by the context, the singular shall include the plural and the plural
shall include the singular.  Use of the
term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

9.             Administration and Interpretation.  Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Agreement
shall be submitted by the Grantee or by the Company to the Administrator.  The resolution of such question or dispute by
the Administrator shall be final and binding on all persons.

 3
 

 

10.           Venue.  The parties agree that any suit, action, or
proceeding arising out of or relating to the Notice, the Plan or this Agreement
shall be brought in the United States District Court for the Northern District
of California (or should such court lack jurisdiction to hear such action, suit
or proceeding, in a California state court in the County of Santa Clara) and
that the parties shall submit to the jurisdiction of such court.  The parties irrevocably waive, to the fullest
extent permitted by law, any objection the party may have to the laying of
venue for any such suit, action or proceeding brought in such court.  If any one or more provisions of this
Section 10 shall for any reason be held invalid or unenforceable, it is
the specific intent of the parties that such provisions shall be modified to
the minimum extent necessary to make it or its application valid and
enforceable.

11.           Notices.  Any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon personal
delivery, upon deposit for delivery by an internationally recognized express
mail courier service or upon deposit in the United States mail by certified
mail (if the parties are within the United States), with postage and fees
prepaid, addressed to the other party at its address as shown in these
instruments, or to such other address as such party may designate in writing
from time to time to the other party.

12.           Amendment to Meet the Requirements
of Section 409A.  The Grantee
acknowledges that the Company, in the exercise of its sole discretion and
without the consent of the Grantee, may amend or modify this Agreement in any
manner and delay the payment of any amounts payable pursuant to this Agreement to
the minimum extent necessary to meet the requirements of Section 409A of
the Code as amplified by any Internal Revenue Service or U.S. Treasury
Department regulations or guidance as the Company deems appropriate or
advisable.

END OF AGREEMENT

 4Exhibit
10.1

EXECUTION
VERSION

 

 

 

SECURITY AGREEMENT

By

SHUFFLE MASTER,
INC.,

as Borrower

and

THE GUARANTORS
PARTY HERETO

and

DEUTSCHE BANK AG NEW YORK
BRANCH,

as Collateral
Agent

Dated as of July
31, 2006

 

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PREAMBLE

  	
   

  	
   

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
   

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGREEMENT

  	
   

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS AND
  INTERPRETATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  SECTION 1.2.

  	
   

  	
  Interpretation

  	
   

  	
  8

  
	
  SECTION 1.3.

  	
   

  	
  Resolution of Drafting Ambiguities

  	
   

  	
  9

  
	
  SECTION 1.4.

  	
   

  	
  Perfection Certificate

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GRANT OF
  SECURITY AND SECURED OBLIGATIONS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
   

  	
  Grant of Security Interest

  	
   

  	
  9

  
	
  SECTION 2.2.

  	
   

  	
  Filings

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  PERFECTION;
  SUPPLEMENTS; FURTHER ASSURANCES;

  
	
  USE OF PLEDGED
  COLLATERAL

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
   

  	
  Delivery of Certificated Securities Collateral

  	
   

  	
  10

  
	
  SECTION 3.2.

  	
   

  	
  Perfection of Uncertificated Securities Collateral

  	
   

  	
  11

  
	
  SECTION 3.3.

  	
   

  	
  Financing Statements and Other Filings; Maintenance
  of Perfected Security Interest

  	
   

  	
  11

  
	
  SECTION 3.4.

  	
   

  	
  Other Actions

  	
   

  	
  11

  
	
  SECTION 3.5.

  	
   

  	
  Joinder of Additional Guarantors

  	
   

  	
  12

  
	
  SECTION 3.6.

  	
   

  	
  Supplements; Further Assurances

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
   

  	
  Title

  	
   

  	
  13

  
	
  SECTION 4.2.

  	
   

  	
  Validity of Security Interest

  	
   

  	
  13

  
	
  SECTION 4.3.

  	
   

  	
  Defense of Claims; Transferability of Pledged
  Collateral

  	
   

  	
  14

  
	
  SECTION 4.4.

  	
   

  	
  Other Financing Statements

  	
   

  	
  14

  

 

 i
 

 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.5.

  	
   

  	
  Due Authorization and Issuance

  	
   

  	
  14

  
	
  SECTION 4.6.

  	
   

  	
  Consents, etc.

  	
   

  	
  14

  
	
  SECTION 4.7.

  	
   

  	
  Pledged Collateral

  	
   

  	
  15

  
	
  SECTION 4.8.

  	
   

  	
  Insurance

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  CERTAIN
  PROVISIONS CONCERNING SECURITIES COLLATERAL

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1.

  	
   

  	
  Pledge of Additional Securities Collateral

  	
   

  	
  15

  
	
  SECTION 5.2.

  	
   

  	
  Voting Rights; Distributions; etc.

  	
   

  	
  15

  
	
  SECTION 5.3.

  	
   

  	
  Defaults, etc.

  	
   

  	
  16

  
	
  SECTION 5.4.

  	
   

  	
  Certain Agreements of Pledgors As Issuers and
  Holders of Equity Interests

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CERTAIN
  PROVISIONS CONCERNING INTELLECTUAL

  
	
  PROPERTY
  COLLATERAL

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.1.

  	
   

  	
  Grant of Intellectual Property License

  	
   

  	
  17

  
	
  SECTION 6.2.

  	
   

  	
  Protection of Collateral Agent’s Security

  	
   

  	
  17

  
	
  SECTION 6.3.

  	
   

  	
  After-Acquired Property

  	
   

  	
  18

  
	
  SECTION 6.4.

  	
   

  	
  Litigation

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CERTAIN
  PROVISIONS CONCERNING RECEIVABLES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.1.

  	
   

  	
  Maintenance of Records

  	
   

  	
  19

  
	
  SECTION 7.2.

  	
   

  	
  Legend

  	
   

  	
  19

  
	
  SECTION 7.3.

  	
   

  	
  Modification of Terms, etc

  	
   

  	
  19

  
	
  SECTION 7.4.

  	
   

  	
  Collection

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TRANSFERS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.1.

  	
   

  	
  Transfers of Pledged Collateral

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
   

  	
  Remedies

  	
   

  	
  20

  
	
  SECTION 9.2.

  	
   

  	
  Notice of Sale

  	
   

  	
  22

  
	
  SECTION 9.3.

  	
   

  	
  Waiver of Notice and Claims

  	
   

  	
  22

  

 

 ii
 

 

 

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.4.

  	
   

  	
  Certain Sales of Pledged Collateral

  	
   

  	
  23

  
	
  SECTION 9.5.

  	
   

  	
  No Waiver; Cumulative Remedies

  	
   

  	
  24

  
	
  SECTION 9.6.

  	
   

  	
  Certain Additional Actions Regarding Intellectual
  Property

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  
	
  APPLICATION OF
  PROCEEDS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.1.

  	
   

  	
  Application of Proceeds

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.1.

  	
   

  	
  Concerning Collateral Agent

  	
   

  	
  25

  
	
  SECTION 11.2.

  	
   

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

  	
   

  	
  26

  
	
  SECTION 11.3.

  	
   

  	
  Continuing Security Interest; Assignment

  	
   

  	
  26

  
	
  SECTION 11.4.

  	
   

  	
  Termination; Release

  	
   

  	
  27

  
	
  SECTION 11.5.

  	
   

  	
  Modification in Writing

  	
   

  	
  28

  
	
  SECTION 11.6.

  	
   

  	
  Notices

  	
   

  	
  28

  
	
  SECTION 11.7.

  	
   

  	
  Governing Law, Consent to Jurisdiction and Service
  of Process; Waiver of Jury Trial

  	
   

  	
  28

  
	
  SECTION 11.8.

  	
   

  	
  Severability of Provisions

  	
   

  	
  28

  
	
  SECTION 11.9.

  	
   

  	
  Execution in Counterparts

  	
   

  	
  28

  
	
  SECTION 11.10.

  	
   

  	
  Business Days

  	
   

  	
  28

  
	
  SECTION 11.11.

  	
   

  	
  No Credit for Payment of Taxes or Imposition

  	
   

  	
  28

  
	
  SECTION 11.12.

  	
   

  	
  No Claims Against Collateral Agent

  	
   

  	
  29

  
	
  SECTION 11.13.

  	
   

  	
  No Release

  	
   

  	
  29

  
	
  SECTION 11.14.

