Document:

ex104-tlguarantyandsecur

Execution Version  12445098v4 4/2/2021 9:02 AM 1989.726      122895846v5  GUARANTY AND SECURITY AGREEMENT  This GUARANTY AND SECURITY AGREEMENT (this "Agreement"), dated as of  April 26, 2021, by and among the Persons listed on the signature pages hereof as "Grantors" and  those additional entities that hereafter become parties hereto by executing the form of Joinder  attached hereto as Annex 1 (each, a "Grantor" and collectively, the "Grantors"), and MGG  INVESTMENT GROUP LP, a Delaware limited partnership ("MGG"), in its capacity as  administrative agent for each member of the Lender Group (in such capacity, together with its  successors and assigns in such capacity, "Agent").  W I T N E S S E T H:  WHEREAS, pursuant to that certain Credit Agreement, of even date herewith (as  amended, restated, supplemented, or otherwise modified from time to time, the "Credit  Agreement"), by and among FARMER BROS. CO., a Delaware corporation ("Parent"), and the  Subsidiaries of Parent from time to time party to the Credit Agreement as borrowers in accordance  with the terms thereof (together with Parent, each a "Borrower" and individually and collectively,  jointly and severally, the "Borrowers"), the lenders party thereto as "Lenders" (each of such  Lenders, together with its successors and permitted assigns, is referred to hereinafter as a  "Lender"), and Agent, the Lender Group has agreed to make certain financial accommodations  available to Borrowers from time to time pursuant to the terms and conditions thereof;   WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group in  connection with the transactions contemplated by the Credit Agreement and this Agreement;  WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement and  the other Loan Documents, extend the Loans thereunder and make financial accommodations to  Borrowers as provided for in the Credit Agreement and the other Loan Documents, (a) each  Grantor (other than any Borrower) has agreed to guaranty the Guarantied Obligations, and (b) each  Grantor has agreed to grant to Agent, for the benefit of the Lender Group, a continuing security  interest in and to the Collateral in order to secure the prompt and complete payment, observance  and performance of, among other things, the Secured Obligations; and  WHEREAS, each Grantor will benefit by virtue of the financial accommodations extended  to Borrowers by the Lender Group.  NOW, THEREFORE, for and in consideration of the recitals made above and other good  and valuable consideration, the receipt, sufficiency and adequacy of which are hereby  acknowledged, the parties hereto agree as follows:  1. Definitions; Construction.  (a) All initially capitalized terms used herein (including in the preamble and  recitals hereof) without definition shall have the meanings ascribed thereto in the Credit  Agreement.  Any terms (whether capitalized or lower case) used in this Agreement that are defined  in the Code (including, without limitation, Account, Account Debtor, Chattel Paper, Commercial  Tort Claims, Deposit Account, Drafts, Documents, Equipment, Farm Products, Fixtures, General  

 

  -2-  122895846v5  Intangibles, Inventory, Investment Property, Instruments, Letters of Credit, Letter of Credit Rights,  Promissory Notes, Proceeds, Securities Account and Supporting Obligations) shall be construed  and defined as set forth in the Code unless otherwise defined herein or in the Credit Agreement;  provided, that to the extent that the Code is used to define any term used herein and if such term  is defined differently in different Articles of the Code, the definition of such term contained in  Article 9 of the Code shall govern.  In addition to those terms defined elsewhere in this Agreement,  as used in this Agreement, the following terms shall have the following meanings:  (i) "Acquisition Documents" means the agreements, instruments and  documents evidencing, or entered into in connection with, an Acquisition (including a Permitted  Acquisition) by a Grantor.  (ii) "Activation Instruction" has the meaning specified therefor in Section  7(k) hereof.  (iii) "Agent" has the meaning specified therefor in the preamble to this  Agreement.  (iv) "Agreement" has the meaning specified therefor in the preamble to  this Agreement.  (v) "Books" means books and records (including each Grantor's Records  indicating, summarizing, or evidencing such Grantor's assets (including the Collateral) or  liabilities, each Grantor's Records relating to such Grantor's business operations or financial  condition, and each Grantor's goods or General Intangibles related to such information).  (vi) "Borrower" and "Borrowers" have the respective meanings specified  therefor in the recitals to this Agreement.  (vii) "Cash Dominion Event" means the occurrence of either of the  following:  (A) the occurrence and continuance of any Event of Default, or (B) Excess Availability  is less than the greater of (x) 12.5% of the Line Cap and (y) $10,000,000 at any time.  (viii) "Cash Dominion Period" means the period commencing after the  occurrence of a Cash Dominion Event and continuing until the date when (A) no Event of Default  shall exist and be continuing, and (B) Excess Availability is greater than $10,000,000 for 30  consecutive days.  (ix) "Code" means the New York Uniform Commercial Code, as in effect  from time to time; provided, that in the event that, by reason of mandatory provisions of law, any  or all of the attachment, perfection, priority, or remedies with respect to Agent's Lien on any  Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction  other than the State of New York, the term "Code" shall mean the Uniform Commercial Code as  enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating  to such attachment, perfection, priority, or remedies.  (x) "Collateral" has the meaning specified therefor in Section 3 hereof.  

 

  -3-  122895846v5  (xi) "Collection Account" means a Deposit Account of a Grantor which is  used exclusively for deposits of collections and proceeds of Collateral and not as a disbursement  or operating account upon which checks or other drafts may be drawn.  (xii) "Commercial Tort Claims" means commercial tort claims (as that  term is defined in the Code), and includes those commercial tort claims listed on Schedule 1.  (xiii) "Commodity Exchange Act" means the Commodity Exchange Act (7  U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.  (xiv) "Controlled Account" has the meaning specified therefor in Section  7(k) hereof.  (xv) "Controlled Account Agreements" means those certain cash  management agreements, in form and substance satisfactory to Agent in its Permitted Discretion,  each of which is executed and delivered by a Grantor, Agent, and one of the Controlled Account  Banks.  (xvi) "Controlled Account Bank" has the meaning specified therefor in  Section 7(k) hereof.  (xvii) "Copyrights" means any and all rights in any works of authorship,  including (A) copyrights and moral rights, (B) copyright registrations and recordings thereof and  all applications in connection therewith including those listed on Schedule 2, (C) income, license  fees, royalties, damages, and payments now and hereafter due or payable under and with respect  thereto, including payments under all licenses entered into in connection therewith and damages  and payments for past, present, or future infringements thereof, (D) the right to sue for past,  present, and future infringements thereof, and (E) all of each Grantor's rights corresponding thereto  throughout the world.  (xviii) "Copyright Security Agreement" means each Copyright Security  Agreement executed and delivered by Grantors, or any of them, and Agent, in substantially the  form of Exhibit A.  (xix) "Credit Agreement" has the meaning specified therefor in the recitals  to this Agreement.  (xx) "Excluded Accounts" means (A) Deposit Accounts and Securities  Accounts (x) with an amount on deposit in any individual Deposit Account or Securities Account  of not more than $50,000 at any one time and (y) with an aggregate amount on deposit for all such  Deposit Accounts and Securities Accounts taken together of not more than $250,000 at any one  time, (B) Deposit Accounts specially and exclusively used for payroll, payroll taxes and other  employee wage and benefit payments to or for any Grantor's employees; provided, that the amount  on deposit in the Deposit Accounts of this clause (B) does not exceed the current amount of such  payroll, payroll taxes and other employee wage and benefit obligations, (C) Deposit Accounts  specially and exclusively used for taxes, including sales taxes; provided, that the amount on deposit  in the Deposit Accounts of this clause (C) does not exceed the current amount of such tax  obligations, (D) the Excluded L/C Account; provided that the aggregate amount of cash collateral  

 

  -4-  122895846v5  and cash in Excluded L/C Account does not exceed 105% of the face amount of the Existing  Letters of Credit, (E) the Excluded Banking Services Account; provided that the aggregate amount  of cash collateral and cash in Excluded Banking Services Account does not exceed$250,000.00,  and (F) Deposit Accounts used solely for the hedging of green coffee pricing (including (i) Deposit  Account number 9387 maintained by Parent at StoneX Markets, LLC, (ii) Deposit Account  number MIC-H2601 maintained by Parent at StoneX Financial Inc., and (iii) Deposit Account  number 52319040 maintained by Parent at Macquarie Futures USA LLC), which Deposit  Accounts have a 30-day average balance of less than $250,000 in the aggregate for all such Deposit  Accounts.  (xxi) "Excluded Swap Obligation" means, with respect to any Grantor, any  Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Grantor of  (including by virtue of the joint and several liability provisions of Section 2.15 of the Credit  Agreement with respect to any Grantor that is a Borrower), or the grant by such Grantor of a  security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal  under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures  Trading Commission (or the application or official interpretation of any thereof) by virtue of such  Grantor's failure for any reason to constitute an "eligible contract participant" as defined in the  Commodity Exchange Act and the regulations thereunder at the time the guaranty of such Grantor  or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a  Swap Obligation arises under a master agreement governing more than one swap, such exclusion  shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such  guaranty or security interest is or becomes illegal.  (xxii) "Foreclosed Grantor" has the meaning specified therefor in Section  2(i)(iv) hereof.  (xxiii) "Gem Note" means that certain Broker Agreement and Note, dated as  of April 1, 2019, by and between Parent, as Seller or Noteholder, and Florida Seminole Coffee  Company, Inc., a Florida corporation, as Broker or Maker.  (xxiv) "General Intangibles" means general intangibles (as that term is  defined in the Code), and includes payment intangibles, software, contract rights, rights to  payment, rights under Hedge Agreements (including the right to receive payment on account of  the termination (voluntarily or involuntarily) of such Hedge Agreements), rights arising under  common law, statutes, or regulations, choses or things in action, goodwill, Intellectual Property,  Intellectual Property Licenses, purchase orders, customer lists, route lists, rights to payment and  other rights under Acquisition Documents, rights to payment and other rights under any royalty or  licensing agreements, including Intellectual Property Licenses, infringement claims, monies due  or recoverable from pension funds, pension plan refunds, pension plan refund claims, insurance  premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability  company which do not constitute a security under Article 8 of the Code, and any other personal  property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts,  goods, Investment Property, Negotiable Collateral, and oil, gas, or other minerals before  extraction.  

 

  -5-  122895846v5  (xxv) "Grantor" and "Grantors" have the respective meanings specified  therefor in the preamble to this Agreement.  (xxvi) "Guarantied Obligations" means all of the Obligations now or  hereafter existing, whether for principal, interest (including any interest that accrues after the  commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole  or in part as a claim in any such Insolvency Proceeding), fees (including the fees provided for in  the Fee Letter), Lender Group Expenses (including any fees or expenses payable under the Loan  Documents that accrue after the commencement of an Insolvency Proceeding, regardless of  whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding),  or otherwise, and any and all documented expenses (including reasonable and documented counsel  fees and expenses) incurred by Agent or any other member of the Lender Group in enforcing any  rights under the any of the Loan Documents.  Without limiting the generality of the foregoing,  Guarantied Obligations shall include all amounts that constitute part of the Guarantied Obligations  and would be owed by any Borrower to Agent or any other member of the Lender Group but for  the fact that they are unenforceable or not allowable, including due to the existence of a  bankruptcy, reorganization, other Insolvency Proceeding or similar proceeding involving any  Borrower or any guarantor; provided that, anything to the contrary contained in the foregoing  notwithstanding, the Guarantied Obligations shall exclude any Excluded Swap Obligation.  (xxvii) "Guarantor" means each Grantor other than any Borrower.  (xxviii) "Guaranty" means the guaranty set forth in Section 2 hereof.  (xxix) "Intellectual Property" means any and all Patents, Copyrights,  Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software  programs (including source code and object code), processes, product designs, industrial designs,  blueprints, drawings, data, customer lists, URLs and domain names, specifications,  documentations, reports, catalogs, literature, and any other forms of technology or proprietary  information of any kind, including all rights therein and all applications for registration or  registrations thereof.  (xxx) "Intellectual Property Licenses" means, with respect to any Grantor,  (A) any licenses or other similar rights provided to such Grantor in or with respect to Intellectual  Property owned or controlled by any other Person, and (B) any licenses or other similar rights  provided to any other Person in or with respect to Intellectual Property owned or controlled by  such Grantor, in each case, including (x) any software license agreements (other than license  agreements for commercially available off-the-shelf software that is generally available to the  public which have been licensed to a Grantor pursuant to end-user licenses), (y) the license  agreements listed on Schedule 3, and (z) the right to use any of the licenses or other similar rights  described in this definition in connection with the enforcement of the Lender Group's rights under  the Loan Documents.  (xxxi) "Investment Property" means (A) any and all investment property,  and (B) any and all of the following (regardless of whether classified as investment property under  the Code):  all Pledged Interests, Pledged Operating Agreements, and Pledged Partnership  Agreements.  

 

  -6-  122895846v5  (xxxii) "Joinder" means each Joinder to this Agreement executed and  delivered by Agent and each of the other parties listed on the signature pages thereto, in  substantially the form of Annex 1.  (xxxiii) "Lender" and "Lenders" have the respective meanings specified  therefor in the recitals to this Agreement.  (xxxiv) "Negotiable Collateral" means letters of credit, letter-of-credit rights,  instruments, promissory notes, drafts and documents (as each such term is defined in the Code).  (xxxv) "Parent" has the meaning specified therefor in the recitals to this  Agreement.  (xxxvi) "Patents" means patents and patent applications, including (A) the  patents and patent applications listed on Schedule 4, (B) all continuations, divisionals,  continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon,  (C) all income, royalties, damages and payments now and hereafter due or payable under and with  respect thereto, including payments under all licenses entered into in connection therewith and  damages and payments for past, present, or future infringements thereof, (D) the right to sue for  past, present, and future infringements thereof, and (E) all of each Grantor's rights corresponding  thereto throughout the world.  (xxxvii) "Patent Security Agreement" means each Patent Security Agreement  executed and delivered by Grantors, or any of them, and Agent, in substantially the form of  Exhibit B.  (xxxviii) "Pledged Companies" means each Person listed on Schedule 5 as a  "Pledged Company", together with each other Person, all or a portion of whose Equity Interests  are acquired or otherwise owned by a Grantor after the Closing Date and is required to be pledged  pursuant to Section 5.11 of the Credit Agreement.  (xxxix) "Pledged Interests" means all of each Grantor's right, title and interest  in and to all of the Equity Interests now owned or hereafter acquired by such Grantor, regardless  of class or designation, including in each of the Pledged Companies, and all substitutions therefor  and replacements thereof, all proceeds thereof and all rights relating thereto, also including any  certificates representing the Equity Interests, the right to receive any certificates representing any  of the Equity Interests, all warrants, options, share appreciation rights and other rights, contractual  or otherwise, in respect thereof and the right to receive all dividends, distributions of income,  profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in  kind, and all cash, instruments, and other property from time to time received, receivable, or  otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange  for any or all of the foregoing.  (xl) "Pledged Interests Addendum" means a Pledged Interests Addendum  substantially in the form of Exhibit C.  (xli) "Pledged Notes" has the meaning specified therefor in Section 6(i)  hereof.  

 

  -7-  122895846v5  (xlii) "Pledged Operating Agreements" means all of each Grantor's rights,  powers, and remedies under the limited liability company operating agreements of each of the  Pledged Companies that are limited liability companies.  (xliii) "Pledged Partnership Agreements" means all of each Grantor's rights,  powers, and remedies under the partnership agreements of each of the Pledged Companies that are  partnerships.  (xliv) "Proceeds" has the meaning specified therefor in Section 3.  (xlv) "PTO" means the United States Patent and Trademark Office.  (xlvi) "Qualified ECP Grantor" means, in respect of any Swap Obligation,  each Grantor that has total assets exceeding $10,000,000 at the time the relevant guaranty,  keepwell, or grant of the relevant security interest becomes effective with respect to such Swap  Obligation or such other person as constitutes an "eligible contract participant" under the  Commodity Exchange Act or any regulations promulgated thereunder and can cause another  person to qualify as an "eligible contract participant" at such time by entering into a keepwell under  Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.  (xlvii) "Real Property" means any estates or interests in real property now  owned or hereafter acquired by any Grantor and the improvements thereto.  (xlviii) "Record" means information that is inscribed on a tangible medium or  which is stored in an electronic or other medium and is retrievable in perceivable form.  (xlix) "Rescission" has the meaning specified therefor in Section 7(k)  hereof.  (l) "Secured Obligations" means each and all of the following:  (A) all of  the present and future obligations of each of the Grantors arising from, or owing under or pursuant  to, this Agreement (including the Guaranty), the Credit Agreement, or any of the other Loan  Documents and (B)  all other Obligations of each Borrower and all other Guarantied Obligations  of each Guarantor (including, in the case of each of clauses (A) and (B), Lender Group Expenses  and any interest, fees, or expenses that accrue after the filing of an Insolvency Proceeding,  regardless of whether allowed or allowable in whole or in part as a claim in any Insolvency  Proceeding); provided that, anything to the contrary contained in the foregoing notwithstanding,  the Secured Obligations shall exclude any Excluded Swap Obligation.  (li) "Security Interest" has the meaning specified therefor in Section 3.  (lii) "Supporting Obligations" means supporting obligations (as such term  is defined in the Code), and includes letters of credit and guaranties issued in support of Accounts,  Chattel Paper, documents, General Intangibles, instruments or Investment Property.  (liii) "Swap Obligation" means, with respect to any Grantor, any obligation  to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the  meaning of section 1a(47) of the Commodity Exchange Act.  

 

  -8-  122895846v5  (liv) "Titled Collateral" means all Collateral for which the title to such  Collateral is governed by a Certificate of Title or certificate of ownership, including, without  limitation, all motor vehicles (including, without limitation, all trucks, trailers, tractors, service  vehicles, automobiles and other mobile equipment) for which the title to such motor vehicles is  governed by a Certificate of Title or certificate of ownership.  (lv) "Trademarks" means any and all trademarks, trade names, registered  trademarks, trademark applications, service marks, registered service marks and service mark  applications, including (A) the trade names, registered trademarks, trademark applications,  registered service marks and service mark applications listed on Schedule 6, (B) all renewals  thereof, (C) all income, royalties, damages and payments now and hereafter due or payable under  and with respect thereto, including payments under all licenses entered into in connection  therewith and damages and payments for past, present or future infringements or dilutions thereof,  (D) the right to sue for past, present and future infringements and dilutions thereof, (E) the  goodwill of each Grantor's business symbolized by the foregoing or connected therewith, and  (F) all of each Grantor's rights corresponding thereto throughout the world.  (lvi) "Trademark Security Agreement" means each Trademark Security  Agreement executed and delivered by Grantors, or any of them, and Agent, in substantially the  form of Exhibit D.  (lvii) "URL" means "uniform resource locator," an internet web address.  (lviii) "VIN" has the meaning specified therefor in Section 5(h) hereof.  (b) This Agreement shall be subject to the rules of construction set forth in  Section 1.4 of the Credit Agreement, and such rules of construction are incorporated herein by this  reference, mutatis mutandis.  (c) All of the schedules and exhibits attached to this Agreement shall be  deemed incorporated herein by reference.  2. Guaranty.  (a) In recognition of the direct and indirect benefits to be received by  Guarantors from the proceeds of the Term Loan and by virtue of the financial accommodations to  be made to Borrowers pursuant to the Loan Documents, each of the Guarantors, jointly and  severally, hereby unconditionally and irrevocably guarantees as a primary obligor and not merely  as a surety the full and prompt payment when due, whether upon maturity, acceleration, or  otherwise, of all of the Guarantied Obligations.  If any or all of the Obligations constituting  Guarantied Obligations becomes due and payable, each of the Guarantors, unconditionally and  irrevocably, and without the need for demand, protest, or any other notice or formality, promises  to pay such indebtedness to Agent, for the benefit of the Lender Group, together with any and all  reasonable and documented expenses (including Lender Group Expenses) that may be incurred by  Agent or any other member of the Lender Group in demanding, enforcing, or collecting any of the  Guarantied Obligations (including the enforcement of any collateral for such Guarantied  Obligations or any collateral for the obligations of the Guarantors under this Guaranty).  If claim  is ever made upon Agent or any other member of the Lender Group for repayment or recovery of  

 

  -9-  122895846v5  any amount or amounts received in payment of or on account of any or all of the Guarantied  Obligations and any of Agent or any other member of the Lender Group repays all or part of said  amount by reason of (i) any judgment, decree, or order of any court or administrative body having  jurisdiction over such payee or any of its property, or (ii) any settlement or compromise of any  such claim effected by such payee with any such claimant (including any Borrower or any  Guarantor), then and in each such event, each of the Guarantors agrees that any such judgment,  decree, order, settlement, or compromise shall be binding upon the Guarantors, notwithstanding  any revocation (or purported revocation) of this Guaranty or other instrument evidencing any  liability of any Grantor, and the Guarantors shall be and remain liable to the aforesaid payees  hereunder for the amount so repaid or recovered to the same extent as if such amount had never  originally been received by any such payee.  (b) Additionally, each of the Guarantors unconditionally and irrevocably  guarantees the payment of any and all of the Guarantied Obligations to Agent, for the benefit of  the Lender Group, whether or not due or payable by any Loan Party upon the occurrence of any  of the events specified in Section 8.4 or 8.5 of the Credit Agreement, and irrevocably and  unconditionally promises to pay such indebtedness to Agent, for the benefit of the Lender Group,  without the requirement of demand, protest, or any other notice or other formality, in lawful money  of the United States.  (c) The liability of each of the Guarantors hereunder is primary, absolute, and  unconditional, and is independent of any security for or other guaranty of the Guarantied  Obligations, whether executed by any other Guarantor or by any other Person, and the liability of  each of the Guarantors hereunder shall not be affected or impaired by (i) any payment on, or in  reduction of, any such other guaranty or undertaking (other than payment in full of the Guarantied  Obligations), (ii) any dissolution, termination, or increase, decrease, or change in personnel by any  Grantor, (iii) any payment made to Agent or any other member of the Lender Group on account of  the Obligations which Agent or such other member of the Lender Group repays to any Grantor  pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other  debtor relief proceeding (or any settlement or compromise of any claim made in such a proceeding  relating to such payment), and each of the Guarantors waives any right to the deferral or  modification of its obligations hereunder by reason of any such proceeding, (iv) any action or  inaction by Agent or any other member of the Lender Group or (v) any invalidity, irregularity,  avoidability, or unenforceability of all or any part of the Obligations or of any security therefor.  (d) This Guaranty includes all present and future Guarantied Obligations  including any under transactions continuing, compromising, extending, increasing, modifying,  releasing, or renewing the Guarantied Obligations, changing the interest rate, payment terms, or  other terms and conditions thereof, or creating new or additional Guarantied Obligations after prior  Guarantied Obligations have been satisfied in whole or in part.  To the maximum extent permitted  by law, each Guarantor hereby waives any right to revoke this Guaranty as to future Guarantied  Obligations.  If such a revocation is effective notwithstanding the foregoing waiver, each  Guarantor acknowledges and agrees that (i) no such revocation shall be effective until written  notice thereof has been received by Agent, (ii) no such revocation shall apply to any Guarantied  Obligations in existence on the date of receipt by Agent of such written notice (including any  subsequent continuation, extension, or renewal thereof, or change in the interest rate, payment  terms, or other terms and conditions thereof), (iii) no such revocation shall apply to any Guarantied  

 

  -10-  122895846v5  Obligations made or created after such date to the extent made or created pursuant to a legally  binding commitment of any member of the Lender Group in existence on the date of such  revocation, (iv) no payment by any Guarantor, any Borrower, or from any other source, prior to  the date of Agent's receipt of written notice of such revocation shall reduce the maximum  obligation of such Guarantor hereunder, and (v) any payment by any Borrower or from any source  other than such Guarantor subsequent to the date of such revocation shall first be applied to that  portion of the Guarantied Obligations as to which the revocation is effective and which are not,  therefore, guaranteed hereunder, and to the extent so applied shall not reduce the maximum  obligation of such Guarantor hereunder.  This Guaranty shall be binding upon each Guarantor, its  successors and assigns and inure to the benefit of and be enforceable by Agent (for the benefit of  the Lender Group) and its successors, transferees, or assigns.  (e) The guaranty by each of the Guarantors hereunder is a guaranty of payment  when due and not of collection, and each Guarantor waives any right to require that any resort be  made by Agent or any other member of the Lender Group to any Collateral.  The obligations of  each of the Guarantors hereunder are independent of the obligations of any other Guarantor or  Grantor or any other Person and a separate action or actions may be brought and prosecuted against  one or more of the Guarantors whether or not action is brought against any other Guarantor or  Grantor or any other Person and whether or not any other Guarantor or Grantor or any other Person  be joined in any such action or actions.  Each of the Guarantors waives, to the fullest extent  permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the  enforcement hereof.  Any payment by any Grantor or other circumstance which operates to toll  any statute of limitations as to any Grantor shall operate to toll the statute of limitations as to each  of the Guarantors.  (f) Each of the Guarantors authorizes Agent and the other members of the  Lender Group, without notice or demand (other than any notice expressly required to be provided  hereunder or under any other Loan Document), and without affecting or impairing its liability  hereunder, from time to time to:  (i) change the manner, place, or terms of payment of, or change or extend  the time of payment of, renew, increase, accelerate, or alter:  (A) any of the Obligations (including  any increase or decrease in the principal amount thereof or the rate of interest or fees thereon), or  (B) any security therefor or any liability incurred directly or indirectly in respect thereof, and this  Guaranty shall apply to the Obligations as so changed, extended, renewed, or altered;  (ii) take and hold security for the payment of the Obligations and sell,  exchange, release, impair, surrender, realize upon, collect, settle, or otherwise deal with in any  manner and in any order any property at any time pledged or mortgaged to secure the Obligations  or any of the Guarantied Obligations (including any of the obligations of all or any of the  Guarantors under this Guaranty) incurred directly or indirectly in respect thereof or hereof, or any  offset on account thereof;  (iii) exercise or refrain from exercising any rights against any Grantor;  (iv) release or substitute any one or more endorsers, guarantors, any  Grantor, or other obligors;  

 

  -11-  122895846v5  (v) settle or compromise any of the Obligations, any security therefor, or  any liability (including any of those of any of the Guarantors under this Guaranty) incurred directly  or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof  to the payment of any liability (whether due or not) of any Grantor to its creditors;  (vi) apply any sums by whomever paid or however realized to any liability  or liabilities of any Grantor to Agent or any other member of the Lender Group regardless of what  liability or liabilities of such Grantor remain unpaid;  (vii) consent to or waive any breach of, or any act, omission, or default  under, this Agreement, any other Loan Document or any of the instruments or agreements referred  to herein or therein, or otherwise amend, modify, or supplement this Agreement, any other Loan  Document, or any of such other instruments or agreements; or  (viii) take any other action that could, under otherwise applicable principles  of law, give rise to a legal or equitable discharge of one or more of the Guarantors from all or part  of its liabilities under this Guaranty (other than a defense of payment in full of the Guarantied  Obligations).  (g) It is not necessary for Agent or any other member of the Lender Group to  inquire into the capacity or powers of any of the Guarantors or the officers, directors, partners or  agents acting or purporting to act on their behalf, and any Obligations made or created in reliance  upon the professed exercise of such powers shall be guaranteed hereunder.  (h) Each Guarantor jointly and severally guarantees that the Guarantied  Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless  of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of such  terms or the rights of any member of the Lender Group with respect thereto.  The obligations of  each Guarantor under this Guaranty are independent of the Guarantied Obligations, and a separate  action or actions may be brought and prosecuted against each Guarantor to enforce such  obligations, irrespective of whether any action is brought against any other Guarantor or whether  any other Guarantor is joined in any such action or actions.  The liability of each Guarantor under  this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor  hereby irrevocably waives any defense it may now or hereafter have (other than a defense of  payment in full of the Guarantied Obligations) in any way relating to, any or all of the following:  (i) any lack of validity or enforceability of any Loan Document or any  agreement or instrument relating thereto;  (ii) any change in the time, manner, or place of payment of, or in any other  term of, all or any of the Guarantied Obligations, or any other amendment or waiver of or any  consent to departure from any Loan Document, including any increase in the Guarantied  Obligations resulting from the extension of additional credit;  (iii) any taking, exchange, release, or non-perfection of any Lien in and to  any Collateral, or any taking, release, amendment, waiver, supplement, restatements, extension,  novation, renewal, replacements, or continuation of, or consent to departure from any other  guaranty, for all or any of the Guarantied Obligations;  

 

  -12-  122895846v5  (iv) the existence of any claim, set-off, defense, or other right that any  Guarantor may have at any time against any Person, including Agent or any other member of the  Lender Group;  (v) any defense, set-off, counterclaim, or claim, of any kind or nature,  arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or  enforceability of the Guarantied Obligations or any security therefor;  (vi) any right or defense arising by reason of any claim or defense based  upon an election of remedies by any member of the Lender Group including any defense based  upon an impairment or elimination of such Guarantor's rights of subrogation, reimbursement,  contribution, or indemnity of such Guarantor against any Grantor or any other guarantors or  sureties;  (vii) any change, restructuring, or termination of the corporate, limited  liability company, or partnership structure or existence of any Grantor; or  (viii) any other circumstance (including, without limitation, any statute of  limitations) or any existence of or reliance on any representation by the Agent or any other member  of the Lender Group that might otherwise constitute a defense available to, or a discharge of, any  Grantor or any other guarantor or surety, except a defense that the Guarantied Obligations have  been paid in full.  (i) Waivers.  (i) Each of the Guarantors waives any right (except as shall be required  by applicable statute and cannot be waived) to require Agent ro any other member of the Lender  Group to (i) proceed against any other Grantor or any other Person, (ii) proceed against or exhaust  any security held from any other Grantor or any other Person, or (iii) protect, secure, perfect, or  insure any security interest or Lien on any property subject thereto or exhaust any right to take any  action against any other Grantor, any other Person, or any collateral, or (iv) pursue any other  remedy in any member of the Lender Group's power whatsoever. Each of the Guarantors waives  promptness and diligence and notice of acceptance and any other notice with respect to any of the  Guarantied Obligations. Each of the Guarantors waives any defense based on or arising out of any  defense of any Grantor or any other Person, other than payment of the Guarantied Obligations to  the extent of such payment, based on or arising out of the disability of any Grantor or any other  Person, or the validity, legality, or unenforceability of the Obligations or any part thereof from any  cause, or the cessation from any cause of the liability of any Grantor other than payment of the  Obligations to the extent of such payment.  Agent may, at the election of the Required Lenders  and in accordance with the terms of the relevant Loan Documents, foreclose upon any Collateral  held by Agent by one or more judicial or non-judicial sales or other dispositions, whether or not  every aspect of any such sale is commercially reasonable or otherwise fails to comply with  applicable law or may exercise any other right or remedy Agent or any other member of the Lender  Group may have against any Grantor or any other Person, or any security, in each case, without  affecting or impairing in any way the liability of any of the Guarantors hereunder except to the  extent the Guarantied Obligations have been paid.  

