Document:

exv10w2

 

Exhibit 10.2

EXECUTION COPY

 

GUARANTEE AGREEMENT

dated as of

May 2, 2006

among

LONE STAR MERGER CORP. (to be merged with,

and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into,

Activant Solutions Inc.),

LONE STAR HOLDING CORP.,

CERTAIN OTHER SUBSIDIARIES OF LONE STAR MERGER CORP.

IDENTIFIED HEREIN

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I Definitions	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Section 1.01. Credit Agreement
	 	 	2	 
	 

	 	Section 1.02. Other Defined Terms
	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE II Guarantee	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Section 2.01. Guarantee
	 	 	3	 
	 

	 	Section 2.02. Guarantee of Payment
	 	 	4	 
	 

	 	Section 2.03. No Limitations
	 	 	4	 
	 

	 	Section 2.04. Reinstatement
	 	 	5	 
	 

	 	Section 2.05. Agreement To Pay; Subrogation
	 	 	5	 
	 

	 	Section 2.06. Information
	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE III Indemnity, Subrogation and Subordination	 	 	5	 
	 
	 	 	 	 	 	 
	 

	 	Section 3.01. Indemnity and Subrogation
	 	 	5	 
	 

	 	Section 3.02. Contribution and Subrogation
	 	 	6	 
	 

	 	Section 3.03. Subrogation
	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE IV Miscellaneous	 	 	7	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.01. Notices
	 	 	7	 
	 

	 	Section 4.02. Waivers; Amendment
	 	 	7	 
	 

	 	Section 4.03. Administrative Agent’s Fees and Expenses; Indemnification
	 	 	8	 
	 

	 	Section 4.04. Successors and Assigns
	 	 	8	 
	 

	 	Section 4.05. Survival of Agreement
	 	 	8	 
	 

	 	Section 4.06. Counterparts; Effectiveness; Several Agreement
	 	 	9	 
	 

	 	Section 4.07. Severability
	 	 	9	 
	 

	 	Section 4.08. Right of Set-Off
	 	 	9	 
	 

	 	Section 4.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	10	 
	 

	 	Section 4.10. WAIVER OF JURY TRIAL
	 	 	10	 
	 

	 	Section 4.11. Headings
	 	 	11	 
	 

	 	Section 4.12. Obligations Absolute
	 	 	11	 
	 

	 	Section 4.13. Termination or Release
	 	 	11	 
	 

	 	Section 4.14. Additional Restricted Subsidiaries
	 	 	12	 
	 

	 	Section 4.15. Effectiveness of the Merger and the Secondary Merger
	 	 	12	 
	 

	 	Section 4.16. Recourse
	 	 	12	 
	 

	 	Section 4.17. Limitation on Guaranteed Obligations
	 	 	12	 

	 	 	 
	SCHEDULES
	 	 
	 
	 	 
	Schedule I

	 	Subsidiary Parties
	 
	 	 
	EXHIBITS
	 	 
	 
	 	 
	Exhibit I

	 	Form of Guarantee Agreement Supplement

(i)

 

 

     GUARANTEE AGREEMENT, dated as of May 2, 2006, among LONE STAR MERGER CORP., a Delaware
corporation (to be merged with,
and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into,
Activant Solutions Inc., “Merger Sub”), LONE STAR HOLDING CORP., a Delaware corporation
(“Holdings”), the Subsidiaries of the Borrower identified herein and DEUTSCHE BANK TRUST
COMPANY AMERICAS, as Administrative Agent.

     Reference is made to the Credit Agreement, dated as of May 2, 2006 (as amended, restated,
supplemented and/or otherwise modified from time to time, the “Credit Agreement”), among
the Borrower, Holdings, Deutsche Bank Trust Company Americas, as Administrative Agent, Swing Line
Lender and an L/C Issuer, each Lender from time to time party thereto, JPMorgan Chase Bank, N.A.,
as Syndication Agent, and Lehman Commercial Paper Inc. as Documentation Agent.

     The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions
set forth in the Credit Agreement, the Hedge Banks have agreed to enter into and/or maintain one or
more Secured Hedge Agreements on the terms and conditions set forth therein and the Cash Management
Banks have agreed to provide and/or maintain Cash Management Services on the terms and conditions
agreed upon by the Borrower or the respective Restricted Subsidiary and such Cash Management Bank.
The obligations of the Lenders to extend such credit, the obligation of the Hedge Banks to enter
into and/or maintain such Secured Hedge Agreements and the obligation of the Cash Management Banks
to provide and/or maintain Cash Management Services are, in each case, conditioned upon, among
other things, the execution and delivery of this Agreement by each Guarantor. Holdings, the
Borrower and the Subsidiary Parties are affiliates of one another, will derive substantial benefits
from (i) the extensions of credit to the Borrower pursuant to the Credit Agreement, (ii) the
entering into and/or maintaining by the Hedge Banks of Secured Hedge Agreements with the Borrower
and/or one or more of its Restricted Subsidiaries and (iii) the providing and/or maintaining of
Cash Management Services by the Cash Management Banks to the Borrower and/or one or more of its
Restricted Subsidiaries, and are willing to execute and deliver this Agreement in order to induce
the Lenders to extend such credit, the Hedge Banks to enter into and/or maintain such Secured Hedge
Agreements and the Cash Management Banks to provide and/or maintain such Cash Management Services.

     Accordingly, in consideration of the foregoing and other benefits accruing to each Guarantor,
the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the
following representations and warranties to the Administrative Agent for the benefit of the Secured
Parties and hereby covenants and agrees with each other Guarantor and the Administrative Agent for
the benefit of the Secured Parties as follows:

ARTICLE I

Definitions

     Section 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings
specified in the Credit Agreement.

 

 

     (b) The rules of construction specified in Article I of the Credit Agreement also apply to
this Agreement.

     Section 1.02. Other Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

     “Agreement” means this Guarantee Agreement.

     “Credit Agreement” has the meaning assigned to such term in the preliminary statement
of this Agreement.

     “Guarantee Agreement Supplement” means an instrument substantially in the form of
Exhibit I hereto.

     “Guaranteed Obligations” mean the “Obligations” as defined in the Credit Agreement.

     “Guaranteed Party” means Holdings, the Borrower, each Subsidiary Guarantor and each
Restricted Subsidiary of the Borrower party to any Secured Hedge Agreement.

     “Guarantor” means each of Holdings, the Borrower and each Subsidiary Party.

     “Secured Credit Document” shall mean each Loan Document, each Secured Hedge Agreement
and any agreement evidencing any Cash Management Obligation.

     “Secured Parties” has the meaning provided in the Security Agreement.

     “Subsidiary Parties” means (a) the Restricted Subsidiaries identified on Schedule I
and (b) each other Restricted Subsidiary that becomes a party to this Agreement as a Subsidiary
Party after the Closing Date.

ARTICLE II

Guarantee

     Section 2.01. Guarantee. Each Guarantor irrevocably, absolutely and unconditionally
guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as
a surety, the due and punctual payment and performance of the Guaranteed Obligations, in each case,
whether such Guaranteed Obligations are now existing or hereafter incurred under, arising out of or
in connection with any Secured Credit Document, and whether at maturity, by acceleration or
otherwise. Each of the Guarantors further agrees that the Guaranteed Obligations may be extended,
increased or renewed, in whole or in part, without notice to, or further assent from, such
Guarantor and that
such Guarantor will remain bound upon its guarantee notwithstanding any extension, increase or
renewal of any Guaranteed Obligation. Each of the Guarantors waives presentment to, demand of
payment from, and protest to, the applicable Guaranteed Party or any other Loan Party of any of the
Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest
for nonpayment.

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     Section 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Administrative Agent or any other Secured Party
to any security held for the payment of the Guaranteed Obligations, or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other Secured Party in
favor of any Guaranteed Party or any other Person.

     Section 2.03. No Limitations. (a) Except for termination of a Guarantor’s obligations
hereunder as expressly provided in Section 4.13, the obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations, or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or
impaired or otherwise affected by (i) the failure of the Administrative Agent or any other Secured
Party to assert any claim or demand or to enforce any right or remedy under the provisions of any
Secured Credit Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any Secured Credit Document or any other
agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of
any security held by the Collateral Agent (as defined in the Security Agreement) or any other
Secured Party for the Guaranteed Obligations; (iv) any default, failure or delay, willful or
otherwise, in the performance of the Guaranteed Obligations; or (v) any other act or omission that
may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as
a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in
full in cash of all the Guaranteed Obligations, or the termination of this Agreement pursuant to
Section 4.13). Each Guarantor expressly authorizes the applicable Secured Parties to take and hold
security for the payment and performance of the Guaranteed Obligations, to exchange, waive or
release any or all such security (with or without consideration), to enforce or apply such security
and direct the order and manner of any sale thereof in their sole discretion or to release or
substitute any one or more other guarantors or obligors upon or in respect of the Guaranteed
Obligations all without affecting the obligations of any Guarantor hereunder.

     (b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based
on or arising out of any defense of the Borrower or any other Guaranteed Party or the
unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower or any other Guaranteed Party, other than the
indefeasible payment in full in cash of all the Guaranteed Obligations (or the
termination of this Agreement pursuant to Section 4.13). The Administrative Agent and the
other Secured Parties may in accordance with the terms of the Collateral Documents, at their
election, foreclose on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or
adjust any part of the Guaranteed Obligations make any other accommodation with the Borrower or any
other Guaranteed Party or exercise any other right or remedy available to them against Guaranteed
Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to
the extent the Guaranteed Obligations have been fully and indefeasibly paid in full in cash (or the
termination of this Agreement pursuant to Section 4.13).

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To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any
other Guaranteed Party, as the case may be, or any security.

     Section 2.04. Reinstatement. Notwithstanding anything to contrary contained in this
Agreement, each of the Guarantors agrees that (i) its guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any
Guaranteed Obligation is rescinded or must otherwise be restored by the Administrative Agent or any
other Secured Party upon the bankruptcy or reorganization of the Borrower or any other Guaranteed
Party or otherwise and (ii) the provisions of this Section 2.04 shall survive the termination of
this Agreement.

     Section 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in
limitation of any other right that the Administrative Agent or any other Secured Party has at law
or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other
Guaranteed Party to pay any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises
to and will forthwith pay, or cause to be paid, to the Administrative Agent for distribution to the
applicable Secured Parties in cash the amount of such unpaid Guaranteed Obligation. Upon payment
by any Guarantor of any sums to the Administrative Agent as provided above, all rights of such
Guarantor against the Borrower or any other Guaranteed Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article III.

     Section 2.06. Information. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower’s and each other Guaranteed Party’s financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Administrative Agent or the other Secured Parties will have any duty to
advise such Guarantor of information known to it or any of them regarding such circumstances or
risks.

ARTICLE III

Indemnity, Subrogation and Subordination

     Section 3.01. Indemnity and Subrogation. In addition to all such rights of indemnity and
subrogation as the Guarantors may have under applicable law (but subject to Section 3.03), each
Guaranteed Party agrees that in the event a payment shall be made by any Guarantor under this
Agreement on account of any Obligation owed directly by such Guaranteed Party (i.e., other
than any obligation arising under this Agreement), such Guaranteed Party shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights
of the Person to whom such payment shall have been made to the extent of such payment.