  	
   

  	
  Obligations Absolute

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  	
   

  	
   

  	
  S-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT 1

  	
   

  	
  Form of Securities Pledge Amendment

  	
   

  	
   

  
	
  EXHIBIT 2

  	
   

  	
  Form of Joinder Agreement

  	
   

  	
   

  
	
  EXHIBIT 3

  	
   

  	
  Form of Copyright Security Agreement

  	
   

  	
   

  
	
  EXHIBIT 4

  	
   

  	
  Form of Patent Security Agreement

  	
   

  	
   

  
	
  EXHIBIT 5

  	
   

  	
  Form of Trademark Security Agreement

  	
   

  	
   

  

 

 iii

 

 

SECURITY AGREEMENT

This SECURITY AGREEMENT
dated as of July 31, 2006 (as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the provisions hereof,
this “Agreement”) made by SHUFFLE MASTER, INC., a Minnesota corporation
(the “Borrower”), and the Guarantors from to time to time party hereto
(the “Guarantors”), as pledgors, assignors and debtors (the Borrower,
together with the Guarantors, in such capacities and together with any
successors in such capacities, the “Pledgors,” and each, a “Pledgor”),
in favor of DEUTSCHE BANK AG NEW YORK BRANCH, in its capacity as collateral
agent pursuant to the Credit Agreement (as hereinafter defined), as pledgee,
assignee and secured party (in such capacities and together with any successors
in such capacities, the “Collateral Agent”).

R  E  C  I  T  A  L  S :

A.                                   The
Borrower, the Guarantors, the Collateral Agent and the lending institutions
listed therein (the “Lenders”) are party to that certain credit
agreement, dated as of January 25, 2006 (as amended April 24, 2006 by Amendment
No. 1 (“Amendment No. 1”), and as further amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
which term shall also include and refer to any increase in the amount of
indebtedness under the Credit Agreement and any refinancing or replacement of
the Credit Agreement (whether under a bank facility, securities offering or
otherwise) or one or more successor or replacement facilities whether or not
with a different group of agents or lenders (whether under a bank facility,
securities offering or otherwise) and whether or not with different obligors
upon the Administrative Agent’s acknowledgment of the termination of the
predecessor Credit Agreement).

B.                                 In
connection with the agreement of the Required Lenders under the Credit
Agreement to enter into Amendment No. 1, the Borrower and the Guarantors are
required to use their commercially reasonable efforts to cause all Loan amounts
under the Credit Agreement and any Secured Hedging Agreements entered into with
any Lender or any affiliate of such Lender and all obligations of the
Guarantors under the Guaranty (the “Guaranty”) to be secured by a first
priority perfected security interest in certain assets as discussed herein, as
promptly as practicable after the Amendment No. 1 Effective Date.

C.                                 Each
Guarantor has, pursuant to the Credit Agreement, unconditionally guaranteed the
Secured Obligations.

D.                                    The
Borrower and each Guarantor has received substantial benefits from the
execution, delivery and performance of the obligations under the Credit
Agreement and the other Credit Documents and each is, therefore, willing to
enter into this Agreement.

E.                                      This
Agreement is given by each Pledgor in favor of the Collateral Agent for the
benefit of the Secured Parties (as hereinafter defined) to secure the payment
and performance of all of the Secured Obligations.

F.                                      It
is a condition to (i) the agreement of the Required Lenders to enter into
Amendment No. 1 and (ii) the performance of the obligations of the Secured
Parties under Hedging 

 

 

Agreements that constitute Secured Obligations that
each Pledgor execute and deliver the applicable Credit Documents, including
this Agreement.

A  G  R  E  E  M  E  N  T :

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

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1.                                          Definitions.

(a)                                  Unless
otherwise defined herein or in the Credit Agreement, capitalized terms used
herein that are defined in the UCC shall have the meanings assigned to them in
the UCC; provided that in any event, the following terms shall have the
meanings assigned to them in the UCC:

“Accounts”; “Bank”;
“Chattel Paper”; “Commercial Tort Claim”; “Commodity Account”;
“Commodity Contract”; “Commodity Intermediary”; “Deposit
Accounts”; “Documents”; “Electronic Chattel Paper”; “Entitlement
Order”; “Equipment”; “Financial Asset”; “Fixtures”; “Goods”,
“Inventory”; “Money”; “Payment Intangibles”; “Proceeds”;
“ Records”; “Securities Account”; “Securities Intermediary”;
“Supporting Obligations”; and “Tangible Chattel Paper.”

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

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

“Account Debtor”
shall mean each person who is obligated on a Receivable or Supporting
Obligation related thereto.

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

“Amendment No. 1”  shall have the meaning assigned to such term
in Recital A hereof.

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

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

 2
 

 

 

“Collateral Support”
shall mean all property (real or personal) assigned, hypothecated or otherwise
securing any Pledged Collateral and shall include any security agreement or
other agreement granting a lien or security interest in such real or personal
property.

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

“Copyrights” shall
mean, collectively, with respect to each Pledgor, all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof, whether registered
or unregistered and whether published or unpublished) and all copyright
registrations and applications made by such Pledgor, in each case, whether now
owned or hereafter created or acquired by or assigned to such Pledgor, together
with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor’s use of such copyrights, (ii) reissues,
renewals, continuations and extensions thereof and amendments thereto, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable with respect thereto, including damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.

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

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

“Excluded Property”
shall mean

(a)                                  any
permit or license issued by a Governmental Authority to any Pledgor or any
agreement to which any Pledgor is a party, in each case, only to the extent and
for so long as the terms of such permit, license or agreement or any
Requirement of Law applicable thereto, validly prohibit the creation by such
Pledgor of a security interest in such permit, license or agreement in favor of
the Collateral Agent (after giving effect to Sections 9-406(d), 9-407(a),
9-408(a) or 9-409 of the UCC (or any successor provision or provisions)
or any other applicable law (including the Bankruptcy Code) or principles of equity);

(b)                                 Equipment
owned by any Pledgor on the date hereof or hereafter acquired that is subject
to a Lien securing a Purchase Money Obligation or Capitalized Lease Obligation
permitted to be incurred pursuant to the provisions of the Credit Agreement if
the 

 3
 

 

 

contract or other agreement in which such
Lien is granted (or the documentation providing for such Purchase Money
Obligation or Capitalized Lease Obligation) validly prohibits the creation of
any other Lien on such Equipment;

(c)                                  any
intent to use application filed in respect of a Trademark prior to such time as
a verified statement of use has been filed in connection therewith;

(d)                                 any
Equity Interests of any company organized under any non-U.S. jurisdiction in
excess of 65% of the issued and outstanding voting Equity Interests of any such
company; and

(e)                                  all
cash, deposit accounts, leaseholds and vehicles;

provided,
however, that Excluded Property shall not include any Proceeds,
substitutions or replacements of any Excluded Property referred to in clause
(a) or (b) (unless such Proceeds, substitutions or replacements would
constitute Excluded Property referred to in clause (a) or (b)).

“General Intangibles”
shall mean, collectively, with respect to each Pledgor, all “general
intangibles,” as such term is defined in the UCC, of such Pledgor and, in any
event, shall include (i) all of such Pledgor’s rights, title and interest
in, to and under all Contracts and insurance policies (including all
rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in respect
of any Contract), (ii) all know-how and warranties relating to any of the
Pledged Collateral, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other person
and the benefits of any and all collateral or other security given by any other
person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral, (v) all lists,
books, records, correspondence, ledgers, printouts, files (whether in printed
form or stored electronically), tapes and other papers or materials containing
information relating to any of the Pledged Collateral, including all customer
or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and automatic
machinery software and programs and the like, field repair data, accounting
information pertaining to such Pledgor’s operations or any of the Pledged
Collateral and all media in which or on which any of the information or
knowledge or data or records may be recorded or stored and all computer
programs used for the compilation or printout of such information, knowledge,
records or data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, now or
hereafter acquired or held by such Pledgor, including building permits,
certificates of occupancy, environmental certificates, industrial permits or licenses
and certificates of operation and (vii) all rights to reserves, deferred
payments, deposits, refunds, indemnification of claims and claims for tax or
other refunds against any Governmental Authority.

“Goodwill” shall
mean, collectively, with respect to each Pledgor, the goodwill connected with
such Pledgor’s business including all goodwill connected with (i) the use of
and symbolized by any Trademark or Intellectual Property License with respect
to any Trademark in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists,

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proprietary information, inventions, methods,
procedures, formulae, descriptions, compositions, technical data, drawings,
specifications, name plates, catalogs, confidential information and the right
to limit the use or disclosure thereof by any person, pricing and cost
information, business and marketing plans and proposals, consulting agreements,
engineering contracts and such other assets which relate to such goodwill and
(iii) all product lines of such Pledgor’s business.