 

  -13-  122895846v5  (ii) Each of the Guarantors waives all presentments, demands for  performance, protests and notices, including notices of nonperformance, notices of protest, notices  of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation, or  incurring of new or additional Obligations or other financial accommodations, in each case, except  with respect to any notices expressly required or provided pursuant to this Agreement or any other  Loan Document.  Each of the Guarantors waives notice of any Default or Event of Default under  any of the Loan Documents.  Each of the Guarantors assumes all responsibility for being and  keeping itself informed of each Grantor's financial condition and assets and of all other  circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope, and  extent of the risks which each of the Guarantors assumes and incurs hereunder, and agrees that  neither Agent nor any of the other members of the Lender Group shall have any duty to advise any  of the Guarantors of information known to them regarding such circumstances or risks.  (iii) To the fullest extent permitted by applicable law, each Guarantor  hereby waives:  (A) any right to assert against any member of the Lender Group, any defense (legal  or equitable) (other than the defense that all of the Guarantied Obligations have been paid in full),  set-off, counterclaim, or claim which each Guarantor may now or at any time hereafter have  against any Borrower or any other party liable to any member of the Lender Group, (B) any  defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from  the present or future lack of perfection, sufficiency, validity, or enforceability of the Guarantied  Obligations or any security therefor, (C) any right or defense arising by reason of any claim or  defense based upon an election of remedies by any member of the Lender Group including any  defense based upon an impairment or elimination of such Guarantor's rights of subrogation,  reimbursement, contribution, or indemnity of such Guarantor against any Borrower or other  guarantors or sureties, and (D) the benefit of any statute of limitations affecting such Guarantor's  liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation  of any statute of limitations applicable to the Guarantied Obligations shall similarly operate to  defer or delay the operation of such statute of limitations applicable to such Guarantor's liability  hereunder.  (iv) No Guarantor will exercise any rights that it may now or hereafter  acquire against any Grantor or any other guarantor that arise from the existence, payment,  performance or enforcement of such Guarantor's obligations under this Guaranty, including any  right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to  participate in any claim or remedy of Agent or any other member of the Lender Group, against  any Grantor or any other guarantor or any Collateral, whether or not such claim, remedy or right  arises in equity or under contract, statute or common law, including the right to take or receive  from any Grantor or any other guarantor, directly or indirectly, in cash or other property or by set- off or in any other manner, payment or security solely on account of such claim, remedy or right,  unless and until all of the Guarantied Obligations and all other amounts payable under this  Guaranty shall have been paid in full in cash and all of the Commitments have been terminated.   If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence,  such amount shall be held in trust for the benefit of Agent, for the benefit of the Lender Group,  and shall forthwith be paid to Agent to be credited and applied to the Guarantied Obligations and  all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with  the terms of the Credit Agreement, or to be held as Collateral for any Guarantied Obligations or  other amounts payable under this Guaranty thereafter arising.  Notwithstanding anything to the  

 

  -14-  122895846v5  contrary contained in this Guaranty, no Guarantor may exercise any rights of subrogation,  contribution, indemnity, reimbursement or other similar rights against, and may not proceed or  seek recourse against or with respect to any property or asset of, any other Grantor (the "Foreclosed  Grantor"), including after payment in full of the Obligations, if all or any portion of the Obligations  have been satisfied in connection with an exercise of remedies in respect of the Equity Interests of  such Foreclosed Grantor whether pursuant to this Agreement or otherwise.  (v) Each of the Guarantors hereby acknowledges and affirms that it  understands that to the extent the Guarantied Obligations are secured by Real Property located in  California, Guarantors shall be liable for the full amount of the liability hereunder notwithstanding  the foreclosure on such Real Property by trustee sale or any other reason impairing such  Guarantor's right to proceed against any Loan Party.  In accordance with Section 2856 of the  California Civil Code or any similar laws of any other applicable jurisdiction, each of the  Guarantors hereby waives until such time as the Guarantied Obligations have been paid in full:  (1) all rights of subrogation, reimbursement, indemnification,  and contribution and any other rights and defenses that are or may become available to the  Guarantors by reason of Sections 2787 to 2855, inclusive, 2899, and 3433 of the California Civil  Code or any similar laws of any other applicable jurisdiction;  (2) all rights and defenses that the Guarantors may have because  the Guarantied Obligations are secured by Real Property located in California, meaning, among  other things, that:  (A) Agent and the other members of the Lender Group may collect from the  Guarantors without first foreclosing on any real or personal property collateral pledged by any  Borrower or any other Grantor, and (B) if Agent, on behalf of the Lender Group, forecloses on any  Real Property collateral pledged by any Borrower or any other Grantor, (1) the amount of the  Guarantied Obligations may be reduced only by the price for which that collateral is sold at the  foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Lender Group  may collect from the Guarantors even if, by foreclosing on the Real Property collateral, Agent or  the other members of the Lender Group have destroyed or impaired any right the Guarantors may  have to collect from any other Grantor, it being understood that this is an unconditional and  irrevocable waiver of any rights and defenses the Guarantors may have because the Guarantied  Obligations are secured by Real Property (including, without limitation, any rights or defenses  based upon Sections 580a, 580d, or 726 of the California Code of Civil Procedure or any similar  laws of any other applicable jurisdiction); and  (3) all rights and defenses arising out of an election of remedies  by Agent and the other members of the Lender Group, even though that election of remedies, such  as a non-judicial foreclosure with respect to security for the Guarantied Obligations, has destroyed  Guarantors' rights of subrogation and reimbursement against any Grantor by the operation of  Section 580d of the California Code of Civil Procedure or any similar laws of any other applicable  jurisdiction or otherwise.  (vi) Each of the Guarantors represents, warrants, and agrees that each of  the waivers set forth above is made with full knowledge of its significance and consequences and  that if any of such waivers are determined to be contrary to any applicable law or public policy,  such waivers shall be effective to the maximum extent permitted by law.  

 

  -15-  122895846v5  (vii) The provisions in this Section 2 which refer to certain sections of the  California Civil Code or the California Code of Civil Procedure are included in this Guaranty  solely out of an abundance of caution and shall not be construed to mean that any of the above- referenced provisions of California law are in any way applicable to this Guaranty.  3. Grant of Security.  Each Grantor hereby unconditionally grants, collaterally  assigns, and pledges to Agent, for the benefit of each member of the Lender Group, to secure the  Secured Obligations (whether now existing or hereafter arising), a continuing security interest  (hereinafter referred to as the "Security Interest") in all personal property and Fixtures of such  Grantor, wherever located and whether now or hereafter existing and whether now owned or  hereafter acquired, of every kind and description, tangible or intangible, including, without  limitation, the following (the "Collateral"):  (a) all of such Grantor's Accounts;  (b) all of such Grantor's Books;  (c) all of such Grantor's Chattel Paper;  (d) all of such Grantor's Commercial Tort Claims;  (e) all of such Grantor's Deposit Accounts;  (f) all of such Grantor's Equipment;  (g) all of such Grantor's Farm Products;  (h) all of such Grantor's Fixtures;  (i) all of such Grantor's General Intangibles;  (j) all of such Grantor's Inventory;  (k) all of such Grantor's Investment Property;  (l) all of such Grantor's Titled Collateral;  (m) all of such Grantor's Intellectual Property and Intellectual Property  Licenses;  (n) all of such Grantor's Negotiable Collateral (including all of such Grantor's  Pledged Notes);  (o) all of such Grantor's Pledged Interests (including all of such Grantor's  Pledged Operating Agreements and Pledged Partnership Agreements);  (p) all of such Grantor's Securities Accounts;  (q) all of such Grantor's Supporting Obligations;  

 

  -16-  122895846v5  (r) all of such Grantor's money, Cash Equivalents, or other assets of such  Grantor that now or hereafter come into the possession, custody, or control of Agent (or its agent  or designee) or any other member of the Lender Group;   (s) all other tangible and intangible personal property and Fixtures of such  Grantor (whether or not subject to the Code), including, without limitation, all bank and other  accounts and all cash and all investments therein, all proceeds, products, offspring, accessions,  rents, profits, income, benefits, substitutions and replacements of and to any of the property of  such Grantor described in the preceding clauses of this Section 3 (including, without limitation,  any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter  held by such Grantor in respect of any of the items listed above), and all books, correspondence,  files and other Records, including, without limitation, all tapes, disks, cards, software, data and  computer programs in the possession or under the control of such Grantor or any other Person  from time to time acting for such Grantor that at any time evidence or contain information relating  to any of the property described in the preceding clauses of this Section 3 or are otherwise  necessary or helpful in the collection or realization thereof; and  (t) all of the Proceeds and products, whether tangible or intangible, of any of  the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to  any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts,  Equipment, Farm Products, Fixtures, General Intangibles, Inventory, Investment Property,  Intellectual Property, Negotiable Collateral, Pledged Interests, Securities Accounts, Supporting  Obligations, money, or other tangible or intangible property resulting from the sale, lease, license,  exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in  condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or  otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and  the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above,  whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty,  or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the  foregoing (the "Proceeds").  Without limiting the generality of the foregoing, the term "Proceeds"  includes whatever is receivable or received when Investment Property or proceeds are sold,  exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or  involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or Agent  from time to time with respect to any of the Investment Property.  Notwithstanding anything contained in this Agreement to the contrary, the term  "Collateral" shall not include, and the security interest shall not attach to :  (i) any rights or interest  in any contract, lease, permit, license, or license agreement covering real or personal property of  any Grantor if under the terms of such contract, lease, permit, license, or license agreement, or  applicable law with respect thereto, the grant of a security interest or lien therein is prohibited or  restricted as a matter of law or under the terms of such contract, lease, permit, license, or license  agreement, or would violate or invalidate any such contract, lease, permit, license or license  agreement (or create a right of termination in favor of any other party thereto (other than a  Grantor)), and such prohibition or restriction has not been waived or the consent of the other party  to such contract, lease, permit, license, or license agreement has not been obtained (provided, that  (A) the foregoing exclusions of this clause (i) shall in no way be construed (1) to apply to the  extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9- 

 

  -17-  122895846v5  408, or 9-409 of the Code or other applicable law, or (2) to apply to the extent that any consent or  waiver has been obtained that would permit Agent's security interest or lien to attach  notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license,  or license agreement and (B) the foregoing exclusions of this clause (i) shall in no way be  construed to limit, impair, or otherwise affect any of Agent's or any other member of the Lender  Group's continuing security interests in and liens upon any rights or interests of any Grantor in or  to (1) monies due or to become due under or in connection with any described contract, lease,  permit, license, license agreement, or Equity Interests (including any Accounts or Equity  Interests), or (2) any proceeds from the sale, license, lease, or other dispositions of any such  contract, lease, permit, license, license agreement, or Equity Interests); (ii) any United States  intent-to-use trademark applications to the extent that, and solely during the period in which, the  grant of a security interest therein would impair the validity or enforceability of such intent-to-use  trademark applications under applicable federal law; provided, that upon submission and  acceptance by the PTO of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or  any successor provision), such intent-to-use trademark application shall be considered Collateral;  (iii) any Excluded Account or (iv) Houston Assets.  4. Security for Secured Obligations.  The Security Interest created hereby secures the  payment and performance of the Secured Obligations, whether now existing or arising hereafter.   Without limiting the generality of the foregoing, this Agreement secures the payment of all  amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any  of them, to Agent or the Lender Group, but for the fact that they are unenforceable or not allowable  (in whole or in part) as a claim in an Insolvency Proceeding involving any Grantor due to the  existence of such Insolvency Proceeding.  Further, the Security Interest created hereby encumbers  each Grantor's right, title, and interest in all Collateral, whether now owned by such Grantor or  hereafter acquired, obtained,  developed, or created by such Grantor and wherever located.  5. Grantors Remain Liable.  Anything herein to the contrary notwithstanding, (a) each  of the Grantors shall remain liable under the contracts and agreements to which it is a party  included in the Collateral, including the Pledged Operating Agreements and the Pledged  Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent  as if this Agreement had not been executed, (b) the exercise by Agent or any other member of the  Lender Group of any of the rights hereunder shall not release any Grantor from any of its duties  or obligations under such contracts and agreements included in the Collateral, and (c) none of the  members of the Lender Group shall have any obligation or liability under such contracts and  agreements included in the Collateral by reason of this Agreement, nor shall any of the members  of the Lender Group be obligated to perform any of the obligations or duties of any Grantors  thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.   Until an Event of Default shall occur and be continuing, except as otherwise provided in this  Agreement, the Credit Agreement, or any other Loan Document, Grantors shall have the right to  possession and enjoyment of the Collateral, subject to and upon the terms hereof and of the Credit  Agreement and the other Loan Documents.  Without limiting the generality of the foregoing, it is  the intention of the parties hereto that record and beneficial ownership of the Pledged Interests,  including all voting, consensual, dividend, and distribution rights, shall remain in the applicable  Grantor until (i) the occurrence and continuance of an Event of Default, and (ii) Agent has notified  the applicable Grantor of Agent's election to exercise such rights with respect to the Pledged  Interests pursuant to Section 16.  

 

  -18-  122895846v5  6. Representations and Warranties.  In order to induce Agent to enter into this  Agreement for the benefit of the Lender Group, each Grantor makes the following representations  and warranties to the Lender Group which shall be true, correct, and complete, in all material  respects (except that such materiality qualifier shall not be applicable to any representations and  warranties that already are qualified or modified by materiality in the text thereof), as of the  Closing Date, and shall be true, correct, and complete, in all material respects (except that such  materiality qualifier shall not be applicable to any representations and warranties that already are  qualified or modified by materiality in the text thereof), as of the date of the making of the Term  Loan (except to the extent that such representations and warranties relate solely to an earlier date,  in which case such representations and warranties shall be true and correct in all material respects  (except that such materiality qualifier shall not be applicable to any representations and warranties  that already are qualified or modified by materiality in the text thereof) as of such earlier date) and  such representations and warranties shall survive the execution and delivery of this Agreement:  (a) The name (within the meaning of Section 9-503 of the Code) and  jurisdiction of organization of each Grantor is set forth on Schedule 7 (as such Schedule may be  updated from time to time to reflect changes resulting from transactions permitted under the Loan  Documents).  (b) The chief executive office of each Grantor is located at the address indicated  on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting  from transactions permitted under the Loan Documents).  (c) Each Grantor's tax identification numbers and organizational identification  numbers, if any, are identified on Schedule 7 (as such Schedule may be updated from time to time  to reflect changes resulting from transactions permitted under the Loan Documents).  (d) As of the Closing Date, no Grantor holds any commercial tort claims that  exceed $1,000,000 in amount, except as set forth on Schedule 1.  (e) Set forth on Schedule 9 (as such Schedule may be updated from time to time  subject to Section 7(k)(iii) with respect to Controlled Accounts and provided that Grantors comply  with Section 7(c) hereof) is a listing of all of Grantors' Deposit Accounts and Securities Accounts,  including, with respect to each bank or securities intermediary (i) the name and address of such  Person, and (ii) the account numbers of the Deposit Accounts or Securities Accounts maintained  with such Person.  (f) Schedule 8 sets forth all Real Property owned by any of the Grantors as of  the Closing Date.  (g) As of the Closing Date: (i) Schedule 2 provides a complete and correct list  of all registered Copyrights owned by any Grantor, all applications for registration of Copyrights  owned by any Grantor, and all other Copyrights owned by any Grantor and material to the conduct  of the business of any Grantor, (ii) Schedule 3 provides a complete and correct list of all  Intellectual Property Licenses entered into by any Grantor pursuant to which (A) any Grantor has  provided any license or other rights in Intellectual Property owned or controlled by such Grantor  to any other Person (other than non-exclusive software licenses granted in the ordinary course of  

 

  -19-  122895846v5  business), or (B) any Person has granted to any Grantor any license or other rights in Intellectual  Property owned or controlled by such Person that is material to the business of such Grantor,  including any Intellectual Property that is incorporated in any Inventory, software, or other product  marketed, sold, licensed, or distributed by such Grantor (other than off-the-shelf, shrink-wrapped  or "click to accept" software licenses or other licenses to generally commercially available  software), (iii) Schedule 4 provides a complete and correct list of all Patents owned by any Grantor  and all applications for Patents owned by any Grantor, and (iv) Schedule 6 provides a complete  and correct list of all registered Trademarks owned by any Grantor, and all applications for  registration of Trademarks owned by any Grantor.  (h) (i) (A) each Grantor owns exclusively or holds licenses in all Intellectual  Property that is necessary in or material to the conduct of the business of the Grantors (taken as a  whole), and (B) all employees and contractors of each Grantor who were involved in the creation  or development of any Intellectual Property for such Grantor that is necessary in or material to the  business of such Grantor have signed agreements containing assignment of Intellectual Property  rights to such Grantor and obligations of confidentiality;  (ii) to each Grantor's knowledge, no Person has infringed or  misappropriated or is currently infringing or misappropriating any Intellectual Property rights  owned by such Grantor that are necessary in or material to the conduct of the business of the  Grantors (taken as a whole);  (iii) (A) to each Grantor's knowledge after reasonable inquiry, (1) such  Grantor has never infringed or misappropriated and is not currently infringing or misappropriating  any Intellectual Property rights of any Person, and (2) no product manufactured, used, distributed,  licensed, or sold by or service provided by such Grantor has ever infringed or misappropriated or  is currently infringing or misappropriating any Intellectual Property rights of any Person, and  (B) there are no infringement or misappropriation claims or proceedings pending, or to any  Grantor's knowledge after reasonable inquiry, threatened in writing against any Grantor, and no  Grantor has received any other written notice or other written communication of any actual or  alleged infringement or misappropriation of any Intellectual Property rights of any Person;  (iv) to each Grantor's knowledge after reasonable inquiry, all registered  Copyrights, registered Trademarks, and issued Patents that are owned by such Grantor and  necessary in or material to the conduct of the business of the Grantors (taken as a whole) are valid,  subsisting and enforceable and in compliance with all legal requirements, filings, and payments  and other actions that are required to maintain such Intellectual Property in full force and effect;  and  (v) each Grantor has taken reasonable steps to maintain the confidentiality  of and otherwise protect and enforce its rights in all trade secrets owned by such Grantor that are  necessary in or material to the conduct of the  business of the Grantors (taken as a whole).  (i) This Agreement creates a valid security interest in the Collateral of each  Grantor, to the extent a security interest therein can be created under the Code, securing the  payment of the Secured Obligations.  Except to the extent a security interest in the Collateral  cannot be perfected by the filing of a financing statement under the Code, all filings and other  

 

  -20-  122895846v5  actions necessary or desirable, in Agent's Permitted Discretion, to perfect and protect such security  interest have been duly taken or will have been taken upon the filing of financing statements listing  each applicable Grantor, as a debtor, and Agent, as secured party, in the jurisdictions listed next to  such Grantor's name on Schedule 11.  Upon the making of such filings, Agent shall have a first  priority (subject only to Permitted Liens to the extent any such Liens would have priority over  Agent's Liens pursuant to any applicable law or an agreement expressly permitted under any of  the Loan Documents to have such senior priority) perfected security interest in the Collateral of  each Grantor to the extent such security interest can be perfected by the filing of a financing  statement under the Code.  Upon filing of any Copyright Security Agreement with the United  States Copyright Office, filing of any Patent Security Agreement and any Trademark Security  Agreement with the PTO, and the filing of appropriate financing statements in the jurisdictions  listed on Schedule 11, all action necessary or desirable, in Agent's Permitted Discretion, to protect  and perfect the Security Interest in and on each Grantor's United States issued and registered  Patents, Trademarks, or Copyrights has been taken and such perfected Security Interest is  enforceable as such as against any and all creditors of and purchasers from any Grantor.  All action  by any Grantor necessary to protect and perfect such security interest on each item of Collateral  has been duly taken, except to the extent expressly not required pursuant to this Agreement or any  other Loan Document.  (j) (i) Except for the Security Interest created hereby, each Grantor is and will  at all times be the sole holder of record and the legal and beneficial owner, free and clear of all  Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule 5 as being owned  by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the  Closing Date, (ii) all of the Pledged Interests are duly authorized, validly issued, fully paid and  non-assessable and the Pledged Interests constitute or will constitute the percentage of the issued  and outstanding Equity Interests of the Pledged Companies of such Grantor identified on Schedule  5 as supplemented or modified by any Pledged Interests Addendum or any Joinder to this  Agreement, (iii) such Grantor has the right and requisite authority to pledge, the Investment  Property pledged by such Grantor to Agent as provided herein, (iv) all actions necessary or  desirable, in Agent's Permitted Discretion, to perfect and establish the first priority (subject only  to Permitted Liens to the extent any such Liens would have priority over Agent's Liens pursuant  to any applicable law or an agreement expressly permitted under any of the Loan Documents to  have such senior priority) of, or otherwise protect, Agent's Liens in the Investment Property, and  the proceeds thereof, have been duly taken, upon (A) the execution and delivery of this Agreement,  (B) the taking of possession by Agent (or its agent or designee) of any certificates representing the  Pledged Interests, to the extent such Pledged Interests are represented by certificates, together with  undated powers (or other documents of transfer acceptable to Agent) endorsed in blank by the  applicable Grantor, (C) the filing of financing statements in the applicable jurisdiction set forth on  Schedule 11 for such Grantor with respect to the Pledged Interests of such Grantor that are not  represented by certificates, and (D) with respect to any Securities Accounts, the delivery of Control  Agreements with respect thereto, and (v) each Grantor has delivered to and deposited with Agent  all certificates representing the Pledged Interests owned by such Grantor to the extent such Pledged  Interests are represented by certificates, and undated powers (or other documents of transfer  acceptable to Agent) endorsed in blank with respect to such certificates. None of the Pledged  Interests owned or held by such Grantor has been issued or transferred in violation of any securities  registration, securities disclosure, or similar laws of any jurisdiction to which such issuance or  transfer may be subject.  