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     Section 3.02. Contribution and Subrogation. At any time a payment by any Subsidiary Party
in respect of the Guaranteed Obligations is made under this Agreement that shall not have been
fully indemnified as provided in Section 3.01, the right of contribution of each Subsidiary Party
against each other Subsidiary Party shall be determined as provided in the immediately succeeding
sentence, with the right of contribution of each Subsidiary Party to be revised and restated as of
each date on which an unreimbursed payment (a “Relevant Payment”) is made on the Guaranteed
Obligations under this Agreement. At any time that a Relevant Payment is made by a Subsidiary
Party that results in the aggregate payments made by such Subsidiary Party in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Subsidiary
Party’s Contribution Percentage (as defined below) of the aggregate payments made by all Subsidiary
Parties in respect of the Guaranteed Obligations to and including the date of the Relevant Payment
(such excess, the “Aggregate Excess Amount”), each such Subsidiary Party shall have a right
of contribution against each other Subsidiary Party who has made payments in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount
less than such other Subsidiary Party’s Contribution Percentage of the aggregate payments made to
and including the date of the Relevant Payment by all Subsidiary Parties in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate Deficit
Amount”) in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess
Amount of such Subsidiary Party and the denominator of which is the Aggregate Excess Amount of all
Subsidiary Parties multiplied by (y) the Aggregate Deficit Amount of such other Subsidiary Party.
A Subsidiary Party’s right of contribution pursuant to the preceding sentences shall arise at the
time of each computation, subject to adjustment to the time of each computation; provided
that all contribution rights of such Subsidiary Party shall be subject to Section 3.03. As used in
this Section 3.02: (i) each Subsidiary Party’s “Contribution Percentage” shall mean the
percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Subsidiary
Party by (y) the aggregate Adjusted Net Worth of all Subsidiary Parties; (ii) the “Adjusted Net
Worth” of each Subsidiary Party shall mean the greater of (x) the Net Worth (as defined below)
of such Subsidiary Party and (y) zero; and (iii) the “Net Worth” of each Subsidiary Party
shall mean the amount by which the fair saleable value of such Subsidiary Party’s assets on the
date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed
Obligations arising under this Agreement or any guaranteed obligations arising under any guaranty
of the Senior Subordinated Notes or any Permitted Refinancing thereof) on such date.
Notwithstanding anything to the contrary contained above, any Subsidiary Party that is released
from this Agreement pursuant to Section 4.13 hereof shall thereafter have no contribution
obligations, or rights, pursuant to this Section 3.02, and at the time of any such release, if the
released Subsidiary Party had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall
be deemed reduced to $0, and the contribution rights and obligations of the remaining Subsidiary
Parties shall be recalculated on the respective date of release (as otherwise provided above) based
on the payments made hereunder by the remaining Subsidiary Parties. Each of the Subsidiary Parties
recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an
asset in favor of the party entitled to such contribution. In this connection, each Subsidiary
Party has the right to waive its contribution right against any other Subsidiary Party to the
extent that after giving effect to such waiver such Subsidiary Party would remain solvent, in the
determination of the Required Lenders.

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     Section 3.03. Subordination. Notwithstanding any provision of this Agreement to the
contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Guaranteed Obligations (or the
termination of this Agreement pursuant to Section 4.13); provided, that if any amount shall be paid
to such Guarantor on account of such subrogation rights at any time prior to the irrevocable
payment in full in cash of all the Guaranteed Obligations (or the termination of this Agreement
pursuant to Section 4.13), such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be paid to the Administrative Agent to be credited and applied against
the Guaranteed Obligations, whether matured or unmatured, in accordance with Section 4.02(a) of the
Security Agreement or Section 8.04 of the Credit Agreement, as applicable. No failure on the part
of the Borrower or any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any
other payments required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each
Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.

ARTICLE IV

Miscellaneous

     Section 4.01. Notices. All communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 10.02 of the Credit
Agreement. All communications and notices hereunder to any Subsidiary Party shall be given to it
in care of the Borrower as provided in Section 10.02 of the Credit Agreement.

     Section 4.02. Waivers; Amendment. (a) No failure or delay by the Administrative Agent, any L/C Issuer or any Lender in exercising
any right or power hereunder or under any other Secured Credit Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Secured
Parties hereunder and under the other Secured Credit Documents are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section 4.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or any L/C Issuer may have had notice or knowledge of such Default at the time.
No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or
further notice or demand in similar or other circumstances.

     (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the
Loan Party or Loan Parties with respect to which such waiver,

-6-

 

amendment or modification is to
apply, subject to any consent required in accordance with Section 10.01 of the Credit Agreement.

     Section 4.03. Administrative Agent’s Fees and Expenses; Indemnification. (a) The parties
hereto agree that the Administrative Agent shall be entitled to reimbursement of its expenses
incurred hereunder as provided in Section 10.04 of the Credit Agreement.

     (b) Without limitation of its indemnification obligations under the other Secured Credit
Documents, each Guarantor jointly and severally agrees to indemnify the Administrative Agent and
the other Indemnitees (as defined in Section 10.05 of the Credit Agreement) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses,
including all Attorney Costs of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of, the execution, delivery,
performance or enforcement of this Agreement or any claim, litigation, investigation or proceeding
relating to any of the foregoing agreements or instruments contemplated hereby, whether or not any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses have resulted from the gross negligence or willful misconduct of such Indemnitee or of any
Affiliate, director, officer, employee, counsel, agent, trustee, investment advisor or
attorney-in-fact of such Indemnitee.

     (c) Any such amounts payable as provided hereunder shall be additional Guaranteed Obligations
secured by the Collateral Documents. The provisions of this Section 4.03 shall remain operative
and in full force and effect regardless of the termination of this Agreement or any other Secured
Credit Document, the consummation of the transactions contemplated hereby, the repayment of any of
the Guaranteed Obligations, the invalidity or unenforceability of any term or provision of this
Agreement or any other Secured Credit
Document, or any investigation made by or on behalf of the Administrative Agent or any other
Secured Party. All amounts due under this Section 4.03 shall be payable within 10 days of written
demand therefor.

     Section 4.04. Successors and Assigns. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any Guarantor or the
Administrative Agent that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

     Section 4.05. Survival of Agreement. All covenants, agreements, representations and
warranties made by the Guaranteed Parties in the Secured Credit Documents and in the certificates
or other instruments prepared or delivered in connection with or pursuant to this Agreement or any
other Secured Credit Document shall be considered to have been relied upon by the relevant Secured
Parties, and shall survive the execution and delivery of the relevant Secured Credit Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made
by any Secured Party or on its behalf and notwithstanding that the Administrative Agent, any L/C
Issuer, any Lender or any other Secured Party may have had notice or knowledge of any Default or
default under any other Secured Credit Document or any incorrect representation or warranty at the
time any credit is extended under any Secured

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Credit Document, 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 any Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

     Section 4.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be
executed in counterparts, each of which shall constitute an original but all of which when taken
together shall constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement. This Agreement shall become effective as to any Loan Party when a
counterpart hereof executed on behalf of such Loan Party shall have been delivered to the
Administrative Agent and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Loan Party and the Administrative
Agent and their respective permitted successors and assigns, and shall inure to the benefit of such
Loan Party, the Administrative Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein (and any such assignment or transfer shall be void)
except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall
be construed as a separate agreement with respect to each Loan Party and may be amended, restated,
modified, supplemented, waived or released with respect to any Loan Party without the approval of
any other Loan Party and without affecting the obligations of any other Loan Party hereunder.

     Section 4.07. Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

     Section 4.08. Right of Set-Off. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of Default, each
Lender and its Affiliates is authorized at any time and from time to time, without prior notice to
the Borrower or any other Guaranteed Party, any such notice being waived by the Borrower or any
other Guaranteed Party to the fullest extent permitted by applicable Law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender and its Affiliates to or for the credit or
the account of the respective Loan Parties against any and all obligations owing to such Lender and
its Affiliates hereunder, now or hereafter existing, irrespective of whether or not such Lender or
Affiliate shall have made demand under this Agreement and although such obligations may be
contingent or unmatured or denominated in a currency different from that of the applicable deposit
or Indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set off and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such

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setoff and application. The rights of each Lender
under this Section 4.08 are in addition to other rights and remedies (including other rights of
setoff) that such Lender may have.

     Section 4.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.

     (b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York City and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in
this Agreement or any other Loan Document shall affect any right that the Administrative Agent, any
L/C Issuer, any Lender or any other Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or any other Loan Document
against any Guarantor, or its properties in the courts of any jurisdiction.

     (c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section 4.09. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.

     (d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 4.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.

     Section 4.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY,

-9-

 

AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 4.10.

     Section 4.11. Headings. Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this Agreement.

     Section 4.12. Obligations Absolute. All rights of the Administrative Agent hereunder and
all obligations of each Guarantor hereunder shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any
Secured Hedge Agreement, any agreement with respect to any of the Guaranteed Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to any departure from the Credit Agreement, any other
Loan Document, any other Secured Hedge Agreement or any other agreement or instrument, (c) any
release or amendment or waiver of or consent under or departure from any
guarantee guaranteeing all or any portion of the Guaranteed Obligations or (d) any other
circumstance that might otherwise constitute a defense available to, or a discharge of, any
Guarantor in respect of the Guaranteed Obligations or this Agreement.

     Section 4.13. Termination or Release. (a) This Agreement and the Guarantees made herein
shall terminate with respect to all Guaranteed Obligations when all the outstanding Guaranteed
Obligations have been indefeasibly paid in full and the Lenders have no further commitment to lend
under the Credit Agreement, the L/C Obligations have been reduced to zero and the L/C Issuers have
no further obligations to issue Letters of Credit under the Credit Agreement.

     (b) A Subsidiary Party shall automatically be released from its obligations hereunder upon the
consummation of any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Party ceases to be a Subsidiary of the Borrower; provided that the Required
Lenders shall have consented to such transaction (to the extent required by the Credit Agreement)
and the terms of such consent did not provide otherwise.

     (c) In connection with any termination or release pursuant to paragraph (a) or (b), the
Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor’s expense, all
documents that such Guarantor shall reasonably request to evidence such termination or release.
Any execution and delivery of documents pursuant to this Section 4.13 shall be without recourse to
or warranty by the Administrative Agent.

     (d) At any time that the Borrower desires that the Administrative Agent take any of the
actions described in immediately preceding clause (c), it shall, upon request of the Administrative
Agent, deliver to the Administrative Agent an officer’s certificate certifying that the release of
the respective Subsidiary Party is permitted pursuant to paragraph (a) or (b). The Administrative
Agent shall have no liability whatsoever to any Secured Party as the result of any release of any
Subsidiary Party by it as permitted (or which the Administrative Agent in good faith believes to be
permitted) by this Section 4.13.

-10-

 

     (e) Notwithstanding anything to contrary set forth in this Agreement, each Cash Management
Bank and each Hedge Bank by the acceptance of the benefits under this Agreement hereby acknowledge
and agree that (i) the guarantees made under this Agreement of the Guaranteed Obligations of the
Borrower or any Subsidiary under any Secured Hedge Agreement and the Cash Management Obligations
shall be automatically released upon termination of the Aggregate Commitments and payment in full
of all other Guaranteed Obligations, in each case, unless such Guaranteed Obligations under the
Secured Hedge Agreement or the Cash Management Obligations are due and payable at such time (it
being understood and agreed that this Agreement and the guarantees made herein shall survive solely
as to such due and payable Guaranteed Obligations and until such time as such due and payable
Guaranteed Obligations have been paid in full) and (ii) any release of a Guarantor effected in the
manner permitted by this Agreement shall not require the consent of any Hedge Bank or Cash
Management Bank.

     Section 4.14. Additional Restricted Subsidiaries. Pursuant to (and to the extent required by) Section 6.11 of the Credit Agreement, certain
Restricted Subsidiaries of the Loan Parties that were not in existence or not Restricted
Subsidiaries on the date of the Credit Agreement are required to enter in this Agreement as
Subsidiary Parties upon becoming a Restricted Subsidiary. Upon execution and delivery by the
Administrative Agent and a Restricted Subsidiary of a Guarantee Agreement Supplement, such
Restricted Subsidiary shall become a Subsidiary Party hereunder with the same force and effect as
if originally named as a Subsidiary Party herein. The execution and delivery of any such
instrument shall not require the consent of any other Loan Party hereunder. The rights and
obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the
addition of any new Loan Party as a party to this Agreement.

     Section 4.15. Effectiveness of the Merger and the Secondary Merger. (a) Target and its
Subsidiaries shall have no rights or obligations hereunder until the consummation of the Merger and
any representations and warranties of Target or any of its Subsidiaries hereunder shall not become
effective until such time. Upon consummation of the Merger, Target shall succeed to all the rights
and obligations of Merger Sub under this Agreement and all rights, obligations, representations and
warranties of Target and its Subsidiaries shall become effective as of the date hereof, without any
further action by any Person.

