This SECURITY
AGREEMENT (this “ Agreement ”) is made as of
February 1, 2008, by the Grantor listed on the signature pages
hereof “ Grantor ”), and PRIVATE EQUITY
MANAGEMENT GROUP, INC., a Nevada corporation, in its capacity as
administrative agent for the Lender Group (together with its
successors, “ Agent ”).
WHEREAS, pursuant
to that certain Second Lien Credit Agreement of even date herewith
(as amended, restated, supplemented or otherwise modified from time
to time, including all schedules thereto, the “ Credit
Agreement ”) among BAKERS FOOTWEAR GROUP, INC., a
Missouri corporation (“ Borrower ”), the lenders
party thereto as “Lenders” (“ Lenders
”), and Agent, the Lender Group is willing to make available
to Borrower a secured credit facility of $10,000,000 from time to
time pursuant to the terms and conditions thereof, and
WHEREAS, Agent has
agreed to act as agent for the benefit of the Lender Group in
connection with the transactions contemplated by this Agreement,
and
WHEREAS, in order
to induce the Lender Group to enter into the Credit Agreement and
the other Loan Documents and to induce the Lender Group to make
financial accommodations to Borrower as provided for in the Credit
Agreement, Grantor has agreed to grant a continuing security
interest in and to the Collateral in order to secure the prompt and
complete payment, observance and performance of, among other
things, (a) the obligations of Grantor arising from this
Agreement, the Credit Agreement, and the other Loan Documents
(excluding the Registration Rights Agreement and the Warrants) and
(b) all Obligations of Borrower (including, without
limitation, any interest, fees or expenses that accrue after the
filing of an Insolvency Proceeding, regardless of whether allowed
or allowable in whole or in part as a claim in any Insolvency
Proceeding), plus reasonable attorneys fees and expenses if the
obligations represented thereunder are collected by law, through an
attorney-at-law, or under advice therefrom (clauses (a) and
(b) being hereinafter referred to as the “ Secured
Obligations ”), by the granting of the security interests
contemplated by this Agreement, and
NOW, THEREFORE,
for and in consideration of the recitals made above and other good
and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, the parties hereto agree as
follows:
1.
Defined Terms . All capitalized terms used herein
(including, without limitation, in the preamble and recitals
hereof) without definition shall have the meanings ascribed thereto
in the Credit Agreement. Any terms used in this Agreement that are
defined in the Code shall be construed and defined as set forth in
the Code unless otherwise defined herein or in the Credit
Agreement; provided , however , that to the extent
that the Code is used to define any term herein and such term is
defined differently in different Articles of the Code, the
definition of such term contained in Article 9 of the Code
shall govern. In addition to those terms defined elsewhere in this
Agreement, as used in this Agreement, the following terms shall
have the following meanings:
(a) “
Accounts ” means accounts (as that term is defined in
the Code).
(b) “
Code ” means the California Uniform Commercial Code,
as in effect from time to time; provided, however, that in the
event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection, priority, or remedies with respect to
Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other
than the State of California, the term “Code” shall
mean the Uniform Commercial Code as enacted and in effect in such
other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or
remedies.
(c) “
Copyrights ” means all right, title and interest in
and to copyrights in works of authorship of any kind, and all
registration applications, registrations and recordings thereof in
the Office of the United States Register of Copyrights, Library of
Congress, or in any similar office or agency of any country or
political
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subdivision
thereof throughout the world, whether now owned or hereafter
acquired, including, but not limited to, those described in
Schedule A to the Copyright Security Agreement annexed
hereto and made a part hereof, together with all extensions,
renewals, reversionary rights, and corrections thereof and all
licenses thereof or pertaining thereto.
(d) “
Copyright Security Agreement ” means each Copyright
Security Agreement between Grantor and Agent, for the benefit of
the Lender Group, in substantially the form of Exhibit B
attached hereto, pursuant to which Grantor has granted to Agent,
for the benefit of the Lender Group, a security interest in all of
its Copyrights.
(e) “
Deposit Account ” means deposit account (as that term
is defined in the Code).
(f) “
Equipment ” means equipment (as that term is defined
in the Code).