 

  -21-  122895846v5  (k) No consent, approval, authorization, or other order or other action by, and  no notice to or filing with, any Governmental Authority or any other Person is required (i) for the  grant of a Security Interest by such Grantor in and to the Collateral pursuant to this Agreement or  for the execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the  exercise by Agent of the voting or other rights provided for in this Agreement with respect to the  Investment Property or the remedies in respect of the Collateral pursuant to this Agreement, except  (A) as may be required in connection with such disposition of Investment Property by laws  affecting the offering and sale of securities generally, (B) for consents, approvals, authorizations,  or other orders or actions that have already been obtained or given (as applicable) and that are still  in force, and (C) the filing of financing statements and other filings necessary to perfect the  Security Interests granted hereby.  No Intellectual Property License of any Grantor that is  necessary in or material to the conduct of such Grantor's business requires any consent of any other  Person that has not been obtained in order for such Grantor to grant the security interest granted  hereunder in such Grantor's right, title or interest in or to such Intellectual Property License.  (l) Schedule 12 sets forth all Titled Collateral owned by Grantors as of the  Closing Date, by model, model year, and vehicle identification number ("VIN").  (m) There is no default, breach, violation, or event of acceleration existing under  any promissory note (as defined in the Code) constituting Collateral and pledged hereunder (each  a "Pledged Note") and no event has occurred or circumstance exists which, with the passage of  time or the giving of notice, or both, would constitute a default, breach, violation, or event of  acceleration under any Pledged Note.  No Grantor that is an obligee under a Pledged Note has  waived any default, breach, violation, or event of acceleration under such Pledged Note.  (n) As to all limited liability company or partnership interests, issued under any  Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents  and warrants that the Pledged Interests issued pursuant to such agreement (i) are not dealt in or  traded on securities exchanges or in securities markets, (ii) do not constitute investment company  securities, and (iii) are not held by such Grantor in a Securities Account.  In addition, as of the  Closing Date, none of the Pledged Operating Agreements, the Pledged Partnership Agreements,  or any other agreements governing any of the Pledged Interests issued under any Pledged  Operating Agreement or Pledged Partnership Agreement, provides that such Pledged Interests are  securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant  jurisdiction. If after the Closing Date any Pledged Operating Agreement, Pledged Partnership  Agreement, or any other agreement governing any of the Pledged Interests issued under any  Pledged Operating Agreement or Pledged Partnership Agreement provides that such Pledged  Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any  relevant jurisdiction, such agreement shall require that such Pledged Interests be certificated and  such Grantor shall comply with Section 7(h)(vi) with respect thereto.  7. Covenants.  Each Grantor, jointly and severally, covenants and agrees with Agent  that from and after the date of this Agreement and until the date of termination of this Agreement  in accordance with Section 23:  (a) Possession of Collateral.  In the event that any Collateral, including  Proceeds, is evidenced by or consists of Negotiable Collateral (other than (i) checks received in  

 

  -22-  122895846v5  the ordinary course of business and (ii) the Gem Note to the extent that the aggregate outstanding  principal amount of the Gem Note does not exceed $300,000), Investment Property, or Chattel  Paper having an aggregate value or face amount of $250,000 or more for all such Negotiable  Collateral, Investment Property, or Chattel Paper, the Grantors shall promptly (and in any event  within five Business Days (or such longer period as agreed to by Agent in writing in its sole  discretion) after acquisition thereof), notify Agent thereof, and if and to the extent that perfection  or priority of Agent's Security Interest is dependent on or enhanced by possession, the applicable  Grantor, promptly (and in any event within five Business Days (or such longer period as agreed to  by Agent in writing in its sole discretion)) after request by Agent, shall execute such other  documents and instruments as shall be requested by Agent or, if applicable, endorse (without  recourse, representation or warranty) and deliver physical possession of such Negotiable  Collateral, Investment Property, or Chattel Paper to Agent, together with such undated powers (or  other relevant document of transfer acceptable to Agent) endorsed in blank as shall be requested  by Agent, and shall do such other acts or things deemed necessary or desirable by Agent, in its  Permitted Discretion, to protect Agent's Security Interest therein.  (b) Chattel Paper.  (i) Promptly (and in any event within five Business Days (or such longer  period as agreed to by Agent in writing in its sole discretion)) after request by Agent, each Grantor  shall take all steps reasonably necessary to grant Agent control of all electronic Chattel Paper in  accordance with the Code and all "transferable records" as that term is defined in Section 16 of the  Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global  and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the aggregate  value or face amount of such electronic Chattel Paper equals or exceeds $250,000; and  (ii) If any Grantor retains possession of any Chattel Paper or instruments  (which retention of possession shall be subject to the extent permitted hereby and by the Credit  Agreement), promptly upon the request of Agent, such Chattel Paper and instruments shall be  marked with the following legend:  "This writing and the obligations evidenced or secured hereby  are subject to the Security Interest of MGG Investment Group LP, as Agent for the benefit of the  Lender Group".  (c) Control Agreements.  (i) Subject to any applicable time periods provided under the Credit  Agreement (including Schedule 3.6 to the Credit Agreement), each Grantor shall obtain an  authenticated Control Agreement (which may include a Controlled Account Agreement), from  each bank maintaining a Deposit Account or Securities Account for such Grantor (other than with  respect to any Excluded Accounts);  (ii) Each Grantor shall obtain an authenticated Control Agreement, from  each issuer of uncertificated securities, securities intermediary, or commodities intermediary  issuing or holding any financial assets or commodities to or for any Grantor, or maintaining a  Securities Account for such Grantor (other than with respect to any Excluded Accounts); and  

 

  -23-  122895846v5  (iii) Each Grantor shall obtain an authenticated Control Agreement with  respect to all of such Grantor's investment property.  (d) Letter-of-Credit Rights.  If the Grantors (or any of them) are or become the  beneficiary of letters of credit having a face amount or value of $1,000,000 or more in the  aggregate, then the applicable Grantor or Grantors shall promptly (and in any event within five  Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) after  becoming a beneficiary), notify Agent thereof and, promptly (and in any event within five Business  Days (or such longer period as agreed to by Agent in writing in its sole discretion)) after request  by Agent, enter into a tri-party agreement with Agent and the issuer or confirming bank with  respect to letter-of-credit rights assigning such letter-of-credit rights as part of the Collateral to  Agent and directing all payments thereunder to Agent's Account, all in form and substance  reasonably satisfactory to Agent.  (e) Commercial Tort Claims.  If the Grantors (or any of them) obtain  Commercial Tort Claims having a value, or involving an asserted claim, in the amount of  $1,000,000 or more in the aggregate for all Commercial Tort Claims, then the applicable Grantor  or Grantors shall promptly (and in any event within five Business Days (or such longer period as  agreed to by Agent in writing in its sole discretion) of obtaining such Commercial Tort Claim),  notify Agent upon incurring or otherwise obtaining such Commercial Tort Claims and, promptly  (and in any event within five Business Days (or such longer period as agreed to by Agent in writing  in its sole discretion)) after request by Agent, amend Schedule 1 to describe such Commercial Tort  Claims in a manner that reasonably identifies such Commercial Tort Claims and which is  otherwise reasonably satisfactory to Agent, and hereby authorizes the filing of additional financing  statements or amendments to existing financing statements describing such Commercial Tort  Claims, and agrees to do such other acts or things deemed necessary or desirable by Agent, in its  Permitted Discretion, to give Agent a first priority (subject only to Permitted Liens to the extent  any such Liens would have priority over Agent's Liens pursuant to any applicable law or an  agreement expressly permitted under any of the Loan Documents to have such senior priority),  perfected security interest in any such Commercial Tort Claim.  (f) Government Contracts.  Other than Accounts and Chattel Paper the  aggregate value of which does not at any one time exceed $250,000, if any Account or Chattel  Paper arises out of a contract or contracts with the United States of America or any department,  agency, or instrumentality thereof, Grantors shall promptly (and in any event within five Business  Days (or such longer period as agreed to by Agent in writing in its sole discretion) of the creation  thereof) notify Agent thereof and, promptly (and in any event within five Business Days (or such  longer period as agreed to by Agent in writing in its sole discretion)) after request by Agent,  execute any instruments or take any steps reasonably required by Agent in order that all moneys  due or to become due under such contract or contracts shall be assigned as part of the Collateral to  Agent, for the benefit of the Lender Group, and shall provide written notice thereof under the  Assignment of Claims Act or other applicable law.  (g) Intellectual Property.  (i) Upon the request of Agent, in order to facilitate filings with the PTO  and the United States Copyright Office, each Grantor shall execute and deliver to Agent one or  

 

  -24-  122895846v5  more Copyright Security Agreements, Trademark Security Agreements, or Patent Security  Agreements to further evidence Agent's Lien on such Grantor's United States issued and registered  Patents, Trademarks, or Copyrights, and the General Intangibles of such Grantor relating thereto  or represented thereby;  (ii) Each Grantor shall have the duty, with respect to Intellectual Property  owned by such Grantor that is necessary in or material to the conduct of Grantors' business (taken  as a whole), to protect and diligently enforce and defend at such Grantor's expense its Intellectual  Property, in each case, subject to and in accordance with good business judgment as reasonably  determined by such Grantor, including (A) to diligently enforce and defend, including promptly  suing for infringement, misappropriation, or dilution and to recover any and all damages for such  infringement, misappropriation, or dilution, and filing for opposition, interference, and  cancellation against conflicting Intellectual Property rights of any Person, (B) to prosecute  diligently any trademark application or service mark application that is part of the Trademarks  pending as of the date hereof or hereafter until the termination of this Agreement, (C) to prosecute  diligently any patent application that is part of the Patents pending as of the date hereof or hereafter  until the termination of this Agreement, (D) to take all reasonable and necessary action to preserve  and maintain all of such Grantor's Trademarks, Patents, Copyrights, Intellectual Property Licenses,  and its rights therein, including paying all maintenance fees and filing of applications for renewal,  affidavits of use, and affidavits of noncontestability, and (E) to require all employees, consultants,  and contractors of each Grantor who were involved in the creation or development of such  Intellectual Property to sign agreements containing assignment of Intellectual Property rights and  obligations of confidentiality.  Except with respect to Permitted Dispositions, each Grantor further  agrees not to abandon any Intellectual Property or Intellectual Property License that is necessary  in or material to the conduct of such Grantor's business.  Each Grantor hereby agrees, subject to  its reasonable business judgment, to take the steps described in this Section 7(g)(ii) with respect  to all new or acquired Intellectual Property to which it or any of its Subsidiaries is now or later  becomes entitled that is necessary in or material to the conduct of such Grantor's business;  (iii) Grantors acknowledge and agree that the Lender Group shall have no  duties with respect to any Intellectual Property or Intellectual Property Licenses of any Grantor.   Without limiting the generality of this Section 7(g)(iii), Grantors acknowledge and agree that no  member of the Lender Group shall be under any obligation to take any steps necessary to preserve  rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against  any other Person, but any member of the Lender Group may do so at its option from and after the  occurrence and during the continuance of an Event of Default, and all expenses incurred in  connection therewith (including reasonable and documented fees and expenses of attorneys and  other professionals) shall be for the sole account of Borrowers and shall be chargeable to the Loan  Account;  (iv) On each date on which a Compliance Certificate is required to be  delivered pursuant to Section 5.1 of the Credit Agreement in respect of a fiscal quarter (or, if an  Event of Default has occurred and is continuing, more frequently if requested by Agent), each  Grantor shall provide Agent with a written report of all new Patents, Trademarks or Copyrights  that are registered or the subject of pending applications for registrations, and of all Intellectual  Property Licenses that are material to the conduct of such Grantor's business, in each case, which  were acquired, registered, or for which applications for registration were filed by any Grantor  

 

  -25-  122895846v5  during the prior period and any statement of use or amendment to allege use with respect to intent- to-use trademark applications.  In the case of such registrations or applications therefor, which  were acquired by any Grantor, each such Grantor shall file the necessary documents with the  appropriate Governmental Authority identifying the applicable Grantor as the owner (or as a co- owner thereof, if such is the case) of such Intellectual Property.  In each of the foregoing cases,  the applicable Grantor shall promptly cause to be prepared, executed, and delivered to Agent  supplemental schedules to the applicable Loan Documents to identify such Patent, Trademark and  Copyright registrations and applications therefor (with the exception of Trademark applications  filed on an intent-to-use basis for which no statement of use or amendment to allege use has been  filed) and Intellectual Property Licenses as being subject to the security interests created  thereunder;  (v) Anything to the contrary in this Agreement notwithstanding, in no  event shall any Grantor, either itself or through any agent, employee, licensee, or designee, file an  application for the registration of any Copyright with the United States Copyright Office or any  similar office or agency in another country without giving Agent written notice thereof at least five  (5) Business Days prior to such filing and complying with Section 7(g)(i) and, if available, each  such application for registration shall be filed on an "expedited basis".  Upon receipt from the  United States Copyright Office of notice of registration of any Copyright, each Grantor shall  promptly (but in no event later than five Business Days after receipt thereof (or such longer period  as agreed to by Agent in writing in its sole discretion) following such receipt) notify (but without  duplication of any notice required by Section 7(g)(iv)) Agent of such registration by delivering, or  causing to be delivered, to Agent, documentation sufficient for Agent to perfect Agent's Liens on  such Copyright.  If any Grantor acquires from any Person any Copyright registered with the United  States Copyright Office or an application to register any Copyright with the United States  Copyright Office, such Grantor shall promptly (but in no event later than five Business Days (or  such longer period as agreed to by Agent in writing in its sole discretion) following such  acquisition) notify Agent of such acquisition and deliver, or cause to be delivered, to Agent,  documentation sufficient for Agent to perfect Agent's Liens on such Copyright.  In the case of such  Copyright registrations or applications therefor which were acquired by any Grantor, each such  Grantor shall promptly (but in no event later than five Business Days (or such longer period as  agreed to by Agent in writing in its sole discretion) following such acquisition) file the necessary  documents with the appropriate Governmental Authority identifying the applicable Grantor as the  owner (or as a co-owner thereof, if such is the case) of such Copyrights;  (vi) Each Grantor shall take reasonable steps to maintain the  confidentiality of, and otherwise protect and enforce (subject to its reasonable business judgment)  its rights in, the Intellectual Property that is necessary in or material to the conduct of such  Grantor's business, including, as applicable (A) protecting the secrecy and confidentiality of its  confidential information and trade secrets by having and enforcing, subject to its reasonable  business judgment, a policy requiring all current employees, consultants, licensees, vendors and  contractors with access to such information to execute appropriate confidentiality agreements,  (B) taking actions reasonably necessary to ensure that no trade secret falls into the public domain,  and (C) protecting the secrecy and confidentiality of the source code of all software programs and  applications of which it is the owner or licensee by having and enforcing, subject to its reasonable  business judgment, a policy requiring any licensees (or sublicensees) of such source code to enter  into license agreements with commercially reasonable use and non-disclosure restrictions; and  

 

  -26-  122895846v5  (vii) No Grantor shall enter into any Intellectual Property License material  to the conduct of the business to receive any license or rights in any Intellectual Property of any  other Person unless such Grantor has used commercially reasonable efforts to permit the  assignment of or grant of a security interest in such Intellectual Property License (and all rights of  Grantor thereunder) to Agent (and any transferees of Agent).  (h) Investment Property.  (i) If any Grantor shall acquire, obtain, receive or become entitled to  receive any Pledged Interests after the Closing Date, it shall promptly (and in any event within five  Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) of  acquiring or obtaining such Collateral) deliver to Agent a duly executed Pledged Interests  Addendum identifying such Pledged Interests;  (ii) Upon the occurrence and during the continuance of an Event of  Default, following the request of Agent, all sums of money and property paid or distributed in  respect of the Investment Property that are received by any Grantor shall be held by the Grantors  in trust for the benefit of Agent segregated from such Grantor's other property, and such Grantor  shall deliver it forthwith to Agent in the exact form received;  (iii) Each Grantor shall promptly deliver to Agent a copy of each material  notice or other material communication received by it in respect of any Pledged Interests;  (iv) No Grantor shall make or consent to any amendment or other  modification or waiver with respect to any Pledged Interests, Pledged Operating Agreement, or  Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with  respect to any Pledged Interests if the same is prohibited pursuant to the Loan Documents;  (v) Each Grantor agrees that it will cooperate with Agent in (A) obtaining  all necessary approvals and making all necessary filings under federal, state, local, or foreign law  to effect the perfection of the Security Interest on the Investment Property or (B) effecting any sale  or transfer thereof; and  (vi) As to all limited liability company or partnership interests owned by  such Grantor and issued under any Pledged Operating Agreement or Pledged Partnership  Agreement, each Grantor hereby covenants that the Pledged Interests issued pursuant to such  agreement (A) are not and shall not be dealt in or traded on securities exchanges or in securities  markets, (B) do not and will not constitute investment company securities, and (C) are not and will  not be held by such Grantor in a securities account.  In addition, as of the Closing Date, none of  the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements  governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged  Partnership Agreement, provides or shall provide that such Pledged Interests are securities  governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction.  If after the Closing Date any Pledged Operating Agreement, Pledged Partnership Agreement, or  any other agreement governing any of the Pledged Interests issued under any Pledged Operating  Agreement or Pledged Partnership Agreement provides that such Pledged Interests are securities  governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction,  

 

  -27-  122895846v5  such agreement shall require that such Pledged Interests be certificated and such Grantor shall  promptly deliver each such certificate to Agent; and  (vii) With regard to any Pledged Interests that are not certificated, any such  Grantor of such non-certificated Pledged Interests (i) agrees promptly to note on its books the  security interests granted to Agent and confirmed under this Agreement, (ii) agrees that after the  occurrence and during the continuation of an Event of Default, it will comply with instructions of  Agent or its nominee with respect to the applicable Pledged Interests without further consent by  the applicable Grantor, (iii) to the extent permitted by law, agrees that the "issuer's jurisdiction"  (as defined in Section 8-110 of the UCC) is the State of New York, (iv) agrees to notify Agent  upon obtaining knowledge of any interest in favor of any person in the applicable Pledged Interests  that is materially adverse to the interest of the Agent therein, other than any Permitted Liens and  (v) waives any right or requirement at any time hereafter to receive a copy of this Agreement in  connection with the registration of any Pledged Interests hereunder in the name of Agent or its  nominee or the exercise of voting rights by Agent or its nominee.  (i) Real Property; Fixtures.  Each Grantor covenants and agrees that upon the  acquisition of any fee interest in Real Property it will promptly (and in any event within five  Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) of  acquisition) notify Agent of the acquisition of such Real Property and, to the extent required under  Section 5.12 of the Credit Agreement, will grant to Agent, for the benefit of the Lender Group, a  first priority (subject only to Permitted Liens to the extent any such Liens would have priority over  Agent's Liens pursuant to any applicable law or an agreement expressly permitted under any of  the Loan Documents to have such senior priority) Mortgage on each fee interest in Real Property  now or hereafter owned by such Grantor and, to the extent required under Section 5.12 of the  Credit Agreement, shall deliver such Additional Documents (including, without limitation, title  insurance policies, financing statements, fixture filings and environmental audits), in form and  substance satisfactory to Agent, in connection with the grant of such Mortgage as Agent shall  request in its Permitted Discretion, and such Grantor shall pay all recording costs, intangible taxes  and other fees and costs (including reasonable and documented attorneys' fees and expenses)  incurred in connection therewith, in each case, to the extent provided for pursuant to the Credit  Agreement and the other Loan Documents.  Each Grantor acknowledges and agrees that, to the  extent permitted by applicable law, all of the Collateral shall remain personal property regardless  of the manner of its attachment or affixation to real property.  (j) Transfers and Other Liens.  Grantors shall not (i) sell, assign (by operation  of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the  Collateral, except as expressly permitted by the Credit Agreement, or (ii) create or permit to exist  any Lien upon or with respect to any of the Collateral of any Grantor, except for Permitted Liens.   The inclusion of Proceeds in the Collateral shall not be deemed to constitute Agent's consent to  any sale or other disposition of any of the Collateral except as expressly permitted in this  Agreement or the other Loan Documents.  (k) Controlled Accounts; Controlled Investments.  (i) Subject to any applicable time periods provided under the Credit  Agreement (including Schedule 3.6 to the Credit Agreement), each Grantor shall (A) establish and  

 

  -28-  122895846v5  maintain cash management services of a type and on terms reasonably satisfactory to Agent at  Wells Fargo Bank, National Association or one or more of the other banks set forth on Schedule  10 (each a "Controlled Account Bank"), and shall take reasonable steps to ensure that all of its  Account Debtors forward payment of the amounts owed by them directly to a Collection Account  at such Controlled Account Bank that is not an Excluded Account (each, a "Controlled Account")  (by wire transfer to the applicable Controlled Account Bank or to a lockbox maintained by the  applicable Controlled Account Bank for deposit into such Collection Account), and (B) deposit or  cause to be deposited promptly, and in any event no later than the first Business Day after the date  of receipt thereof, all of their Collections (including those sent directly by their Account Debtors  to a Grantor) and proceeds of Collateral into a Controlled Account;  (ii) Subject to any applicable time periods provided under the Credit  Agreement (including Schedule 3.6 to the Credit Agreement), each Grantor shall establish and  maintain with respect to each Collateral Account, Controlled Account Agreements with Agent and  the applicable Controlled Account Bank, in form and substance reasonably acceptable to Agent.   Each such Controlled Account Agreement shall provide, among other things, that (A) the  Controlled Account Bank will comply with any instructions originated by Agent directing the  disposition of the funds in each applicable Controlled Account without further consent by the  applicable Grantor, (B) the Controlled Account Bank waives, subordinates, or agrees not to  exercise any rights of setoff or recoupment or any other claim against each applicable Controlled  Account other than for payment of its service fees and other charges directly related to the  administration of such Controlled Account and for returned checks or other items of payment, and  (C) upon the instruction of Agent (an "Activation Instruction"), the Controlled Account Bank will  forward by daily sweep all amounts in each applicable Controlled Account to the Agent's Account.   Agent agrees not to issue an Activation Instruction with respect to the Controlled Accounts unless  such Activation Instruction is issued during a Cash Dominion Period.  Agent agrees to use  commercially reasonable efforts to promptly rescind an Activation Instruction (the "Rescission")  after any Cash Dominion Period has ended;  (iii) So long as no Default or Event of Default has occurred and is  continuing or would result therefrom, Borrowers may amend Schedule 10 to add or replace a  Controlled Account Bank or Controlled Account and shall upon such addition or replacement  provide to Agent an amended Schedule 10; provided, that (A) such prospective Controlled  Account Bank shall be reasonably satisfactory to Agent, and (B) prior to the time of the opening  of such Controlled Account, the applicable Grantor and such prospective Controlled Account Bank  shall have executed and delivered to Agent a Controlled Account Agreement.  Each Grantor shall  close any of its Controlled Accounts (and establish replacement Controlled Account accounts in  accordance with the foregoing sentence) as promptly as practicable and in any event within 45  days after notice from Agent that the operating performance, funds transfer, or availability  procedures or performance of the Controlled Account Bank with respect to Controlled Account  Accounts or Agent's liability under any Controlled Account Agreement with such Controlled  Account Bank is no longer acceptable in Agent's reasonable judgment; and  (iv) Subject to any applicable time periods provided under the Credit  Agreement (including Schedule 3.6 to the Credit Agreement), other than with respect to Excluded  Accounts, no Grantor will, and no Grantor will permit its Subsidiaries to, make, acquire, or permit  to exist Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to  

 

  -29-  122895846v5  Deposit Accounts or Securities Accounts unless Grantor or its Subsidiary, as applicable, and the  applicable bank or securities intermediary have entered into Control Agreements governing such  Permitted Investments in order to perfect (or further establish) Agent's Liens in such Permitted  Investments.  (l) Name, Etc.  No Grantor will change its name, chief executive office,  organizational identification number, jurisdiction of organization or organizational identity;  provided, that any Grantor may change its name or chief executive office upon at least ten days  prior written notice to Agent of such change.  (m) Account Verification. Each Grantor will, and will cause each of its  Subsidiaries to, permit Agent, after the occurrence and during the continuance of an Event of  Default, in Agent's name or in the name or a nominee of Agent, to verify the validity, amount or  any other matter relating to any Account, by mail, telephone, facsimile transmission or other  electronic means of transmission or otherwise.  Further, at the request of Agent, each Grantor will,  and will cause each of its Subsidiaries to, send requests for verification of Accounts or, after the  occurrence and during the continuance of an Event of Default, send notices of assignment of  Accounts to Account Debtors and other obligors.  (n) Titled Collateral.    (i) Each Grantor shall (A) cause all Collateral, now owned or hereafter  acquired by any Grantor, which under applicable law are required to be registered, to be properly  registered in the name of such Grantor, (B) cause all Titled Collateral, to be properly titled in the  name of such Grantor, and if requested by Agent, with Agent's Lien noted thereon and (C) if  requested by Agent, promptly deliver to Agent (or its custodian) originals of all such Certificates  of Title or certificates of ownership for such Titled Collateral, with Agent's Lien noted thereon.  (ii) Upon the acquisition after the date hereof by any Grantor of any Titled  Collateral (other than Equipment to be acquired that is subject to a purchase money security  interest that constitutes a Permitted Lien under the Credit Agreement), such Grantor shall promptly  (and in any event within 10 Business Days) notify Agent of such acquisition, set forth a description  of such Titled Collateral acquired and a good faith estimate of the current value of such Titled  Collateral, and if so requested by Agent, immediately deliver to Agent (or its custodian) originals  of the Certificates of Title or certificates of ownership for such Titled Collateral, together with the  manufacturer's statement of origin, and an application duly executed by the appropriate Grantor to  evidence Agent's Lien thereon.  (iii) Each Grantor hereby appoints Agent as its attorney-in-fact, effective  the date hereof and terminating upon the termination of this Agreement, for the purpose of (A)  executing on behalf of such Grantor title or ownership applications for filing with appropriate  Governmental Authority to enable Titled Collateral now owned or hereafter acquired by such  Grantor to be amended to reflect Agent listed as lienholder thereof, (B) filing such applications  with such Governmental Authority, and (C) executing such other documents and instruments on  behalf of, and taking such other action in the name of, such Grantor as Agent may deem necessary  or advisable, in its Permitted Discretion, to accomplish the purposes of this Section 7(n) (including,  without limitation, for the purpose of creating in favor of Agent a perfected Lien on such Titled  

 

  -30-  122895846v5  Collateral and exercising the rights and remedies of Agent hereunder).  This appointment as  attorney-in-fact is coupled with an interest and is irrevocable until the Obligations have been paid  in full in accordance with the provisions of the Credit Agreement and the Commitments have  expired or have been terminated.  (iv) So long as no Event of Default shall have occurred and be continuing,  upon the request of any Grantor, Agent shall execute and deliver to such Grantor such instruments  as such Grantor shall reasonably request to remove the notation of Agent as lienholder on any  Certificate of Title or certificate of ownership for any Titled Collateral; provided that any such  instruments shall be delivered, and the release shall be effective, only upon receipt by Agent of a  certificate from such Grantor, stating that the Titled Collateral, the Lien on which is to be released,  is to be sold in accordance with the terms of the Credit Agreement or has suffered a casualty loss  (with title thereto passing to the casualty insurance company therefor in settlement of the claim for  such loss), the amount that such Grantor will receive as sale proceeds or insurance proceeds and  whether or not such sale proceeds or insurance proceeds are required by the Credit Agreement to  be paid to Agent to be applied to the Secured Obligations and, to the extent required by the Credit  Agreement, any proceeds of such sale or casualty loss shall be paid to Agent hereunder to be  applied to the Secured Obligations in accordance with the terms of the Credit Agreement.  (o) Pledged Notes.  With respect to any of the Pledged Notes (other than the  Gem Note to the extent that the aggregate principal amount thereunder does not exceed $300,000),  Grantors (i) without the prior written consent of Agent, will not (A) waive or release any obligation  of any Person that is obligated under any of the Pledged Notes, (B) take or omit to take any action  or knowingly suffer or permit any action to be omitted or taken, the taking or omission of which  would result in any right of offset against sums payable under the Pledged Notes, or (C) other than  Permitted Dispositions, assign or surrender their rights and interests under any of the Pledged  Notes or terminate, cancel, modify, change, supplement or amend the Pledged Notes, and (ii) shall  provide to Agent copies of all material written notices (including notices of default) given or  received with respect to the Pledged Notes promptly after giving or receiving such notice.  (p) Keepwell.  Each Qualified ECP Grantor  hereby jointly and severally  absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as  may be needed from time to time by each other Loan Party to guaranty and otherwise honor all  Obligations in respect of Swap Obligations.  The obligations of each Qualified ECP Grantor under  this Section shall remain in full force and effect until payment in full of the Obligations.  Each  Qualified ECP Grantor intends that this Section 7(p) constitute, and this Section 7(p) shall be  deemed to constitute, a "keepwell, support, or other agreement" for the benefit of each other  Grantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.  8. Relation to Other Security Documents.  The provisions of this Agreement shall be  read and construed with the other Loan Documents referred to below in the manner so indicated.  (a) Credit Agreement. In the event of any conflict between any provision in this  Agreement and a provision in the Credit Agreement, such provision of the Credit Agreement shall  control.  