(b) Upon consummation of the Secondary Merger, Opco shall succeed to all the rights and obligations
of Target under this Agreement and all rights, obligations, representations and warranties of Opco
and its Subsidiaries shall become effective as of the date hereof, without any further action by
any Person.

     Section 4.16. Recourse. This Agreement is made with full recourse to each Guarantor and
pursuant to and upon all the warranties, representations, covenants and agreements on the part of
such Guarantor contained herein, in the Loan Documents and the other Secured Credit Documents and
otherwise in writing in connection herewith or therewith, with respect to the Obligations of each
applicable Secured Party.

     Section 4.17. Limitation on Guaranteed Obligations. Each Guarantor that is a Subsidiary
Party and each Secured Party (by its acceptance of the benefits of this Agreement) hereby confirms
that it is its intention that this Agreement not constitute a fraudulent transfer or

-11-

 

conveyance for
purposes of any Debtor Relief Laws (including the Bankruptcy Code, the Uniform Fraudulent
Conveyance Act or any similar Federal or state law). To effectuate the foregoing intention, each
Guarantor that is a Subsidiary Party and each Secured Party (by its acceptance of the benefits of
this Agreement) hereby irrevocably agrees that the Guaranteed Obligations owing by such Guarantor
under this Agreement shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant
under such Debtor Relief Laws (it being understood that it is the intention of the parties to this
Agreement and the parties to any guaranty of the Senior Subordinated Notes that, to the maximum
extent permitted under applicable laws,
the liabilities in respect of the guarantees of the Senior Subordinated Notes shall not be included
for the foregoing purposes and that, if any reduction is required to the amount guaranteed by any
Guarantor hereunder and with respect to the Senior Subordinated Notes that its guarantee of amounts
owing in respect of the Senior Subordinated Notes shall first be reduced) and after giving effect
to any rights to contribution and/or subrogation pursuant to any agreement providing for an
equitable contribution and/or subrogation among such Guarantor and the other Guarantors, result in
the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a
fraudulent transfer or conveyance.

-12-

 

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	LONE STAR MERGER CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-13-

 

	 	 	 	 	 

	 	 	 	 	 
	 	LONE STAR HOLDINGS CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-14-

 

	 	 	 	 	 

	 	 	 	 	 
	 	ACTIVANT SOLUTIONS HOLDINGS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-15-

 

	 	 	 	 	 

	 	 	 	 	 
	 	ACTIVANT SOLUTIONS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-16-

 

	 	 	 	 	 

	 	 	 	 	 
	 	CCI/ARD, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-17-

 

	 	 	 	 	 

	 	 	 	 	 
	 	CCI/TRIAD FINANCIAL HOLDING CORPORATION

 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-18-

 

	 	 	 	 	 

	 	 	 	 	 
	 	CCI/TRIAD GEM, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-19-

 

	 	 	 	 	 

	 	 	 	 	 
	 	DISTRIBUTOR INFORMATION SYSTEMS CORPORATION

 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-20-

 

	 	 	 	 	 

	 	 	 	 	 
	 	ENTERPRISE COMPUTER SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-21-

 

	 	 	 	 	 

	 	 	 	 	 
	 	HM COOP LLC

 	 
	 	  	By: Activant Solutions Inc., as its Sole Member
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-22-

 

	 	 	 	 	 

	 	 	 	 	 
	 	PRELUDE SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-23-

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROPHET 21 CANADA INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-24-

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROPHET 21 INVESTMENT CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-25-

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROPHET 21 (NEW JERSEY), INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-26-

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROPHET 21, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-27-

 

	 	 	 	 	 

	 	 	 	 	 
	 	SDI MERGER CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-28-

 

	 	 	 	 	 

	 	 	 	 	 
	 	SPEEDWARE HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-29-

 

	 	 	 	 	 

	 	 	 	 	 
	 	SPEEDWARE USA INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-30-

 

	 	 	 	 	 

	 	 	 	 	 
	 	STANPAK SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-31-

 

	 	 	 	 	 

	 	 	 	 	 
	 	TRADE SERVICE SYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-32-

 

	 	 	 	 	 

	 	 	 	 	 
	 	TRIAD DATA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-33-

 

	 	 	 	 	 

	 	 	 	 	 
	 	TRIAD SYSTEMS CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-34-

 

	 	 	 	 	 

	 	 	 	 	 
	 	TRIAD SYSTEMS FINANCIAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-35-

 

	 	 	 	 	 

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent

 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

-36-

 

	 	 	 	 	 

SCHEDULE I to the

Guarantee Agreement

SUBSIDIARY PARTIES

 

 

EXHIBIT I to the

Guarantee Agreement

     SUPPLEMENT
NO. ___ dated as of [                    ], to the Guarantee Agreement dated as of May 2, 2006,
among LONE STAR HOLDING CORP., a Delaware corporation (“Holdings”), ACTIVANT SOLUTIONS INC.
(f/k/a Lone Star Merger Corp.), a Delaware Corporation (the “Borrower”) the Subsidiaries of
Holdings identified therein and DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for the
Secured Parties (as defined below).

     A. Reference is made to (i) the Credit Agreement dated as of May 2, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Holdings, the Borrower, Deutsche Bank Trust Company Americas, as Administrative Agent, Swing
Line Lender and an L/C Issuer, each Lender from time to time party thereto, JPMorgan Chase Bank,
N.A., as Syndication Agent and and Lehman Commercial Paper Inc., as Documentation Agent, (ii) each
Secured Hedge Agreement (as defined in the Credit Agreement) and (iii) the Cash Management
Obligations (as defined in the Credit Agreement).

     B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Guarantee Agreement referred to therein.

     C. The Guarantors have entered into the Guarantee Agreement in order to induce (x) the Lenders
to make Loans and the L/C Issuers to issue Letters of Credit, (y) the Hedge Banks to enter into
and/or maintain Secured hedge Agreement and (z) the Cash Management Banks to provide Cash
Management Services. Section 4.14 of the Guarantee Agreement provides that additional Restricted
Subsidiaries of the Borrower may become Subsidiary Parties under the Guarantee Agreement by
execution and delivery of an instrument in the form of this Supplement. The undersigned Restricted
Subsidiary (the “New Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Party under the Guarantee Agreement in
order to induce the Lenders to make additional Loans and the L/C Issuers to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of Credit previously
issued.

     Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

     Section 1. In accordance with Section 4.14 of the Guarantee Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party and Guarantor under the Guarantee
Agreement with the same force and effect as if originally named therein as a Subsidiary Party and
the New Subsidiary hereby (a) agrees to all the terms and provisions of the Guarantee Agreement
applicable to it as a Subsidiary Party and Guarantor thereunder and (b) represents and warrants
that the representations and warranties made by it as a Guarantor thereunder are true and correct
on and as of the date hereof, provided that, to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct in all respects as of such
earlier date Each reference to a “Guarantor” in the Guarantee Agreement shall be deemed to include
the New Subsidiary. The Guarantee Agreement is hereby incorporated herein by reference.

 

 

Exhibit I

Page 2

     Section 2. The New Subsidiary represents and warrants to the Administrative Agent and
the other Secured Parties that this Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to the effects of any applicable Debtor Relief Laws.

     Section 3. This Supplement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Supplement shall become effective
when the Administrative Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Administrative Agent has executed a counterpart hereof.
Delivery of an executed signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement.

     Section 4. Except as expressly supplemented hereby, the Guarantee Agreement shall
remain in full force and effect.

     Section 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

     Section 6. In case any one or more of the provisions contained in this Supplement
should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and in the Guarantee Agreement shall
not in any way be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

     Section 7. All communications and notices hereunder shall be in writing and given as
provided in Section 4.01 of the Guarantee Agreement.

     Section 8. The New Subsidiary agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including all Attorney Costs
of counsel for the Administrative Agent.

 

 

EXHIBIT I to the

Guarantee Agreement

     IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly executed this
Supplement to the Guarantee Agreement as of the day and year first above written.

	 	 	 	 	 
	 	[NAME OF NEW SUBSIDIARY]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent

 
	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w3

 

Exhibit
10.3

EXECUTION COPY

	 	 	 
	 

	 	 
	 

SECURITY AGREEMENT

dated as of

May 2, 2006

among

LONE STAR HOLDING CORP.,

LONE STAR MERGER CORP. (to be merged with,

and into, Activant Solutions Holdings Inc., which, in turn, will be merged with, and into,

Activant Solutions Inc.),

CERTAIN OTHER SUBSIDIARIES OF LONE STAR

HOLDING CORP. IDENTIFIED HEREIN

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Collateral Agent

	 	 	 
	 

	 	 
	 

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page
	ARTICLE I Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 1.01. Credit Agreement
	 	 	1	 
	Section 1.02. Other Defined Terms
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II Pledge of Securities
	 	 	3	 
	 
	 	 	 	 
	Section 2.01. Pledge
	 	 	3	 
	Section 2.02. Delivery of the Pledged Collateral
	 	 	4	 
	Section 2.03. Representations, Warranties and Covenants
	 	 	5	 
	Section 2.04. Certification of Limited Liability Company and Limited Partnership Interests
	 	 	6	 
	Section 2.05. Registration in Nominee Name; Denominations
	 	 	6	 
	Section 2.06. Voting Rights; Dividends and Interest
	 	 	6	 
	Section 2.07. Collateral Agent Not a Partner or Limited Liability Company Member
	 	 	8	 
	 
	 	 	 	 
	ARTICLE III Security Interests in Personal Property
	 	 	9	 
	 
	 	 	 	 
	Section 3.01. Security Interest
	 	 	9	 
	Section 3.02. Representations and Warranties
	 	 	10	 
	Section 3.03. Covenants
	 	 	12	 
	Section 3.04. Other Actions
	 	 	13	 
	 
	 	 	 	 
	ARTICLE IV Remedies
	 	 	15	 
	 
	 	 	 	 
	Section 4.01. Remedies Upon Default
	 	 	15	 
	Section 4.02. Application of Proceeds
	 	 	17	 
	 
	 	 	 	 
	ARTICLE V Indemnity, Subrogation and Subordination
	 	 	17	 
	 
	 	 	 	 
	Section 5.01. Indemnity
	 	 	17	 
	Section 5.02. Contribution and Subrogation
	 	 	18	 
	Section 5.03. Subordination
	 	 	19	 
	 
	 	 	 	 
	ARTICLE VI Miscellaneous
	 	 	19	 
	 
	 	 	 	 
	Section 6.01. Notices
	 	 	19	 
	Section 6.02. Waivers; Amendment
	 	 	19	 
	Section 6.03. Collateral Agent’s Fees and Expenses; Indemnification
	 	 	20	 
	Section 6.04. Successors and Assigns
	 	 	20	 
	Section 6.05. Survival of Agreement
	 	 	20	 
	Section 6.06. Counterparts; Effectiveness; Several Agreement
	 	 	21	 
	Section 6.07. Severability
	 	 	21	 
	Section 6.08. Right of Set-Off
	 	 	21	 
	Section 6.09. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	22	 
	Section 6.10. WAIVER OF JURY TRIAL
	 	 	22	 
	Section 6.11. Headings
	 	 	23	 
	Section 6.12. Security Interest Absolute
	 	 	23	 
	Section 6.13. Termination or Release
	 	 	23	 

(i)

 

Table of Contents
(continued)

	 	 	 	 	 
	 	 	Page
	Section 6.14. Additional Restricted Subsidiaries
	 	 	24	 
	Section 6.15. Collateral Agent Appointed Attorney-in-Fact
	 	 	24	 
	Section 6.16. General Authority of the Collateral Agent
	 	 	25	 
	Section 6.17. Effectiveness of the Merger
	 	 	25	 
	Section 6.18. Recourse
	 	 	26	 

	 	 	 	    	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule I

	 	-
	 	Subsidiary Parties
	Schedule II

	 	-
	 	Pledged Equity; Pledged Debt
	Schedule III

	 	-
	 	Commercial Tort Claims
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit I

	 	-
	 	Form of Security Agreement Supplement
	Exhibit II

	 	-
	 	Form of Perfection Certificate

(ii)

 

          SECURITY AGREEMENT, dated as of May 2, 2006, among LONE STAR MERGER CORP., a Delaware
corporation (to be merged with, and into, Activant Solutions Holdings Inc., which, in turn, will be
merged with, and into, Activant Solutions Inc., “Merger Sub”), LONE STAR HOLDING CORP., a
Delaware corporation (“Holdings”), the Subsidiaries of Holdings identified herein and
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for the Secured Parties (as defined
below).