“Governmental
Authority” shall mean the government of the United States or any other
nation, or of any political subdivision thereof, whether state, provincial or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

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

“Hedging Agreement”
shall mean any swap, cap, collar, forward purchase or similar agreements or
arrangements dealing with interest rates, currency exchange rates or commodity
prices, either generally or under specific contingencies.

“Instruments”
shall mean, collectively, with respect to each Pledgor, all “instruments,” as
such term is defined in Article 9, rather than Article 3, of the UCC,
and shall include all promissory notes, drafts, bills of exchange or
acceptances.

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

“Intellectual Property
Licenses” shall mean, collectively, with respect to each Pledgor, all
license and distribution agreements with, and covenants not to sue, any other
party with respect to any Patent, Trademark or Copyright or any other patent,
trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and continuations
thereof, (ii) income, fees, royalties, damages, claims and payments now
and hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future infringements or violations
thereof, (iii) rights to sue for past, present and future infringements or
violations thereof and (iv) other rights to use, exploit or practice any or all
of the Patents, Trademarks or Copyrights or any other patent, trademark or
copyright.

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

“Investment Property”
shall mean a security, whether certificated or uncertificated or Security
Entitlement, excluding, however, the Securities Collateral.

 5
 

 

 

“Joinder Agreement”
shall mean an agreement substantially in the form of Exhibit 2
hereto.

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

“Material Intellectual
Property Collateral” shall mean any Intellectual Property Collateral that
is material (i) to the use and operation of the Pledged Collateral or Mortgaged
Property or (ii) to the business, results of operations, prospects or
condition, financial or otherwise, of any Pledgor.

“Organizational
Documents” shall mean, with respect to any person, (i) in the case of
any corporation, the certificate of incorporation and by-laws (or similar
documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership,
the certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership,
the partnership agreement (or similar document) of such person and (v) in
any other case, the functional equivalent of the foregoing.

“Patents” shall
mean, collectively, with respect to each Pledgor, all patents issued or
assigned to, and all patent applications and registrations made by, such
Pledgor (whether established or registered or recorded in the United States or
any other country or any political subdivision thereof), together with any and
all (i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto, (iv)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable thereunder and with respect thereto including damages and
payments for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for past, present
or future infringements thereof.

 “Perfection Certificate” shall mean
that certain perfection certificate dated July 31, 2006, executed and delivered
by each Pledgor in favor of the Collateral Agent for the benefit of the Secured
Parties, and each other Perfection Certificate (which shall be in form and substance
reasonably acceptable to the Collateral Agent) executed and delivered by the
applicable Guarantor in favor of the Collateral Agent for the benefit of the
Secured Parties contemporaneously with the execution and delivery of each
Joinder Agreement executed in accordance with Section 3.5 hereof, in
each case, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the Credit Agreement or
upon the request of the Collateral Agent.

“Permitted Collateral
Liens” means (a) in the case of Collateral other than Mortgaged Property,
the Liens described in clauses (i) through (xvi) of Section 8.01 and
(b) in the case of Mortgaged Property, “Permitted Collateral Liens” shall
mean the Liens described in clauses (i), (ii), (iii), (vii), (ix) and (iv) of Section
8.01; provided, however,
on the Closing Date or upon the date of delivery of each additional Mortgage
under Section 7.11, Permitted Collateral Liens shall mean only
those Liens set forth in Schedule B to the applicable Mortgage.

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

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

“Pledged Securities”
shall mean, collectively, with respect to each Pledgor, (i) all issued and
outstanding Equity Interests of each issuer set forth on Schedules 10(a)
and 10(b) to the Perfection Certificate as being owned by such Pledgor
and all options, warrants, rights, agreements and additional Equity Interests
of whatever class of any such issuer acquired by such Pledgor (including by
issuance), together with all rights, privileges, authority and powers of such
Pledgor relating to such Equity Interests in each such issuer or under any
Organizational Document of each such issuer, and the certificates, instruments
and agreements representing such Equity Interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, (ii) all Equity Interests of any issuer,
which Equity Interests are hereafter acquired by such Pledgor (including by
issuance) and all options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and
powers of such Pledgor relating to such Equity Interests or under any
Organizational Document of any such issuer, and the certificates, instruments
and agreements representing such Equity Interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by such Pledgor
in any manner, and (iii) all Equity Interests issued in respect of the Equity
Interests referred to in clause (i) or (ii) upon any consolidation or merger of
any issuer of such Equity Interests.

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

“Purchase Money
Obligation” shall mean, for any person, the obligations of such person in
respect of Indebtedness (including Capitalized Lease Obligations) incurred for
the purpose of financing all or any part of the purchase price of any property
(including Equity Interests of any person) or the cost of installation,
construction or improvement of any property and any refinancing thereof; provided, however, that
(i) such Indebtedness is incurred within one year after such acquisition,
installation, construction or improvement of such property by such person and
(ii) the amount of such Indebtedness does not exceed 100% of the cost of such
acquisition, installation, construction or improvement, as the case may be.

“Receivables” shall
mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv)
General Intangibles, (v) Instruments and (vi) all other rights to payment,
whether or not earned by performance, for goods or other property sold, leased,
licensed, assigned or otherwise disposed of, or services rendered or to be
rendered, regardless of how classified under the UCC together with all of
Pledgors’ rights, if any, in any goods or other property giving rise to such
right to payment and all Collateral Support and Supporting Obligations related
thereto and all Records relating thereto.

“Requirements of Law”
shall mean, collectively, any and all requirements of any Governmental Authority
including any and all laws, judgments, orders, decrees, ordinances, rules,
regulations, statutes or case law.

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“Secured Obligations”
shall mean (a) the Obligations, (b) the due and punctual payment and
performance of all obligations of Borrower and the other Credit Parties under
each Hedging Agreement entered into with any counterparty that is a Secured
Party and (c) the due and punctual payment and performance of all
obligations of Borrower and the other Credit Parties (including overdrafts and
related liabilities) under each Treasury Services Agreement entered into with
any counterparty that is a Secured Party.

“Secured Parties”
shall mean, collectively, the Administrative Agent, the Collateral Agent, each
other Agent, the Lenders and each party to a Hedging Agreement if at the date
of entering into such Hedging Agreement 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
Collateral Agent as its agent under the applicable Credit Documents and
(ii) agrees to be bound by the provisions of Sections 10.03, 11.01
and 10.06 of the Credit Agreement.

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

“Trademarks” shall
mean, collectively, with respect to each Pledgor, all trademarks (including
service marks), slogans, logos, certification marks, trade dress, uniform resource
locations (URL’s), domain names, corporate names and trade names, whether
registered or unregistered, owned by or assigned to such Pledgor and all
registrations and applications for the foregoing (whether statutory or common
law and whether established or registered in the United States or any other
country or any political subdivision thereof), together with any and all
(i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any trademarks, (ii) reissues, continuations,
extensions and renewals thereof and amendments thereto, (iii) income,
fees, royalties, damages and payments now and hereafter due and/or payable
thereunder and with respect thereto, including damages, claims and payments for
past, present or future infringements thereof, (iv) rights corresponding
thereto throughout the world and (v) rights to sue for past, present and future
infringements thereof.

“Treasury Services
Agreement” shall mean any agreement relating to treasury, depositary and
cash management services or automated clearinghouse transfer of funds.

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

SECTION 1.2.                                          Interpretation.  The rules of interpretation specified in the
Credit Agreement shall be applicable to this Agreement.

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

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

ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

SECTION 2.1.                                          Grant
of Security Interest.  As collateral
security for the payment and performance in full of all the Secured
Obligations, each Pledgor hereby pledges and grants to the Collateral Agent for
the benefit of the Secured Parties, a lien on and security interest in all of
the right, title and interest of such Pledgor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or
acquired from time to time (collectively, the “Pledged Collateral”):

(i)                     all
Accounts;

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

(iii)               all
Documents, Instruments and Chattel Paper;

(iv)              all
Securities Collateral;

(v)                 all
Investment Property;

(vi)              all
Intellectual Property Collateral;

(vii)           the
Commercial Tort Claims described on Schedule 13 to the Perfection
Certificate;

(viii)        all
General Intangibles;

(ix)                all
Supporting Obligations;

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

(xi)                to
the extent not covered by clauses (i) through (xii) of this sentence, all other
personal property of such Pledgor, whether tangible or intangible, and all
Proceeds and products of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of, each of
the foregoing, any and all Proceeds of any insurance, indemnity, 

 9
 

 

 

warranty or
guaranty payable to such Pledgor from time to time with respect to any of the
foregoing.