 

  -31-  122895846v5  (b) Patent, Trademark, Copyright Security Agreements.  The provisions of the  Copyright Security Agreements, Trademark Security Agreements, and Patent Security  Agreements are supplemental to the provisions of this Agreement, and nothing contained in the  Copyright Security Agreements, Trademark Security Agreements, or the Patent Security  Agreements shall limit any of the rights or remedies of Agent hereunder.  In the event of any  conflict between any provision in this Agreement and a provision in a Copyright Security  Agreement, Trademark Security Agreement or Patent Security Agreement, such provision of this  Agreement shall control.  9. Further Assurances.  (a) Subject to and in accordance with Section 5.12 of the Credit Agreement,  each Grantor agrees that from time to time, at its own expense, such Grantor will promptly execute  and deliver all further instruments and documents, and take all further action, that Agent may  reasonably request, in order to perfect and protect the Security Interest granted hereby, to create,  perfect or protect the Security Interest purported to be granted hereby or to enable Agent to exercise  and enforce its rights and remedies hereunder with respect to any of the Collateral.  (b) Each Grantor authorizes the filing by Agent of financing or continuation  statements, or amendments thereto, and such Grantor will execute and deliver to Agent such other  instruments or notices, as Agent may reasonably request, in order to perfect and preserve the  Security Interest granted or purported to be granted hereby.  (c) Each Grantor authorizes Agent at any time and from time to time to file,  transmit, or communicate, as applicable, financing statements and amendments (i) describing the  Collateral as "all personal property of debtor" or "all assets of debtor" or words of similar effect,  (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that  contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing  office acceptance.  Each Grantor also hereby ratifies any and all financing statements or  amendments previously filed by Agent in connection with the Loan Documents in any jurisdiction.  (d) Each Grantor acknowledges that it is not authorized to file any financing  statement or amendment or termination statement with respect to any financing statement filed in  connection with this Agreement without the prior written consent of Agent, subject to such  Grantor's rights under Section 9-509(d)(2) of the Code.  10. Agent's Right to Perform Contracts, Exercise Rights, etc.  Upon the occurrence and  during the continuance of an Event of Default, Agent (or its designee) (a) may proceed to perform  any and all of the obligations of any Grantor contained in any contract, lease, or other agreement  and exercise any and all rights of any Grantor therein contained as fully as such Grantor itself  could, (b) shall have the right (subject to Section 17(b)) to use any Grantor's rights under  Intellectual Property Licenses in connection with the enforcement of Agent's rights hereunder,  including the right to prepare for sale and sell any and all Inventory and Equipment now or  hereafter owned by any Grantor and now or hereafter covered by such licenses, and (c) shall have  the right to request that any Equity Interests that are pledged hereunder be registered in the name  of Agent or any of its nominees.  

 

  -32-  122895846v5  11. Agent Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably appoints  Agent its attorney-in-fact, with full authority in the place and stead of such Grantor and in the  name of such Grantor or otherwise, at such time as an Event of Default has occurred and is  continuing under the Credit Agreement, to take any action and to execute any instrument which  Agent may reasonably deem necessary or advisable to accomplish the purposes of this Agreement,  including:  (a) to ask, demand, collect, sue for, recover, compromise, receive and give  acquittance and receipts for moneys due and to become due under or in connection with the  Accounts or any other Collateral of such Grantor;  (b) to receive and open all mail addressed to such Grantor and to notify postal  authorities to change the address for the delivery of mail to such Grantor to that of Agent;  (c) to receive, indorse, and collect any drafts or other instruments, documents,  Negotiable Collateral or Chattel Paper;  (d) to file any claims or take any action or institute any proceedings which  Agent may deem necessary or desirable for the collection of any of the Collateral of such Grantor  or otherwise to enforce the rights of Agent with respect to any of the Collateral;  (e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or in  part the purchase order of any Person obligated to such Grantor in respect of any Account of such  Grantor;  (f) to use any Intellectual Property or Intellectual Property Licenses of such  Grantor, including but not limited to any labels, Patents, Trademarks, trade names, URLs, domain  names, industrial designs, Copyrights, or advertising matter, in preparing for sale, advertising for  sale, or selling Inventory or other Collateral and to collect any amounts due under Accounts,  contracts or Negotiable Collateral of such Grantor; and  (g) Agent, on behalf of the Lender Group, shall have the right, but shall not be  obligated, to bring suit in its own name to enforce the Intellectual Property and Intellectual  Property Licenses and, if Agent shall commence any such suit, the appropriate Grantor shall, at  the request of Agent, do any and all lawful acts and execute any and all proper documents  reasonably required by Agent in aid of such enforcement.  To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact  shall lawfully do or cause to be done by virtue hereof.  This power of attorney is coupled with an  interest and shall be irrevocable until this Agreement is terminated.  12. Agent May Perform.  If any Grantor fails to perform any agreement contained  herein, after expiration of any applicable grace or cure period under the Loan Documents and upon  written notice (which shall be prior or concurrent) to the applicable Grantor, Agent may itself  perform, or cause performance of, such agreement, and the reasonable and documented expenses  of Agent incurred in connection therewith shall be payable, jointly and severally, by Grantors in  accordance with the terms of the Credit Agreement.  

 

  -33-  122895846v5  13. Agent's Duties.  The powers conferred on Agent hereunder are solely to protect  Agent's interest in the Collateral, for the benefit of the Lender Group, and shall not impose any  duty upon Agent to exercise any such powers.  Except for the safe custody of any Collateral in its  actual possession and the accounting for moneys actually received by it hereunder, Agent shall  have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against  prior parties or any other rights pertaining to any Collateral.  Agent shall be deemed to have  exercised reasonable care in the custody and preservation of any Collateral in its actual possession  if such Collateral is accorded treatment substantially equal to that which Agent accords its own  property.  14. Collection of Accounts, General Intangibles and Negotiable Collateral.  At any time  upon the occurrence and during the continuance of an Event of Default, Agent or Agent's designee  may (a) make direct verification from Account Debtors with respect to any or all Accounts that  are part of the Collateral, (b) notify Account Debtors of any Grantor that the Accounts, General  Intangibles, Chattel Paper or Negotiable Collateral of such Grantor have been assigned to Agent,  for the benefit of the Lender Group, or that Agent has a security interest therein, or (c) collect the  Accounts, General Intangibles and Negotiable Collateral of any Grantor directly, and any  collection costs and expenses shall constitute part of such Grantor's Secured Obligations under the  Loan Documents.  15. Disposition of Pledged Interests by Agent.  None of the Pledged Interests existing  as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on the  date of acquisition thereof will be, registered or qualified under the various federal or state  securities laws of the United States and disposition thereof after an Event of Default has occurred  and is continuing may be restricted to one or more private (instead of public) sales in view of the  lack of such registration.  Each Grantor understands that in connection with such disposition,  Agent may approach only a restricted number of potential purchasers and further understands that  a sale under such circumstances may yield a lower price for the Pledged Interests than if the  Pledged Interests were registered and qualified pursuant to federal and state securities laws and  sold on the open market.  Each Grantor, therefore, agrees that:  (a) if Agent shall, pursuant to the  terms of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a  private sale, Agent shall have the right to rely upon the advice and opinion of any nationally  recognized brokerage or investment firm (but shall not be obligated to seek such advice and the  failure to do so shall not be considered in determining the commercial reasonableness of such  action) as to the best manner in which to offer the Pledged Interest or any portion thereof for sale  and as to the best price reasonably obtainable at the private sale thereof, and (b) such reliance shall  be conclusive evidence that Agent has handled the disposition in a commercially reasonable  manner.  16. Voting and Other Rights in Respect of Pledged Interests.  (a) Upon the occurrence and during the continuation of an Event of Default, (i)  Agent may, at its option, and in addition to all rights and remedies available to Agent under any  other agreement, at law, in equity, or otherwise, exercise all voting rights, or any other ownership  or consensual rights (including any dividend or distribution rights) in respect of the Pledged  Interests owned by such Grantor, but under no circumstances is Agent obligated by the terms of  this Agreement to exercise such rights, and (ii) if Agent duly exercises its right to vote any of such  

 

  -34-  122895846v5  Pledged Interests, each Grantor hereby appoints Agent, such Grantor's true and lawful attorney- in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner Agent deems  advisable for or against all matters submitted or which may be submitted to a vote of shareholders,  partners or members, as the case may be.  The power-of-attorney and proxy granted hereby is  coupled with an interest and shall be irrevocable.  (b) For so long as any Grantor shall have the right to vote the Pledged Interests  owned by it, such Grantor covenants and agrees that it will not, without the prior written consent  of Agent, vote or take any consensual action with respect to such Pledged Interests which would  reasonably be expected to materially adversely affect the rights of Agent or the other members of  the Lender Group, or the value of the Pledged Interests.  17. Remedies.  Upon the occurrence and during the continuance of an Event of Default:  (a) Agent may, and, at the instruction of the Required Lenders, shall exercise  in respect of the Collateral, in addition to other rights and remedies provided for herein, in the  other Loan Documents, or otherwise available to it, all the rights and remedies of a secured party  on default under the Code or any other applicable law.  Without limiting the generality of the  foregoing, each Grantor expressly agrees that, in any such event, Agent without demand of  performance or other demand, advertisement or notice of any kind (except a notice specified below  of time and place of public or private sale) to or upon any Grantor or any other Person (all and  each of which demands, advertisements and notices are hereby expressly waived to the maximum  extent permitted by the Code or any other applicable law), may take immediate possession of all  or any portion of the Collateral and (i) require Grantors to, and each Grantor hereby agrees that it  will at its own expense and upon request of Agent forthwith, assemble all or part of the Collateral  as directed by Agent and make it available to Agent at one or more locations where such Grantor  regularly maintains Inventory, and (ii) without notice except as specified below, sell the Collateral  or any part thereof in one or more parcels at public or private sale, at any of Agent's offices or  elsewhere, for cash, on credit, and upon such other terms as Agent may deem commercially  reasonable.  Each Grantor agrees that, to the extent notification of sale shall be required by law, at  least ten days notification by mail to the applicable Grantor of the time and place of any public  sale or the time after which any private sale is to be made shall constitute reasonable notification  and specifically such notification shall constitute a reasonable "authenticated notification of  disposition" within the meaning of Section 9-611 of the Code.  Agent shall not be obligated to  make any sale of Collateral regardless of notification of sale having been given.  Agent may  adjourn any public sale from time to time by announcement at the time and place fixed therefor,  and such sale may, without further notice, be made at the time and place to which it was so  adjourned.  Each Grantor agrees that (A) the internet shall constitute a "place" for purposes of  Section 9-610(b) of the Code, and (B) to the extent notification of sale shall be required by law,  notification by mail of the URL where a sale will occur and the time when a sale will commence  at least ten days prior to the sale shall constitute a reasonable notification for purposes of Section  9-611(b) of the Code.  Each Grantor agrees that any sale of Collateral to a licensor pursuant to the  terms of a license agreement between such licensor and a Grantor is sufficient to constitute a  commercially reasonable sale (including as to method, terms, manner, and time) within the  meaning of Section 9-610 of the Code.  

 

  -35-  122895846v5  (b) Agent is hereby granted a license or other right to use, without liability for  royalties or any other charge, each Grantor's Intellectual Property, including but not limited to, any  labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights,  and advertising matter, whether owned by any Grantor or with respect to which any Grantor has  rights under license, sublicense, or other agreements (including any Intellectual Property License),  as it pertains to the Collateral, in preparing for sale, advertising for sale and selling any Collateral,  and each Grantor's rights under all licenses and all franchise agreements shall inure to the benefit  of Agent.  (c) Agent may, in addition to other rights and remedies provided for herein, in  the other Loan Documents, or otherwise available to it under applicable law and without the  requirement of notice to or upon any Grantor or any other Person (which notice is hereby expressly  waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect  to any Grantor's Deposit Accounts in which Agent's Liens are perfected by control under Section  9-104 of the Code, instruct the bank maintaining such Deposit Account for the applicable Grantor  to pay the balance of such Deposit Account to or for the benefit of Agent, and (ii) with respect to  any Grantor's Securities Accounts in which Agent's Liens are perfected by control under Section  9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the  applicable Grantor to (A) transfer any cash in such Securities Account to or for the benefit of  Agent, or (B) liquidate any financial assets in such Securities Account that are customarily sold on  a recognized market and transfer the cash proceeds thereof to or for the benefit of Agent.  (d) Any cash held by Agent as Collateral and all cash proceeds received by  Agent in respect of any sale of, collection from, or other realization upon all or any part of the  Collateral shall be applied against the Secured Obligations in the order set forth in the Credit  Agreement.   In the event the proceeds of Collateral are insufficient to satisfy all of the Secured  Obligations in full, each Grantor shall remain jointly and severally liable for any such deficiency.  (e) Each Grantor hereby acknowledges that the Secured Obligations arise out  of a commercial transaction, and agrees that if an Event of Default shall occur and be continuing  Agent shall have the right to an immediate writ of possession without notice of a hearing.  Agent  shall have the right to the appointment of a receiver for the properties and assets of each Grantor,  and each Grantor hereby consents to such rights and such appointment and hereby waives any  objection such Grantor may have thereto or the right to have a bond or other security posted by  Agent.  18. Remedies Cumulative.  Each right, power, and remedy of Agent or any other  member of the Lender Group as provided for in this Agreement or the other Loan Documents now  or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and  concurrent and shall be in addition to every other right, power, or remedy provided for in this  Agreement and the other Loan Documents now or hereafter existing at law or in equity or by  statute or otherwise, and the exercise or beginning of the exercise by Agent or any other member  of the Lender Group, of any one or more of such rights, powers, or remedies shall not preclude the  simultaneous or later exercise by Agent or such other member of the Lender Group of any or all  such other rights, powers, or remedies.  

 

  -36-  122895846v5  19. Marshaling. Agent  shall not be required to marshal any present or future collateral  security (including but not limited to the Collateral) for, or other assurances of payment of, the  Secured Obligations or any of them or to resort to such collateral security or other assurances of  payment in any particular order, and all of its rights and remedies hereunder and in respect of such  collateral security and other assurances of payment shall be cumulative and in addition to all other  rights and remedies, however existing or arising.  To the extent that it lawfully may, each Grantor  hereby agrees that it will not invoke any law relating to the marshaling of collateral which might  cause delay in or impede the enforcement of Agent's rights and remedies under this Agreement or  under any other instrument creating or evidencing any of the Secured Obligations or under which  any of the Secured Obligations is outstanding or by which any of the Secured Obligations is  secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each  Grantor hereby irrevocably waives the benefits of all such laws.  20. Indemnity.  Each Grantor agrees to indemnify Agent and the other members of the  Lender Group from and against all claims, lawsuits and liabilities (including reasonable and  documented attorneys' fees) arising out of or resulting from this Agreement (including  enforcement of this Agreement) or any other Loan Document to which such Grantor is a party, in  each case, in accordance with and to the extent set forth in Section 10.3 of the Credit Agreement.   This provision shall survive the termination of this Agreement and the Credit Agreement and the  repayment of the Secured Obligations.  21. Merger, Amendments; Etc.  THIS AGREEMENT, TOGETHER WITH THE  OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE  PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO  UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.  No waiver of any provision of this  Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be  effective unless the same shall be in writing and signed by Agent, and then such waiver or consent  shall be effective only in the specific instance and for the specific purpose for which given.  No  amendment of any provision of this Agreement shall be effective unless the same shall be in  writing and signed by Agent and each Grantor to which such amendment applies.  22. Addresses for Notices.  All notices and other communications provided for  hereunder shall be given in the form and manner and delivered to Agent at its address specified in  the Credit Agreement, and to any of the Grantors at the notice address specified for Loan Parties  in the Credit Agreement, or as to any party, at such other address as shall be designated by such  party in a written notice to the other party.  23. Continuing Security Interest: Assignments under Credit Agreement.  (a) This Agreement shall create a continuing security interest in the Collateral  and shall (i) remain in full force and effect until the Obligations have been paid in full in  accordance with the provisions of the Credit Agreement and the Commitments have expired or  have been terminated, (ii) be binding upon each Grantor, and their respective successors and  assigns, and (iii) inure to the benefit of, and be enforceable by, Agent, and its successors,  transferees and assigns.  Without limiting the generality of the foregoing clause (iii), any Lender  may, in accordance with the provisions of the Credit Agreement, assign or otherwise transfer all  

 

  -37-  122895846v5  or any portion of its rights and obligations under the Credit Agreement to any other Person, and  such other Person shall thereupon become vested with all the benefits in respect thereof granted to  such Lender herein or otherwise.  Upon payment in full of the Secured Obligations in accordance  with the provisions of the Credit Agreement and the expiration or termination of the Commitments,  the Guaranty made and the Security Interest granted hereby shall terminate and all rights to the  Collateral shall revert to Grantors or any other Person entitled thereto.  At such time, upon  Borrowers' request (and at the sole expense of Borrowers), Agent will authorize the filing of  appropriate termination statements to terminate such Security Interest, return any Collateral then  in Agent's possession and execute and deliver any documents, and take any actions, as Borrowers  reasonably request to evidence the termination and release of the Agent's Liens in the Collateral.   No transfer or renewal, extension, assignment, or termination of this Agreement or of the Credit  Agreement, any other Loan Document, or any other instrument or document executed and  delivered by any Grantor to Agent, nor the taking of further security, nor the retaking or re-delivery  of the Collateral to Grantors, or any of them, by Agent, nor any other act of the Lender Group, or  any of them, shall release any Grantor from any obligation, except a release or discharge executed  in writing by Agent in accordance with the provisions of the Credit Agreement.  Agent shall not  by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies  hereunder, unless such waiver is in writing and signed by Agent and then only to the extent therein  set forth.  A waiver by Agent of any right or remedy on any occasion shall not be construed as a  bar to the exercise of any such right or remedy which Agent would otherwise have had on any  other occasion.  (b) If any member of the Lender Group repays, refunds, restores, or returns in  whole or in part, any payment or property (including any proceeds of Collateral) previously paid  or transferred to such member of the Lender Group in full or partial satisfaction of any Secured  Obligation or on account of any other obligation of any Loan Party under any Loan Document,  because the payment, transfer, or the incurrence of the obligation so satisfied is asserted or declared  to be void, voidable, or otherwise recoverable under any law relating to creditors' rights, including  provisions of the Bankruptcy Code relating to fraudulent transfers, preferences, or other voidable  or recoverable obligations or transfers (each, a "Voidable Transfer"), or because such member of  the Lender Group elects to do so on the reasonable advice of its counsel in connection with a claim  that the payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to any such  Voidable Transfer, or the amount thereof that such member of the Lender Group elects to repay,  restore, or return (including pursuant to a settlement of any claim in respect thereof), and as to all  reasonable and documented costs, expenses, and attorneys' fees of such member of the Lender  Group related thereto, (i) the liability of the Loan Parties with respect to the amount or property  paid, refunded, restored, or returned will automatically and immediately be revived, reinstated,  and restored and will exist, and (ii) Agent's Liens securing such liability shall be effective, revived,  and remain in full force and effect, in each case, as fully as if such Voidable Transfer had never  been made.  If, prior to any of the foregoing, (A) Agent's Liens shall have been released or  terminated, or (B) any provision of this Agreement shall have been terminated or cancelled,  Agent's Liens, or such provision of this Agreement, shall be reinstated in full force and effect and  such prior release, termination, cancellation or surrender shall not diminish, release, discharge,  impair or otherwise affect the obligation of any Loan Party in respect of such liability or any  Collateral securing such liability.  

 

  -38-  122895846v5  (c) In connection with any Disposition of Collateral permitted pursuant to  Section 6.4 of the Credit Agreement, Agent hereby acknowledges and agrees in accordance with  Section 15.11(a) of the Credit Agreement to promptly release Agent's Lien in such Collateral and  to promptly execute and deliver, upon the applicable Grantor's reasonable written request therefor  (and at the sole expense of such Grantor), such documents, releases or other evidence of  termination of the Agent's Lien in such Collateral.  24. Survival.  All representations and warranties made by the Grantors in this  Agreement and in the certificates or other instruments delivered in connection with or pursuant to  this Agreement shall be considered to have been relied upon by the other parties hereto and shall  survive the execution and delivery of this Agreement and the making of any loans and issuance of  any Letters of Credit, regardless of any investigation made by any such other party or on its behalf  and notwithstanding that Agent, Issuing Lender, or any Lender may have had notice or knowledge  of any Default or Event of Default or incorrect representation or warranty at the time any credit is  extended under the Credit Agreement, and shall continue in full force and effect as long as the  principal of or any accrued interest on any loan or any fee or any other amount payable under the  Credit Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as  the Commitments have not expired or terminated.  25. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL  REFERENCE PROVISION.  (a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION,  INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES  HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED  HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER  OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND  CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS  ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND  LITIGATED ONLY IN THE STATE OF NEW YORK AND, TO THE EXTENT PERMITTED  BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK,  STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT  AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S  OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING  SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE  FOUND.  EACH GRANTOR AND AGENT WAIVE, TO THE EXTENT PERMITTED UNDER  APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF  FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY  PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 25(b).  (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,  EACH GRANTOR AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY,  TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION  DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT  OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT  

 

  -39-  122895846v5  CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON  LAW OR STATUTORY CLAIMS (EACH A "CLAIM").  EACH GRANTOR AND AGENT  REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY  AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION  WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS  AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.  (d) EACH GRANTOR HEREBY IRREVOCABLY AND  UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE  AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE  OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING  TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY  JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN  ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE  ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY  OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL  AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION  OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY GRANTOR OR ITS  PROPERTIES IN THE COURTS OF ANY JURISDICTION.  (e) NO CLAIM MAY BE MADE BY ANY GRANTOR, ON THE ONE  HAND, OR ANY MEMBER OF THE LENDER GROUP, ON THE OTHER, AGAINST EACH  OTHER, OR ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS,  EMPLOYEES, COUNSELS, REPRESENTATIVES, AGENTS, OR ATTORNEYS-IN-FACT  FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN  RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF  LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED  BY THIS AGREEMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN  CONNECTION HEREWITH, AND EACH SUCH PERSON HEREBY WAIVES, RELEASES,  AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR  NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS  FAVOR.  (f) IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT  OF THE STATE OF CALIFORNIA (THE "COURT") BY OR AGAINST ANY PARTY  HERETO IN CONNECTION WITH ANY CLAIM AND THE WAIVER SET FORTH IN  SECTION 25(c) ABOVE IS NOT ENFORCEABLE IN SUCH PROCEEDING, THE PARTIES  HERETO AGREE AS FOLLOWS:  (i) WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN  SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL BE DETERMINED BY A GENERAL  REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF  CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1.  THE  PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY  ENFORCEABLE.  VENUE FOR THE REFERENCE PROCEEDING SHALL BE IN THE  COUNTY OF LOS ANGELES, CALIFORNIA.  

 

  -40-  122895846v5  (ii) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A  GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY  SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF- HELP REMEDIES (INCLUDING SET-OFF OR RECOUPMENT), (C) APPOINTMENT OF A  RECEIVER, AND (D) TEMPORARY, PROVISIONAL, OR ANCILLARY REMEDIES  (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY  RESTRAINING ORDERS, OR PRELIMINARY INJUNCTIONS).  THIS AGREEMENT DOES  NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE  RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) THROUGH (D) AND ANY SUCH  EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO  PARTICIPATE IN A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT  WITH RESPECT TO ANY OTHER MATTER.  (iii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE  PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR  JUSTICE.  IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN TEN DAYS OF  SUCH WRITTEN REQUEST, THEN, ANY PARTY SHALL HAVE THE RIGHT TO  REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE  OF CIVIL PROCEDURE SECTION 640(B).  THE REFEREE SHALL BE APPOINTED TO SIT  WITH ALL OF THE POWERS PROVIDED BY LAW.  PENDING APPOINTMENT OF THE  REFEREE, THE COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR  PROVISIONAL REMEDIES.  (iv) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,  THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE  PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS,  THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT  ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING.  ALL  PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR  TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY  PARTY SO REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A  COURT REPORTER SHALL BE USED AND THE REFEREE SHALL BE PROVIDED A  COURTESY COPY OF THE TRANSCRIPT.  THE PARTY MAKING SUCH REQUEST  SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY THE COSTS OF THE  COURT REPORTER; PROVIDED, THAT SUCH COSTS, ALONG WITH THE REFEREE'S  FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS  DETERMINED BY THE REFEREE.  (v) THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING  CONFERENCES.  THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND  THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF  DISCOVERY, AND SHALL ENFORCE ALL DISCOVERY ORDERS IN THE SAME  MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF  CALIFORNIA.  (vi) THE REFEREE SHALL APPLY THE RULES OF EVIDENCE  APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL  

 

  -41-  122895846v5  DETERMINE ALL ISSUES IN ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND  PROCEDURAL LAW.  THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE  AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE  AUTHORIZED IN A TRIAL, INCLUDING MOTIONS FOR DEFAULT JUDGMENT OR  SUMMARY JUDGMENT.  THE REFEREE SHALL REPORT HIS OR HER DECISION,  WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF  LAW.  THE REFEREE SHALL ISSUE A DECISION AND PURSUANT TO CALIFORNIA  CODE OF CIVIL PROCEDURE, SECTION 644, THE REFEREE'S DECISION SHALL BE  ENTERED BY THE COURT AS A JUDGMENT IN THE SAME MANNER AS IF THE  ACTION HAD BEEN TRIED BY THE COURT.  THE FINAL JUDGMENT OR ORDER FROM  ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE SHALL BE  FULLY APPEALABLE AS IF IT HAS BEEN ENTERED BY THE COURT.  (vii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS  RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE  DECIDED BY A REFEREE AND NOT BY A JURY.  AFTER CONSULTING (OR HAVING  HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE,  EACH PARTY HERETO KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL  BENEFIT AGREES THAT THIS REFERENCE PROVISION SHALL APPLY TO ANY  DISPUTE BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS  AGREEMENT.  26. New Subsidiaries.  Pursuant to Section 5.11 of the Credit Agreement, certain  Subsidiaries (whether by acquisition or creation) of any Grantor are required to enter into this  Agreement by executing and delivering in favor of Agent a Joinder to this Agreement in  substantially the form of Annex 1.  Upon the execution and delivery of Annex 1 by any such new  Subsidiary, such Subsidiary shall become a Guarantor and/or Grantor hereunder with the same  force and effect as if originally named as a Guarantor and/or Grantor herein.  The execution and  delivery of any instrument adding an additional Guarantor or Grantor as a party to this Agreement  shall not require the consent of any Guarantor or Grantor hereunder.  The rights and obligations of  each Guarantor and Grantor hereunder shall remain in full force and effect notwithstanding the  addition of any new Guarantor or Grantor hereunder.  27. Agent.  Each reference herein to any right granted to, benefit conferred upon or  power exercisable by the "Agent" shall be a reference to Agent, for the benefit of each member of  the Lender Group.  28. Miscellaneous.  (a) This Agreement is a Loan Document.  This Agreement may be executed in  any number of counterparts and by different parties on separate counterparts, each of which, when  executed and delivered, shall be deemed to be an original, and all of which, when taken together,  shall constitute but one and the same Agreement.  Delivery of an executed counterpart of this  Agreement by telefacsimile or other electronic method of transmission shall be equally as effective  as delivery of an original executed counterpart of this Agreement.  Any party delivering an  executed counterpart of this Agreement by telefacsimile or other electronic method of transmission  also shall deliver an original executed counterpart of this Agreement but the failure to deliver an  

 

  -42-  122895846v5  original executed counterpart shall not affect the validity, enforceability, and binding effect of this  Agreement.  The foregoing shall apply to each other Loan Document mutatis mutandis.  (b) Any provision of this Agreement which is prohibited or unenforceable shall  be ineffective to the extent of such prohibition or unenforceability without invalidating the  remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such  provision in any other jurisdiction.  Each provision of this Agreement shall be severable from  every other provision of this Agreement for the purpose of determining the legal enforceability of  any specific provision.  (c) Headings and numbers have been set forth herein for convenience only.   Unless the contrary is compelled by the context, everything contained in each Section applies  equally to this entire Agreement.  (d) Neither this Agreement nor any uncertainty or ambiguity herein shall be  construed against any member of the Lender Group or any Grantor, whether under any rule of  construction or otherwise.  This Agreement has been reviewed by all parties and shall be construed  and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the  purposes and intentions of all parties hereto.  29. Intercreditor Agreement.  (a) Notwithstanding anything herein to the contrary, in the event of any conflict  between any provision in this Agreement and any provision in the Intercreditor Agreement, such  provision in the Intercreditor Agreement shall control.  (b) Without limiting the generality of the foregoing, and notwithstanding  anything herein to the contrary, any obligation of any Grantor hereunder with respect to the  delivery or control of any Collateral that constitutes ABL Priority Collateral shall be deemed to be  satisfied if such Grantor delivers or provides control of such ABL Priority Collateral to the ABL  Agent in accordance with the requirements of the corresponding provision of the applicable ABL  Loan Document.  Any representation, warranty, covenant or other obligation of any Grantor  hereunder to create a "first priority" security interest in any Collateral that constitutes ABL Priority  Collateral shall be first priority other than any Lien in favor of the ABL Agent.  [Signature pages follow]    

 

IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be executed and delivered as of the day and year first above written. "Grantors" FARMER BROS. CO., a Delaware corporation By: Name: Title: BOYD ASSETS CO., a Delaware corporation By: Name: Title: clue F,- n a..n of FBC FINANCE COMPANY, a California COFFEE BEAN HOLDING CO., INC., a corporation By: Name: Title: Delaware corporation By: Name: Title: chit e hhoth kW 0 Ph COFFEE BEAN INTERNATIONAL, INC., CHINA MIST BRANDS, INC., a Delaware an Oregon corporation corporation By: Name: Title: Signature Page to Guaranty and Security Agreement By: Name: 510H- e. chTitle:  e' '  •0 y pro cet- 

 

 

 

      122895846v5  SCHEDULE 1    COMMERCIAL TORT CLAIMS    None.    