          Reference is made to (i) the Credit Agreement, dated as of May 2, 2006 (as amended, restated,
supplemented and/or otherwise modified from time to time, the “Credit Agreement”), among
Merger Sub, Holdings, Deutsche Bank Trust Company Americas, as Administrative Agent, Swing Line
Lender and an L/C Issuer, each Lender from time to time party thereto, JPMorgan Chase Bank, N.A.,
as Syndication Agent, and Lehman Commercial Paper Inc., as Documentation Agent, (ii) the Holdings
Guaranty (as defined in the Credit Agreement), (iii) the Borrower Guaranty (as defined in the
Credit Agreement), (iv) the Subsidiary Guaranty (as defined in the Credit Agreement), (v) each
Secured Hedge Agreement (as defined in the Credit Agreement) and (vi) the Cash Management
Obligations (as defined in the Credit Agreement).

          The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions
set forth in the Credit Agreement, the Hedge Banks have agreed to enter into and/or maintain one or
more Secured Hedge Agreements on the terms and conditions set forth therein and the Cash Management
Banks have agreed to provide and/or maintain Cash Management Services on the terms and conditions
agreed upon by the Borrower or the respective Restricted Subsidiary and such Cash Management Bank.
The obligations of the Lenders to extend such credit, the obligation of the Hedge Banks to enter
into and/or maintain such Secured Hedge Agreements and the obligation of the Cash Management Banks
to provide and/or maintain Cash Management Services are, in each case, conditioned upon, among
other things, the execution and delivery of this Agreement by each Grantor. Holdings, the Borrower
and the Subsidiary Parties are affiliates of one another, will derive substantial benefits from (i)
the extensions of credit to the Borrower pursuant to the Credit Agreement, (ii) the entering into
and/or maintaining by the Hedge Banks of Secured Hedge Agreements with the Borrower and/or one or
more of its Restricted Subsidiaries and (iii) the providing and/or maintaining of Cash Management
Services by the Cash Management Banks to the Borrower and/or one or more of its Restricted
Subsidiaries, and are willing to execute and deliver this Agreement in order to induce the Lenders
to extend such credit, the Hedge Banks to enter into and/or maintain such Secured Hedge Agreements
and the Cash Management Banks to provide and/or maintain such Cash Management Services.
Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

          Section 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings specified in the Credit Agreement. All terms
defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings
specified therein; the term “instrument” shall have the meaning specified in Article 9 of the New
York UCC.

 

 

          (b) The rules of construction specified in Article I of the Credit Agreement also apply to
this Agrfaeement.

          Section 1.02. Other Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

          “Account Debtor” means any Person who is or who may become obligated to any Grantor
under, with respect to or on account of an Account.

          “Agreement” means this Security Agreement.

          “Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).

          “Bankruptcy Event of Default” shall mean any Event of Default under Section 8.01(f) of
the Credit Agreement.

          “Collateral” means the Article 9 Collateral and the Pledged Collateral.

          “Collateral Account” means any cash collateral account established pursuant to, or in
connection with, any Secured Credit Document (including, the Cash Collateral Account (as defined in
the Credit Agreement)), which cash collateral account shall be maintained with, and under the sole
dominion and control of, the Collateral Agent for the benefit of the relevant Secured Parties.

          “Credit Agreement” has the meaning assigned to such term in the preliminary statement
of this Agreement.

          “General Intangibles” has the meaning provided in Article 9 of the New York UCC and
shall in any event include all chooses in action and causes of action and all other intangible
personal property of every kind and nature now owned or hereafter acquired by any Grantor, as the
case may be, including corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap Contracts and other
agreements), goodwill, registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any Grantor, as the
case may be, to secure payment by an Account Debtor of any of the Accounts; provided that
the term “General Intangibles” shall not include any intellectual property and related assets
subject to the Intellectual Property Security Agreement.

          “Grantor” means each of Holdings, the Borrower and each Subsidiary Party.

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

          “Perfection Certificate” means a certificate substantially in the form of Exhibit II,
completed and supplemented with the schedules and attachments contemplated thereby, and duly
executed by the chief financial officer and the chief legal officer of the Borrower.

          “Pledged Collateral” has the meaning assigned to such term in Section 2.01.

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          “Pledged Debt” has the meaning assigned to such term in Section 2.01.

          “Pledged Equity” has the meaning assigned to such term in Section 2.01.

          “Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all certificates,
instruments or other documents representing or evidencing any Pledged Collateral.

          “Secured Credit Document” shall mean each Loan Document, each Secured Hedge Agreement
and any agreement evidencing any Cash Management Obligation.

          “Secured Obligations” means the “Obligations” as defined in the Credit Agreement; it
being acknowledged and agreed that the term “Secured Obligations” as used herein shall include each
extension of credit under the Credit Agreement, all obligations of the Borrower and/or its
Restricted Subsidiaries under the Secured Hedge Agreements and all Cash Management Obligations, in
each case, whether outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.

          “Secured Parties” has the meaning provided in the Credit Agreement.

          “Security Agreement Supplement” means an instrument substantially in the form of
Exhibit I hereto.

          “Security Interest” has the meaning assigned to such term in Section 3.01(a).

          “Subsidiary Parties” means (a) the Restricted Subsidiaries identified on Schedule I
and (b) each other Restricted Subsidiary that becomes a party to this Agreement as a Subsidiary
Party after the Closing Date.

ARTICLE II

Pledge of Securities

          Section 2.01. Pledge. As security for the payment or performance, as the case may
be, in full of the Secured Obligations, each Grantor hereby assigns and pledges to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security
interest in, all of such Grantor’s right, title and interest in, to and under (i) all Equity
Interests held by it and listed on Schedule II and any other Equity Interests obtained in the
future by such Grantor and the certificates representing all such Equity Interests (the
“Pledged Equity”); provided that the Pledged Equity shall not include (A) more than
65% of the issued and outstanding Equity Interests of any Foreign Subsidiary, (B) Equity Interests
of Unrestricted Subsidiaries (until such time as any Unrestricted Subsidiary becomes a Restricted
Subsidiary in accordance with the Credit Agreement, at which time, and without further action, this
clause (B) shall no longer apply to the Equity Interests of such Subsidiary), (C) Equity Interests
of any Subsidiary of a Foreign Subsidiary, (D) Equity Interests of any Person that is not a direct
or indirect, wholly owned Subsidiary of the Borrower and (E) specifically identified Equity
Interests of any Subsidiary with respect to which the Administrative Agent has confirmed

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in writing to the Borrower its determination that the costs or other consequences (including
adverse tax consequences) of providing a pledge of its Equity Interests is excessive in view of the
benefits to be obtained by the Lenders; (ii)(A) the promissory notes and any instruments evidencing
indebtedness owned by it and listed opposite the name of such Grantor on Schedule II and (B) any
promissory notes and instruments evidencing indebtedness obtained in the future by such Grantor
(the “Pledged Debt”); (iii) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms of this Section 2.01; (iv) all payments of principal or
interest, dividends, cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of, and all other
Proceeds received in respect of, the securities referred to in clauses (i) and (ii) above; (v) all
rights and privileges of such Grantor with respect to the securities and other property referred to
in clauses (i), (ii), (iii) and (iv) above; and (vi) all Proceeds of, and Security Entitlements in,
any of the foregoing (the items referred to in clauses (i) through (vi) above being collectively
referred to as the “Pledged Collateral”).

          TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its
successors and assigns, for the benefit of the applicable Secured Parties, forever;
subject, however, to the terms, covenants and conditions hereinafter set forth.

          Section 2.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees promptly
to deliver or cause to be delivered to the Collateral Agent, for the benefit of the applicable
Secured Parties, any and all Pledged Securities (other than any uncertificated securities, but only
for so long as such securities remain uncertificated) to the extent such Pledged Securities, in the
case of promissory notes and instruments evidencing Indebtedness, are required to be delivered
pursuant to paragraph (b) of this Section 2.02.

     (b) Each Grantor will cause any Indebtedness for borrowed money having an aggregate
principal amount equal to or in excess of $2,000,000 owed to such Grantor by any Person
pursuant to any obligation to be evidenced by a duly executed promissory note that is
pledged and delivered to the Collateral Agent, for the benefit of the applicable Secured
Parties, pursuant to the terms hereof.

     (c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be
accompanied by stock powers duly executed in blank or other instruments of transfer
reasonably satisfactory to the Collateral Agent and by such other instruments and documents
as the Collateral Agent may reasonably request and (ii) all other property comprising part
of the Pledged Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as the Collateral
Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a
schedule describing the securities, which schedule shall be deemed to supplement Schedule II
and be made a part hereof; provided that failure to attach any such schedule hereto
shall not affect the validity of such pledge of such Pledged Securities.

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          Section 2.03. Representations, Warranties and Covenants. Holdings and the Borrower
jointly and severally represent, warrant and covenant, as to themselves and the other Grantors, to
and with the Collateral Agent, for the benefit of the Secured Parties, that:

     (a) Schedule II correctly sets forth the percentage of the issued and outstanding
units of each class of the Equity Interests of the issuer thereof represented by the Pledged
Equity and includes all Equity Interests, the promissory notes and instruments required to
be pledged hereunder in order to satisfy the Collateral and Guarantee Requirement;

     (b) the Pledged Equity and Pledged Debt (solely with respect to Pledged Debt issued by
a Person other than Holdings or a Subsidiary of Holdings, to the best of Holdings’ and the
Borrower’s knowledge) have been duly and validly authorized and issued by the issuers
thereof and (i) in the case of Pledged Equity (other than Pledged Equity consisting of
limited liability company interests or partnership interests which, pursuant to the relevant
organizational or formation documents, cannot be fully paid and non-assessable), are fully
paid and nonassessable and (ii) in the case of Pledged Debt (solely with respect to Pledged
Debt issued by a Person other than Holdings or a Subsidiary of Holdings, to the best of
Holdings’ and the Borrower’s knowledge), are legal, valid and binding obligations of the
issuers thereof;

     (c) except for the security interests granted hereunder, each of the Grantors (i) is
and, subject to any transfers made in compliance with the Credit Agreement, will continue to
be the direct owner, beneficially and of record, of the Pledged Securities indicated on
Schedule II as owned by such Grantors, (ii) holds the same free and clear of all Liens,
other than (A) Liens created by the Collateral Documents and (B) nonconsensual Liens
expressly permitted pursuant to Section 7.01 of the Credit Agreement, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than (A) Liens created by the
Collateral Documents and (B) nonconsensual Liens expressly permitted pursuant to Section
7.01 of the Credit Agreement, and (iv) will defend its title or interest thereto or therein
against any and all Liens (other than the Liens permitted pursuant to this Section 2.03(c)),
however, arising, of all Persons whomsoever;

     (d) except for restrictions and limitations imposed by the Loan Documents or
securities laws generally and except as described in the Perfection Certificate, the Pledged
Collateral is and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to any option, right of first refusal, shareholders
agreement, charter or by-law provisions or contractual restriction of any nature that might
prohibit, impair, delay or otherwise affect in any manner material and adverse to the
Secured Parties the pledge of such Pledged Collateral hereunder, the sale or disposition
thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies
hereunder;

     (e) each of the Grantors has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated;

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     (f) no consent or approval of any Governmental Authority, any securities exchange or
any other Person was or is necessary to the validity of the pledge effected hereby (other
than such as have been obtained and are in full force and effect);

     (g) without limiting the requirements of Section 2.02 or any other provision of this
agreement requiring the delivery of any Pledged Securities to the Collateral Agent, by
virtue of the execution and delivery by the Grantors of this Agreement, upon the earlier of
(i) the delivery of any Pledged Securities to the Collateral Agent in accordance with this
Agreement, and (ii) the filing of the applicable Uniform Commercial Code financing statement
described in Section 3.02(b), the Collateral Agent will obtain a legal, valid and
first-priority (subject only to any nonconsensual Lien permitted pursuant by Section 7.01 of
the Credit Agreement) perfected lien upon and security interest in such Pledged Securities
as security for the payment and performance of the Secured Obligations; and

     (h) the pledge effected hereby is effective to vest in the Collateral Agent, for the
benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral
as set forth herein.