(g) “
General Intangibles ” means general intangibles (as
that term is defined in the Code and, in any event, including,
without limitation, payment intangibles, contract rights, rights to
payment, rights arising under common law, statutes, or regulations,
choses or things in action, goodwill (including the goodwill
associated with any Trademark, Patent, or Copyright), Patents,
Trademarks, Copyrights, URLs and domain names, industrial designs,
other industrial or intellectual property or rights therein or
applications therefor, whether under license or otherwise,
programs, programming materials, blueprints, drawings, purchase
orders, customer lists, monies due or recoverable from pension
funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, including intellectual property
licenses, infringement claims, computer programs, information
contained on computer disks or tapes, software, literature,
reports, catalogs, pension plan refunds, pension plan refund
claims, insurance premium rebates, tax refunds, and tax refund
claims, uncertificated securities, and any other personal property
other than commercial tort claims, money, Accounts, Chattel Paper,
Deposit Accounts, goods, Investment Related Property, Negotiable
Collateral, and oil, gas, or other minerals before
extraction).
(h) “
Intellectual Property Collateral ” means the
Copyrights, the Patents and the Trademarks.
(i) “
Inventory ” means inventory (as that term is defined
in the Code).
(j) “
Investment Related Property ” means
(i) investment property (as that term is defined in the Code),
and (ii) all of the following regardless of whether classified
as investment property under the Code: all Pledged Interests,
Pledged Operating Agreements, and Pledged Partnership
Agreements.
(k) “
Patents ” means all right, title and interest in and
to all inventions and letters patent and registration applications
therefor, and all registrations and recordings thereof, including,
without limitation, registration applications, registrations and
recordings in the United States Patent and Trademark Office or in
any similar office or agency of the United States or any state
thereof, or in any similar office or agency of any country or
political subdivision thereof throughout the world, whether now
owned or hereafter acquired, including, but not limited to, those
described in Schedule A to the Patent Security
Agreement annexed hereto and made a part hereof, together with all
re-examinations, reissues, continuations, continuations-in-part,
divisions, improvements and extensions thereof and all licenses
thereof or pertaining thereto and all licenses of patent rights now
in effect or hereafter entered into and the rights to make, use and
sell, and all other rights with respect to, the inventions
disclosed or claimed therein, all inventions, designs, proprietary
or technical information, know-how, other data or information,
software, databases, all embodiments or fixations thereof and
related documentation, all information having value in connection
with the business relating thereto and all other trade secret
rights not described above.
(l) “
Patent Security Agreement ” means each Patent Security
Agreement between Grantor and Agent, for the benefit of the Lender
Group, in substantially the form of Exhibit C attached
hereto, pursuant to which Grantor has granted to Agent, for the
benefit of the Lender Group, a security interest in all of its
Patents.
(m) “
Pledged Companies ” means, each Person listed on
Schedule 1 hereto as a “Pledged Company”,
together with each other Person, all or a portion of whose Stock,
is acquired or otherwise owned by Grantor after the Closing
Date.
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(n) “
Pledged Interests ” means all of Grantor’s
right, title and interest in and to all of the Stock now or
hereafter owned by Grantor, regardless of class or designation,
including, without limitation, in each of the Pledged Companies,
and all substitutions therefor and replacements thereof, all
proceeds thereof and all rights relating thereto, including,
without limitation, any certificates representing the Stock, the
right to request after the occurrence and during the continuation
of an Event of Default that such Stock be registered in the name of
Agent or any of its nominees, the right to receive any certificates
representing any of the Stock and the right to require that such
certificates be delivered to Agent together with undated powers or
assignments of investment securities with respect thereto, duly
endorsed in blank by Grantor, all warrants, options, share
appreciation rights and other rights, contractual or otherwise, in
respect thereof and of all dividends, distributions of income,
profits, surplus, or other compensation by way of income or
liquidating distributions, in cash or in kind, and cash,
instruments, and other property from time to time received,
receivable, or otherwise distributed in respect of or in addition
to, in substitution of, on account of, or in exchange for any or
all of the foregoing.
(o) “
Pledged Interests Addendum ” means a Pledged Interests
Addendum substantially in the form of Exhibit D to this
Agreement.
(p) “
Pledged Operating Agreements ” means all of
Grantor’s rights, powers, and remedies under the limited
liability company operating agreements of the Pledged Companies
that are limited liability companies.
(q) “
Pledged Partnership Agreements ” means all of
Grantor’s rights, powers, and remedies under the partnership
agreements of each of the Pledged Companies that are
partnerships.