 

      122895846v5  SCHEDULE 2    COPYRIGHTS    UNITED STATES COPYRIGHTS  Registrations:   OWNER TITLE  REGISTRATION  NUMBER  Farmer Bros. Co.1 Farmer Brothers route  accounting  TXU000082758  Farmer Bros. Co.2 The Brewmatic/Daw  prescription for success  TX0001130633  China Mist Brands,  Inc.3  Oasis Design VA0000746115  China Mist Brands,  Inc.4  Why switch to China  Mist?  TX0003332425  Boyd Assets Co.5 Expresso Cleaning  Ticket  for Reneka 123.  TXu001061982  Boyd Assets Co.6 COFFEE HOUSE  ROASTERS HI-REV  COFFEE.  VA0001626268  Boyd Assets Co. Hewlett-Packard master  job scheduler controller;  DS version  TX0001884754      Applications:  OWNER  APPLICATION  NUMBER                                                    1  Copyright owned by “Farmer Brothers Company”  2  Copyright owned by “Farmer Brothers Company”  3  Copyright owned by “China Mist Tea Company”  4  Copyright owned by “Restaurant Tea Service, Inc., d.b.a. Mist Tea Company”  5  Copyright owned by “Boyd Assets Company”  6  Copyright owned by “Boyd Assets Company”  

 

      122895846v5  None       OTHER (NON-UNITED STATES) COPYRIGHTS  Registrations:  OWNER  REGISTRATION  NUMBER COUNTRY/STATE TITLE  None          Applications:  OWNER  APPLICATION  NUMBER COUNTRY/STATE  None             

 

      122895846v5  SCHEDULE 3    INTELLECTUAL PROPERTY LICENSES  LICENSEE LICENSOR COUNTRY/STATE  REGISTRATION/  APPLICATION  NUMBER, IF ANY DESCRIPTION  Farmer Bros. Co. NuZee, Inc. World-wide  License to use all specifications,  formulas, recipes, blends, brands,  trademarks, service marks, trade  names, logos and other intellectual  property of NuZee Co-Packing  Single Serve Coffee Filters owned  by Licensor in order for Licensee  to perform its obligations under the  Equipment Bailment and Contract  Manufacturing Agreement, dated  as of October 23, 2020, between  Licensor and Licensee.      

 

      122895846v5  SCHEDULE 4    PATENTS  UNITED STATES PATENTS:  Registrations:  OWNER  REGISTRATION  NUMBER DESCRIPTION  Boyd Assets Co. 6786138 Device For Preparing  Milk Froth For  Cappuccino      Applications:  OWNER  APPLICATION  NUMBER DESCRIPTION  None        OTHER (NON-UNITED STATES) PATENTS:  Registrations:  OWNER  REGISTRATION  NUMBER COUNTRY/STATE DESCRIPTION  None         Applications:  OWNER  APPLICATION  NUMBER COUNTRY/STATE DESCRIPTION  None         

 

      122895846v5  SCHEDULE 5    PLEDGED COMPANIES    Name of Grantor  Name of Pledged  Company  Number of  Shares/Units  Class of  Interests  Percentage of  Class Owned  Percentage of  Class Pledged  Certificate  Nos.  Farmer Bros. Co. Boyd Assets Co. 100 Common 100%    100% 3  Farmer Bros. Co. China Mist Brands,  Inc.   100 Common 100% 100% C-02  Farmer Bros. Co. Coffee Bean  Holding Co., Inc.  1,000 Common 100% 100% 11  Farmer Bros. Co. FBC Finance  Company  10,000 Common 100% 100% 2  Coffee Bean  Holding Co., Inc.  Coffee Bean  International, Inc.  100 Common 100% 100% 2    

 

      122895846v5  SCHEDULE 6    TRADEMARKS    

 

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      122895846v5  SCHEDULE 7    NAME; CHIEF EXECUTIVE OFFICE; TAX IDENTIFICATION NUMBERS AND  ORGANIZATIONAL NUMBERS  Name Chief Executive Office  Tax Identification  Number  Organizational  Number  Farmer Bros. Co.  1912 Farmer Brothers Drive  Northlake, Texas 76262  95-0725980 3742785  Boyd Assets Co.  1912 Farmer Brothers Drive  Northlake, Texas 76262  82-2659061 6498468  China Mist Brands, Inc.  1912 Farmer Brothers Drive  Northlake, Texas 76262  81-3861172 61339189  Coffee Bean Holding Co., Inc.  1912 Farmer Brothers Drive  Northlake, Texas 76262  56-2488947 3781157  Coffee Bean International, Inc.  1912 Farmer Brothers Drive  Northlake, Texas 76262  93-0714098 129369-10  FBC Finance Company  1912 Farmer Brothers Drive  Northlake, Texas 76262  95-3428785 0905697      

 

      122895846v5  SCHEDULE 8    OWNED REAL PROPERTY  Address City State Zip  Code        1105 Aviation Dr. Lake Havasu City AZ 86404   3818 S. Evans Blvd Tucson AZ 85714   480 Ryan Ave.  Chico CA 95973   8802 Swigert Ct. Bakersfield CA 93311   9373 Remick Ave   Los Angeles CA 91331   11460 Commercial Pky Castroville CA 95012   2450 Boatman Ave  West Sacramento CA 95691   4243 Arch Rd  Stockton CA 95215   470 E. Todd Rd  Santa Rosa CA 95407   3217 Nebraska Ave Council Bluffs IA 51501   3074 84th Lane N.E. Blaine MN 55449   9 N.E. Skyline Dr. Lee's Summit MO 64086   12832 Pennridge Dr. Bridgeton MO 63044   5911 Office Blvd NE Albuquerque NM 87109   3880 Technology Way Carson City NV 89706   13131 Broadway Ext.  Oklahoma City OK 73114  1912 Farmer Brothers Dr. Northlake TX 76262   2230 S. 2000 West  West Valley City UT 84119  7855 Ostrow St. San Diego CA 92111   2385 N. Walgreens St. Flagstaff AZ 86004   4576 N. Bendel Avenue Fresno CA 93722  17190 Yuma Street Victorville CA 92395   2848 Chipeta Avenue Grand Junction CO 81501   2625 Enterprise Ave Billings MT 59102   460 S. A St. Elko NV 89801  7515 NE 33rd Dr. Portland OR 97211   5753 E. Shelby Dr. Memphis TN 38141   1325 Don Haskins Dr.  El Paso TX 79936   1312 E. Laurel  McAllen TX 78501   10915 E Montgomery Dr. Spokane Valley WA 99206   2301 S. 18th St Union Gap WA 98903  3921 W. Segerstrom Ave. Santa Ana CA 92704  72205 Corporate Way Thousand Palms CA 92276   9901 Bell Ranch Dr. Santa Fe Springs CA 90670  2751 S Lilac Ave Bloomington CA 92316  4930 Center Park Blvd. San Antonio TX 78218  

 

      122895846v5  805 S. Saturn Ave. Idaho Falls ID 83402  2030 Creek Dr. Rapid City SD 57703        

 

      122895846v5  SCHEDULE 9    DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS  Owner Type of Account  Bank or  Intermediary Account Number  Farmer Bros. Co. Operating Account JP Morgan Chase  Bank, N.A.  687795299  Farmer Bros. Co. Lockbox Account JP Morgan Chase  Bank, N.A.  626513415  Farmer Bros. Co. Lockbox Account JP Morgan Chase  Bank, N.A.  473379837  Farmer Bros. Co. Operating Account Wells Fargo Bank,  N.A.  2000042721280  Farmer Bros. Co. Customer Deposit  Account  Wells Fargo Bank,  N.A.  2000042673105  Farmer Bros. Co. Customer EFT/ACH  Payments  Wells Fargo Bank,  N.A.  2000042721345  Farmer Bros. Co. Excluded Account -  Cash Collateral  Account—Existing  Letters of Credit –  Clause (D) of the  definition of  “Excluded Accounts”  JP Morgan Chase  Bank, N.A.  715323769  Farmer Bros. Co. Excluded Account –  Cash Collateral  Account—Existing  Banking Services  Obligations – Clause  (E) of the definition of  “Excluded Accounts”  JP Morgan Chase  Bank, N.A.  715323835  Farmer Bros.  Co./West Coast  Coffee  West Coast Coffee  Deposit Account  JP Morgan Chase  Bank, N.A.  110838205  Farmer Bros.  Co./West Coast  Coffee  West Coast Coffee  Receivables Account  JP Morgan Chase  Bank, N.A.  115990357  Farmer Bros.  Co./Boyd’s Coffee  Boyd’s Coffee  Operating Account   JP Morgan Chase  Bank, N.A.  206235597  Farmer Bros.  Co./Boyd’s Coffee  Boyd’s Coffee  Depository Account  JP Morgan Chase  Bank, N.A.  206221159  China Mist Brands,  Inc.  Operating Account Wells Fargo Bank,  N.A.  7560074580  

 

      122895846v5  Owner Type of Account  Bank or  Intermediary Account Number  China Mist Brands,  Inc.  Deposit/Retail  Account  Wells Fargo Bank,  N.A.  7560074598  Farmer Bros. Co. Excluded Account –  Hedge Agreement –  Clause (F) of the  definition of  “Excluded Accounts”  StoneX Markets, LLC 9837  Farmer Bros. Co. Excluded Account –  Hedge Agreement –  Clause (F) of the  definition of  “Excluded Accounts”  StoneX Financial Inc. MIC-H2601  Farmer Bros. Co. Excluded Account –  Hedge Agreement –  Clause (F) of the  definition of  “Excluded Accounts”  Macquarie Futures  USA LLC  52319040  Farmer Bros. Co. Excluded Account –  Workers  Compensation –  Clause (B) of the  definition of  “Excluded Accounts”  JP Morgan Chase  Bank, N.A.  687795307  Farmer Bros. Co. Excluded Account –  dormant account –  Clause (A) of the  definition of  “Excluded Accounts”  JP Morgan Chase  Bank, N.A.  3729172891  Farmer Bros. Co. Excluded Account –  payroll account –  Clause (B) of the  definition of  “Excluded Accounts”  JP Morgan Chase  Bank, N.A.  687795315  Farmer Bros. Co. Excluded Account –  disbursement account  – Clause (A) of the  definition of  “Excluded Accounts”  JP Morgan Chase  Bank, N.A.  687795323    

 

      122895846v5  SCHEDULE 10    CONTROLLED ACCOUNT BANKS    1. Wells Fargo Bank, National Association  2. JPMorgan Chase Bank, N.A.      

 

      122895846v5  SCHEDULE 11    LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS    Grantor Jurisdictions  Farmer Bros. Co. Delaware  Boyd Assets Co. Delaware  China Mist Brands, Inc. Delaware  Coffee Bean Holding Co., Inc. Delaware  Coffee Bean International, Inc. Oregon  FBC Finance Company California    

 

      122895846v5  SCHEDULE 12    TITLED COLLATERAL    

 

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  Annex I - 1    122895846v5  ANNEX 1 TO GUARANTY AND SECURITY AGREEMENT  FORM OF JOINDER  Joinder No. ____ (this "Joinder"), dated as of ____________ 20___, to the Guaranty and  Security Agreement, dated as of April 26, 2021 (as amended, restated, supplemented, or otherwise  modified from time to time, the "Guaranty and Security Agreement"), by and among each of the  parties listed on the signature pages thereto and those additional entities that thereafter become  parties thereto (collectively, jointly and severally, "Grantors" and each, individually, a "Grantor")  and MGG INVESTMENT GROUP LP, a Delaware limited partnership, in its capacity as  administrative agent for each member of the Lender Group (in such capacity, together with its  successors and assigns in such capacity, "Agent").  W I T N E S S E T H:  WHEREAS, pursuant to that certain Credit Agreement dated as of April 26, 2021 (as  amended, restated, supplemented, or otherwise modified from time to time, the "Credit  Agreement") by and among FARMER BROS. CO., a Delaware corporation ("Parent"), and the  Subsidiaries of Parent from time to time party to the Credit Agreement as borrowers in accordance  with the terms thereof (collectively with Parent, each a "Borrower" and individually and  collectively, jointly and severally, the "Borrowers"), the lenders party thereto as "Lenders" (each  of such Lenders, together with its successors and permitted assigns, is referred to hereinafter as a  "Lender"), and Agent, the Lender Group has agreed to make certain financial accommodations  available to Borrowers from time to time pursuant to the terms and conditions thereof;  WHEREAS, initially capitalized terms used herein and not otherwise defined herein shall  have the meanings assigned to such terms in the Guaranty and Security Agreement or, if not  defined therein, in the Credit Agreement, and this Joinder shall be subject to the rules of  construction set forth in Section 1(b) of the Guaranty and Security Agreement, which rules of  construction are incorporated herein by this reference, mutatis mutandis;  WHEREAS, Grantors have entered into the Guaranty and Security Agreement in order to  induce the Lender Group to make certain financial accommodations to Borrowers as provided for  in the Credit Agreement and the other Loan Documents;  WHEREAS, pursuant to Section 5.11 of the Credit Agreement and Section 26 of the  Guaranty and Security Agreement, certain Subsidiaries of the Loan Parties, must execute and  deliver certain Loan Documents, including the Guaranty and Security Agreement, and the joinder  to the Guaranty and Security Agreement by the undersigned new Grantor or Grantors (collectively,  the "New Grantors") may be accomplished by the execution of this Joinder in favor of Agent, for  the benefit of the Lender Group; and  WHEREAS, each New Grantor (a) is [an Affiliate] [a Subsidiary] of Borrowers and, as  such, will benefit by virtue of the financial accommodations extended to Borrowers by the Lender  Group and (b) by becoming a Grantor will benefit from certain rights granted to the Grantors  pursuant to the terms of the Loan Documents.  

 

  Annex I - 2      122895846v5  NOW, THEREFORE, for and in consideration of the foregoing and other good and  valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each New  Grantor hereby agrees as follows:  1. In accordance with Section 26 of the Guaranty and Security Agreement, each New  Grantor, by its signature below, becomes a "Grantor" [and "Guarantor"] under the Guaranty and  Security Agreement with the same force and effect as if originally named therein as a "Grantor"  [and "Guarantor"] and each New Grantor hereby (a) agrees to all of the terms and provisions of  the Guaranty and Security Agreement applicable to it as a "Grantor" [or "Guarantor"]  thereunder, and (b) represents and warrants that the representations and warranties made by it as a  "Grantor" [or "Guarantor"] thereunder are true and correct in all material respects (except that  such materiality qualifier shall not be applicable to any representations and warranties that are  already qualified or modified by materiality in the text thereof) on and as of the date hereof (except  to the extent that such representations and warranties relate solely to an earlier date, in which case  such representations and warranties shall be true and correct in all material respects (except that  such materiality qualifier shall not be applicable to any representations and warranties that already  are qualified or modified by materiality in the text thereof) as of such earlier date).  In furtherance  of the foregoing, each New Grantor hereby [(i) jointly and severally unconditionally and  irrevocably guarantees as a primary obligor and not merely as a surety the full and prompt  payment when due, whether upon maturity, acceleration, or otherwise, of all of the  Guarantied Obligations, and (ii)] unconditionally grants, assigns, and pledges to Agent, for the  benefit of the Lender Group, to secure the Secured Obligations, a continuing security interest in  and to all of such New Grantor's right, title and interest in and to the Collateral.  Each reference to  a "Grantor" [or "Guarantor"] in the Guaranty and Security Agreement shall be deemed to include  each New Grantor.  The Guaranty and Security Agreement is incorporated herein by reference.  2. Schedule 1, "Commercial Tort Claims", Schedule 2, "Copyrights", Schedule 3,  "Intellectual Property Licenses", Schedule 4, "Patents", Schedule 5, "Pledged Companies",  Schedule 6, "Trademarks", Schedule 7, Name; Chief Executive Office; Tax Identification  Numbers and Organizational Numbers, Schedule 8, "Owned Real Property", Schedule 9, "Deposit  Accounts and Securities Accounts", Schedule 10, "Controlled Account Banks", Schedule 11, "List  of Uniform Commercial Code Filing Jurisdictions", and Schedule 12, "Titled Collateral" attached  hereto supplement Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 6,  Schedule 7, Schedule 8, Schedule 9, Schedule 10, Schedule 11, and Schedule 12 respectively, to  the Guaranty and Security Agreement and shall be deemed a part thereof for all purposes of the  Guaranty and Security Agreement.  3. Each New Grantor authorizes Agent at any time and from time to time to file,  transmit, or communicate, as applicable, financing statements and amendments thereto  (a) describing the Collateral as "all personal property of debtor" or "all assets of debtor" or words  of similar effect, (b) describing the Collateral as being of equal or lesser scope or with greater  detail, or (c) that contain any information required by part 5 of Article 9 of the Code for the  sufficiency or filing office acceptance.  Each New Grantor also hereby ratifies any and all financing  statements or amendments previously filed by Agent in any jurisdiction in connection with the  Loan Documents.  

 

  Annex I - 3      122895846v5  4. Each New Grantor represents and warrants to Agent and the Lender Group that this  Joinder has been duly executed and delivered by such New Grantor and constitutes its legal, valid,  and binding obligation, enforceable against it in accordance with its terms, except as enforceability  thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium,  or other similar laws affecting creditors' rights generally and general principles of equity  (regardless of whether such enforceability is considered in a proceeding at law or in equity).  5. This Joinder is a Loan Document.  This Joinder may be executed in any number of  counterparts and by different parties on separate counterparts, each of which, when executed and  delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute  but one and the same Joinder.  Delivery of an executed counterpart of this Joinder by telefacsimile  or other electronic method of transmission shall be equally as effective as delivery of an original  executed counterpart of this Joinder.  Any party delivering an executed counterpart of this Joinder  by telefacsimile or other electronic method of transmission also shall deliver an original executed  counterpart of this Joinder but the failure to deliver an original executed counterpart shall not affect  the validity, enforceability, and binding effect of this Joinder.  6. The Guaranty and Security Agreement, as supplemented hereby, shall remain in  full force and effect.  7. THIS JOINDER SHALL BE SUBJECT TO THE PROVISIONS REGARDING  CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE  SET FORTH IN SECTION 25 OF THE GUARANTY AND SECURITY AGREEMENT, AND  SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS  MUTANDIS.    [Signature pages follow]  

 

  [SIGNATURE PAGE TO JOINDER NO. ___ TO GUARANTY AND SECURITY AGREEMENT]    122895846v5  IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Guaranty and  Security Agreement to be executed and delivered as of the day and year first above written.  NEW GRANTORS: [NAME OF NEW GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________     [NAME OF NEW GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________     AGENT: MGG INVESTMENT GROUP LP, a Delaware  limited partnership,     By:  MGG GP LLC, its general partner      By: ____________________________________   Name: _________________________________    Its Authorized Signatory    

 

      122895846v5  EXHIBIT A  COPYRIGHT SECURITY AGREEMENT    This COPYRIGHT SECURITY AGREEMENT (this "Copyright Security Agreement") is  made this ___ day of ___________, 20__, by and among Grantors listed on the signature pages  hereof (collectively, jointly and severally, "Grantors" and each individually "Grantor"), and MGG  INVESTMENT GROUP LP, a Delaware limited partnership ("MGG"), in its capacity as  administrative agent for each member of the Lender Group (in such capacity, together with its  successors and assigns in such capacity, "Agent").  W I T N E S S E T H:  WHEREAS, pursuant to that certain Credit Agreement dated as of April 26, 2021 (as  amended, restated, supplemented, or otherwise modified from time to time, the "Credit  Agreement"), by and among FARMER BROS. CO., a Delaware corporation ("Parent"), and the  Subsidiaries of Parent from time to time party to the Credit Agreement as borrowers in accordance  with the terms thereof (collectively with Parent, each a "Borrower" and individually and  collectively, jointly and severally, the "Borrowers"), the lenders party thereto as "Lenders" (each  of such Lenders, together with its successors and permitted assigns, is referred to hereinafter as a  "Lender"), the Lender Group has agreed to make certain financial accommodations available to  Borrowers from time to time pursuant to the terms and conditions thereof;  WHEREAS, the members of the Lender Group are willing to make the financial  accommodations to Borrowers as provided for in the Credit Agreement, the other Loan  Documents, but only upon the condition, among others, that Grantors shall have executed and  delivered to Agent, for the benefit of the Lender Group, that certain Guaranty and Security  Agreement, dated as of April 26, 2021 (including all annexes, exhibits or schedules thereto, as  from time to time amended, restated, supplemented or otherwise modified, the "Guaranty and  Security Agreement"); and  WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required to  execute and deliver to Agent, for the benefit of the Lender Group, this Copyright Security  Agreement.  NOW, THEREFORE, in consideration of the premises and mutual covenants herein  contained and for other good and valuable consideration, the receipt and sufficiency of which are  hereby acknowledged, Grantors hereby agree as follows:  1. DEFINED TERMS.  All initially capitalized terms used but not otherwise defined  herein have the meanings given to them in the Guaranty and Security Agreement or, if not defined  therein, in the Credit Agreement, and this Copyright Security Agreement shall be subject to the  rules of construction set forth in Section 1(b) of the Guaranty and Security Agreement, which rules  of construction are incorporated herein by this reference, mutatis mutandis.  2. GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL.  Each  Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit each member  

 

    122895846v5  of the Lender Group, to secure the Secured Obligations, a continuing security interest (referred to  in this Copyright Security Agreement as the "Security Interest") in all of such Grantor's right, title  and interest in and to the following, whether now owned or hereafter acquired or arising  (collectively, the "Copyright Collateral"):  (a) all of such Grantor's Copyrights and Copyright Intellectual Property  Licenses to which it is a party including those referred to on Schedule I;  (b) all renewals or extensions of the foregoing; and  (c) all products and Proceeds of the foregoing, including any claim by such  Grantor against third parties for past, present or future infringement of any Copyright or any  Copyright exclusively licensed under any Intellectual Property License, including the right to  receive damages, or the right to receive license fees, royalties, and other compensation under any  Copyright Intellectual Property License.  3. SECURITY FOR SECURED OBLIGATIONS.  This Copyright Security  Agreement and the Security Interest created hereby secures the payment and performance of the  Secured Obligations, whether now existing or arising hereafter.  Without limiting the generality of  the foregoing, this Copyright Security Agreement secures the payment of all amounts which  constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to  Agent, the other members of the Lender Group or any of them, whether or not they are  unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any  Grantor.  4. SECURITY AGREEMENT.  The Security Interest granted pursuant to this  Copyright Security Agreement is granted in conjunction with the security interests granted to  Agent, for the benefit of the Lender Group, pursuant to the Guaranty and Security Agreement.   Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect  to the Security Interest in the Copyright Collateral made and granted hereby are more fully set  forth in the Guaranty and Security Agreement, the terms and provisions of which are incorporated  by reference herein as if fully set forth herein.  To the extent there is any inconsistency between  this Copyright Security Agreement and the Guaranty and Security Agreement, the Guaranty and  Security Agreement shall control.  5. AUTHORIZATION TO SUPPLEMENT.  Grantors shall give Agent prior written  notice of no less than five Business Days before filing any additional application for registration  of any copyright and prompt notice in writing of any additional copyright registrations granted  therefor after the date hereof. Without limiting Grantors' obligations under this Section, Grantors  hereby authorize Agent unilaterally to modify this Copyright Security Agreement by amending  Schedule I to include any future United States registered copyrights or applications therefor of  each Grantor.  Notwithstanding the foregoing, no failure to so modify this Copyright Security  Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent's  continuing security interest in all Collateral, whether or not listed on Schedule I.  6. COUNTERPARTS.  This Copyright Security Agreement is a Loan Document.   This Copyright Security Agreement may be executed in any number of counterparts and by  

 

    122895846v5  different parties on separate counterparts, each of which, when executed and delivered, shall be  deemed to be an original, and all of which, when taken together, shall constitute but one and the  same Copyright Security Agreement.  Delivery of an executed counterpart of this Copyright  Security Agreement by telefacsimile or other electronic method of transmission shall be equally  as effective as delivery of an original executed counterpart of this Copyright Security Agreement.   Any party delivering an executed counterpart of this Copyright Security Agreement by  telefacsimile or other electronic method of transmission also shall deliver an original executed  counterpart of this Copyright Security Agreement but the failure to deliver an original executed  counterpart shall not affect the validity, enforceability, and binding effect of this Copyright  Security Agreement.  7. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL  REFERENCE PROVISION.  THIS COPYRIGHT SECURITY AGREEMENT SHALL BE  SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY  TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE  GUARANTY AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE  INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.    [signature page follows]  

 

  Signature Page to Copyright Security Agreement    122895846v5  IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security  Agreement to be executed and delivered as of the day and year first above written.    GRANTORS: [NAME OF GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________     [NAME OF GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________      ACCEPTED AND ACKNOWLEDGED BY:  AGENT: MGG INVESTMENT GROUP LP    By:  MGG GP LLC, its general partner      By: ____________________________________   Name: _________________________________    Its Authorized Signatory    