          Section 2.04. Certification of Limited Liability Company and Limited Partnership
Interests. Each interest in any limited liability company or limited partnership controlled by
any Grantor and pledged under Section 2.01 shall be represented by a certificate, shall be a
“security” within the meaning of Article 8 of the New York UCC and shall be governed by Article 8
of the New York UCC.

          Section 2.05. Registration in Nominee Name; Denominations. If an Event of Default
shall occur and be continuing and the Collateral Agent shall give the Borrower notice of its intent
to exercise such rights, (a) the Collateral Agent, on behalf of the Secured Parties, shall have the
right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable
Grantor, endorsed or assigned in blank or in favor of the Collateral Agent and each Grantor will
promptly give to the Collateral Agent copies of any notices or other communications received by it
with respect to Pledged Securities registered in the name of such Grantor and (b) the Collateral
Agent shall have the right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with this Agreement;
provided that, notwithstanding the foregoing, if a Bankruptcy Event of Default shall have
occurred and be continuing, the Collateral Agent shall not be required to give the notice referred
to above in order to exercise the rights described above.

          Section 2.06. Voting Rights; Dividends and Interest. (a) Unless and until an Event
of Default shall have occurred and be continuing and the Collateral Agent shall have notified the
Borrower that the rights of the Grantors under this Section 2.06 are being suspended:

     (i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any part
thereof for any purpose consistent with the terms of this Agreement, the Credit
Agreement and the other Loan Documents; provided that such rights and

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powers shall not be exercised in any manner that could materially and adversely
affect the rights inuring to a holder of any Pledged Securities or the rights and
remedies of any of the Collateral Agent or the other Secured Parties under this
Agreement, the Credit Agreement or any other Loan Document or the ability of the
Secured Parties to exercise the same.

     (ii) The Collateral Agent shall execute and deliver to each Grantor, or cause
to be executed and delivered to such Grantor, all such proxies, powers of attorney
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and/or consensual rights and powers it
is entitled to exercise pursuant to subparagraph (i) above.

     (iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities, to the extent (and only to the extent) that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of the
Credit Agreement, the other Loan Documents and applicable Laws; provided
that any noncash dividends, interest, principal or other distributions that would
constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision,
combination or reclassification of the outstanding Equity Interests of the issuer of
any Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if received by
any Grantor, shall not be commingled by such Grantor with any of its other funds or
property but shall be held separate and apart therefrom, shall be held in trust for
the benefit of the Collateral Agent and the applicable Secured Parties and shall be
forthwith delivered to the Collateral Agent in the same form as so received (with
any necessary endorsement reasonably requested by the Collateral Agent).

     (b) Upon the occurrence and during the continuance of an Event of Default, after the
Collateral Agent shall have notified the Borrower of the suspension of the rights of the
Grantors under paragraph (a)(iii) of this Section 2.06, then all rights of any Grantor to
dividends, interest, principal or other distributions that such Grantor is authorized to
receive pursuant to paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to receive and retain such dividends, interest, principal or
other distributions. All dividends, interest, principal or other distributions received by
any Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the
benefit of the Collateral Agent, shall be segregated from other property or funds of such
Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same
form as so received (with any necessary endorsement reasonably requested by the Collateral
Agent). Any and all money and other property paid over to or received by the Collateral
Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral
Agent in an account to be established by the Collateral Agent upon receipt of such money or
other property and shall be applied in accordance with the provisions of

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Section 4.02. After all Events of Default have been cured or waived, the Collateral
Agent shall promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted to retain
pursuant to the terms of paragraph (a)(iii) of this Section 2.06 in the absence of an Event
of Default and that remain in such account.

     (c) Upon the occurrence and during the continuance of an Event of Default, after the
Collateral Agent shall have notified the Borrower of the suspension of the rights of the
Grantors under paragraph (a)(i) of this Section 2.06, then all rights of any Grantor to
exercise the voting and consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 2.06, and the obligations of the Collateral Agent under
paragraph (a)(ii) of this Section 2.06, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided that,
unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right
from time to time following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights. After all Events of Default have been cured or waived,
each Grantor shall have the exclusive right to exercise the voting and/or consensual rights
and powers that such Grantor would otherwise be entitled to exercise pursuant to the terms
of paragraph (a)(i) above.

     (d) Any notice given by the Collateral Agent to the Borrower suspending the rights of
the Grantors under paragraph (a) of this Section 2.06 (i) shall be given in writing, (ii)
may be given with respect to one or more of the Grantors at the same or different times and
(iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in
part without suspending all such rights (as specified by the Collateral Agent in its sole
and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so long as an
Event of Default has occurred and is continuing. Notwithstanding anything to the contrary
contained in Section 2.06(a), (b) or (c), if a Bankruptcy Event of Default shall have
occurred and be continuing, the Collateral Agent shall not be required to give any notice
referred to in said Section in order to exercise any of its rights described in such
Section, and the suspension of the rights of each of the Grantors under each such Section
shall be automatic upon the occurrence of such Bankruptcy Event of Default.

          Section 2.07. Collateral Agent Not a Partner or Limited Liability Company Member.
Nothing contained in this Agreement shall be construed to make the Collateral Agent or any other
Secured Party liable as a member of any limited liability company or as a partner of any
partnership and neither the Collateral Agent nor any other Secured Party by virtue of this
Agreement or otherwise (except as referred to in the following sentence) shall have any of the
duties, obligations or liabilities of a member of any limited liability company or as a partner in
any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become
the absolute owner of Pledged Equity consisting of a limited liability company interest or a
partnership interest pursuant hereto, this Agreement shall not be construed as creating a
partnership or joint venture among the Collateral Agent, any other Secured Party, any Grantor
and/or any other Person.

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ARTICLE III

Security Interests in Personal Property

          Section 3.01. Security Interest. (a) As security for the payment or performance, as
the case may be, in full of the Secured Obligations, including each Guaranty, each Grantor hereby
assigns and pledges to the Collateral Agent, its successors and assigns, for the benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the
benefit of the Secured Parties, a security interest (the “Security Interest”) in, all
right, title or interest in or to any and all of the following assets and properties now owned or
at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in
the future may acquire any right, title or interest (collectively, the “Article 9
Collateral”):

     (i) all Accounts;

     (ii) all Chattel Paper;

     (iii) all Documents;

     (iv) all Equipment;

     (v) all General Intangibles;

     (vi) all Instruments;

     (vii) all Inventory;

     (viii) all Investment Property;

     (ix) all books and records pertaining to the Article 9 Collateral;

     (x) all Goods;

     (xi) all Letter-of-Credit Rights;

     (xii) all Commercial Tort Claims described on Schedule III from time to time;

     (xiii) each Collateral Account, and all cash, securities and other investments
deposited therein;

     (xiv) all Supporting Obligations;

     (xv) all Security Entitlements in any or all of the foregoing; and

     (xvi) to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing;

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provided that notwithstanding anything to the contrary in this Agreement, this Agreement
shall not constitute a grant of a security interest in (A) motor vehicles the perfection of a
security interest in which is excluded from the UCC in the relevant jurisdiction, (B) any Equity
Interests in any Unrestricted Subsidiary (until such time any Unrestricted Subsidiary becomes a
Restricted Subsidiary in accordance with the Credit Agreement, at which time, and without further
action, this clause (B) shall no longer apply to the Equity Interests of such Subsidiary), (C) more
than 65% of the issued and outstanding Equity Interests of any Foreign Subsidiary, (D) any
specifically identified asset with respect to which the Administrative Agent has confirmed in
writing to the Borrower its determination that the costs or other consequences (including adverse
tax consequences) of providing a security interest is excessive in view of the benefits to be
obtained by the Lenders, or (E) any General Intangible, Investment Property or other such rights of
a Grantor arising under any contract, lease, instrument, license or other document if (but only to
the extent that) the grant of a security interest therein would (x) constitute a violation of a
valid and enforceable restriction in respect of such General Intangible, Investment Property or
other such rights in favor of a third party or under any Law, regulation, permit, order or decree
of any Governmental Authority, unless and until all required consents shall have been obtained (for
the avoidance of doubt, the restrictions described herein are not negative pledges or similar
undertakings in favor of a lender or other financial counterparty) or (y) expressly give any other
party in respect of any such contract, lease, instrument, license or other document, the right to
terminate its obligations thereunder, provided however, that the limitation set
forth in clause (E) above shall not affect, limit, restrict or impair the grant by a Grantor of a
security interest pursuant to this Agreement in any such Collateral to the extent that an otherwise
applicable prohibition or restriction on such grant is rendered ineffective by any applicable law,
including the UCC. Each Grantor shall, if requested to do so by the Administrative Agent, use
commercially reasonable efforts to obtain any such required consent that is reasonably obtainable
with respect to Collateral which the Administrative Agent reasonably determines to be material.

          (b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the
Secured Parties at any time and from time to time to file in any relevant jurisdiction any initial
financing statements (including fixture filings) with respect to the Article 9 Collateral or any
part thereof and amendments thereto that (i) indicate the Collateral as all assets of such Grantor
or words of similar effect as being of an equal or lesser scope or with greater detail, and (ii)
contain the information required by Article 9 of the Uniform Commercial Code or the analogous
legislation of each applicable jurisdiction for the filing of any financing statement or amendment,
including (A) whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (B) in the case of a financing
statement filed as a fixture filing, a sufficient description of the real property to which such
Article 9 Collateral relates. Each Grantor agrees to provide such information to the Collateral
Agent promptly upon request.

          (c) The Security Interest is granted as security only and shall not subject the Collateral
Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Article 9 Collateral.

          Section 3.02. Representations and Warranties. Holdings and the Borrower jointly and
severally represent and warrant, as to themselves and the other Grantors, to the Collateral Agent
and the Secured Parties that:

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     (a) Each Grantor has good and valid rights and/or title in the Article 9 Collateral
with respect to which it has purported to grant a Security Interest hereunder (which rights
and/or title, are in any event, sufficient under Section 9-203 of the Uniform Commercial
Code), and has full power and authority to grant to the Collateral Agent the Security
Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the consent or
approval of any other Person other than any consent or approval that has been obtained.

     (b) The Perfection Certificate has been duly prepared, completed, executed and
delivered to the Collateral Agent and the information set forth therein, including the exact
legal name of each Grantor, is correct and complete in all material respects as of the
Closing Date. The Uniform Commercial Code financing statements (including fixture filings,
as applicable) or other appropriate filings, recordings or registrations prepared by the
Collateral Agent based upon the information provided to the Collateral Agent in the
Perfection Certificate for filing in each governmental, municipal or other office specified
in Schedule 2 to the Perfection Certificate (or specified by notice from the applicable
Grantor to the Collateral Agent after the Closing Date in the case of filings, recordings or
registrations required by Section 6.11 of the Credit Agreement), are all the filings,
recordings and registrations that are necessary to establish a legal, valid and perfected
security interest in favor of the Collateral Agent (for the benefit of the Secured Parties)
in respect of all Article 9 Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing of
continuation statements and as may be required with respect to property of the Grantors of
the types described in clauses (1), (2) and (3) of Section 9-311(a) of the Uniform
Commercial Code which may not be perfected by such filing, recording or registration.

     (c) The Security Interest constitutes (i) a legal and valid security interest in all
the Article 9 Collateral securing the payment and performance of the Secured Obligations and
(ii) subject to the filings described in Section 3.02(b), a perfected security interest in
all Article 9 Collateral in which a security interest may be perfected by filing, recording
or registering a financing statement or analogous document in the United States (or any
political subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code. The Security Interest is and shall be prior to any other Lien on any of
the Article 9 Collateral, other than (i) any nonconsensual Lien that is expressly permitted
pursuant to Section 7.01 of the Credit Agreement and has priority as a matter of law and
(ii) Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement.