(r) “
Records ” means information that is inscribed on a
tangible medium or which is stored in an electronic or other medium
and is retrievable in perceivable form.
(s) “
Securities Accounts ” means securities accounts (as
that term is defined in the Code).
(t) “
Trademarks ” means all right, title and interest in
and to trademarks, trade names, trade styles, service marks, logos,
emblems, prints and labels, all elements of package or trade dress
of goods, and all general intangibles of like nature, now existing
or hereafter adopted or acquired, together with the goodwill of the
business connected with the use thereof and symbolized thereby, and
all registration applications, registrations and recordings
thereof, including, without limitation, registration applications,
registrations and recordings in the United States Patent and
Trademark Office or in any similar office or agency of the United
States or in any office of the Secretary of State (or equivalent)
of any state thereof, or in any similar office or agency of any
country or political subdivision thereof throughout the world,
whether now owned or hereafter acquired, including, but not limited
to, those described in Schedule A to the Trademark
Security Agreement and made a part hereof, together with all
extensions, renewals and corrections thereof and all licenses
thereof or pertaining thereto.
(u) “
Trademark Security Agreement ” means each Trademark
Security Agreement between Grantor and Agent, for the benefit of
the Lender Group, in substantially the form of Exhibit E
attached hereto, pursuant to which Grantor has granted to Agent,
for the benefit of the Lender Group, a security interest in all of
its Trademarks.
(v) “
URL ” means “uniform recourse locator,” an
internet web address.
2. Grant
of Security . Grantor hereby unconditionally grants, assigns
and pledges to Agent, for the benefit of the Lender Group, a
continuing security interest in all personal property of Grantor,
whether now owned or hereafter acquired or arising and wherever
located (hereinafter referred to as the “ Security
Interest ”), including, without limitation,
Grantor’s right, title, and interest in and to the following,
whether now owned or hereafter acquired or arising and wherever
located (the “ Collateral ”):
(a) all
of Grantor’s Accounts;
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(b) all
of Grantor’s books and records (including all of its Records
indicating, summarizing, or evidencing its assets (including the
Collateral) or liabilities, all of its Records relating to its
business operations or financial condition, and all of its goods or
General Intangibles related to such information) (“
Books ”);
(c) all
of Grantor’s chattel paper (as that term is defined in the
Code) and, in any event, including, without limitation, tangible
chattel paper and electronic chattel paper (“ Chattel
Paper ”);
(d) all
of Grantor’s interest with respect to any Deposit
Account;
(e) all
of Grantor’s Equipment and fixtures;
(f) all
of Grantor’s General Intangibles;
(g) all
of Grantor’s Intellectual Property Collateral;
(h) all
of Grantor’s Inventory;
(i) all
of Grantor’s Investment Related Property;
(j) all
of Grantor’s letters of credit, letter of credit rights,
instruments, promissory notes, drafts, and documents (as such terms
may be defined in the Code) (“ Negotiable Collateral
”);
(k) all
of Grantor’s rights in respect of supporting obligations (as
such term is defined in the Code), including letters of credit and
guaranties issued in support of Accounts, Chattel Paper, documents,
General Intangibles, instruments, or Investment Related Property
(“ Supporting Obligations ”);
(l) all
of Grantor’s interest with respect to any commercial tort
claims (as that term is defined in the Code), including, without
limitation those commercial tort claims listed on
Schedule 2 attached hereto (“ Commercial Tort
Claims ”);
(m) all
of Grantor’s money, Cash Equivalents, or other assets of each
Grantor that now or hereafter come into the possession, custody, or
control of Agent or any other member of the Lender Group or the
Bank Product Provider; and
(n) all
of the proceeds and products, whether tangible or intangible, of
any of the foregoing, including proceeds of insurance or commercial
tort claims covering or relating to any or all of the foregoing,
and any and all Accounts, Books, Chattel Paper, Deposit Accounts,
Equipment, General Intangibles, Inventory, Investment Related
Property, Negotiable Collateral, Supporting Obligations, money, or
other tangible or intangible property resulting from the sale,
lease, license, exchange, collection, or other disposition of any
of the foregoing, the proceeds of any award in condemnation with
respect to any of the property of Grantor, any rebates or refunds,
whether for taxes or otherwise, and all proceeds of any such
proceeds, or any portion thereof or interest therein, and the
proceeds thereof, and all proceeds of any loss of, damage to, or
destruction of the above, whether insured or not insured, and, to
the extent not otherwise included, any indemnity, warranty, or
guaranty payable by reason of loss or damage to, or otherwise with
respect to any of the foregoing Collateral (the “
Proceeds ”). Without limiting the generality of the
foregoing, the term “Proceeds” includes whatever is
receivable or received when Investment Related Property or proceeds
are sold, exchanged, collected, or otherwise disposed of, whether
such disposition is voluntary or involuntary, and includes, without
limitation, proceeds of any indemnity or guaranty payable to
Grantor or Agent from time to time with respect to any of the
Investment Related Property.