Notwithstanding anything
to the contrary contained in clauses (i) through (xiii) above, the security
interest created by this Agreement shall not extend to, and the term “Pledged
Collateral” shall not include, any Excluded Property and from and after the
Closing Date, no Pledgor shall permit to become effective in any document
creating, governing or providing for any permit, license or agreement a
provision that would prohibit the creation of a Lien on such permit, license or
agreement in favor of the Collateral Agent unless such Pledgor believes, in its
reasonable judgment, that such prohibition is usual and customary in transactions
of such type.

SECTION 2.2.                                          Filings.

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

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

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL

SECTION 3.1.                                          Delivery
of Certificated Securities Collateral. 
Each Pledgor represents and warrants that all certificates or
instruments representing or evidencing the Securities Collateral in existence
on the date hereof have been delivered to the Collateral Agent in suitable form
for transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank and that the Collateral Agent has a perfected
first priority security interest therein. 
Each Pledgor hereby agrees that all certificates or instruments
representing or evidencing Securities Collateral acquired by such Pledgor after
the date hereof shall promptly (but in any event within five days after receipt
thereof by such Pledgor) be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto.  All
certificated Securities Collateral shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of 

 10
 

 

 

transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. 
The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to register in the name of the Collateral
Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral
is subject to the security interest hereunder. 
In addition, upon the occurrence and during the continuance of an Event
of Default, the Collateral Agent shall have the right at any time to exchange
certificates representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.

SECTION 3.2.                                          Perfection
of Uncertificated Securities Collateral. 
Each Pledgor represents and warrants that the Collateral Agent has a perfected
first priority security interest in all uncertificated Pledged Securities
pledged by it hereunder that are in existence on the date hereof.

SECTION 3.3.                                          Financing
Statements and Other Filings; Maintenance of Perfected Security Interest.  Each Pledgor represents and warrants that all
financing statements, agreements, instruments and other documents necessary to
perfect the security interest granted by it to the Collateral Agent in respect
of the Pledged Collateral have been delivered to the Collateral Agent in completed
and, to the extent necessary or appropriate, duly executed form for filing in
each governmental, municipal or other office specified in Schedule 7 to
the Perfection Certificate.  Each Pledgor
agrees that at the sole cost and expense of the Pledgors, such Pledgor will
maintain the security interest created by this Agreement in the Pledged
Collateral as a perfected first priority security interest subject only to
Permitted Collateral Liens.

SECTION 3.4.                                          Other
Actions.  In order to further ensure
the attachment, perfection and priority of, and the ability of the Collateral
Agent to enforce, the Collateral Agent’s security interest in the Pledged
Collateral, each Pledgor represents and warrants (as to itself) as follows and
agrees, in each case at such Pledgor’s own expense, to take the following
actions with respect to the following Pledged Collateral:

(a)                                  Instruments
and Tangible Chattel Paper.  As of
the date hereof, no amounts payable under or in connection with any of the
Pledged Collateral are evidenced by any Instrument or Tangible Chattel Paper in
excess of $100,000 each, other than such Instruments and Tangible Chattel Paper
listed in Schedule 11 to the Perfection Certificate.  Each Instrument and each item of Tangible
Chattel Paper listed in Schedule 11 to the Perfection Certificate has
been properly endorsed, assigned and delivered to the Collateral Agent,
accompanied by instruments of transfer or assignment duly executed in
blank.  If any amount then payable under
or in connection with any of the Pledged Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, and such amount, together with all
amounts payable evidenced by any Instrument or Tangible Chattel Paper not previously
delivered to the Collateral Agent exceeds $500,000 in the aggregate for all
Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel Paper shall
promptly (but in any event within five days after receipt thereof) endorse,
assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Collateral
Agent may from time to time specify.

 11
 

 

 

(i)                                     As
between the Collateral Agent and the Pledgors, the Pledgors shall bear the
investment risk with respect to the Investment Property and Pledged Securities,
and the risk of loss of, damage to, or the destruction of the Investment
Property and Pledged Securities, whether in the possession of, or maintained as
a Security Entitlement or deposit by.

(b)                                 Electronic
Chattel Paper and Transferable Records. 
As of the date hereof, no amount under or in connection with any of the
Pledged Collateral is evidenced by any Electronic Chattel Paper or any “transferable
record” (as that term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act, or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any relevant jurisdiction)
other than such Electronic Chattel Paper and transferable records listed in Schedule
11 to the Perfection Certificate.

(c)                                  Commercial
Tort Claims.  As of the date hereof,
each Pledgor hereby represents and warrants that it holds no Commercial Tort
Claims other than those listed in Schedule 13 to the Perfection
Certificate.  If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim, such Pledgor shall immediately notify
the Collateral Agent in writing signed by such Pledgor of the brief details
thereof and grant to the Collateral Agent in such writing a security interest
therein and in the Proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the
Collateral Agent.  The requirement in the
preceding sentence shall not apply to the extent that the amount of such
Commercial Tort Claim, together with the amount of all other Commercial Tort
Claims held by any Pledgor in which the Collateral Agent does not have a
security interest, does not exceed $500,000 in the aggregate for all Pledgors.

SECTION 3.5.                                          Joinder
of Additional Guarantors.  The
Pledgors shall cause each Subsidiary of the Borrower which, from time to time,
after the date hereof shall be required to pledge any assets to the Collateral
Agent for the benefit of the Secured Parties pursuant to the provisions of the
Credit Agreement, (a) to execute and deliver to the Collateral Agent (i) a
Joinder Agreement substantially in the form of Exhibit 2 hereto
within thirty (30) days of the date on which it was acquired or created and
(ii) a Perfection Certificate, in each case, within thirty (30) days of the
date on which it was acquired or created or (b) in the case of a
Subsidiary organized outside of the United States required to pledge any assets
to the Collateral Agent, to execute and deliver to the Collateral Agent such
documentation as the Collateral Agent shall reasonably request and, in each
case with respect to clauses (a) and (b) above, upon such execution and
delivery, such Subsidiary shall constitute a “Guarantor” and a “Pledgor” for
all purposes hereunder with the same force and effect as if originally named as
a Guarantor and Pledgor herein.  The
execution and delivery of such Joinder Agreement shall not require the consent
of any Pledgor hereunder.  The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor and Pledgor as a party to
this Agreement.

SECTION 3.6.                                          Supplements;
Further Assurances.  Each Pledgor
shall take such further actions, and execute and/or deliver to the Collateral
Agent such additional financing 

 12
 

 

 

statements, amendments, assignments,
agreements, supplements, powers and instruments, as the Collateral Agent may in
its reasonable judgment deem necessary or appropriate in order to create,
perfect, preserve and protect the security interest in the Pledged Collateral
as provided herein and the rights and interests granted to the Collateral Agent
hereunder, to carry into effect the purposes hereof or better to assure and
confirm the validity, enforceability and priority of the Collateral Agent’s security
interest in the Pledged Collateral or permit the Collateral Agent to exercise
and enforce its rights, powers and remedies hereunder with respect to any
Pledged Collateral, including the filing of financing statements, continuation
statements and other documents (including this Agreement) under the Uniform
Commercial Code (or other similar laws) in effect in any jurisdiction with
respect to the security interest created hereby, all in form reasonably
satisfactory to the Collateral Agent and in such offices (including the United
States Patent and Trademark Office and the United States Copyright Office)
wherever required by law to perfect, continue and maintain the validity,
enforceability and priority of the security interest in the Pledged Collateral
as provided herein and to preserve the other rights and interests granted to
the Collateral Agent hereunder, as against third parties, with respect to the
Pledged Collateral.  Without limiting the
generality of the foregoing, each Pledgor shall make, execute, endorse, acknowledge,
file or refile and/or deliver to the Collateral Agent from time to time upon
reasonable request by the Collateral Agent such lists, schedules, descriptions
and designations of the Pledged Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments as the Collateral Agent shall reasonably request.  If an Event of Default has occurred and is
continuing, the Collateral Agent may institute and maintain, in its own name or
in the name of any Pledgor, such suits and proceedings as the Collateral Agent
may be advised by counsel shall be necessary or expedient to prevent any impairment
of the security interest in or the perfection thereof in the Pledged Collateral.  All of the foregoing shall be at the sole
cost and expense of the Pledgors.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Pledgor represents,
warrants and covenants as follows:

SECTION 4.1.                                          Title.  Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and Permitted Liens, such Pledgor owns and has rights and, as to
Pledged Collateral acquired by it from time to time after the date hereof, will
own and have rights in each item of Pledged Collateral pledged by it hereunder,
free and clear of any and all Liens or claims of others.  In addition, no Liens or claims exist on the
Securities Collateral, other than as permitted by Section 8.01 of
the Credit Agreement.