     (d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien,
except for Liens expressly permitted pursuant to Section 7.01 of the Credit Agreement. None
of the Grantors has filed or consented to the filing of (i) any financing statement or
analogous document under the Uniform Commercial Code or any other applicable laws covering
any Article 9 Collateral or (ii) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article 9 Collateral
with any foreign governmental, municipal or other office, which

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financing statement or analogous document, assignment, security agreement or similar
instrument is still in effect, except, in each case, for Liens expressly permitted pursuant
to Section 7.01 of the Credit Agreement.

     (e) All Commercial Tort Claims of each Grantor in existence on the date of this
Agreement (or on the date upon which such Grantor becomes a party to this Agreement) are
described on Schedule III hereto.

          Section 3.03. Covenants. (a) The Borrower agrees provide the Collateral Agent no
less than 10 Business Days’ prior written notice of any change (i) in legal name of any Grantor,
(ii) in the identity or type of organization or corporate structure of any Grantor, (iii) in the
jurisdiction of organization of any Grantor, (iv) the Location of any Grantor or (v) the
organizational identification number of any Grantor. In addition, if any Grantor does not have an
organizational identification number on the Closing Date (or the date such Grantor becomes a party
to this Agreement) and later obtains one, the Borrower shall promptly thereafter notify the
Collateral Agent of such organizational identification number and shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the security interests
(and the priority thereof) of the Collateral Agent in the Collateral intended to be granted hereby
fully perfected and in full force and effect.

          (b) Each Grantor shall, at its own expense, take any and all commercially reasonable actions
necessary to defend title to the Article 9 Collateral against all Persons and to defend the
Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof
against any Lien not expressly permitted pursuant to Section 7.01 of the Credit Agreement.

          (c) Each year, at the time of delivery of annual financial statements with respect to the
preceding fiscal year pursuant to Section 6.01 of the Credit Agreement, the Borrower shall deliver
to the Collateral Agent a certificate executed by the chief financial officer and the chief legal
officer of the Borrower setting forth the information required pursuant to Sections 1(a), 1(c),
1(e), 1(f) and 2(b) of the Perfection Certificate or confirming that there has been no change in
such information since the date of such certificate or the date of the most recent certificate
delivered pursuant to this Section 3.03(c).

          (d) The Borrower agrees, on its own behalf and on behalf of each other Grantor, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments
and documents and take all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest and the rights and
remedies created hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements (including fixture filings) or other documents in connection herewith
or therewith. If any amount payable under or in connection with any of the Article 9 Collateral
that equals or exceeds $2,000,000 shall be or become evidenced by any promissory note or
instrument, such note or instrument shall be promptly pledged and delivered to the Collateral
Agent, for the benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to
the Collateral Agent.

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          (e) At its option, the Collateral Agent may discharge past due taxes, assessments, charges,
fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9
Collateral and not permitted pursuant to Section 7.01 of the Credit Agreement, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so
as required by the Credit Agreement or this Agreement and within a reasonable period of time after
the Collateral Agent has requested that it do so, and each Grantor jointly and severally agrees to
reimburse the Collateral Agent within 10 days after demand for any payment made or any reasonable
expense incurred by the Collateral Agent pursuant to the foregoing authorization. Nothing in this
paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other
promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.

          (f) If at any time any Grantor shall take a security interest in any property of an Account
Debtor or any other Person the value of which equals or exceeds $2,000,000 to secure payment and
performance of an Account, such Grantor shall promptly assign such security interest to the
Collateral Agent for the benefit of the applicable Secured Parties. Such assignment need not be
filed of public record unless necessary to continue the perfected status of the security interest
against creditors of and transferees from the Account Debtor or other Person granting the security
interest.

          (g) Each Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable
(as between itself and any relevant counterparty) to observe and perform all the conditions and
obligations to be observed and performed by it under each contract agreement or instrument relating
to the Article 9 Collateral, all in accordance with the terms and conditions thereof, and each
Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.

          Section 3.04. Other Actions. In order to further insure the attachment, perfection
and priority of, and the ability of the Collateral Agent to enforce, the Security Interest, each
Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with
respect to the following Article 9 Collateral:

     (a) Instruments. If any Grantor shall at any time hold or acquire any Instruments
constituting Collateral and evidencing an amount equal to or in excess of $2,000,000, such
Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent for the
benefit of the applicable Secured Parties, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time to time reasonably
request.

     (b) Investment Property. Except to the extent otherwise provided in Article II, if
any Grantor shall at any time hold or acquire any certificated securities (other than a
certificated security credited on the books of a clearing corporation or securities
intermediary), such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent for the benefit of the applicable Secured Parties, accompanied by such

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instruments of transfer or assignment duly executed in blank as the Collateral Agent
may from time to time reasonably request. If any securities now or hereafter acquired by
any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the
issuer thereof, upon the Collateral Agent’s request and following the occurrence of an Event
of Default such Grantor shall promptly notify the Collateral Agent thereof and, at the
Collateral Agent’s reasonable request, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (i) cause the issuer to agree to
comply with instructions from the Collateral Agent as to such securities, without further
consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become
the registered owner of the securities. If any securities, whether certificated or
uncertificated, or other investment property are held by any Grantor or its nominee through
a securities intermediary or commodity intermediary, upon the Collateral Agent’s request and
following the occurrence of an Event of Default, such Grantor shall immediately notify the
Collateral Agent thereof and at the Collateral Agent’s request and option, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral Agent shall either
(i) cause such securities intermediary or (as the case may be) commodity intermediary to
agree to comply with entitlement orders or other instructions from the Collateral Agent to
such securities intermediary as to such security entitlements, or (as the case may be) to
apply any value distributed on account of any commodity contract as directed by the
Collateral Agent to such commodity intermediary, in each case without further consent of any
Grantor or such nominee, or (ii) in the case of financial assets or other Investment
Property held through a securities intermediary, arrange for the Collateral Agent to become
the entitlement holder with respect to such Investment Property, with the Grantor being
permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw or
otherwise deal with such Investment Property. The Collateral Agent agrees with each of the
Grantors that the Collateral Agent shall not give any such entitlement orders or
instructions or directions to any such issuer, securities intermediary or commodity
intermediary, and shall not withhold its consent to the exercise of any withdrawal or
dealing rights by any Grantor, unless an Event of Default has occurred and is continuing.
The provisions of this paragraph shall not apply to any financial assets credited to a
securities account for which the Collateral Agent is the securities intermediary.

     (c) Commercial Tort Claims. If any Grantor shall at any time after the date of this
Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the aggregate
claimed damages thereunder or the reasonably estimated value thereof) of $2,000,000 or more,
such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such
Grantor and provide supplements to Schedule III describing the details thereof and shall
grant to the Collateral Agent a security interest therein and in the proceeds thereof, all
upon the terms of this Agreement.

     (d) Letter of Credit Rights. If any Grantor is at any time a beneficiary under a
letter of credit with a stated amount of $2,000,000 or more, the proceeds of which have not
otherwise been previously perfected as a supporting obligation of such Grantor by the filing
of the Uniform Commercial Code Financing Statement described in Section 3.02(b), such
Grantor shall promptly notify the Collateral Agent thereof and, at the request of the
Collateral Agent, such Grantor shall, pursuant to an agreement in form and

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substance reasonably satisfactory to the Collateral Agent, use its commercially
reasonable efforts to (i) arrange for the issuer and any confirmer of such letter of credit
to consent to an assignment to the Collateral Agent of the proceeds of any drawing under
such letter of credit or (ii) arrange for the Collateral Agent to become the transferee
beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that
the proceeds of any drawing under the letter of credit are to be applied as provided in this
Agreement after the occurrence and during the continuance of an Event of Default.

     (e) Notwithstanding anything to the contrary contained in this Agreement or any other
Secured Credit Document, unless an Event of Default shall have occurred and be continuing,
no Grantor shall be required to enter into any security agreement, pledge agreement, charge
over shares (or any similar agreement granting or perfecting a lien over the Collateral)
governed by the laws of any jurisdiction outside of the United States (or any political
subdivision thereof) or make any registrations, filings or recordings outside of the United
States (or any political subdivision thereof), in each case, to perfect the Security
Interests created (or purported to be created ) by this Agreement.

ARTICLE IV

Remedies

          Section 4.01. Remedies Upon Default. Upon the occurrence and during the continuance
of an Event of Default, it is agreed that the Collateral Agent shall have the right to exercise any
and all rights afforded to a secured party with respect to the Secured Obligations, as applicable,
under the Uniform Commercial Code or other applicable law and also may (i) require each Grantor to,
and each Grantor agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place and time to be designated by the Collateral Agent that
is reasonably convenient to both parties; (ii) occupy any premises owned or, to the extent lawful
and permitted, leased by any of the Grantors where the Collateral or any part thereof is assembled
or located for a reasonable period in order to effectuate its rights and remedies hereunder or
under law, without obligation to such Grantor in respect of such occupation; provided that
the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or promptly
after such occupancy; (iii) exercise any and all rights and remedies of any of the Grantors under
or in connection with the Collateral, or otherwise in respect of the Collateral; provided
that the Collateral Agent shall provide the applicable Grantor with notice thereof prior to or
promptly after such exercise; (iv) withdraw any and all cash or other Collateral from any
Collateral Account and apply such cash and other Collateral to the payment of any and all Secured
Obligations in the manner provided in Section 4.02 of this Agreement; and (v) subject to the
mandatory requirements of applicable law and the notice requirements described below, sell or
otherwise dispose of all or any part of the Collateral securing the Secured Obligations at a public
or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or
for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale of securities (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that they are purchasing
the Collateral for their own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent

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shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold
absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor
now has or may at any time in the future have under any rule of law or statute now existing or
hereafter enacted.

          The Collateral Agent shall give the applicable Grantors 10 days’ written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its
equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral shall have been given.
The Collateral Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place to which the same
was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale
price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At
any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any
Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then due and payable to
such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof, a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral
Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be
entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Secured Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit
or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court appointed receiver. Any sale pursuant to the provisions of
this Section 4.01 shall be deemed to conform to the commercially reasonable

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standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

          Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful
agent (and attorney-in-fact) during the continuance of an Event of Default and after notice to the
Borrower of its intent to exercise such rights (except in the case of a Bankruptcy Event of
Default, in which case no such notice shall be required), for the purpose of (i) making, settling
and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of
such policies of insurance, (ii) making all determinations and decisions with respect thereto and
(iii) obtaining or maintaining the policies of insurance required by Section 6.07 of the Credit
Agreement or to pay any premium in whole or in part relating thereto. All sums disbursed by the
Collateral Agent in connection with this paragraph, including reasonable attorneys’ fees, court
costs, expenses and other charges relating thereto, shall be payable, within 10 days of demand, by
the Grantors to the Collateral Agent and shall be additional Secured Obligations secured hereby.

          By accepting the benefits of this Agreement and each other Collateral Document, the Secured
Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may
be enforced only by the action of the Collateral Agent acting upon the instructions of the Required
Lenders and that no other Secured Party shall have any right individually to seek to enforce or to
enforce this Agreement or to realize upon the security to be granted hereby, it being understood
and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit
of the Secured Parties upon the terms of this Agreement and the other Collateral Documents.

          Section 4.02. Application of Proceeds. The Collateral Agent shall apply the proceeds
of any collection or sale of Collateral, including any Collateral consisting of cash, in accordance
with the provisions of Section 8.04 of the Credit Agreement. The Collateral Agent shall have
absolute discretion as to the time of application of any such proceeds, moneys or balances in
accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser
or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the Collateral Agent or such
officer or be answerable in any way for the misapplication thereof. It is understood and agreed
that the Grantors shall remain jointly and severally liable to the extent of any deficiency between
the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.

ARTICLE V

Indemnity, Subrogation and Subordination

          Section 5.01. Indemnity. In addition to all such rights of indemnity and subrogation
as the Grantors may have under applicable law (but subject to Section 5.03), each

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Guaranteed Party (as defined in the Guaranty) agrees that, in the event any assets of any
Grantor shall be sold pursuant to this Agreement or any other Collateral Document to satisfy in
whole or in part an Obligation owing directly by such Guaranteed Party to any Secured Party (i.e.,
other than pursuant to its capacity as a Guarantor under the Guaranty), such Guaranteed Party shall
indemnify such Grantor in an amount equal to the fair market value of the assets so sold.