 

      122895846v5  SCHEDULE I  to  COPYRIGHT SECURITY AGREEMENT  Copyright Registrations  Grantor Country Copyright Registration No. Registration Date                                                    Copyright Licenses    

 

        122895846v5  EXHIBIT B  PATENT SECURITY AGREEMENT    This PATENT SECURITY AGREEMENT (this "Patent Security Agreement") is made  this ___ day of ___________, 20__, by and among the Grantors listed on the signature pages  hereof (collectively, jointly and severally, "Grantors" and each individually "Grantor"), and MGG  INVESTMENT GROUP LP, a Delaware limited partnership ("MGG"), in its capacity as  administrative agent for each member of the Lender Group (in such capacity, together with its  successors and assigns in such capacity,  "Agent").  W I T N E S S E T H:  WHEREAS, pursuant to that certain Credit Agreement dated as of April 26, 2021 (as  amended, restated, supplemented, or otherwise modified from time to time, the "Credit  Agreement"), by and among FARMER BROS. CO., a Delaware corporation ("Parent"), and the  Subsidiaries of Parent from time to time party to the Credit Agreement as borrowers in accordance  with the terms thereof (collectively with Parent, each a "Borrower" and individually and  collectively, jointly and severally, the "Borrowers"), the lenders party thereto as "Lenders" (each  of such Lenders, together with its successors and permitted assigns, is referred to hereinafter as a  "Lender"), the Lender Group has agreed to make certain financial accommodations available to  Borrowers from time to time pursuant to the terms and conditions thereof;  WHEREAS, the members of the Lender Group are willing to make the financial  accommodations to Borrowers as provided for in the Credit Agreement and the other Loan  Documents, but only upon the condition, among others, that the Grantors shall have executed and  delivered to Agent, for the benefit of the Lender Group, that certain Guaranty and Security  Agreement, dated as of April 26, 2021 (including all annexes, exhibits or schedules thereto, as  from time to time amended, restated, supplemented or otherwise modified, the "Guaranty and  Security Agreement"); and  WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required to  execute and deliver to Agent, for the benefit of the Lender Group, this Patent Security Agreement.  NOW, THEREFORE, in consideration of the premises and mutual covenants herein  contained and for other good and valuable consideration, the receipt and sufficiency of which are  hereby acknowledged, each Grantor hereby agrees as follows:  1. DEFINED TERMS.  All initially capitalized terms used but not otherwise defined  herein have the meanings given to them in the Guaranty and Security Agreement or, if not defined  therein, in the Credit Agreement, and this Patent Security Agreement shall be subject to the rules  of construction set forth in Section 1(b) of the Guaranty and Security Agreement, which rules of  construction are incorporated herein by this reference, mutatis mutandis.  2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor  hereby unconditionally grants, assigns, and pledges to Agent, for the benefit each member of the  

 

  -2-  122895846v4    122895846v5  Lender Group, to secure the Secured Obligations, a continuing security interest (referred to in this  Patent Security Agreement as the "Security Interest") in all of such Grantor's right, title and interest  in and to the following, whether now owned or hereafter acquired or arising (collectively, the  "Patent Collateral"):  (a) all of its Patents and Patent Intellectual Property Licenses to which it is a  party including those referred to on Schedule I;  (b) all divisionals, continuations, continuations-in-part, reissues,  reexaminations, or extensions of the foregoing; and  (c) all products and Proceeds of the foregoing, including any claim by such  Grantor against third parties for past, present or future infringement of any Patent or any Patent  exclusively licensed under any Intellectual Property License, including the right to receive  damages, or right to receive license fees, royalties, and other compensation under any Patent  Intellectual Property License.  3. SECURITY FOR SECURED OBLIGATIONS.  This Patent Security Agreement  and the Security Interest created hereby secures the payment and performance of the Secured  Obligations, whether now existing or arising hereafter.  Without limiting the generality of the  foregoing, this Patent Security Agreement secures the payment of all amounts which constitute  part of the Secured Obligations and would be owed by Grantors, or any of them, to Agent or the  other members of the Lender Group, whether or not they are unenforceable or not allowable due  to the existence of an Insolvency Proceeding involving any Grantor.  4. SECURITY AGREEMENT.  The Security Interest granted pursuant to this Patent  Security Agreement is granted in conjunction with the security interests granted to Agent, for the  benefit of the Lender Group, pursuant to the Guaranty and Security Agreement.  Each Grantor  hereby acknowledges and affirms that the rights and remedies of Agent with respect to the Security  Interest in the Patent Collateral made and granted hereby are more fully set forth in the Guaranty  and Security Agreement, the terms and provisions of which are incorporated by reference herein  as if fully set forth herein.  To the extent there is any inconsistency between this Patent Security  Agreement and the Guaranty and Security Agreement, the Guaranty and Security Agreement shall  control.  5. AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to any  new patent application or issued patent or become entitled to the benefit of any patent application  or patent for any divisional, continuation, continuation-in-part, reissue, or reexamination of any  existing patent or patent application, the provisions of this Patent Security Agreement shall  automatically apply thereto. Grantors shall give prompt notice in writing to Agent with respect to  any such new patent rights.  Without limiting Grantors' obligations under this Section, Grantors  hereby authorize Agent unilaterally to modify this Patent Security Agreement by amending  Schedule I to include any such new patent rights of each Grantor.  Notwithstanding the foregoing,  no failure to so modify this Patent Security Agreement or amend Schedule I shall in any way affect,  invalidate or detract from Agent's continuing security interest in all Collateral, whether or not listed  on Schedule I.  

 

  -3-  122895846v4    122895846v5  6. COUNTERPARTS.  This Patent Security Agreement is a Loan Document.  This  Patent Security Agreement may be executed in any number of counterparts and by different parties  on separate counterparts, each of which, when executed and delivered, shall be deemed to be an  original, and all of which, when taken together, shall constitute but one and the same Patent  Security Agreement.  Delivery of an executed counterpart of this Patent Security Agreement by  telefacsimile or other electronic method of transmission shall be equally as effective as delivery of  an original executed counterpart of this Patent Security Agreement.  Any party delivering an  executed counterpart of this Patent Security Agreement by telefacsimile or other electronic method  of transmission also shall deliver an original executed counterpart of this Patent Security  Agreement but the failure to deliver an original executed counterpart shall not affect the validity,  enforceability, and binding effect of this Patent Security Agreement.  7. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL  REFERENCE PROVISION.  THIS PATENT SECURITY AGREEMENT SHALL BE SUBJECT  TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL  WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE GUARANTY  AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED  HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.    [signature page follows]  

 

  Signature Page to Patent Security Agreement  122895846v4    122895846v5  IN WITNESS WHEREOF, the parties hereto have caused this Patent Security Agreement  to be executed and delivered as of the day and year first above written.    GRANTORS: [NAME OF GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________     [NAME OF GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________      ACCEPTED AND ACKNOWLEDGED BY:  AGENT: MGG INVESTMENT GROUP LP    By:  MGG GP LLC, its general partner      By: ____________________________________   Name: _________________________________    Its Authorized Signatory    

 

    122895846v4    122895846v5  SCHEDULE I  to  PATENT SECURITY AGREEMENT  Patents  Grantor Country Patent  Application/  Patent No.  Filing Date                                                    Patent Licenses    

 

    122895846v4    122895846v5  EXHIBIT C  PLEDGED INTERESTS ADDENDUM    This Pledged Interests Addendum, dated as of _________ __, 20___ (this "Pledged  Interests Addendum"), is delivered pursuant to Section 7 of the Guaranty and Security Agreement  referred to below.  The undersigned hereby agrees that this Pledged Interests Addendum may be  attached to that certain Guaranty and Security Agreement, dated as of April 26, 2021, (as amended,  restated, supplemented, or otherwise modified from time to time, the "Guaranty and Security  Agreement"), made by the undersigned, together with the other Grantors named therein, to MGG  INVESTMENT GROUP LP, a Delaware limited partnership, as Agent.  Initially capitalized  terms used but not defined herein shall have the meaning ascribed to such terms in the Guaranty  and Security Agreement or, if not defined therein, in the Credit Agreement, and this Pledged  Interests Addendum shall be subject to the rules of construction set forth in Section 1(b) of the  Guaranty and Security Agreement, which rules of construction are incorporated herein by this  reference, mutatis mutandis.  The undersigned hereby agrees that the additional interests listed on  Schedule I shall be and become part of the Pledged Interests pledged by the undersigned to Agent  in the Guaranty and Security Agreement and any pledged company set forth on Schedule I shall  be and become a "Pledged Company" under the Guaranty and Security Agreement, each with the  same force and effect as if originally named therein.  This Pledged Interests Addendum is a Loan Document.  Delivery of an executed  counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of  transmission shall be equally as effective as delivery of an original executed counterpart of this  Pledged Interests Addendum.  If the undersigned delivers an executed counterpart of this Pledged  Interests Addendum by telefacsimile or other electronic method of transmission, the undersigned  shall also deliver an original executed counterpart of this Pledged Interests Addendum but the  failure to deliver an original executed counterpart shall not affect the validity, enforceability, and  binding effect of this Pledged Interests Addendum.  The undersigned hereby certifies that the representations and warranties set forth in Section  6 of the Guaranty and Security Agreement of the undersigned are true and correct as to the Pledged  Interests listed herein on and as of the date hereof.  THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE  PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND  JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE GUARANTY AND  SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY  THIS REFERENCE, MUTATIS MUTANDIS.    [signature page follows]  

 

  -2-  122895846v4    122895846v5  IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum  to be executed and delivered as of the day and year first above written.    ______________________________      By: ____________________________________   Name: _________________________________   Title: __________________________________     

 

    122895846v4    122895846v5  SCHEDULE I  to  PLEDGED INTERESTS ADDENDUM  Pledged Interests    Name of Grantor  Name of Pledged  Company  Number of  Shares/Units  Class of  Interests  Percentage  of Class  Owned  Certificate  Nos.                         

 

  -1-  122895846v4    122895846v5  EXHIBIT D  TRADEMARK SECURITY AGREEMENT    This TRADEMARK SECURITY AGREEMENT (this "Trademark Security Agreement")  is made this ___ day of ___________, 20__, by and among Grantors listed on the signature pages  hereof (collectively, jointly and severally, "Grantors" and each individually "Grantor"), and MGG  INVESTMENT GROUP LP, a Delaware limited partnership ("MGG"), in its capacity as  administrative agent for each member of the Lender Group (in such capacity, together with its  successors and assigns in such capacity, "Agent").  W I T N E S S E T H:  WHEREAS, pursuant to that certain Credit Agreement dated as of April 26, 2021 (as  amended, restated, supplemented, or otherwise modified from time to time, the "Credit  Agreement"), by and among FARMER BROS. CO., a Delaware corporation ("Parent"), and the  Subsidiaries of Parent from time to time party to the Credit Agreement as borrowers in accordance  with the terms thereof (collectively with Parent, each a "Borrower" and individually and  collectively, jointly and severally, the "Borrowers"), the lenders party thereto as "Lenders" (each  of such Lenders, together with its successors and permitted assigns, is referred to hereinafter as a  "Lender"), the Lender Group has agreed to make certain financial accommodations available to  Borrowers from time to time pursuant to the terms and conditions thereof;  WHEREAS, the members of the Lender Group are willing to make the financial  accommodations to Borrowers as provided for in the Credit Agreement and the other Loan  Documents, but only upon the condition, among others, that Grantors shall have executed and  delivered to Agent, for the benefit of Lender Group, that certain Guaranty and Security Agreement,  dated as of April 26, 2021 (including all annexes, exhibits or schedules thereto, as from time to  time amended, restated, supplemented or otherwise modified, the "Guaranty and Security  Agreement"); and  WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required to  execute and deliver to Agent, for the benefit of the Lender Group, this Trademark Security  Agreement.  NOW, THEREFORE, in consideration of the premises and mutual covenants herein  contained and for other good and valuable consideration, the receipt and sufficiency of which are  hereby acknowledged, each Grantor hereby agrees as follows:  1. DEFINED TERMS.  All initially capitalized terms used but not otherwise defined  herein have the meanings given to them in the Guaranty and Security Agreement or, if not defined  therein, in the Credit Agreement, and this Trademark Security Agreement shall be subject to the  rules of construction set forth in Section 1(b) of the Guaranty and Security Agreement, which rules  of construction are incorporated herein by this reference, mutatis mutandis.  

 

  -2-  122895846v4    122895846v5  2. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL.  Each  Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit each member  of the Lender Group, to secure the Secured Obligations, a continuing security interest (referred to  in this Trademark Security Agreement as the "Security Interest") in all of such Grantor's right, title  and interest in and to the following, whether now owned or hereafter acquired or arising  (collectively, the "Trademark Collateral"):  (a) all of its Trademarks and Trademark Intellectual Property Licenses to which  it is a party including those referred to on Schedule I;  (b) all goodwill of the business connected with the use of, and symbolized by,  each Trademark and each Trademark Intellectual Property License; and  (c) all products and Proceeds (as that term is defined in the Code) of the  foregoing, including any claim by such Grantor against third parties for past, present or future  (i) infringement or dilution of any Trademark or any Trademarks exclusively licensed under any  Intellectual Property License, including right to receive any damages, (ii) injury to the goodwill  associated with any Trademark, or (iii) right to receive license fees, royalties, and other  compensation under any Trademark Intellectual Property License.  3. SECURITY FOR SECURED OBLIGATIONS.  This Trademark Security  Agreement and the Security Interest created hereby secures the payment and performance of the  Secured Obligations, whether now existing or arising hereafter.  Without limiting the generality of  the foregoing, this Trademark Security Agreement secures the payment of all amounts which  constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to  Agent or the other members of the Lender Group, whether or not they are unenforceable or not  allowable due to the existence of an Insolvency Proceeding involving any Grantor.  4. SECURITY AGREEMENT.  The Security Interest granted pursuant to this  Trademark Security Agreement is granted in conjunction with the security interests granted to  Agent, for the benefit of the Lender Group, pursuant to the Guaranty and Security Agreement.   Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect  to the Security Interest in the Trademark Collateral made and granted hereby are more fully set  forth in the Guaranty and Security Agreement, the terms and provisions of which are incorporated  by reference herein as if fully set forth herein.  To the extent there is any inconsistency between  this Trademark Security Agreement and the Guaranty and Security Agreement, the Guaranty and  Security Agreement shall control.  5. AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to any  new trademarks, the provisions of this Trademark Security Agreement shall automatically apply  thereto. Grantors shall give prompt notice in writing to Agent with respect to any such new  trademarks or renewal or extension of any trademark registration.   Without limiting Grantors'  obligations under this Section, Grantors hereby authorize Agent unilaterally to modify this  Trademark Security Agreement by amending Schedule I to include any such new trademark rights  of each Grantor.  Notwithstanding the foregoing, no failure to so modify this Trademark Security  

 

  -3-  122895846v4    122895846v5  Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent's  continuing security interest in all Collateral, whether or not listed on Schedule I.  6. COUNTERPARTS.  This Trademark Security Agreement is a Loan Document.   This Trademark Security Agreement may be executed in any number of counterparts and by  different parties on separate counterparts, each of which, when executed and delivered, shall be  deemed to be an original, and all of which, when taken together, shall constitute but one and the  same Trademark Security Agreement.  Delivery of an executed counterpart of this Trademark  Security Agreement by telefacsimile or other electronic method of transmission shall be equally  as effective as delivery of an original executed counterpart of this Trademark Security Agreement.   Any party delivering an executed counterpart of this Trademark Security Agreement by  telefacsimile or other electronic method of transmission also shall deliver an original executed  counterpart of this Trademark Security Agreement but the failure to deliver an original executed  counterpart shall not affect the validity, enforceability, and binding effect of this Trademark  Security Agreement.  7. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL  REFERENCE PROVISION.  THIS TRADEMARK SECURITY AGREEMENT SHALL BE  SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY  TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE  GUARANTY AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE  INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.    [signature page follows]  

 

  Signature Page to Trademark Security Agreement  122895846v4    122895846v5  IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security  Agreement to be executed and delivered as of the day and year first above written.    GRANTORS: [NAME OF GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________     [NAME OF GRANTOR]      By: ____________________________________   Name: _________________________________   Title: __________________________________      ACCEPTED AND ACKNOWLEDGED BY:  AGENT: MGG INVESTMENT GROUP LP    By:  MGG GP LLC, its general partner      By: ____________________________________   Name: _________________________________    Its Authorized Signatory    

 

    122895846v4    122895846v5  SCHEDULE I  to  TRADEMARK SECURITY AGREEMENT    Trademark Registrations/Applications  Grantor Country Mark  Application/  Registration No.  App/Reg Date                                                      Trade Names    Common Law Trademarks    Trademarks Not Currently In Use    Trademark Licensesex105-isdafullyexecuteda

    (Multicurrency—Cross Border)    ISDA®  International Swap Dealers Association. Inc.  MASTER AGREEMENT  dated as of April 26, 2021                 WELLS FARGO BANK, N.A. and FARMER BROS. CO.    have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will  be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents  and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those  Transactions.    Accordingly, the parties agree as follows:—  1. Interpretation  (a) Definitions.  The terms defined in Section 14 and in the Schedule will have the meanings therein  specified for the purpose of this Master Agreement.    (b) Inconsistency.  In the event of any inconsistency between the provisions of the Schedule and the  other provisions of this Master Agreement, the Schedule will prevail.  In the event of any inconsistency  between the provisions of any Confirmation and this Master Agreement (including the Schedule), such  Confirmation will prevail for the purpose of the relevant Transaction.    (c) Single Agreement.  All Transactions are entered into in reliance on the fact that this Master  Agreement and all Confirmations form a single agreement between the parties (collectively referred to as  this “Agreement”), and the parties would not otherwise enter into any Transactions.     2. Obligations  (a) General Conditions.  (i) Each party will make each payment or delivery specified in each Confirmation to be made by  it, subject to the other provisions of this Agreement.    (ii) Payments under this Agreement will be made on the due date for value on that date in the place  of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in  freely transferable funds and in the manner customary for payments in the required currency. Where  settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on  the due date in the manner customary for the relevant obligation unless otherwise specified in the  relevant Confirmation or elsewhere in this Agreement.     (iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent  that no Event of Default or Potential Event of Default with respect to the other party has occurred  and is continuing, (2) the condition precedent that no Early Termination Date in respect of the  relevant Transaction has occurred or been effectively designated and (3) each other applicable  condition precedent specified in this Agreement.  Copyright ©1992 by International Swap Dealers Association, Inc.   

 

                                                   ISDA ® 1992 2  (b) Change of Account.  Either party may change its account for receiving a payment or delivery by  giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment  or delivery to which such change applies unless such other party gives timely notice of a reasonable objection  to such change.    (c) Netting.  If on any date amounts would otherwise be payable:—  (i) in the same currency; and  (ii) in respect of the same Transaction,    by each party to the other, then, on such date, each party's obligation to make payment of any such amount  will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been  payable by one party exceeds the aggregate amount that would otherwise have been payable by the other  party, replaced by an obligation upon the party by whom the larger aggregate amount would have been  payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.    The parties may elect in respect of two or more Transactions that a net amount will be determined in respect  of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of  whether such amounts are payable in respect of the same Transaction.  The election may be made in the  Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions  identified as being subject to the election, together with the starting date (in which case subparagraph (ii)  above will not, or will cease to, apply to such Transactions from such date).  This election may be made  separately for different groups of Transactions and will apply separately to each pairing of Offices  through  which the parties make and receive payments or deliveries.     (d) Deduction or Withholding for Tax.    (i) Gross-Up. All payments under this Agreement will be made without any deduction or  withholding for or on account of any Tax unless such deduction or withholding is required by any  applicable law, as modified by the practice of any relevant governmental revenue authority, then in  effect.  If a party is so required to deduct or withhold, then that party (“X”) will:—  (1) promptly notify the other party (“Y”) of such requirement;  (2) pay to the relevant authorities the full amount required to be deducted or withheld  (including the full amount required to be deducted or withheld from any additional amount  paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such  deduction or withholding is required or receiving notice that such amount has been assessed  against Y;  (3) promptly forward to Y an official receipt (or a certified copy), or other documentation  reasonably acceptable to Y, evidencing such payment to such authorities; and  (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is  otherwise entitled under this Agreement, such additional amount as is necessary to ensure that  the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against  X or Y) will equal the full amount Y would have received had no such deduction or withholding  been required.  However, X will not be required to pay any additional amount to Y to  the  extent that it would not be required to be paid but for:—    (A) the failure by Y to comply with or perform any agreement contained in  Section 4(a)(i), 4(a)(iii) or 4(d); or  (B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and  true unless such failure would not have occurred but for (I) any action taken by a taxing  authority, or brought in a court of competent jurisdiction, on or after the date on which a  Transaction is entered into (regardless of whether such action is taken or brought with  respect to a party to this Agreement) or (II) a Change in Tax Law.  

 

                                                   ISDA ® 1992 3    (ii) Liability.  If:—  (1) X is required by any applicable law, as modified by the practice of any relevant  governmental revenue authority, to make any deduction or withholding in respect of which X  would not be required to pay an additional amount to Y under Section 2(d)(i)(4);   (2) X does not so deduct or withhold; and  (3) a liability resulting from such Tax is assessed directly against X,    then, except to the extent Y has satisfied or then sati sfies the liability resulting from such Tax, Y  will promptly pay to X the amount of such liability (including any related liability for interest, but  including any related liability for penalties only if Y has failed to comply with or perform any  agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).     (e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early  Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any  payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest  (before as well as after judgment) on the overdue amount to the other party on demand in the same currency  as such overdue amount, for the period from (and including) the original due date for payment to (but  excluding) the date of actual payment, at the Default Rate.  Such interest will be calculated on the basis of  daily compounding and the actual number of days elapsed.  If, prior to the occurrence or effective designation  of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any  obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent  provided for in the relevant Confirmation or elsewhere in this Agreement.     3. Representations    Each party represents to the other party (which representations will be deemed to be repeated by each party on  each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all  times until the termination of this Agreement) that:    (a) Basic Representations.  (i)   Status.  It is duly organised and validly existing under the laws of the jurisdiction of its  organisation or incorporation and, if relevant under such laws, in good standing;    (ii)   Powers.  It has the power to execute this Agreement and any other documentation relating to  this Agreement to which it is a party, to deliver this Agreement and any other documentation relating  to this Agreement that it is required by this Agreement to deliver and to perform its obligations  under this Agreement and any obligations it has under any Credit Support Document to which it is  a party and has taken all necessary action to authorise such execution, delivery and performance;     (iii)  No Violation or Conflict.  Such execution, delivery and performance do not violate or conflict  with any law applicable to it, any provision of its constitutional documents, any order or judgment  of any court or other agency of government applicable to it or any of its assets or any contractual  restriction binding on or affecting it or any of its assets;     (iv)  Consents.  All governmental and other consents that are required to have been obtained by it  with respect to this Agreement or any Credit Support Document to which it is a party have been  obtained and are in full force and effect and all conditions of any such consents have been complied  with; and    (v)  Obligations Binding.  Its obligations under this Agreement and any Credit Support Document  to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance  with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency,  moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to  equitable principles of general application (regardless of whether enforcement is sought in a  proceeding in equity or at law)).    

 

                                                   ISDA ® 1992 4  (b) Absence of Certain Events.  No Event of Default or Potential Event of Default or, to its knowledge,  Termination Event with respect to it has occurred and is continuing and no such event or circumstance would  occur as a result of its entering into or performing its obligations under this  Agreement or any Credit Support  Document to which it is a party.    (c) Absence of Litigation.  There is not pending or, to its knowledge, threatened against it or any of its  Affiliates any action, suit or proceeding at law or in equity or before any court,  tribunal, governmental body,  agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of  this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations  under this Agreement or such Credit Support Document.    (d) Accuracy of Specified Information.  All applicable information that is furnished in writing by or on  behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of  the date of the information, true, accurate and complete in every material respect.     (e) Payer Tax Representation.  Each representation specified in the Schedule as being made by it for the  purpose of this Section 3(e) is accurate and true.    (f) Payee Tax Representations.  Each representation specified in the Schedule as being made by it for  the purpose of this Section 3(f) is accurate and true.    4. Agreements  Each party agrees with the other that, so long as either party has or may have any obligation under this  Agreement or under any Credit Support Document to which it is a party:  (a) Furnish Specified Information.  It will deliver to the other party or, in certain cases under  subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:  (i) any forms, documents or certificates relating to taxation specified in the Schedule or any  Confirmation;  (ii) any other documents specified in the Schedule or any Confirmation; and  (iii) upon reasonable demand by such other party, any form or document that may be required or  reasonably requested in writing in order to allow such other party or its Credit Support Provider to make  a payment under this Agreement or any applicable Credit Support Document without any deduction o r  withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so  long as the completion, execution or submission of such form or document would not materially  prejudice the legal or commercial position of the party in receipt of such demand), with any such  form or document to be accurate and completed in a manner reasonably satisfactory to such other  party and to be executed and to be delivered with any reasonably required certification,   in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably  practicable.  (b) Maintain Authorisations.  It will use all reasonable efforts to maintain in full force and effect all  consents of any governmental or other authority that are required to be obtained by it with respect to this  Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any  that may become necessary in the future.  (c) Comply with Laws.  It will comply in all material respects with all applicable laws and orders to  which it may be subject if failure so to comply would materially impair its ability to perform its obligations  under this Agreement or any Credit Support Document to which it is a party.   (d) Tax Agreement.  It will give notice of any failure of a representation made by it under Section 3(f) to  be accurate and true promptly upon learning of such failure.   (e) Payment of Stamp Tax.  Subject to Section 11, it will pay any Stamp Tax levied or imposed upon  it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated,   

 

                                                   ISDA ® 1992 5  organised, managed and controlled, or considered to have its seat, or in which a branch or office through  which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify  the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other  party’s  execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp  Tax Jurisdiction with respect to the other party.    5. Events of Default and Termination Events    (a) Events of Default.  The occurrence at any time with respect to a party or, if applicable, any Credit  Support Provider of such party or any Specified Entity of such party of any of the following events constitutes  an event of default (an “Event of Default”) with respect to such party:—  (i) Failure to Pay or Deliver.  Failure by the party to make, when due, any payment under this  Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not  remedied on or before the third Local Business Day after notice of such failure is given to the party;   (ii) Breach of Agreement.  Failure by the party to comply with or perform any agreement or  obligation (other than an obligation to make any payment under this Agreement or delivery under  Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation  under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance  with this Agreement if such failure is not remedied on or before the thirtieth day after notice of  such failure is given to the party;    (iii) Credit Support Default.    (1) Failure by the party or any Credit Support Provider of such party to comply with or  perform any agreement or obligation to be complied with or performed by it in accordance  with any Credit Support Document if such failure is continuing after any applicable grace  period has elapsed;    (2) the expiration or termination of such Credit Support Document or the failing or ceasing  of such Credit Support Document to be in full force and effect for the purpose of this  Agreement  (in either case other than in accordance with its terms) prior to the satisfaction of all obligations  of such party under each Transaction to which such Credit Support Document relates without  the written consent of the other party; or    (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in  whole or in part, or challenges the validity of, such Credit Support Document;     (iv) Misrepresentation.  A representation (other than a representation under Section 3(e) or (f))  made or repeated or deemed to have been made or repeated by the party or any Credit Support  Provider of such party in this Agreement or any Credit Support Document proves to have been  incorrect or misleading in any material respect when made or repeated or deemed to have been made  or repeated;  (v) Default under Specified Transaction.  The party, any Credit Support Provider of such party or  any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after  giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an  acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults,  after giving effect to any applicable notice requirement or grace period, in making any payment or  delivery due on the last payment, delivery or exchange date of, or any payment on early termination  of, a Specified Transaction (or such default continues for at least three Local Business Days if there  is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or  rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity  appointed or empowered to operate it or act on its behalf);     (vi) Cross Default.  If “Cross Default” is specified in the Schedule as applying to the party, the  occurrence or existence of (1) a default, event of default or other similar condition or event (however   