SECTION 4.2.                                          Validity
of Security Interest.  The security
interest in and Lien on the Pledged Collateral granted to the Collateral Agent
for the benefit of the Secured Parties hereunder constitutes (a) a legal
and valid security interest in all the Pledged Collateral securing the payment
and performance of the Secured Obligations, and (b) subject to the filings and
other 

 13
 

 

 

actions described in Schedule
7 to the Perfection Certificate (to the extent required to be listed on the
schedules to the Perfection Certificate as of the date this representation is
made or deemed made), a perfected security interest in all the Pledged
Collateral that can be perfected either by delivery of certificates or
instruments or the filing of UCC financing statements.  The security interest and Lien granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Pledged Collateral will at all times constitute a
perfected (to the extent perfectable by the filing of UCC financing statements
or delivery of instruments or certificates), continuing security interest
therein, prior to all other Liens on the Pledged Collateral except for
Permitted Collateral Liens.

SECTION 4.3.                                          Defense
of Claims; Transferability of Pledged Collateral.  Subject to Section 7.08 and 7.09
of the Credit Agreement, each Pledgor shall, at its own cost and expense,
defend title to the Pledged Collateral pledged by it hereunder and the security
interest therein and Lien thereon granted to the Collateral Agent and the
priority thereof against all claims and demands of all persons, at its own cost
and expense, at any time claiming any interest therein adverse to the Collateral
Agent or any other Secured Party other than Permitted Collateral Liens.  There is no agreement, order, judgment or
decree, and no Pledgor shall enter into any agreement or take any other action,
that would restrict the transferability of any of the Pledged Collateral or
otherwise impair or conflict with such Pledgor’s obligations or the rights of
the Collateral Agent hereunder.

SECTION 4.4.                                          Other
Financing Statements.  It has not
filed, nor authorized any third party to file (nor will there be), any valid or
effective financing statement (or similar statement, instrument of registration
or public notice under the law of any jurisdiction) covering or purporting to
cover any interest of any kind in the Pledged Collateral, except such as have
been filed in favor of the Collateral Agent pursuant to this Agreement or in
favor of any holder of a Permitted Collateral Lien with respect to such
Permitted Collateral Lien or financing statements or public notices relating to
the termination statements listed on Schedule 9 to the Perfection
Certificate.  No Pledgor shall execute,
authorize or permit to be filed in any public office any financing statement
(or similar statement, instrument of registration or public notice under the
law of any jurisdiction) relating to any Pledged Collateral, except financing
statements and other statements and instruments filed or to be filed in respect
of and covering the security interests granted by such Pledgor to the holder of
the Permitted Collateral Liens.

SECTION 4.5.                                          Due
Authorization and Issuance.  All of
the Pledged Securities existing on the date hereof have been, and to the extent
any Pledged Securities are hereafter issued, such Pledged Securities will be,
upon such issuance, duly authorized, validly issued and fully paid and
non-assessable to the extent applicable. 
There is no amount or other obligation owing by any Pledgor to any
issuer of the Pledged Securities in exchange for or in connection with the issuance
of the Pledged Securities or any Pledgor’s status as a partner or a member of
any issuer of the Pledged Securities.

SECTION 4.6.                                          Consents,
etc.  In the event that the Collateral
Agent desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, 

 14
 

 

 

such Pledgor agrees to use its
best efforts to assist and aid the Collateral Agent to obtain as soon as
practicable any necessary approvals or consents for the exercise of any such
remedies, rights and powers.

SECTION 4.7.                                          Pledged
Collateral.  All information set
forth herein, including the schedules hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. 
The Pledged Collateral described on the schedules to the Perfection
Certificate constitutes all of the property of such type of Pledged Collateral
owned or held by the Pledgors.

SECTION 4.8.                                          Insurance.  In the event that the proceeds of any
insurance claim are paid to any Pledgor after the Collateral Agent has
exercised its right to foreclose after an Event of Default, such Net Cash
Proceeds shall be held in trust for the benefit of the Collateral Agent and
immediately after receipt thereof shall be paid to the Collateral Agent for
application in accordance with the Credit Agreement.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

SECTION 5.1.                                          Pledge
of Additional Securities Collateral. 
Each Pledgor shall, upon obtaining any Pledged Securities or
Intercompany Notes of any person, accept the same in trust for the benefit of
the Collateral Agent and promptly (but in any event within five days after
receipt thereof) deliver to the Collateral Agent a pledge amendment, duly
executed by such Pledgor, in substantially the form of Exhibit 1 hereto
(each, a “Pledge Amendment”), and the certificates and other documents
required under Section 3.1 and Section 3.2 hereof in respect
of the additional Pledged Securities or Intercompany Notes which are to be
pledged pursuant to this Agreement, and confirming the attachment of the Lien
hereby created on and in respect of such additional Pledged Securities or
Intercompany Notes.  Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Securities or Intercompany Notes listed
on any Pledge Amendment delivered to the Collateral Agent shall for all
purposes hereunder be considered Pledged Collateral.

SECTION 5.2.                                          Voting
Rights; Distributions; etc.

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

(i)                  Each
Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Securities Collateral or any part thereof for any purpose
not inconsistent with the terms or purposes hereof, the Credit Agreement or any
other document evidencing the Secured Obligations; provided, however,
that no Pledgor shall in any event exercise such rights in any manner which
could reasonably be expected to have a Material Adverse Effect.

 15
 

 

 

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

(b)                                 So
long as no Event of Default shall have occurred and be continuing, the
Collateral Agent shall be deemed without further action or formality to have
granted to each Pledgor all necessary consents relating to voting rights and
shall, if necessary, upon written request of any Pledgor and at the sole
cost and expense of the Pledgors, from time to time execute and deliver (or
cause to be executed and delivered) to such Pledgor all such instruments as
such Pledgor may reasonably request in order to permit such Pledgor to exercise
the voting and other rights which it is entitled to exercise pursuant to Section 5.2(a)(i)
hereof and to receive the Distributions which it is authorized to receive and
retain pursuant to Section 5.2(a)(ii) hereof.

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

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

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

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

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

SECTION 5.3.                                          Defaults,
etc.  Such Pledgor is not in default
in the payment of any portion of any mandatory capital contribution, if any,
required to be made under any agreement 

 16
 

 

 

to which such Pledgor is a
party relating to the Pledged Securities pledged by it, and such Pledgor is not
in violation of any other provisions of any such agreement to which such
Pledgor is a party, or otherwise in default or violation thereunder.  No Securities Collateral pledged by such
Pledgor is subject to any defense, offset or counterclaim, nor have any of the
foregoing been asserted or alleged against such Pledgor by any person with
respect thereto, and as of the date hereof, there are no certificates,
instruments, documents or other writings (other than the Organizational
Documents and certificates representing such Pledged Securities that have been
delivered to the Collateral Agent) which evidence any Pledged Securities of
such Pledgor.

SECTION 5.4.                                          Certain
Agreements of Pledgors As Issuers and Holders of Equity Interests.

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

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

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

SECTION 6.1.                                          Grant
of Intellectual Property License. 
For the purpose of enabling the Collateral Agent, during the continuance
of an Event of Default, to exercise rights and remedies under Article IX
hereof at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Pledgor
hereby grants to the Collateral Agent, to the extent assignable, an
irrevocable, non-exclusive license to use, assign, license or sublicense any of
the Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, wherever the same may be located. 
Such license shall include access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout hereof.