          Section 5.02. Contribution and Subrogation. At any time a payment by any Subsidiary
Party in respect of the Secured Obligations is made under this Agreement or any other Collateral
Document as a result of a sale of assets by such Subsidiary Party that shall not have been fully
indemnified as provided in Section 5.01, the right of contribution of each Subsidiary Party against
each other Subsidiary Party shall be determined as provided in the immediately succeeding sentence,
with the right of contribution of each Subsidiary Party to be revised and restated as of each date
on which a payment (a “Relevant Payment”) is made on the Secured Obligations under this
Agreement and not indemnified pursuant to Section 5.01. At any time that a Relevant Payment is
made by a Subsidiary Party that results in the aggregate payments made by such Subsidiary Party in
respect of the Secured Obligations to and including the date of the Relevant Payment exceeding such
Subsidiary Party’s Contribution Percentage (as defined below) of the aggregate payments made by all
Subsidiary Parties in respect of the Secured Obligations to and including the date of the Relevant
Payment (such excess, the “Aggregate Excess Amount”), each such Subsidiary Party shall have
a right of contribution against each other Subsidiary Party who has made payments in respect of the
Secured Obligations to and including the date of the Relevant Payment in an aggregate amount less
than such other Subsidiary Party’s Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Subsidiary Parties in respect of the Secured
Obligations (the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an
amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such
Subsidiary Party and the denominator of which is the Aggregate Excess Amount of all Subsidiary
Parties multiplied by (y) the Aggregate Deficit Amount of such other Subsidiary Party. A
Subsidiary Party’s right of contribution pursuant to the preceding sentences shall arise at the
time of each computation, subject to adjustment to the time of each computation; provided
that the contribution rights of such Subsidiary Party shall be subject to Section 5.03. As used in
this Section 5.02: (i) each Subsidiary Party’s “Contribution Percentage” shall mean the
percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Subsidiary
Party by (y) the aggregate Adjusted Net Worth of all Subsidiary Parties; (ii) the “Adjusted Net
Worth” of each Subsidiary Party shall mean the greater of (x) the Net Worth (as defined below)
of such Subsidiary Party and (y) zero; and (iii) the “Net Worth” of each Subsidiary Party
shall mean the amount by which the fair saleable value of such Subsidiary Party’s assets on the
date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed Obligations arising under the Subsidiary
Guaranty or any guaranteed obligations arising under any guaranty of the Senior Subordinated Notes
or any Permitted Refinancing thereof) on such date. Notwithstanding anything to the contrary
contained above, any Subsidiary Party that is released from this Agreement pursuant to Section 6.13
hereof shall thereafter have no contribution obligations, or rights, pursuant to this Section 3.02,
and at the time of any such release, if the released Subsidiary Party had an Aggregate Excess
Amount or an Aggregate Deficit Amount, same shall be deemed reduced to $0, and the contribution
rights and obligations of the remaining Subsidiary Parties shall be recalculated on the respective
date of release (as otherwise provided above)

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based on the payments made hereunder by the remaining Subsidiary Parties. Each of the
Subsidiary Parties recognizes and acknowledges that the rights to contribution arising hereunder
shall constitute an asset in favor of the party entitled to such contribution. In this connection,
each Subsidiary Party has the right to waive its contribution right against any other Subsidiary
Party to the extent that after giving effect to such waiver such Subsidiary Party would remain
solvent, in the determination of the Required Lenders.

          Section 5.03. Subordination. Notwithstanding any provision of this Agreement to the
contrary, all rights of the Grantors under Sections 5.01 and 5.02 and all other rights of
indemnity, contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Secured Obligations (or the
termination of this agreement in accordance with Section 6.13); provided that if any amount shall
be paid to such Grantor on account of such subrogation rights at any time prior to the irrevocable
payment in full in cash of all the Secured Obligations (or the termination of this agreement in
accordance with Section 6.13), such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be paid to the Collateral Agent to be credited and applied against the
Secured Obligations, whether matured or unmatured, in accordance with Section 4.02(a). No failure
on the part of any Borrower or any Grantor to make the payments required by Sections 5.01 and 5.02
(or any other payments required under applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Grantor with respect to its obligations hereunder, and each
Grantor shall remain liable for the full amount of the obligations of such Grantor hereunder.

ARTICLE VI

s

Miscellaneous

          Section 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of the
Credit Agreement. All communications and notices hereunder to any Subsidiary Party shall be given
to it in care of the Borrower as provided in Section 10.02 of the Credit Agreement.

          Section 6.02. Waivers; Amendment. (a) No failure or delay by the Collateral Agent,
any L/C Issuer or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Collateral Agent, the L/C Issuers and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section 6.02, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Collateral Agent, any Lender or any L/C Issuer may
have had notice or knowledge of such

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Default at the time. No notice or demand on any Loan Party in any case shall entitle any Loan
Party to any other or further notice or demand in similar or other circumstances.

          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Loan
Party or Loan Parties with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Section 10.01 of the Credit Agreement.

          Section 6.03. Collateral Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses
incurred hereunder as provided in Section 10.04 of the Credit Agreement.

          (b) Without limitation of its indemnification obligations under the other Loan Documents, the
Borrower agrees to indemnify the Collateral Agent and the other Indemnitees (as defined in Section
10.05 of the Credit Agreement) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, the execution, delivery, performance or
enforcement of this Agreement or any claim, litigation, investigation or proceeding relating to any
of the foregoing agreement or instrument contemplated hereby, or to the Collateral, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses have resulted from the gross negligence or willful misconduct of such Indemnitee or of any
Affiliate, director, officer, employee, counsel, agent, trustee, investment advisor or
attorney-in-fact of such Indemnitee.

          (c) Any such amounts payable as provided hereunder shall be additional Secured Obligations
secured hereby and by the other Collateral Documents. The provisions of this Section 6.03 shall
remain operative and in full force and effect regardless of the termination of this Agreement or
any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of
any of the Secured Obligations, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 6.03 shall be payable within
10 days of written demand therefor.

          Section 6.04. Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the permitted successors and
assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or
the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

          Section 6.05. Survival of Agreement. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and issuance of

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any Letters of Credit, regardless of any investigation made by any Lender or on its behalf and
notwithstanding that the Collateral Agent, any L/C Issuer or any Lender may have had notice or
knowledge of any 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 any Loan Document
is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated.

          Section 6.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be
executed in counterparts, each of which shall constitute an original but all of which when taken
together shall constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement. This Agreement shall become effective as to any Loan Party when a
counterpart hereof executed on behalf of such Loan Party shall have been delivered to the
Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral
Agent, and thereafter shall be binding upon such Loan Party and the Collateral Agent and their
respective permitted successors and assigns, and shall inure to the benefit of such Loan Party, the
Collateral Agent and the other Secured Parties and their respective successors and assigns, except
that no Loan Party shall have the right to assign or transfer its rights or obligations hereunder
or any interest herein or in the Collateral (and any such assignment or transfer shall be void)
except as expressly contemplated by this Agreement or the Credit Agreement. This Agreement shall
be construed as a separate agreement with respect to each Loan Party and may be amended, modified,
supplemented, waived or released with respect to any Loan Party without the approval of any other
Loan Party and without affecting the obligations of any other Loan Party hereunder.

          Section 6.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

          Section 6.08. Right of Set-Off. In addition to any rights and remedies of the
Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default,
each Lender and its Affiliates is authorized at any time and from time to time, without prior
notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower and
each Loan Party to the fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time held by, and other
Indebtedness at any time owing by, such Lender and its Affiliates to or for the credit or the
account of the respective Loan Parties against any and all obligations owing to such Lender and its
Affiliates hereunder, now or hereafter existing, irrespective of whether or not such Lender or
Affiliate shall have made demand under this Agreement and although such obligations may be
contingent or unmatured or denominated in a currency different from that of the applicable deposit
or Indebtedness. Each Lender agrees promptly to notify the Borrower and the

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Collateral Agent after any such set off and application made by such Lender; provided,
that the failure to give such notice shall not affect the validity of such setoff and application.
The rights of each Lender under this Section 6.08 are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.

          Section 6.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.

     (b) Each of the Loan Parties hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York City and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Collateral Agent, any L/C Issuer or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement or any other
Loan Document against any Grantor or its properties in the courts of any jurisdiction.

     (c) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section 6.09. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

     (d) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 6.01. Nothing in this Agreement or any other Loan
Document will affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

          Section 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE

-22-

 

FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 6.10.

          Section 6.11. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.

          Section 6.12. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and
all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Credit Agreement, any other Loan Document, the
Secured Hedge Agreements, any agreement with respect to any of the Secured Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan
Document, the Secured Hedge Agreements or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of
or consent under or departure from any guarantee, securing or guaranteeing all or any of the
Secured Obligations or (d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor in respect of the Secured Obligations or this
Agreement.

          Section 6.13. Termination or Release. (a) This Agreement, the Security Interest and
all other security interests granted hereby shall terminate with respect to all Secured Obligations
when all the outstanding Secured Obligations have been indefeasibly paid in full and the Lenders
have no further commitment to lend under the Credit Agreement, the L/C Obligations have been
reduced to zero and the L/C Issuers have no further obligations to issue Letters of Credit under
the Credit Agreement.

     (b) A Subsidiary Party shall automatically be released from its obligations hereunder
and the Security Interest in the Collateral of such Subsidiary Party shall be automatically
released upon the consummation of any transaction permitted by the Credit Agreement as a
result of which such Subsidiary Party ceases to be a Subsidiary of the Borrower;
provided that the Required Lenders shall have consented to such transaction (to the
extent required by the Credit Agreement) and the terms of such consent did not provide
otherwise.

     (c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted
under the Credit Agreement, or upon the effectiveness of any written consent to the release
of the security interest granted hereby in any Collateral pursuant to Section 10.01 of the
Credit Agreement, the security interest in such Collateral shall be automatically released.

     (d) In connection with any termination or release pursuant to paragraph (a), (b), or
(c), the Collateral Agent shall execute and deliver to any Grantor, at such Grantor’s

-23-

 

expense, all documents that such Grantor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to this Section
6.13 shall be without recourse to or warranty by the Collateral Agent.

     (e) At any time that the respective Grantor desires that the Collateral Agent take
any action described in immediately preceding clause (d), it shall, upon request of the
Collateral Agent, deliver to the Collateral Agent an officer’s certificate certifying that
the release of the respective Collateral is permitted pursuant to paragraph (a), (b) or (c).
The Collateral Agent shall have no liability whatsoever to any Secured Party as the result
of any release of Collateral by it as permitted (or which the Collateral Agent in good faith
believes to be permitted) by this Section 6.13.

     (f) Notwithstanding anything to contrary set forth in this Agreement, each Cash
Management Bank and each Hedge Bank by the acceptance of the benefits under this Agreement
hereby acknowledge and agree that (i) the Security Interests granted under this Agreement of
the Secured Obligations of the Borrower or any Subsidiary under any Secured Hedge Agreement
and the Cash Management Obligations shall be automatically released upon termination of the
Aggregate Commitments and payment in full of all other Secured Obligations, in each case,
unless the Secured Obligations under the Secured Hedge Agreement or the Cash Management
Obligations are due and payable at such time (it being understood and agreed that this
Agreement and the Security Interests granted herein shall survive solely as to such due and
payable Secured Obligations and until such time as such due and payable Secured Obligations
have been paid in full) and (ii) any release of Collateral or of a Grantor, as the case may
be, effected in the manner permitted by this Agreement shall not require the consent of any
Hedge Bank or Cash Management Bank.

          Section 6.14. Additional Restricted Subsidiaries. Pursuant to (and to the extent
required by) Section 6.11 of the Credit Agreement, certain Restricted Subsidiaries of the Loan
Parties that were not in existence or not Restricted Subsidiaries on the date of the Credit
Agreement are required to enter in this Agreement as Subsidiary Parties upon becoming Restricted
Subsidiaries. Upon execution and delivery by the Collateral Agent and a Restricted Subsidiary of a
Security Agreement Supplement, such Restricted Subsidiary shall become a Subsidiary Party hereunder
with the same force and effect as if originally named as a Subsidiary Party herein. The execution
and delivery of any such instrument shall not require the consent of any other Loan Party
hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and
effect notwithstanding the addition of any new Loan Party as a party to this Agreement.