 

                                                   ISDA ® 1992 6  described) in respect of such party, any Credit Support Provider of such party or any applicable  Specified Entity of such party under one or more agreements or instruments relating to Specified  Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the   applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified  Indebtedness becoming, or becoming capable at such time of being declared, due and payable under  such agreements or instruments, before it would otherwise have been due and payable or (2) a default  by such party, such Credit Support Provider or such Specified Entity (individually or collective ly)  in making one or more payments on the due date thereof in an aggregate amount of not less than the  applicable Threshold Amount under such agreements or instruments (after giving effect to any  applicable notice requirement or grace period);     (vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified  Entity of such party:—    (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes  insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay  its debts as they become due; (3) makes a general assignment, arrangement or composition  with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding  seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or  insolvency law or other similar law affecting creditors' rights, or a petition is presented for its  winding-up or liquidation, and, in the case of any such proceeding or petition instituted or  presented against it, such proceeding or petition (A) results in a judgment of insolvency or  bankruptcy or the entry of an order for relief or the making of an order for its winding-up or  liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days  of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official  management or liquidation (other than pursuant to a consolidation, amalgamation or merger);  (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator,  conservator, receiver, trustee, custodian or other similar official for it or for all or substantially  all its assets; (7) has a secured party take possession of all or substantially all its assets or has  a distress, execution, attachment, sequestration or  other legal process levied, enforced or sued  on or against all or substantially all its assets and such secured party maintains possession, or  any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days  thereafter; (8) causes or is subject to any event with respect to it which, under the applicable  laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1)  to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval  of, or acquiescence in, any of the foregoing acts; or     (viii) Merger Without Assumption.  The party or any Credit Support Provider of such party  consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets  to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:—    (1)  the resulting, surviving or transferee entity fails to assume all the obligations  of such party  or such Credit Support Provider under this Agreement or any Credit Support Document to  which it or its predecessor was a party by operation of law or pursuant to an agreement  reasonably satisfactory to the other party to this Agreement; or    (2)  the benefits of any Credit Support Document fail to extend (without the consent of the  other party) to the performance by such resulting, surviving or transferee entity of its  obligations under this Agreement.    (b) Termination Events.  The occurrence at any time with respect to a party or, if applicable, any Credit  Support Provider of such party or any Specified Entity of such party of any event specified below constitutes  an Illegality if the event is specified in (i) below, a Tax Event if the event i s specified in (ii) below or a Tax  Event upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event  

 

                                                   ISDA ® 1992 7  Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event  is specified pursuant to (v) below:—    (i) Illegality.  Due to the adoption of, or any change in, any applicable law after the date on which  a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation  by  any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after  such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for  such party (which will be the Affected Party):—    (1)  to perform any absolute or contingent obligation to make a payment or delivery or to  receive a payment or delivery in respect of such Transaction or to comply with any other  material provision of this Agreement relating to such Transaction; or     (2)  to perform, or for any Credit Support Provider of such party to perform, any contingent  or other obligation which the party (or such Credit Support Provider) has under any Credit  Support Document relating to such Transaction;    (ii)  Tax Event.  Due to (x) any action taken by a taxing authority, or brought in a court of competent  jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such  action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law,   the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on  the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional  amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest  under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to  be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e),  6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under  Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));     (iii)  Tax Event Upon Merger.  The party (the “Burdened Party”) on the next succeeding Scheduled  Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable  Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or  (2) receive a payment from which an amount has been deducted or withheld for or on account of  any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount  (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party  consolidating or amalgamating with, or merging with or into, or transferring all or substantially all  its assets to, another entity (which will be the Affected Party) where such action does not constitute  an event described in Section 5(a)(viii);    (iv)  Credit Event Upon Merger.  If “Credit Event Upon Merger” is specified in the Schedule as applying  to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X  consolidates or amalgamates with, or merges with or into, or transfers all  or substantially all its assets  to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the  creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such  Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action  (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or     (v)  Additional Termination Event.   If any “Additional Termination Event” is specified in the  Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the  Affected Party or Affected Parties shall be as specified for such Additional Termination Event in  the Schedule or such Confirmation).    (c) Event of Default and Illegality.   If an event or circumstance which would otherwise constitute or  give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not  constitute an Event of Default.      

 

                                                   ISDA ® 1992 8    6. Early Termination    (a) Right to Terminate Following Event of Default.   If at any time an Event of Default with respect  to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non -defaulting  Party”) may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of  Default,  designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of  all outstanding Transactions.  If, however, “Automatic Early Termination” is specified in the Schedule as  applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur  immediately upon the occurrence with respect to such party of an Event of Default specified in  Section 5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately  preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the  occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent  analogous thereto, (8).    (b) Right to Terminate Following Termination Event.    (i)  Notice.  If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of  it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction  and will also give such other information about that Termination Event as the other party may reasonably  require.    (ii)  Transfer to Avoid Termination Event.   If either an Illegality under Section 5(b)(i)(l) or a Tax  Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the  Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to  designate  an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require  such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after  it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of  the Affected Transactions to another of its Offices or Affiliates so that such Termination Event  ceases to exist.    If the Affected Party is not able to make such a transfer it will give notice to the other party to that  effect within such 20 day period, whereupon the other party may effect such a transfer within  30 days after notice is given under Section 6(b)(i).     Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the  prior written consent of the other party, which consent will not be withheld if such other party's  policies in effect at such time would permit it to enter into transactions with the transferee on the  terms proposed.    (iii)  Two Affected Parties.  If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there  are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days  after notice thereof is given under Section 6(b)(i) on action to avoid tha t Termination Event.    (iv)   Right to Terminate. If:—    (1)  a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be,  has not been effected with respect to all Affected Transactions within 30 days after an Affected  Party gives notice under Section 6(b)(i); or    (2)  an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional  Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not  the Affected Party,  either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger,  any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more  than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event  Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not  more than 20 days notice to the other party and provided that the relevant Termination Event is then   

 

                                                   ISDA ® 1992 9  continuing, designate a day not earlier than the day such notice is effective as an Early Termination  Date in respect of all Affected Transactions.  (c) Effect of Designation.    (i)  If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early  Termination Date will occur on the date so designated, whether or not the relevant Event of Default  or Termination Event is then continuing.    (ii)  Upon the occurrence or effective designation of an Early Termination Date, no further  payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will  be required to be made, but without prejudice to the other provisions of this Agreement. The amount  if any, payable in respect of an Early Termination Date shall be determined pursuant to S ection 6(e).    (d) Calculations.    (i)  Statement.  On or as soon as reasonably practicable following the occurrence of an Early  Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e)  and will provide to the other party a statement (1) showing, in reasonable detail, such calculations  (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving  details of the relevant account to which any amount payable to it is to be paid.  In the absence of written  confirmation from the source of a quotation obtained in determining a Market Quotation, the records of  the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such  quotation.    (ii)  Payment Date.  An amount calculated as being due in respect of any Early Termination Date  under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the  case of an Early Termination Date which is designated or occurs as a result of an Event of Default)  and on the day which is two Local Business Days after the day on which notice of the amount payable is  effective (in the case of an Early Termination Date which is designated as a result of a Termination  Event). Such amount will be paid together with (to the extent permitted under applicable law)  interest thereon (before as well as after judgment) in the Termination Currency, from (and including)  the relevant Early Termination Date to (but excluding) the date such amount i s paid, at the  Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual  number of days elapsed.    (e) Payments on Early Termination.  If an Early Termination Date occurs. the following provisions  shall apply based on the parties' election in the Schedule of a payment measure, either “Market Quotation”  or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If the parties fail to  designate a payment measure or payment method in the Schedule,  it will be deemed that “Market Quotation”  or the “Second Method”, as the case may be, shall apply. The amount, if any, payable in respect of an Early  Termination Date and determined pursuant to this Section will be subject to any Set -off.    (i)  Events of Default.  If the Early Termination Date results from an Event of Default:—  (1)  First Method and Market Quotation.  If the First Method and Market Quotation apply, the  Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the  sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the  Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts  owing  to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts  owing to the Defaulting Party.  (2)  First Method and Loss.  If the First Method and Loss apply, the Defaulting Party will pay  to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect  of this Agreement.    (3)  Second Method and Market Quotation.  If the Second Method and Market Quotation apply,  an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the   

 

                                                   ISDA ® 1992 10  Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency  Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination  Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is  a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative  number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting  Party.    (4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable  equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a  positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative  number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting  Party.    (ii) Termination Events.  If the Early Termination Date results from a Termination Event:—    (1)  One Affected Party.  If there is one Affected Party, the amount payable will be determined  in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss  applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting  Party will be deemed to be references to the Affected Party and the party which is not the  Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being  terminated, Loss shall be calculated in respect of all Terminated Transactions.    (2)  Two Affected Parties. If there are two Affected Parties:—    (A)  if Market Quotation applies, each party will determine a Settlement Amount in  respect of the Terminated Transactions, and an amount will be payable equal to (I) the  sum of (a) one-half of the difference between the Settlement Amount of  the party with  the higher Settlement Amount (“X”) and the Settlement Amount of the party with the  lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the  Unpaid Amounts owing  to X less (II) the Termination Currency Equivalent of the Unpaid  Amounts owing to Y; and    (B)  if Loss applies, each party will determine its Loss in respect of this Agreement (or,  if fewer than all the Transactions are being terminated, in respect of all Terminated  Transactions) and an amount will be payable equal to one-half of the difference between  the Loss of the party with the higher Loss (“X”) and the Loss of the party with the lower  Loss (“Y”).    If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will  pay the absolute value of that amount to Y.    (iii)  Adjustment for Bankruptcy.  In circumstances where an Early Termination Date occurs because  “Automatic Early Termination” applies in respect of a party, the amount determined under this  Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect  any payments or deliveries made by one party to the other under this Agreement (and retained by  such other party) during the period from the relevant Early Termination Date to the date for payment  determined under Section 6(d)(ii).    (iv)   Pre-Estimate.  The parties agree that if Market Quotation applies an amount recoverable under  this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for  the loss of bargain and the loss of protection against future risks and except as otherwise provided  in this Agreement neither party will be entitled to  recover any additional damages as a consequence  of such losses.    

 

                                                   ISDA ® 1992 11    7. Transfer    Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement  may be transferred (whether by way of security or otherwise) by either party without the prior written consent  of the other party, except that:—    (a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation  with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without  prejudice to any other right or remedy under this Agreement); and    (b) a party may make such a transfer of all or any part of its interest in any amount payable to it from  a Defaulting Party under Section 6(e).   Any purported transfer that is not in compliance with this Section will be void.   8. Contractual Currency  (a) Payment in the Contractual Currency.  Each payment under this Agreement will be made in the  relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent  permitted by applicable law, any obligation to make payments under this Agreement in the Contractual  Currency will not be discharged or satisfied by any tender in any currency other than the Contractual  Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed,  acting in a reasonable manner and in good faith in converting the currency so tendered into this Contractual  Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement.  If for any reason the amount in the Contractual Currency so received falls short of the amount in the  Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to  the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency  as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency  so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party  receiving the payment will refund promptly the amount of such excess.    (b) Judgments.  To the extent permitted by applicable law, if any judgment or order expressed in a  currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect  of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this  Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described  in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such  party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party  the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid  in such other currency and will refund promptly to the other party any excess of the Contractual Currency  received by such party as a consequence of sums paid in such other currency if such shortfall or such excess  arises or results from any variation between the rate of exchange at which the Contractual Currency is  converted into the currency of the judgment or order for the purposes of such judgment or order and the rate  of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the  currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the  currency of the judgment or order actually received by such party. The term “rate of exchange” includes,  without limitation, any premiums and costs of exchange payable in connection with the purchase of or  conversion into the Contractual Currency.    (c ) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute  separate and independent obligations from the other obligations in this Agreement, will be enforceable as  separate and independent causes of action, will apply notwithstanding any indulgence granted by the party  to which any payment is owed and will not be affected by judgment being obtained or claim or proof being  made for any other sums payable in respect of this Agreement.     (d) Evidence of Loss.  For the purpose of this Section 8, it will be sufficient for a party to demonstrate  that it would have suffered a loss had an actual exchange or purchase been made.    

 

                                                   ISDA ® 1992 12  9. Miscellaneous  (a) Entire Agreement.  This Agreement constitutes the entire agreement and understanding of the parties  with respect to its subject matter and supersedes all oral communication and prior writings wit h respect  thereto.  (b) Amendments.  No amendment, modification or waiver in respect of this Agreement will be effective  unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the  parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.   (c) Survival of Obligations.  Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of  the  parties under this Agreement will survive the termination of any Transacti on.  (d) Remedies Cumulative.  Except as provided in this Agreement, the rights, powers, remedies and  privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies  and privileges provided by law.    (e) Counterparts and Confirmations.  (i)  This Agreement (and each amendment, modification and waiver in respect of it) may be  executed and delivered in counterparts (including by facsimile transmission), each of which will be  deemed an original.  (ii)  The parties intend that they are legally bound by the terms of each Transaction from the moment  they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as  soon as practicable and may be executed and delivered in counterparts (including by facsimile  transmission) or be created by an exchange of telexes or by an exchange of electronic messages on  an electronic messaging system, which in each case will be sufficient for all purposes to evidence  a binding supplement to this Agreement. The parties will specify therein or through another effective  means that any such counterpart, telex or electronic message constitutes a Confirmation.     (f) No Waiver of Rights.  A failure or delay in exercising any right, power or privilege in respect of this  Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power  or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or  privilege or the exercise of any other right, power or privilege.    (g) Headings.  The headings used in this Agreement are for convenience of reference only and are  not to  affect the construction of or to be taken into consideration in interpreting this Agreement.     10.  Offices; Multibranch Parties  (a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction  through an Office other than its head or home office represents to the other party that, notwithstanding the  place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such  party are the same as if it had entered into the Transaction through its head or home office. This representation  will be deemed to be repeated by such party on each date on which a Transaction is entered into.  (b) Neither party may change the Office through which it makes and receives payments or deliveries  for the purpose of a Transaction without the prior written consent of the other party.     (c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make  and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the  Office through which it makes and receives payments or deliveries with respect to a Transaction wi ll be  specified in the relevant Confirmation.  11. Expenses  A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all  reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other par ty by  reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document   

 

                                                   ISDA ® 1992 13  to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including,  but not limited to, costs of collection.    12. Notices  (a) Effectiveness.  Any notice or other communication in respect of this Agreement may be given in any  manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given  by facsimile transmission or electronic messaging system) to the address or number or in accordance with  the electronic messaging system details provided (see the Schedule) and will be deemed effective as  indicated:—  (i)  if in writing and delivered in person or by courier, on the date it is delivered;    (ii)  if sent by telex, on the date the recipient's answerback is received;     (iii)  if sent by facsimile transmission, on the date that transmission is received by a responsible  employee of the recipient in legible form (it being agreed that the burden of proving receipt will be  on the sender and will not be met by a transmission report generated by the sender's facsimile  machine);    (iv)  if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt   requested), on the date that mail is delivered or its delivery is attempted; or     (v)  if sent by electronic messaging system, on the date that electronic message is received,   unless the date of that delivery (or attempted delivery) or that receipt, as app licable, is not a Local Business  Day or that communication is delivered (or attempted) or received, as applicable, after the close of business  on a Local Business Day, in which case that communication shall be deemed given and effective on the first  following day that is a Local Business Day.  (b) Change of Addresses.  Either party may by notice to the other change the address, telex or facsimile  number or electronic messaging system details at which notices or other communications are to be given to  it.    13. Governing Law and Jurisdiction  (a) Governing Law. This Agreement will be governed by and construed in accordance with the law  specified in the Schedule.    (b) Jurisdiction.  With respect to any suit, action or proceedings relating to this Agreement  (“Proceedings”), each party irrevocably:—    (i)  submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by  English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the  United States District Court located in the Borough of Manhattan in New York City, if this  Agreement is expressed to be governed by the laws of the State of New York; and     (ii)  waives any objection which it may have at any time to the laying of venue of any Proceedings  brought in any such court, waives any claim that such Proceedings have been brought in an  inconvenient forum and further waives the right to object, with respect to such Proceedings, that  such court does not have any jurisdiction over such party.     Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction  (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined  in Section 1(3) of the Civil Jurisdiction and Judgments Ac t 1982 or any modification, extension or  re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more  jurisdictions preclude the bringing of Proceedings in any other jurisdiction.     (c) Service of Process.  Each party irrevocably appoints the Process Agent (if any) specified opposite  its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings.  If for any   

 

                                                   ISDA ® 1992 14  reason any party's Process Agent is unable to act as such,  such par ty will promptly notify the other party  and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably  consent to service of process given in the manner provided for notices in Section 12. Nothing in this  Agreement will affect the right of either party to serve process in any other manner permitted by law.   (d) Waiver of Immunities.  Each party irrevocably waives, to the fullest extent permitted by applicable  law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity  on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief  by way of injunction, order for specific performance or for recovery of property,  (iv) attachment of its assets  (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its  revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and  irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any  Proceedings.  14. Definitions  As used in this Agreement:—   “Additional Termination Event” has the meaning specified in Section 5(b).  “Affected Party” has the meaning specified in Section 5(b).  “Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Tax  Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event  and (b) with respect to any other Termination Event, all Transactions.   “Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or  indirectly, by the person, any entity that controls, directly or indirectly, the person or any enti ty directly or  indirectly under common control with the person. For this purpose, “control” of any entity or person means  ownership of a majority of the voting power of the entity or person.   “Applicable Rate” means:—  (a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii))  by a Defaulting Party, the Default Rate;  (b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date  (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;  (c) in respect of all other obligations payable or deliverable (or which would have been but for  Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and  (d) in all other cases, the Termination Rate.    “Burdened Party” has the meaning specified in Section 5(b).    “Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or  amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the  date on which the relevant Transaction is entered into.  “consent” includes a consent, approval, action, authorisation, exemption, notice, filing, registration or  exchange control consent.  “Credit Event Upon Merger” has the meaning specified in Section 5(b).  “Credit Support Document” means any agreement or instrument that is specified as such in this Agreement.   “Credit Support Provider” has the meaning specified in the Schedule.  “Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to  the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.       

 

                                                   ISDA ® 1992 15  “Defaulting Party” has the meaning specified in Section 6(a).    “Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).    “Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.    “Illegality” has the meaning specified in Section 5(b).    “Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment  under this Agreement but for a present or former connection between the jurisdiction of the government or  taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient  (including, without limitation, a connection arising from such recipient or related person being or having been  a citizen or resident of such jurisdiction, or being or having been organised, present or engaged  in a trade or  business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in  such jurisdiction, but excluding a connection arising solely from such recipient or related person having  executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a  Credit Support Document).       “law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of  any relevant governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.    “Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for   business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any  obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified,  as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated  by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account  is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in  relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the  city specified in the address for notice provided by the recipient and, in the case of a notice contemplated  by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to  Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.     “Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and  a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be  its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement  or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of  bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result  of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain  resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery  required to have been made (assuming satisfaction of each applicable condition precedent) on or before the   relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or  6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to under  Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably  practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its  Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant  markets.    “Market Quotation” means, with respect to one or more Terminated Transactions and a party making the  determination, an amount determined on the basis of quotations from Reference Market -makers. Each  quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number)  or by such party (expressed as a positive number) in consideration of an agreement between such party (taking  into account any existing Credit Support Document with respect to the obligations of such party) and the  quoting Reference Market-maker to enter into a transaction (the “Replacement Transaction”) that would  have the effect of preserving for such party the economic equivalent of any paym ent or delivery (whether  the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable  condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group  of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have   

 

                                                   ISDA ® 1992 16  been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or  group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that  would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each  applicable condition precedent) after that Early Termination Date is to be included. The Replacement  Transaction would be subject to such documentation as such party and the Reference Market -maker may, in  good faith, agree. The party making the determination (or its agent) will request each Reference  Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time  (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early  Termination Date.  The day and time as of which those quotations are to be obtained will be selected in good   faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after  consultation with the other. If more than three quotations are provided, the Market Quotation will be the  arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values.  If  exactly three such quotations are provided, the Market Quotation will be the quotation remaining after  disregarding the highest and lowest quotations.  For this purpose, if more than one quotation has the same  highest value or lowest value, then one of such quotations shall be disregarded.  If fewer than three quotations  are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group  of Terminated Transactions cannot be determined.    “Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost)  to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount.     “Non-defaulting Party” has the meaning specified in Section 6(a).    “Office” means a branch or office of a party, which may be such party's head or home office.     “Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both,  would constitute an Event of Default.    “Reference Market-makers” means four leading dealers in the relevant market selected by the party  determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which  satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make  an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same  city.  “Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is  incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through  which the party is acting for purposes of this Agreement is located, (c) in which the party executes this  Agreement and (d) in relation to any payment, from or through which such payment is made.   “Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section 2(a)(i)  with respect to a Transaction.    “Set-off” means set-off, offset, combination of accounts, right of retention or withholding or similar right  or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising  under  this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such  payer.    “Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—  (a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each  Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined;  and  (b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for  each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be  determined or would not (in the reasonable belief of the party making the determination) produce a  commercially reasonable result.  “Specified Entity” has the meaning specified in the Schedule.    

 

                                                   ISDA ® 1992 17  “Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future,  contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.     “Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect  thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support  Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or  any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is  a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or  equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction,  cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap  transaction, currency option or any other similar transaction (including any option with respect to any of these  transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified  Transaction in this Agreement or the relevant confirmation.    “Stamp Tax” means any stamp, registration, documentation or similar tax.    “Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including  interest, penalties and additions thereto) that is imposed by any government or other taxing auth ority in  respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax.     “Tax Event” has the meaning specified in Section 5(b).    “Tax Event Upon Merger” has the meaning specified in Section 5(b).    “Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a  Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions  (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination  Date (or, if “Automatic Early Termination” applies, immediately before that Early Termination Date).     “Termination Currency” has the meaning specified in the Schedule.    “Termination Currency Equivalent” means, in respect of any amount denominated in the Termination  Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other  than the Termination Currency (the “Other Currency”), the amount in the Termination Curren cy determined  by the party making the relevant determination as being required to purchase such amount of such Other  Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case  may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to  the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such  Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign  exchange agent is located) on such date as would be customary for the determination of such a rate for the  purchase of such Other Currency for value on the relevant Early Termination Date or that later date.  The  foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be  selected in good faith by that party and otherwise will be agreed by the parties.     “Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be  applicable, a Credit Event Upon Merger or an Additional Termination Event.     “Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or  evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such  amounts.    “Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a)  in respect of all Terminated Transactions, the amounts that became payable (or that would have become  payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination  Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated  Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for  Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date  and which has not been so settled as at such Early Termination Date, an amount equal to the fair market  

 

Kim V. Farr Authorized Signatory 4/26/2021 

 

4842-4172-0804 v.2          SCHEDULE  to the  1992 ISDA MASTER AGREEMENT  dated as of April 26, 2021 between  WELLS FARGO BANK, N.A. (“Party A”)  and FARMER BROS. CO. (“Party B”)    Part 1.  Termination Provisions    (a) “Specified Entity” means, with respect to Party A and Party B for all purposes of this Agreement, none  specified.    (b) “Specified Transaction” has its meaning as defined in Section 14.    (c)  “Cross Default” applies to both parties, subject to the Cross Default Proviso below.     “Specified Indebtedness” has the meaning set forth in Section 14 (excluding indebtedness in respect of  bank deposits received in the ordinary course of business).    “Threshold Amount” means, (i) with respect to Party A, an amount (including its equivalent in another  currency) equal to 3% of its Shareholders Equity, and (ii) with respect to Party B, an amount (including its  equivalent in another currency) equal to $10,000,000.    “Shareholders Equity” means an amount equal to Party A’s total assets minus its total liabilities, as  reflected on  Party A’s fourth quarter Call Report filed with the FDIC as of Party A’s most recent calendar  year.    Cross Default Proviso.  For purposes of Section 5(a)(vi), (x) the phrase “or becoming capable at such time  of being declared” shall be deleted from clause (1) of such Section 5(a)(vi), and (y) an Event of Default  shall not occur with respect to a party under Section 5(a)(vi) when the failure to pay or deliver, or the  default, event of default or other similar condition or event, as the case may be, arises (i) out of a wire  transfer problem or an operational or administrative error or omission (so long as the required funds or  property required to make that payment or delivery were otherwise available to that party), or (ii) from the  general unavailability of the relevant currency due to exchange controls or other similar governmental  action, but in either case only if the payment or delivery is made within three Local Business Days after the  problem has been corrected, the error or omission has been discovered or the currency becomes generally  available.    (d) “Credit Event Upon Merger” applies to both parties.      (e) “Automatic Early Termination” does not apply to either party.    (f) Payments on Early Termination.  Except as otherwise provided herein, “Market Quotation” and the  “Second Method” apply.    In the case of any Terminated Transaction that is, or is subject to, any unexercised option, the words  “economic equivalent of any payment or delivery” appearing in the definition of “Market Quotation” shall  be construed to take into account the economic equivalent of the option.    (g) “Termination Currency” means U.S. Dollars.  