SECTION 6.2.                                          Protection
of Collateral Agent’s Security.  On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i)
promptly following its becoming aware thereof, notify the Collateral Agent of
any adverse determination in any proceeding or the institution of any proceeding
in any federal, state or local court or administrative body or in the United
States Patent and Trademark Office or the United States Copyright Office
regarding any Material Intellectual Property Collateral, such Pledgor’s right
to register such Material Intellectual 

 17
 

 

 

Property Collateral or its right to keep and
maintain such registration in full force and effect, (ii) maintain all Material
Intellectual Property Collateral as presently used and operated, (iii) not
permit to lapse or become abandoned any Material Intellectual Property
Collateral, and not settle or compromise any pending or future litigation or
administrative proceeding with respect to any such Material Intellectual
Property Collateral, in either case except as shall be consistent with
commercially reasonable business judgment, (iv) upon such Pledgor obtaining
knowledge thereof, promptly notify the Collateral Agent in writing of any event
which may be reasonably expected to materially and adversely affect the value
or utility of any Material Intellectual Property Collateral or the rights and
remedies of the Collateral Agent in relation thereto including a levy or threat
of levy or any legal process against any Material Intellectual Property
Collateral, (v) not license any Intellectual Property Collateral other
than licenses entered into by such Pledgor in, or incidental to, the ordinary
course of business, or amend or permit the amendment of any of the licenses in
a manner that materially and adversely affects the right to receive payments
thereunder, or in any manner that would materially impair the value of any
Intellectual Property Collateral or the Lien on and security interest in the
Intellectual Property Collateral created therein hereby, without the consent of
the Collateral Agent, (vi) diligently keep adequate records respecting all
Intellectual Property Collateral and (vii) furnish to the Collateral Agent
from time to time upon the Collateral Agent’s request therefor reasonably
detailed statements and amended schedules further identifying and describing
the Intellectual Property Collateral and such other materials evidencing or
reports pertaining to any Intellectual Property Collateral as the Collateral
Agent may from time to time request.

SECTION 6.3.                                          After-Acquired
Property.  If any Pledgor shall at
any time after the date hereof (i) obtain any rights to any additional
Intellectual Property Collateral or (ii) become entitled to the benefit of
any additional Intellectual Property Collateral or any renewal or extension thereof,
including any reissue, division, continuation, or continuation-in-part of any
Intellectual Property Collateral, or any improvement on any Intellectual
Property Collateral, the provisions hereof shall automatically apply thereto
and any such item enumerated in the preceding clause (i) or (ii) shall
automatically constitute Intellectual Property Collateral as if such would have
constituted Intellectual Property Collateral at the time of execution hereof
and be subject to the Lien and security interest created by this Agreement
without further action by any party. 
Further, each Pledgor authorizes the Collateral Agent to modify this
Agreement by amending Schedules 12(a) and 12(b) to the Perfection
Certificate to include any Intellectual Property Collateral of such Pledgor acquired
or arising after the date hereof.

SECTION 6.4.                                          Litigation.  Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the
Intellectual Property Collateral.  Upon
the occurrence and during the continuance of any Event of Default, the
Collateral Agent shall have the right but shall in no way be obligated to file
applications for protection of the Intellectual Property Collateral and/or
bring suit in the name of any Pledgor, the Collateral Agent or the Secured
Parties to enforce the Intellectual Property Collateral and any license thereunder.  In the event of such suit, each Pledgor
shall, at the reasonable request of the Collateral Agent, do any 

 18
 

 

 

and all lawful acts and execute any and all
documents requested by the Collateral Agent in aid of such enforcement and the
Pledgors shall promptly reimburse and indemnify the Collateral Agent for all
costs and expenses incurred by the Collateral Agent in the exercise of its
rights under this Section 6.4 in accordance with Section 10.06
and 11.01 of the Credit Agreement. 
In the event that the Collateral Agent shall elect not to bring suit to
enforce the Intellectual Property Collateral, each Pledgor agrees, at the
reasonable request of the Collateral Agent, to take all commercially reasonable
actions necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
of or other damage to any of the Intellectual Property Collateral by any
person.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING RECEIVABLES

SECTION 7.1.                                          Maintenance
of Records.  Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Receivable,
in a manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and
all other documentation relating thereto. 
Each Pledgor shall, at such Pledgor’s sole cost and expense, upon the
Collateral Agent’s demand made at any time after the occurrence and during the
continuance of any Event of Default, deliver all tangible evidence of
Receivables, including all documents evidencing Receivables and any books and
records relating thereto to the Collateral Agent or to its representatives (copies
of which evidence and books and records may be retained by such Pledgor).  Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may transfer a full and complete
copy of any Pledgor’s books, records, credit information, reports, memoranda
and all other writings relating to the Receivables to and for the use by any
person that has acquired or is contemplating acquisition of an interest in the
Receivables or the Collateral Agent’s security interest therein without the consent
of any Pledgor.

SECTION 7.2.                                          Legend.  Each Pledgor shall legend, at the request of
the Collateral Agent and in form and manner satisfactory to the Collateral
Agent, the Receivables and the other books, records and documents of such
Pledgor evidencing or pertaining to the Receivables with an appropriate reference
to the fact that the Receivables have been assigned to the Collateral Agent for
the benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.

SECTION 7.3.                                          Modification
of Terms, etc.  No Pledgor shall
rescind or cancel any obligations evidenced by any Receivable or modify any
term thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or
renew any such obligations except in the ordinary course of business consistent
with prudent business practice or compromise or settle any dispute, claim, suit
or legal proceeding relating thereto or sell any Receivable or interest therein
except in the ordinary course of business consistent with prudent business
practice without the prior written consent of the Collateral Agent.  Each Pledgor shall timely fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables.

 19

 

 

SECTION 7.4.                                          Collection.  Each Pledgor shall cause to be collected from
the Account Debtor of each of the Receivables, as and when due in the ordinary
course of business and consistent with prudent business practice (including
Receivables that are delinquent, such Receivables to be collected in accordance
with generally accepted commercial collection procedures), any and all amounts
owing under or on account of such Receivable, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable, except that any Pledgor may, with respect to a Receivable, allow in
the ordinary course of business (i) a refund or credit due as a result of
returned or damaged or defective merchandise and (ii) such extensions of time
to pay amounts due in respect of Receivables and such other modifications of
payment terms or settlements in respect of Receivables as shall be commercially
reasonable in the circumstances, all in accordance with such Pledgor’s ordinary
course of business consistent with its collection practices as in effect from
time to time.  The costs and expenses
(including attorneys’ fees) of collection, in any case, whether incurred by any
Pledgor, the Collateral Agent or any Secured Party, shall be paid by the
Pledgors.

ARTICLE VIII

TRANSFERS

SECTION 8.1.                                          Transfers of Pledged Collateral.  No Pledgor shall sell, convey, assign or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral
pledged by it hereunder except as expressly permitted by the Credit Agreement.

ARTICLE IX

REMEDIES

SECTION 9.1.                                          Remedies.  Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies:

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

(ii)                                  Demand, sue for, collect or receive any money
or property at any time payable or receivable in respect of the Pledged
Collateral including instructing the obligor or obligors on any agreement,
instrument or other obligation constituting part of the Pledged Collateral to
make any payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent, and in connection with any 

 20
 

 

 

of the foregoing, compromise, settle, extend the time for payment and
make other modifications with respect thereto; provided, however,
that in the event that any such payments are made directly to any Pledgor,
prior to receipt by any such obligor of such instruction, such Pledgor shall
segregate all amounts received pursuant thereto in trust for the benefit of the
Collateral Agent and shall promptly (but in no event later than one (1)
Business Day after receipt thereof) pay such amounts to the Collateral Agent;

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

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

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

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

(vii)                           Exercise any and all rights as beneficial and
legal owner of the Pledged Collateral, including perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Pledged Collateral; and

(viii)                        Exercise all the rights and remedies of a
secured party on default under the UCC, and the Collateral Agent may also in
its sole discretion, without notice except as specified in Section 9.2
hereof, sell, assign or grant a license to use the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of the Collateral Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices and upon
such other terms as the Collateral Agent may deem commercially reasonable.  The Collateral Agent or any other Secured
Party or any of their respective Affiliates may be the purchaser, licensee,
assignee or recipient of the Pledged Collateral or any part thereof at any such
sale and shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all 

 21
 

 

 

or any portion of the Pledged Collateral sold, assigned or licensed at
such sale, to use and apply any of the Secured Obligations owed to such person
as a credit on account of the purchase price of the Pledged Collateral or any
part thereof payable by such person at such sale.  Each purchaser, assignee, licensee or
recipient at any such sale shall acquire the property sold, assigned or
licensed absolutely free from any claim or right on the part of any Pledgor,
and each Pledgor hereby waives, to the fullest extent permitted by law, all
rights of redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted.  The Collateral Agent shall not
be obligated to make any sale of the Pledged Collateral or any part thereof
regardless of notice of sale having been given. 
The Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.  Each Pledgor hereby waives,
to the fullest extent permitted by law, any claims against the Collateral Agent
arising by reason of the fact that the price at which the Pledged Collateral or
any part thereof may have been sold, assigned or licensed at such a private
sale was less than the price which might have been obtained at a public sale,
even if the Collateral Agent accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.