          Section 6.15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out
the provisions of this Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes hereof at any time
after and during the continuance of an Event of Default, which appointment is irrevocable and
coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent
shall have the right, upon the occurrence and during the continuance of an Event of Default and
(unless a Bankruptcy Event of Default has occurred and is continuing) delivery of notice by the

-24-

 

Collateral Agent to the Borrower of its intent to exercise such rights, with full power of
substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of
the Collateral; (d) to send verifications of Accounts to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any
actions, suits or proceedings relating to all or any of the Collateral; (g) to notify, or to
require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent or
to a Collateral Account and adjust, settle or compromise the amount of payment of any Account; and
(h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent to make any commitment or to
make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent,
or to present or file any claim or notice, or to take any action with respect to the Collateral or
any part thereof or the moneys due or to become due in respect thereof or any property covered
thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts
actually received as a result of the exercise of the powers granted to them herein, and neither
they nor their officers, directors, employees or agents shall be responsible to any Grantor for any
act or failure to act hereunder, except for their own gross negligence or willful misconduct or
that of any of their Affiliates, directors, officers, employees, counsel, agents or
attorneys-in-fact.

          Section 6.16. General Authority of the Collateral Agent. By acceptance of the
benefits of this Agreement and any other Collateral Documents, each Secured Party (whether or not a
signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Collateral
Agent as its agent hereunder and under such other Collateral Documents, (b) to confirm that the
Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for
the enforcement of any provisions of this Agreement and such other Collateral Documents against any
Grantor, the exercise of remedies hereunder or thereunder and the giving or withholding of any
consent or approval hereunder or thereunder relating to any Collateral or any Grantor’s obligations
with respect thereto, (c) to agree that it shall not take any action to enforce any provisions of
this Agreement or any other Collateral Document against any Grantor, to exercise any remedy
hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as
expressly provided in this Agreement or any other Collateral Document and (d) to agree to be bound
by the terms of this Agreement and any other Collateral Documents.

          Section 6.17. Effectiveness of the Merger. (a) Target and its Subsidiaries shall
have no rights or obligations hereunder until the consummation of the Merger and any
representations and warranties of Target or any of its Subsidiaries hereunder shall not become
effective until such time. Upon consummation of the Merger, Target shall succeed to all the rights
and obligations of Merger Sub under this Agreement and all rights, obligations,

-25-

 

representations and warranties of Target and its Subsidiaries shall become effective as of the
date hereof, without any further action by any Person.

          (b) Upon consummation of the Secondary Merger, Opco shall succeed to all the rights and
obligations of Target under this Agreement and all rights, obligations, representations and
warranties of Opco and its Subsidiaries shall become effective as of the date hereof, without any
further action by any Person.

          Section 6.18. Recourse; Limited Obligations. This Agreement is made with full
recourse to each Grantor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Grantor contained herein, in the Loan Documents and the other
Secured Credit Documents and otherwise in writing in connection herewith or therewith, with respect
to the Secured Obligations of each applicable Secured Party. It is the desire and intent of each
Grantor and each applicable Secured Party that this Agreement shall be enforced against each
Grantor to the fullest extent permissible under the laws applied in each jurisdiction in which
enforcement is sought. Notwithstanding anything to the contrary contained herein, and in
furtherance of the foregoing, it is noted that the obligations of each Grantor that is a Subsidiary
Party have been limited as provided in the Subsidiary Guaranty.

-26-

 

          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	LONE STAR HOLDINGS CORP.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	LONE STAR MERGER CORP.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-28-

 

	 	 	 	 	 	 	 	 	 
	 	 	ACTIVANT SOLUTIONS HOLDINGS INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-29-

 

	 	 	 	 	 	 	 	 	 
	 	 	ACTIVANT SOLUTIONS INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-30-

 

	 	 	 	 	 	 	 	 	 
	 	 	CCI/ARD, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-31-

 

	 	 	 	 	 	 	 	 	 
	 	 	CCI/TRIAD FINANCIAL HOLDING CORPORATION
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-32-

 

	 	 	 	 	 	 	 	 	 
	 	 	CCI/TRIAD GEM, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-33-

 

	 	 	 	 	 	 	 	 	 
	 	 	DISTRIBUTOR INFORMATION SYSTEMS CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-34-

 

	 	 	 	 	 	 	 	 	 
	 	 	ENTERPRISE COMPUTER SYSTEMS, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-35-

 

	 	 	 	 	 	 	 	 	 
	 	 	HM COOP LLC	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	By: Activant Solutions Inc., as its Sole
Member	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-36-

 

	 	 	 	 	 	 	 	 	 
	 	 	PRELUDE SYSTEMS, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-37-

 

	 	 	 	 	 	 	 	 	 
	 	 	PROPHET 21 CANADA INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-38-

 

	 	 	 	 	 	 	 	 	 
	 	 	PROPHET 21 INVESTMENT CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-39-

 

	 	 	 	 	 	 	 	 	 
	 	 	PROPHET 21 (NEW JERSEY), INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-40-

 

	 	 	 	 	 	 	 	 	 
	 	 	PROPHET 21, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-41-

 

	 	 	 	 	 	 	 	 	 
	 	 	SDI MERGER CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-42-

 

	 	 	 	 	 	 	 	 	 
	 	 	SPEEDWARE HOLDINGS, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-43-

 

	 	 	 	 	 	 	 	 	 
	 	 	SPEEDWARE USA INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-44-

 

	 	 	 	 	 	 	 	 	 
	 	 	STANPAK SYSTEMS, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-45-

 

	 	 	 	 	 	 	 	 	 
	 	 	TRADE SERVICE SYSTEMS, INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-46-

 

	 	 	 	 	 	 	 	 	 
	 	 	TRIAD DATA CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-47-

 

	 	 	 	 	 	 	 	 	 
	 	 	TRIAD SYSTEMS CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-48-

 

	 	 	 	 	 	 	 	 	 
	 	 	TRIAD SYSTEMS FINANCIAL CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-49-

 

	 	 	 	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST
COMPANY AMERICAS, 

     as
Collateral Agent	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 

-50-

 

SCHEDULE I to

the Security Agreement

SUBSIDIARY PARTIES

 

 

SCHEDULE II to

the Security Agreement

EQUITY INTERESTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Number and	 	 	 	 
	 	 	Number of	 	 	Registered	 	 	Class of	 	 	Percentage	 
	Issuer 	 	Certificate	 	 	Owner	 	 	Equity Interest	 	 	of Equity Interests	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

PROMISSORY NOTES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 	 	 	 
	 	 	Amount as of the	 	 	 	 	 	 	 
	 	 	date of Issuance	 	 	Date of Promissory	 	 	 	 
	Issuer	 	(or delivery)	 	 	Note/Instrument	 	 	Maturity Date	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

 

 

SCHEDULE III to

the Security Agreement

COMMERCIAL TORT CLAIMS

 

 

          SUPPLEMENT
NO. ___ dated as of [•], to the Security Agreement dated as of May 2, 2006, among
LONE STAR HOLDING CORP., a Delaware corporation (“Holdings”), ACTIVANT SOLUTIONS INC., a
Delaware Corporation (the “Borrower”) the Subsidiaries of Holdings identified therein and
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent for the Secured Parties (as defined
below).

          A. Reference is made to (i) the Credit Agreement dated as of May 2, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Holdings, the Borrower, Deutsche Bank Trust Company Americas, as Administrative Agent, Swing
Line Lender and an L/C Issuer, each Lender from time to time party thereto, JPMorgan Chase Bank,
N.A., as Syndication Agent, and Lehman Commercial Paper Inc., as Documentation Agent, (ii) the
Holdings Guaranty (as defined in the Credit Agreement), (iii) the Borrower Guaranty (as defined in
the Credit Agreement), (iv) the Subsidiary Guaranty (as defined in the Credit Agreement), (v) each
Secured Hedge Agreement (as defined in the Credit Agreement) and (vi) the Cash Management Services
(as defined in the Credit Agreement).

          B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the Security Agreement referred to therein.

          C. The Grantors have entered into the Security Agreement in order to induce (x) the Lenders
to make Loans and the L/C Issuers to issue Letters of Credit and (y) the Hedge Banks to enter into
and maintain Secured Hedge Agreements. Section 6.14 of the Security Agreement provides that
additional Restricted Subsidiaries of the Borrower may become Subsidiary Parties under the Security
Agreement by execution and delivery of an instrument substantially in the form of this Supplement.
The undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this Supplement
in accordance with the requirements of the Credit Agreement to become a Subsidiary Party under the
Security Agreement in order to induce the Lenders to make additional Loans and the L/C Issuers to
issue additional Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.

          Accordingly, the Collateral Agent and the New Subsidiary agree as follows:

          Section 1. In accordance with Section 6.14 of the Security Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party (and accordingly, becomes a
Grantor) and Grantor under the Security Agreement with the same force and effect as if
originally named therein as a Subsidiary Party and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the Security Agreement applicable to it as a Subsidiary
Party and Grantor thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on and as of the date
hereof; provided that, to the extent that such representations and warranties specifically
refer to an earlier date, they shall be true and correct in all respects as of such earlier
date. In furtherance of the foregoing, the New Subsidiary, as security for the payment and
performance in full of the Secured Obligations does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their
successors and assigns, a security interest in and lien on all of the

 

 

New Subsidiary’s right, title and interest in and to the Collateral (as defined in the
Security Agreement) of the New Subsidiary. Each reference to a “Grantor” in the Security
Agreement shall be deemed to include the New Subsidiary. The Security Agreement is hereby
incorporated herein by reference.

          Section 2. The New Subsidiary represents and warrants to the Collateral Agent and the
other Secured Parties that this Supplement has been duly authorized, executed and delivered
by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

          Section 3. This Supplement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Supplement shall become
effective when the Collateral Agent shall have received a counterpart of this Supplement
that bears the signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart of this
Supplement.

          Section 4. The New Subsidiary hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of the location of any and all
Collateral of the New Subsidiary1 and (b) set forth under its signature hereto is
the true and correct legal name of the New Subsidiary, its jurisdiction of formation and the
location of its chief executive office (or if different, its “location” as determined in
accordance with Section 9-307 of the Uniform Commercial Code).

          Section 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

          Section 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

          Section 7. In case any one or more of the provisions contained in this Supplement
should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and in the Security Agreement
shall not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.

 

			
	1	 	After July 1, 2006, this information will not
be required with respect to any particular jurisdiction, if after the request
by the New Subsidiary with respect to such jurisdiction, the Collateral Agent
and its counsel, reasonably determine that such information is not needed to
ensure the perfection or the priority of the security interests granted (or
purported to be granted) under the Security Agreement in such jurisdiction.

-II-

 

 

          Section 8. All communications and notices hereunder shall be in writing and given as
provided in Section 6.01 of the Security Agreement.

          Section 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including all Attorney
Costs of counsel for the Collateral Agent.

          IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this
Supplement to the Security Agreement as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	[NAME OF NEW SUBSIDIARY],	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Legal Name:	 	 
	 

	 	 	 	Jurisdiction of Formation:	 	 
	 

	 	 	 	Location of Chief Executive office:
	 	 
	 
	 	 	 	 	 	 
	 	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, 

      as
Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

III

 

LOCATION OF COLLATERAL

	 	 	 
	Description	 	Location
	 	 	 
	 	 	 
	 	 	 

EQUITY INTERESTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Number and	 	 	 	 
	 	 	Number of	 	 	Registered	 	 	Class of	 	 	Percentage	 
	Issuer 	 	Certificate	 	 	Owner	 	 	Equity Interest	 	 	of Equity Interests	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

PROMISSORY NOTES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 	 	 	 
	 	 	Amount as of the	 	 	 	 	 	 	 
	 	 	date of issuance	 	 	 	 	 	 	 
	Issuer	 	(or delivery)	 	 	Date of Note/Instrument	 	 	Maturity Date	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

COMMERCIAL TORT CLAIMS

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]