 

4842-4172-0804 v.2   2    (h) Additional Termination Event applies to Party B. “Additional Termination Event” means, with respect  to Party B (which will be the Affected Party), the occurrence of any of the following events:      (i) The Credit Agreement ceases to be in full force and effect or any commitment by Party A to lend or  otherwise extend credit thereunder shall terminate; Party B ceases to have any obligations to Party A under  the Credit Agreement (or under any promissory note or other evidence of indebtedness issued in connection  therewith), whether as the result of the repayment, discharge or satisfaction of such obligations, the sale or  transfer to a third party of Party A’s rights or interests in the Credit Agreement (or any promissory note or  other evidence of indebtedness issued in connection therewith), or otherwise; or either Party A or Party B  ceases to be a party to the Credit Agreement.    (ii) (A) Party B’s obligations to Party A under this Agreement fail at any time to be secured by the collateral  which secures the loans under the Credit Agreement from time to time (“Collateral”) on a pari passu and  pro rata basis with the principal of such loans (being the most senior class of loans if there is more than one  class); or    (B) any notice or consent is given or any action is taken that (I) would cause the Collateral, or the security  interest in or lien on the Collateral, to be released, realized upon, liquidated, sold, transferred, conveyed or  otherwise disposed of, or (II) would adversely alter or impair any of Party A’s rights, interests or benefits  in or pertaining to the Collateral under the Credit Agreement, any Collateral Document or any other  document executed in connection therewith in any material respect;    in each case, other than in connection with any release of collateral permitted or contemplated under the  Credit Agreement, any assignment by Party A or any refinancing, amendment or restatement of the Credit  Agreement or replacement with a new credit agreement in respect of which Party A or any Affiliate of Party  A is a party, or if Party A otherwise provides its written consent to an event that would otherwise constitute  an Additional Termination Event or to any refinancing, amendment or restatement that effects or would  result in any such event.  For the avoidance of doubt, the failure of any Guarantor (as defined in the Credit  Agreement) to be an “Eligible Contract Participant” (as defined in the Commodity Exchange Act, as  amended, and the applicable rules issued by the Commodity Futures Trading Commission) at the time its  guaranty becomes effective with respect to a Transaction shall not give rise to an Additional Termination  Event under this Part 1(h).     “Credit Agreement” means that certain Credit Agreement to be executed on or about April 26, 2021 by  and among Farmer Bros. Co., as Parent and as a Borrower, the other Borrowers party thereto, Wells Fargo  Bank, National Association, as Agent, the Lenders party thereto (and their successors and assigns), as the  same may be amended, supplemented, restated, renewed, extended, replaced or otherwise modified from  time to time.     “Collateral Document” means the Guaranty and Security Agreement, and Party B hereby irrevocably  agrees and consents to the disclosure by Party A of information relating to this Agreement, any Transactions  or any related credit support arrangements to each other Credit Support Provider, to any party to the Credit  Agreement, any such Collateral Document or any other Credit Support Document, to any secured party or  beneficiary thereof, and (solely to the extent reasonably required in connection with the Transactions or the  transactions contemplated under the Credit Agreement, and subject to obtaining reasonable and customary  confidentiality undertakings in respect thereof from such parties) to their respective agents, advisors and  third party providers, and to communicate with each of them in connection therewith.     (i) Bankruptcy.  Section 5(a)(vii) of this Agreement is hereby amended by (i) replacing each occurrence of  the words “30 days” with the words “60 days”, (ii) deleting subclauses (1), (5) and (6) thereof and (iii)  deleting the words “becomes insolvent or” in subclause (2) thereof.    

 

4842-4172-0804 v.2   3  Part 2.  Tax Representations    (a) Payer Tax Representations.  For the purpose of Section 3(e) of this Agreement, each party makes the  following representation:    It is not required by any applicable law, as modified by the practice of any relevant governmental revenue  authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax  from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by  it to the other party under this Agreement.    In making this representation, a party may rely on (i) the accuracy of any representations made by the other  party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Section  4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and effectiveness of any document provided by the  other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the satisfaction of the  agreement of the other party contained in Section 4(d) of this Agreement, except that it shall not be a breach  of this representation where reliance is placed on clause (ii) above and the other party does not deliver a  form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.    (b) Payee Tax Representations.   For the purpose of Section 3(f) of this Agreement:    (i) Party A makes the following representation(s):    (A) It is a national banking association organized or formed under the laws of the United States and  is a United States person for United States federal income tax purposes.      (B) Party A makes no other Payee Tax Representations.     (ii) Party B makes the following representation(s):     (A) It is organized or formed under the laws of a state within the United States, and it is (or, if Party  B is disregarded for United States federal income tax purposes, its beneficial owner is) a United  States person for United States federal income tax purposes.       (B) Party B makes no other Payee Tax Representations.    Part 3.  Documents    (a) Tax Forms.     (i) Delivery of Tax Forms.  For the purpose of Section 4(a)(i), and without limiting Section 4(a)(iii), each  party agrees to duly complete, execute and deliver to the other party the tax forms specified below with  respect to it (A) before the first Payment Date under this Agreement, (B) promptly upon reasonable demand  by the other party and (C) promptly upon learning that any such form previously provided by the party has  become obsolete or incorrect.        (ii) Tax Forms to be Delivered by Party A:     None specified.     (iii) Tax forms to be Delivered by Party B:     A correct, complete and duly executed U.S. Internal Revenue Service Form W-9 (or successor  thereto) that eliminates U.S. federal backup withholding tax on payments to Party B under this  

 

4842-4172-0804 v.2   4  Agreement.    (b) Delivery of Documents. When it delivers this Agreement, each party shall also deliver its closing  documents to the other party in form and substance reasonably satisfactory to the other party.    Party  Documents to be delivered by such party Delivery due date Covered  by §3(d)   Party B A duly executed incumbency certificate of  Party B certifying the name, true signature  and authority of each person authorized to  execute this Agreement (including  Confirmations).  Upon execution of this Agreement,  and for any Confirmation, promptly  upon request.  Yes  Party B A certified copy of the resolutions or  unanimous consent of Party B’s board of  directors authorizing the execution, delivery  and performance of this Agreement  (including Confirmations)   Upon execution of this Agreement. Yes    (c) Financial Statements.  Party B agrees to furnish Party A hereunder with a copy of the financial statements  required to be delivered under the Credit Agreement as and when they are required to be delivered.     Notwithstanding the foregoing, Party B shall be deemed to have satisfied its obligations to deliver such  financial statements within the relevant time periods if such financial statements are publicly available  during such time periods on Party B’s internet home page  or on the Securities and Exchange Commission’s  EDGAR system, or if substantially similar financial statements are delivered or made available to the  Administrative Agent (as defined in the Credit Agreement) under and in accordance with the Credit  Agreement.    Part 4.  Miscellaneous    (a) Addresses for Notices.      (i) To Party A.  For purposes of Section 12(a) of this Agreement, all notices or communications to Party  A shall, with respect to any particular Transaction, be sent or delivered to the address specified by Party A  in the relevant Confirmation (or if not so specified, as specified by Party A in writing for that Transaction  or type of Transaction, or if not so specified, then to its address specified below), and otherwise with respect  to this Agreement, as specified below, provided that any notice under Section 5 or 6 of this Agreement shall  be sent or delivered to Party A at the address specified below as required by Section 12(a).    Wells Fargo Bank, N.A.  45 Fremont Street  30th Floor   MAC A0194-300   San Francisco, CA  94105  Facsimile No.: (877) 564-8524  Attention: Derivatives Documentation Manager     (ii) To Party B.  For purposes of Section 12(a) of this Agreement, all notices or communications to Party  B shall, with respect to any particular Transaction, be sent or delivered to the address specified by Party B  in the relevant Confirmation (or if not so specified, as specified by Party B in writing for that Transaction  or type of Transaction, or if not so specified, then to its address specified below), and otherwise with respect  to this Agreement, as specified below, provided that any notice under Section 5 or 6 of this Agreement shall  be sent or delivered to Party B at its address specified below as required by Section 12(a).    

 

4842-4172-0804 v.2   5  FARMER BROS. CO.  20333 South Normandie Avenue  Torrance, CA 90502  Attention: Jeffrey Wahba  Phone: 310-787-5241  Email: jwahba@farmerbros.com    (b) Process Agent.   For the purpose of Section 13(c) of this Agreement, neither party appoints a Process Agent  hereunder.    (c) Offices.  Section 10(a) applies.    (d) Multibranch Party.    (i) Party A is a Multibranch Party and may act through its San Francisco or Charlotte Office or its London  Branch, as specified in the relevant Confirmation.  If any Confirmation for a Transaction is sent or executed  by Party A without specifying its Office, it will be presumed that Party A’s Office for that Transaction is  its San Francisco Office, absent notice to the contrary from Party A.    (ii) Party B is not a Multibranch Party.    (e) “Calculation Agent”  means Party A, unless an Event of Default has occurred and is continuing with  respect to Party A, in which case, upon the request of Party B, the Calculation Agent will be a mutually  acceptable Leading Independent Dealer (“Replacement Calculation Agent”). If the parties cannot agree on  a Replacement Calculation Agent, then each party shall, by the close of business on the New York Business  Day following Party B’s initial request, select a Leading Independent Dealer, which in turn shall select a  third Leading Independent Dealer to be the Replacement Calculation Agent.  In the event that only one  party selects a Leading Independent Dealer, such Leading Independent Dealer shall act as the Replacement  Calculation Agent. The reasonable costs of employing the Replacement Calculation Agent shall be borne  equally by both parties.    “Leading Independent Dealer” means a leading swap dealer in the relevant market that is independent of  either party and its Affiliates.     (f) “Credit Support Document” means, with respect to Party B, the Guaranty and Security Agreement as  defined in the Credit Agreement, provided that (i) a release of collateral that is specifically permitted or  contemplated by the Credit Agreement or consented to by Required Lenders or other necessary parties  under the Credit Agreement, (ii) any assignmement by Party A or any refinancing, amendment or  restatement of the Credit Agreement or replacement with a new credit agreement in respect of which Party  A or any affiliate is a party, or (iii) any such event or any refinancing, amendment or restatement that effects  or would result in any such event to which Party A has provided its written consent, shall not constitute an  Event of Default under Section 5(a)(iii)(2) of the Agreement.     (g) “Credit Support Provider” means, with respect to Party B, each Guarantor as defined in the Credit  Agreement; provided that no person providing a guaranty of the performance or obligations of Party B  (each such person, a “Guarantor”) shall be deemed to be a guarantor of Party B’s performance or obligations  under this Agreement or in connection with any Transaction (a “Swap Obligation”) if such Guarantor is not  an “Eligible Contract Participant” as defined in § 1(a)(18) of the Commodity Exchange Act and the  applicable rules issued by the Commodity Futures Trading Commission and/or the Securities and Exchange  Commission (collectively, and as now or hereafter in effect, the “ECP Rules”) at the time such guaranty  became effective with respect to such Swap Obligation and to the extent that the providing of such guaranty  by such Guarantor would violate the ECP Rules..    

 

4842-4172-0804 v.2   6  (h) Governing Law and Jurisdiction.  To the extent not otherwise preempted by U.S. Federal law, this  Agreement and all matters arising out of or relating to this Agreement will be governed by and construed  in accordance with the law of the State of New York (without giving effect to any provision of New York  law that would cause another jurisdiction’s laws to be applied). Section 13(b) of the Agreement is hereby  amended by deleting the word “non-exclusive” appearing in subparagraph (i) thereof and substituting  therefor the word “exclusive”, provided that nothing in Section 13(b) shall prohibit a party from bringing  an action to enforce a money judgment in any other jurisdiction.    (i) WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH  PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY  LEGAL PROCEEDING IN CONNECTION WITH THIS AGREEMENT, ANY CREDIT  SUPPORT DOCUMENT TO WHICH IT IS A PARTY, OR ANY TRANSACTION.      If any existing or future agreement, document, transaction or facility to which either party or an affiliate is  a party provides for arbitration to apply to other agreements, documents, transactions or facilities between  the relevant parties or their affiliates, or to any dispute arising out of or relating to any such other agreement,  document, transaction or facility, then it is hereby agreed that such provision for arbitration shall not apply  to, or to any dispute arising out of or relating to, this Agreement or any Transaction, notwithstanding  anything to the contrary contained in any such existing or future agreement, document, transaction or  facility.    (j) Netting of Payments.   Section 2(c) will apply in respect of all Transactions from the date of this  Agreement, provided that Section 2(c)(ii) of the Agreement will not apply with respect to each of the  following groups of Transactions, in respect of which multiple transaction payment netting will apply for  payments due on that date solely among transactions in each such group.    (i) Rate Swap Transactions, Cross Currency Rate Swap Transactions or Forward Rate Transactions  entered into by the parties;  (ii) Rate Cap Transactions; Rate Floor Transactions and Rate Collar Transactions entered into by the  parties;   (iii) FX Transactions entered into by the parties;  (iv) Currency Option Transactions entered into by the parties;  (v) Commodity Option Transactions entered into by the parties (on a Commodity by Commodity basis  to the extent operationally feasible); and  (vi) Commodity Transactions other than Option Transactions (on a Commodity by Commodity basis  to the extent operationally feasible).    The starting date for the election commences upon entering the first Transaction under the Agreement with  respect to either of the above groups of Transactions.    (k) “Affiliate” has its meaning as defined in Section 14.    (l) Financial Statements.  Section 3(d) is hereby amended by adding in the third line thereof after the word  “respect” and before the period:  “or, in the case of financial statements, a fair presentation of the financial  condition of the relevant party”.    (m) Conditions Precedent.     (i) The condition precedent in Section 2(a)(iii)(1) of this Agreement does not apply to a  payment and delivery owing by a party if the other party shall have satisfied in full all its payment  or delivery obligations under Section 2(a)(i) of this Agreement and shall at the relevant time have  no future payment or delivery obligations, whether absolute or contingent, under Section 2(a)(i) of  this Agreement.  

 

4842-4172-0804 v.2   7     (ii) Section 2 is hereby amended by the addition of the following new subsection 2(a)(iv):    “If an Event of Default has occurred and is continuing in relation to a party (“X”), then the condition  precedent specified in Section 2(a)(iii)(1) will cease to be a condition precedent to each obligation  of the other party (“Y”) under Section 2(a)(i) on the first Local Business Day following the date  falling ninety (90) calendar days after the first date on which Y does not make a payment or delivery  otherwise due from it (after the application of Section 2(c)) in reliance on the condition precedent  in Section 2(a)(iii)(1) following written notice by X of the occurrence of the relevant Event of  Default if Y has not designated an Early Termination Date with respect to such Event of Default.    Notwithstanding the foregoing, in no event shall the obligations of Y under Section 2(a)(i) be  subject to the condition precedent that no Potential Event of Default relating to Section 5(a)(ii) with  respect to X has occurred and is continuing.”    Part 5.  Other Provisions    (a) 2006 ISDA Definitions. This Agreement and each Transaction are subject to the 2006 ISDA Definitions  published by the International Swaps and Derivatives Association, Inc. (the “2006 ISDA Definitions”) and  will be governed by the provisions of the 2006 ISDA Definitions. The provisions of the 2006 ISDA  Definitions are incorporated by reference in, and shall form part of, this Agreement and each Confirmation.  Any reference to a “Swap Transaction” in the 2006 ISDA Definitions is deemed to be a reference to a  “Transaction” for purposes of this Agreement or any Confirmation, and any reference to a “Transaction”  in this Agreement or any Confirmation is deemed to be a reference to a “Swap Transaction” for purposes  of the 2006 ISDA Definitions. The provisions of this Agreement (exclusive of the 2006 ISDA Definitions)  shall prevail in the event of any conflict between such provisions and the 2006 ISDA Definitions.      (b) Scope of Agreement. Any Specified Transaction now existing or hereafter entered into between the parties  (whether or not evidenced by a Confirmation) shall constitute a “Transaction” under this Agreement and  shall be subject to, governed by, and construed in accordance with the terms of this Agreement, unless the  confirming document(s) exchanged or otherwise effective between the parties for that transaction expressly  provide(s) otherwise. For any Transaction entered into but not yet evidenced by a Confirmation, such  Transaction shall be subject to the terms of this Agreement, including Section 2(a)(i) as though the reference  to “Confirmation” therein were to “Transaction”.    (c) Additional Representations.  In addition to the representations under Section 3, the following  representations will apply:    (i) Relationship Between Parties.  Each party will be deemed to represent to the other party on the date  on which it enters into a Relevant Agreement that:    (1) Non-Reliance.  It is acting for its own account, and it has made its own independent decisions to  enter into the Relevant Agreement and as to whether the Relevant Agreement is appropriate or  proper for it based solely upon its own judgment and upon advice from such advisers as it has  deemed necessary.  It is not relying on any communication (written or oral) of the other party or  any of its affiliates (or its respective representatives) as investment advice or as a recommendation  to enter into the Relevant Agreement, it being understood that information and explanations related  to the terms and conditions of any Relevant Agreement will not be considered investment advice  or a recommendation to enter into the Relevant Agreement.  No communication (written or oral)  received from the other party or any of its affiliates (or its respective representatives) will be  deemed to be an assurance or guarantee as to the expected results of the Relevant Agreement.    (2) Assessment and Understanding.  It is capable of assessing the merits of and understanding (on its  own behalf or through independent professional advice), and understands and accepts, the terms,  

 

4842-4172-0804 v.2   8  conditions and risks of the Relevant Agreement based solely upon its own evaluation of the  Relevant Agreement (including the present and future results, consequences, risks, and benefits  thereof, whether financial, accounting, tax, legal, or otherwise) or that of its own advisers.  It is also  capable of assuming, and assumes, the risks of the Relevant Agreement.    It also understands that  the terms under which any Transaction may be terminated early are set forth in this Agreement (or  in the relevant Confirmation), and any early termination of a Transaction other than pursuant to  such terms is subject to mutual agreement of the parties confirmed in writing, the terms of which  may require one party to pay an early termination fee to the other party based upon market  conditions prevailing at the time of early termination.    (3) Status of Parties.  The other party is not acting as a fiduciary for or an adviser to it in respect of the  Relevant Agreement, and any agency, brokerage, advisory or fiduciary services that the other party  (or any of its affiliates) may otherwise provide to the party (or to any of its affiliates) excludes the  Relevant Agreement.    “Relevant Agreement” means this Agreement, each Transaction, each Confirmation, any Credit Support  Document, or any agreement (including any amendment, modification, transfer or early termination)  between the parties relating to this Agreement or to any Transaction, Confirmation or Credit Support  Document.    (ii) Eligibility.  Each party will be deemed to represent to the other party on the date on which it enters into  a Transaction that it is an “eligible contract participant” within the meaning of the Commodity  Exchange Act.  For the avoidance of doubt, notwithstanding anything to the contrary in any guarantee,  credit agreement, loan agreement, security agreement or otherwise, the parties hereby expressly agree  that any guaranty or other credit support provided by any Credit Support Provider of Party B shall  exclude any “Excluded Swap Obligations” as defined in the Credit Agreement.    (iii) ERISA.  Each party represents to the other party at all times hereunder that it is not (i) an employee  benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as  amended (“ERISA”), or a plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986,  as amended (the “Code”), subject to Title I of ERISA or Section 4975 of the Code, or a plan as so  defined but which is not subject to Title I of ERISA or Section 4975 of the Code but is subject to another  law materially similar to Title I of ERISA or Section 4975 of the Code (each of which, an “ERISA  Plan”), (ii) a person or entity acting on behalf of an ERISA Plan, or (iii) a person or entity the assets of  which constitute assets of an ERISA Plan.    (d) Set-Off.  Any amount (“Early Termination Amount”) payable to one party (“Payee”) by the other party  (“Payer”) under Section 6(e), in circumstances where there is a Defaulting Party or one Affected Party in  the case where either a Termination Event under Section 5(b)(iv) or any other Termination Event in which  all outstanding Transactions are Affected Transactions has occurred, will, at the option of the party (“X”)  other than the Defaulting Party or the Affected Party (and without prior notice to the Defaulting Party or  the Affected Party), be reduced by means of set off against any amount(s) (“Other Agreement Amount”)  payable (whether at such time or in the future or upon the occurrence of a contingency) by the Payee to the  Payer or to any Affiliate of the Payer (irrespective of the currency, place of payment or booking office of  the obligation) under any other agreement(s) between the Payee and the Payer (or between the Payee and  any Affiliate of the Payer) or instrument(s) or undertaking(s) issued or executed by the Payee to, or in the  favor of, the Payer or any Affiliate of the Payer (and the Other Agreement Amount will be discharged  promptly and in all respects to the extent it is so set-off).  X will give notice to the other party of any set- off effected under this paragraph.    For this purpose, either the Early Termination Amount or the Other Agreement Amount (or the relevant  portion of such amounts) may be converted by X into the currency in which the other is denominated at the  rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to  

 

4842-4172-0804 v.2   9  purchase the relevant amount of such currency.  The term “rate of exchange” includes, without limitation,  any premiums and costs of exchange payable in connection with the purchase of or conversion into the  relevant currency.    Nothing in this paragraph shall be effective to create a charge or other security interest.  This paragraph  shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right  to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).    (e) Escrow.  If payments denominated in different currencies are due hereunder by both parties on the same  day and a party has reasonable cause to believe that the other party will not meet its payment obligation,  then as reasonable assurance of performance the party may notify the other party that payments on that date  are to be made in escrow. In this case, deposit of the payment due earlier on that date shall be made by 2:00  p.m. (local time at the place for the earlier payment) on that date with any escrow agent selected by the  party giving the notice from among major commercial banks independent of either party (and its affiliates),  accompanied by irrevocable payment instructions (i) to release the deposited payment to the intended  recipient upon receipt by the escrow agent of the required deposit of the corresponding payment from the  other party on the same date accompanied by irrevocable payment instructions to the same effect or (ii) if  the required deposit of the corresponding payment is not made on the same date, to return the payment  deposited to the party that paid in escrow.  The party that elects to have payments made in escrow shall pay  the costs of the escrow arrangements and shall make arrangements to provide that the intended recipient of  the amount due to be deposited first shall be entitled to interest on the deposited payment for each day in  the period of its deposit at the rate offered by the escrow agent for that day for overnight deposits in the  relevant currency in the office where it holds that deposited payment (at 11:00 a.m. local time on that day)  if that payment is not released by 5:00 p.m. local time on the date it is deposited for any reason other than  the intended recipient’s failure to make the escrow deposit it is required to make hereunder in a timely  fashion.    (f) Change of Account. Any account designated by a party pursuant to Section 2(b) shall be in the same legal  and tax jurisdiction as the original account.    (g) Recording of Conversations.  Each party (i) consents to the recording of telephone conversations between  the trading, marketing and other relevant personnel of the parties or any of their Affiliates in connection  with this Agreement or any Transaction or potential Transaction, (ii) agrees to obtain any necessary consent  of, and give any necessary notice of such recording to, its relevant personnel and those of its Affiliates and  (iii) agrees, to the extent permitted by applicable law, that such recordings may be submitted in evidence  in any Proceedings.     (h) Confirmation Procedures.  Each confirming document, acknowledgment or other evidence intended by  the parties to be effective for the purpose of confirming or evidencing a Transaction, whether created by  delivery or exchange of written terms that match, or by making available written terms in a manner that  permits the recipient to review and/or accept the terms, or by delivery to an agent or service provider, or  via electronic messaging system, electronic communication network, or web-based platform that confirms  the matching of such terms, shall constitute a “Confirmation” as referred to in this Agreement, provided  that both parties agree in writing or by their course of conduct to use such method with respect to  Transactions or certain types of Transactions. Confirmations for Transactions are due under Rule 23.501  of the Commodity Futures Trading Commission (“CFTC”) within the applicable time frame specified in  such rule, to the extent applicable.     (i) Foreign Account Tax Compliance Act.  The following provision shall apply in respect of this Agreement  (including the Schedule hereto, any Credit Support Annex and each Transaction that has been or will be  entered into hereunder) and shall survive the termination of any Transaction or Confirmation:     

 

4842-4172-0804 v.2   10  “Withholding Tax imposed on payments to non-U.S. counterparties under the United States Foreign  Account Tax Compliance Act. “Tax” as used in Part 2(a) of this Schedule (Payer Tax Representation) and  “Indemnifiable Tax” as defined in Section 14 of this Agreement shall not include any U.S. federal  withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue  Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof,  any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation,  rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the  implementation of such Sections of the Code (a "FATCA Withholding Tax"). For the avoidance of doubt,  a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law  for the purposes of Section 2(d) of this Agreement.”     (j) ISDA Dodd Frank Protocols.    (i)  ISDA August 2012 DF Protocol.  If both parties have adhered to the ISDA August 2012 DF Protocol  Agreement (“August Protocol Agreement”) and have delivered “Matched Questionnaires” (as defined  therein), then this Agreement shall be deemed to be a “Matched PCA” under the August Protocol  Agreement.    (ii)  ISDA March 2013 DF Protocol.  If both parties hereto have adhered to the ISDA March 2013 DF  Protocol Agreement (“March Protocol Agreement”) and have delivered “Matched Questionnaires” (as  defined therein), then this Agreement shall be deemed to be a “Matched PCA” under the March Protocol  Agreement.    (iii) Certain Swap Trading Relationship Documentation Terms. CFTC Regulation 23.504 requires that  Party A include in “swap trading relationship documentation” certain statements and notice provisions  regarding (i) Party A’s status (and, if applicable, Party B’s status) as an “insured depository institution,”  “financial company” or “covered financial company”, and (ii) the effect of clearing swaps on a derivatives  clearing organization.  Such statements and notice provisions are contained in Sections 2.5, 2.12 and 2.13  of March 2013 DF Schedule 2 of the ISDA March 2013 DF Supplement and in certain statements contained  in Matched Questionnaires delivered between the parties as to whether a party is an insured depository  institution or a financial company, which statements and notice provisions are incorporated herein by  reference.     (k)        ISDA 2018 U.S. Resolution Stay Protocol.   If, prior to the date of this Agreement, both parties hereto  have adhered to the ISDA 2018 U.S. Resolution Stay Protocol, as published by the International Swaps  and Derivatives Association, Inc. as of July 31, 2018 (the “ISDA U.S. QFC Protocol”), the terms of the  ISDA U.S. QFC Protocol shall be incorporated into and form a part of this Agreement.  For purposes of  incorporating the ISDA U.S. QFC Protocol,  each party shall be deemed to have the same status as  “Regulated Entity” and/or Adhering Party (as such terms are defined therein)  applicable to it under the  ISDA U.S. QFC Protocol and this Agreement shall be deemed to be a “Protocol Covered Agreement” (as  defined therein).    (l) Amendment and Restatement.  The Master Agreement (including the Schedule and any amendments  thereto) between the parties dated as of November 19, 2012 (the “Prior Agreement”) is hereby amended  and restated in its entirety in the form of this Agreement (including this Schedule). Any transaction  (however described or defined) existing under the Prior Agreement shall be a Transaction governed by this  Agreement, and any confirmation (however described or defined) under the Prior Agreement for any such  transaction shall be a Confirmation under this Agreement.  This Agreement is not intended to constitute a  novation or termination of the obligations under the Prior Agreement and any security interests created  pursuant to the Prior Agreement are intended to continue and to secure the obligations under this  Agreement.      

 

4842-4172-0804 v.2   11  Part 6.  Additional Terms for FX Transactions and Currency Options    (a) ISDA FX and Currency Option Definitions.  The 1998 FX and Currency Option Definitions published  by the International Swaps and Derivatives Association, Inc., the Emerging Markets Traders Association  and The Foreign Exchange Committee (the “FX Definitions”) are hereby incorporated by reference in, and  shall form part of, this Agreement and each Confirmation relating to any “Currency Option Transaction”  or “FX Transaction” as defined in the FX Definitions, except as otherwise specifically provided herein or  in the relevant Confirmation.    (b) Inconsistency.  In the event of any inconsistency between any of the following documents with respect to  an FX Transaction or Currency Option Transaction, the relevant document first listed shall prevail: (i) a  Confirmation, (ii) Part 6 of this Schedule, (iii) the remainder of this Schedule, (iv) the printed form of ISDA  Master Agreement, (v) the FX Definitions, and (vi) the 2006 ISDA Definitions.    (c) Notice of Exercise.  Section 3.5(g) of the FX Definitions is hereby amended by deleting “facsimile,” in the  third line thereof.    (d) Netting of FX and Currency Option Payments.  If the parties mutually agree that Section 2(c)(ii) of this  Agreement will not apply with respect to FX Transactions and/or Currency Option Transactions, then  payment netting will apply separately for each of the following groups of Transactions: (i) FX Transactions  (including FX Transactions resulting from the exercise of Currency Option Transactions), (ii) Currency  Option Transactions, and (iii) Premiums payable under Currency Option Transactions (in each case as such  terms are defined in the FX Definitions), unless otherwise specified in the relevant Confirmation.    [SIGNATURE PAGE FOLLOWS THIS PAGE]     

 

Kim V. Farr Authorized Signatory

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