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

SECTION 9.3.                                          Waiver of Notice and Claims.  Each Pledgor hereby waives, to the fullest
extent permitted by applicable law, notice or judicial hearing in connection
with the Collateral Agent’s taking possession or the Collateral Agent’s
disposition of the Pledged Collateral or any part thereof, including any and
all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law:  (i) all damages occasioned by such
taking of possession, (ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement of the
Collateral Agent’s rights hereunder and (iii) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force
under any applicable law.  The Collateral
Agent shall not be liable for any incorrect or improper payment made pursuant
to this Article IX in the absence of gross negligence or willful
misconduct on the part of the Collateral Agent. 
Any sale of, or the grant of options to purchase, or any other realization
upon, any Pledged Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the applicable
Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Pledgor and against any and all persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.

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SECTION 9.4.                                          Certain
Sales of Pledged Collateral.

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

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

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

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

 

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SECTION 9.5.                                          No
Waiver; Cumulative Remedies.

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

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

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

ARTICLE X

APPLICATION OF PROCEEDS

SECTION 10.1.                                    Application of Proceeds.  The proceeds received by the Collateral Agent
in respect of any sale of, collection from or other realization upon all or any
part of the Pledged Collateral pursuant to the exercise by the Collateral Agent
of its remedies shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, in accordance with the Credit
Agreement.

 24
 

 

 

ARTICLE XI

MISCELLANEOUS

SECTION 11.1.                                    Concerning
Collateral Agent.

(a)                                  The Collateral Agent has been appointed as
collateral agent pursuant to the Credit Agreement.  The actions of the Collateral Agent hereunder
are subject to the provisions of the Credit Agreement.  The Collateral Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the
release or substitution of the Pledged Collateral), in accordance with this
Agreement and the Credit Agreement.  The
Collateral Agent may employ agents and attorneys-in-fact in connection herewith
and shall not be liable for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. 
The Collateral Agent may resign and a successor Collateral Agent may be
appointed in the manner provided in the Credit Agreement.  Upon the acceptance of any appointment as the
Collateral Agent by a successor Collateral Agent, that successor Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent under this Agreement,
and the retiring Collateral Agent shall thereupon be discharged from its duties
and obligations under this Agreement. 
After any retiring Collateral Agent’s resignation, the provisions hereof
shall inure to its benefit as to any actions taken or omitted to be taken by it
under this Agreement while it was the Collateral Agent.

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

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

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

 25
 

 

 

(e)                                  The Collateral Agent may rely on advice of
counsel as to whether any or all UCC financing statements of the Pledgors need
to be amended as a result of any of the changes described in Section 7.01
of the Credit Agreement.  If any Pledgor
fails to provide information to the Collateral Agent about such changes on a
timely basis, the Collateral Agent shall not be liable or responsible to any
party for any failure to maintain a perfected security interest in such Pledgor’s
property constituting Pledged Collateral, for which the Collateral Agent needed
to have information relating to such changes. 
The Collateral Agent shall have no duty to inquire about such changes if
any Pledgor does not inform the Collateral Agent of such changes, the parties
acknowledging and agreeing that it would not be feasible or practical for the
Collateral Agent to search for information on such changes if such information
is not provided by any Pledgor.

SECTION 11.2.                                    Collateral Agent May Perform; Collateral
Agent Appointed Attorney-in-Fact. 
If any Pledgor shall fail to perform any covenants contained in this
Agreement (including such Pledgor’s covenants to (i) pay the premiums in
respect of all required insurance policies hereunder, (ii) pay and discharge
any taxes, assessments and special assessments, levies, fees and governmental
charges imposed upon or assessed against, and landlords’, carriers’, mechanics’,
workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral, (iii) make repairs, (iv) discharge Liens or (v) pay
or perform any obligations of such Pledgor under any Pledged Collateral) or if
any representation or warranty on the part of any Pledgor contained herein
shall be breached, the Collateral Agent may (but shall not be obligated to) do
the same or cause it to be done or remedy any such breach, and may expend funds
for such purpose; provided, however, that the Collateral Agent
shall in no event be bound to inquire into the validity of any tax, Lien,
imposition or other obligation which such Pledgor fails to pay or perform as
and when required hereby and which such Pledgor does not contest in accordance
with the provisions of the Credit Agreement. 
Any and all amounts so expended by the Collateral Agent shall be paid by
the Pledgors in accordance with the provisions of Section 11.01 of
the Credit Agreement.  Neither the
provisions of this Section 11.2 nor any action taken by the Collateral
Agent pursuant to the provisions of this Section 11.2 shall prevent any
such failure to observe any covenant contained in this Agreement nor any breach
of representation or warranty from constituting an Event of Default.  Each Pledgor hereby appoints the Collateral
Agent its attorney-in-fact, with full power and authority in the place and
stead of such Pledgor and in the name of such Pledgor, or otherwise, from time
to time in the Collateral Agent’s discretion after the occurrence and during
the continuance of an Event of Default to take any action and to execute any
instrument consistent with the terms of the Credit Agreement, this Agreement
and the other Security Documents which the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof (but the Collateral Agent shall
not be obligated to and shall have no liability to such Pledgor or any third
party for failure to so do or take action). 
The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof.  Each Pledgor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof.

SECTION 11.3.                                    Continuing Security Interest; Assignment.  This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) be binding upon
the Pledgors, their respective successors and assigns and (ii) inure,
together with the rights and

 26
 

 

 

remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns.  No other persons (including any other
creditor of any Pledgor) shall have any interest herein or any right or benefit
with respect hereto.  Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign
or otherwise transfer any indebtedness held by it secured by this Agreement to
any other person, and such other person shall thereupon become vested with all
the benefits in respect thereof granted to such Secured Party, herein or
otherwise, subject however, to the provisions of the Credit Agreement and, in
the case of a Secured Party that is a party to a Hedging Agreement, such
Hedging Agreement.  Each of the Pledgors
agrees that its obligations hereunder and the security interest created
hereunder shall continue to be effective or be reinstated, as applicable, if at
any time payment, or any part thereof, of all or any part of the Secured Obligations
is rescinded or must otherwise be restored by the Secured Party upon the
bankruptcy or reorganization of any Pledgor or otherwise.

SECTION 11.4.                                    Termination;
Release.

(a)                                  When all the Secured Obligations have been
paid in full and the Commitments of the Lenders to make any Loan under the
Credit Agreement shall have expired or been sooner terminated in accordance
with the provisions of the Credit Agreement, this Agreement shall
terminate.  Upon termination of this Agreement
the Pledged Collateral shall be released from the Lien of this Agreement.  Upon such release or any release of Pledged
Collateral or any part thereof in accordance with the provisions of the Credit
Agreement, the Collateral Agent shall, upon the request and at the sole cost
and expense of the Pledgors, assign, transfer and deliver to Pledgor, against
receipt and without recourse to or warranty by the Collateral Agent except as
to the fact that the Collateral Agent has not encumbered the released assets,
such of the Pledged Collateral or any part thereof to be released (in the case
of a release) as may be in possession of the Collateral Agent and as shall not
have been sold or otherwise applied pursuant to the terms hereof, and, with
respect to any other Pledged Collateral, proper documents and instruments
(including UCC-3 termination financing statements or releases)
acknowledging the termination hereof or the release of such Pledged Collateral,
as the case may be.

(b)                                 Notwithstanding
the foregoing, if (i) the Obligations have been paid in full and the
Commitments of the Lenders to make any Loan under the Credit Agreement shall
have expired or been sooner terminated in accordance with the provisions of the
Credit Agreement, (ii) Secured Obligations of the type described in clause (b)
of the definition of Secured Obligations (“Remaining Secured Obligations”)
remain outstanding and (iii) all or a portion of the repayment of the
Obligations is financed by the proceeds of Indebtedness of one or more Credit
Parties or any affiliate of a Credit Party (“Refinancing Indebtedness”)
which Refinancing Indebtedness is secured by property of such persons, this
Agreement shall terminate as if the Remaining Secured Obligations have been
paid in full and the provisions of paragraph (a) of this Section 11.4
shall apply concurrently with the incurrence of the Refinancing Indebtedness
and the securing of the Refinancing Indebtedness and the Remaining Secured
Obligations on an equal and ratable basis. For the avoidance of doubt, if the
Refinancing Indebtedness is not secured, this Agreement shall not terminate but
shall remain in full force and effect.

 27
 

 

 

SECTION 11.5.                                    Modification in Writing.  No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be effective unless the same shall be
made in accordance with the terms of the Credit Agreement and unless in writing
and signed by the Collateral Agent.  Any
amendment, modification or supplement of or to any provision hereof, any waiver
of any provision hereof and any consent to any departure by any Pledgor from
the terms of any provision hereof in each case shall be effective only in the
specific instance and for the specific purpose for which made or given.  Except where notice is specifically required
by this Agreement or any other document evidencing the Secured Obligations, no
notice to or demand on any Pledgor in any case shall entitle any Pledgor to any
other or further notice or demand in similar or other circumstances.

SECTION 11.6.                                    Notices.  Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement and as to the Collateral Agent, addressed
to it at the address set forth in the Credit Agreement, or in each case at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 11.6.

SECTION 11.7.                                    Governing Law, Consent to Jurisdiction and
Service of Process; Waiver of Jury Trial.  Section 11.07 of the Credit Agreement
are incorporated herein, mutatis mutandis,
as if a part hereof.

SECTION 11.8.                                    Severability of Provisions.  Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof or affecting the validity,
legality or enforceability of such provision in any other jurisdiction.

SECTION 11.9.                                    Execution in Counterparts.  This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.

SECTION 11.10.                              Business Days.  In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.

SECTION 11.11.                              No Credit for Payment of Taxes or Imposition.  Such Pledgor shall not be entitled to any
credit against the principal, premium, if any, or interest payable under the
Credit Agreement, and such Pledgor shall not be entitled to any credit against
any other sums which may become payable under the terms thereof or hereof, by
reason of the payment of any Tax on the Pledged Collateral or any part thereof.

 28
 

 

 

SECTION 11.12.                              No Claims Against Collateral Agent.  Nothing contained in this Agreement shall
constitute any consent or request by the Collateral Agent, express or implied,
for the performance of any labor or services or the furnishing of any materials
or other property in respect of the Pledged Collateral or any part thereof, nor
as giving any Pledgor any right, power or authority to contract for or permit
the performance of any labor or services or the furnishing of any materials or
other property in such fashion as would permit the making of any claim against
the Collateral Agent in respect thereof or any claim that any Lien based on the
performance of such labor or services or the furnishing of any such materials
or other property is prior to the Lien hereof.

SECTION 11.13.                              No Release.  Nothing set forth in this Agreement or any
other Credit Document, nor the exercise by the Collateral Agent of any of the
rights or remedies hereunder, shall relieve any Pledgor from the performance of
any term, covenant, condition or agreement on such Pledgor’s part to be
performed or observed under or in respect of any of the Pledged Collateral or
from any liability to any person under or in respect of any of the Pledged Collateral
or shall impose any obligation on the Collateral Agent or any other Secured
Party to perform or observe any such term, covenant, condition or agreement on
such Pledgor’s part to be so performed or observed or shall impose any
liability on the Collateral Agent or any other Secured Party for any act or
omission on the part of such Pledgor relating thereto or for any breach of any
representation or warranty on the part of such Pledgor contained in this
Agreement, the Credit Agreement or the other Credit Documents, or under or in
respect of the Pledged Collateral or made in connection herewith or
therewith.  Anything herein to the
contrary notwithstanding, neither the Collateral Agent nor any other Secured
Party shall have any obligation or liability under any contracts, agreements
and other documents included in the Pledged Collateral by reason of this
Agreement, nor shall the Collateral Agent or any other Secured Party be
obligated to perform any of the obligations or duties of any Pledgor thereunder
or to take any action to collect or enforce any such contract, agreement or
other document included in the Pledged Collateral hereunder.  The obligations of each Pledgor contained in
this Section 11.13 shall survive the termination hereof and the
discharge of such Pledgor’s other obligations under this Agreement, the Credit
Agreement and the other Credit Documents.

SECTION 11.14.                              Obligations Absolute.  All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

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

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

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

 29
 

 

 

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

(v)                                 any exercise, non-exercise or waiver of any
right, remedy, power or privilege under or in respect hereof, the Credit
Agreement, any Hedging Agreement or any other Credit Document except as
specifically set forth in a waiver granted pursuant to the provisions of Section 11.5
hereof; or

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

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK.]

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

	
   

  	
   

  	
  SHUFFLE MASTER, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Richard L. Baldwin

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Richard L. Baldwin

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice President and CFO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHUFFLE MASTER INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark L. Yoseloff

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark L. Yoseloff

  	
   

  
	
   

  	
   

  	
   

  	
  Title: CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHUFFLE UP PRODUCTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark L. Yoseloff

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Mark L. Yoseloff

  	
   

  
	
   

  	
   

  	
   

  	
  Title: CEO

  	
   

  

 

 S-1
 

 

 

	
  

  	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven P. Lapham

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Steven P. Lapham

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joanna Soliman

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Joanna Soliman

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Assistant Vice President

  	
   

  

 

 S-2

EXHIBIT 1

[Form of]

SECURITIES PLEDGE AMENDMENT

This Securities Pledge
Amendment, dated as of
[                    ],
is delivered pursuant to Section 5.1 of the Security Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement;” capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of
[                    ],
2006 made by SHUFFLE MASTER, INC., a Minnesota corporation (the “Borrower”),
the Guarantors party thereto and DEUTSCHE BANK AG NEW YORK BRANCH, as
collateral agent (in such capacity and together with any successors in such
capacity, the “Collateral Agent”). 
The undersigned hereby agrees that this Securities Pledge Amendment may
be attached to the Security Agreement and that the Pledged Securities and/or
Intercompany Notes listed on this Securities Pledge Amendment shall be deemed
to be and shall become part of the Pledged Collateral and shall secure all
Secured Obligations.

PLEDGED
SECURITIES

	
  ISSUER

  	
   

  	
  CLASS

  OF STOCK

  OR

  INTERESTS

  	
   

  	
  PAR

  VALUE

  	
   

  	
  CERTIFICATE

  NO(S).

  	
   

  	
  NUMBER OF

  SHARES

  OR

  INTERESTS

  	
   

  	
  PERCENTAGE OF

  ALL ISSUED CAPITAL

  OR OTHER EQUITY

  INTERESTS OF ISSUER

  	
   

  
	
          

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
          

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
          

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

INTERCOMPANY NOTES

	
  ISSUER

  	
   

  	
  PRINCIPAL

  AMOUNT

  	
   

  	
  DATE OF

  ISSUANCE

  	
   

  	
  INTEREST

  RATE

  	
   

  	
  MATURITY

  DATE

  	
   

  
	
        

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
        

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
        

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  

  	
   

  	
  [                                                                        ],

  
	
   

  	
   

  	
  as Pledgor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

AGREED TO AND
ACCEPTED:

DEUTSCHE BANK AG
NEW YORK BRANCH,

 as Collateral Agent

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 2

EXHIBIT 2

[Form of]

JOINDER AGREEMENT

[Name of New Pledgor]

[Address of New Pledgor]

[Date]

 

 

 

Ladies and Gentlemen:

Reference is made to the Security Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement;” capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of
[                    ],
2006 made by SHUFFLE MASTER, INC., a Minnesota corporation (the “Borrower”),
the Guarantors party thereto and DEUTSCHE BANK AG NEW YORK BRANCH, as
collateral agent (in such capacity and together with any successors in such
capacity, the “Collateral Agent”).

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

 

 

Annexed hereto are supplements to each of the
schedules to the Security Agreement and the Credit Agreement, as applicable,
with respect to the New Pledgor.  Such
supplements shall be deemed to be part of the Security Agreement or the Credit
Agreement, as applicable.

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

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

 2
 

 

 

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

 

	
  

  	
   

  	
  [NEW PLEDGOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

AGREED TO AND ACCEPTED:

DEUTSCHE BANK AG NEW YORK
BRANCH,

 as Collateral Agent

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

[Schedules to be
attached]

 

 3

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