Notwithstanding
anything herein to the contrary, in no event shall the Collateral
include or the security interest granted under this Section 2
hereof attach to any lease, license, contract, property rights or
agreement to which Grantor is a party or any of its rights or
interests thereunder if and for so long as the grant of such
security interest shall constitute or result in (i) the
abandonment, invalidation or unenforceability of any material
right, title or interest of Grantor therein or (ii) in a
breach or termination pursuant to the terms of, or a default under,
any such lease, license, contract property rights or agreement
(other than to the extent that any such term would be
rendered
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ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code
(or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law (including the Bankruptcy
Code) or principles of equity) (“Excluded Property”),
provided , however that the Collateral shall include
and such security interest shall attach immediately (x) at
such time as the condition causing such abandonment, invalidation
or unenforceability shall be remedied and to the extent severable,
shall attach immediately to any portion of such lease, license,
contract, property rights or agreement that does not result in any
of the consequences specified in (i) or (ii) above; and
(y) to any proceeds of Excluded Property.
3.
Security for Secured Obligations . This Agreement and the
Security Interest created hereby secures the payment and
performance of all the Secured Obligations, whether now existing or
arising hereafter. Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which
constitute part of the Obligations owed by Borrower to Agent, the
Lender Group or any of them.
4.
Grantor Remains Liable . Anything herein to the contrary
notwithstanding, (a) Grantor shall remain liable under the
contracts and agreements included in the Collateral, including,
without limitation, the Pledged Operating Agreements and the
Pledged Partnership Agreements, to perform all of the duties and
obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by Agent or any other
member of the Lender Group of any of the rights hereunder shall not
release Grantor from any of its duties or obligations under such
contracts and agreements included in the Collateral, and
(c) none of the members of the Lender Group shall have any
obligation or liability under such contracts and agreements
included in the Collateral by reason of this Agreement, nor shall
any of the members of the Lender Group be obligated to perform any
of the obligations or duties of Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned
hereunder. Until an Event of Default shall occur and be continuing,
except as otherwise provided in this Agreement, the Credit
Agreement, or other Loan Documents, Grantor shall have the right to
possession and enjoyment of the Collateral for the purpose of
conducting the ordinary course of its business, subject to and upon
the terms hereof and of the Credit Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, it is
the intention of the parties hereto that record and beneficial
ownership of the Pledged Interests, including, without limitation,
all voting, consensual, and dividend rights, shall remain in
Grantor until the occurrence of an Event of Default and until Agent
shall notify Grantor of Agent’s exercise of voting,
consensual, and/or dividend rights with respect to the Pledged
Interests pursuant to Section 15 hereof.
5.
Representations and Warranties . Grantor hereby represents
and warrants as follows, which representations and warranties shall
be continuing until the Secured Obligations are paid in full and
the Commitments terminated:
(a) The
exact legal name of Grantor is set forth on the signature pages of
this Agreement or a written notice provided to Agent pursuant to
Section 6.5 of the Credit Agreement.
(b)
Schedule 3 attached hereto sets forth all Real Property
owned by Grantor as of the Closing Date.
(c) As
of the date hereof, Grantor has no Trademarks, Patents or
Copyrights registered, or which are the subject of any pending
application, in the United States Patent and Trademark Office, or
any similar office of the United States or in any office of the
Secretary of State (or equivalent) of any state thereof, or the
United States Register of Copyrights, or in any similar office or
agency of any country or political subdivision thereof throughout
the world, other than those identified in Schedule A to
each of the Copyright Security Agreement, the Patent Security
Agreement and the Trademark Security Agreement. The registrations
of the Trademarks are valid and subsisting and in full force and
effect. Grantor has not granted a license or otherwise agreed to
allow any third party to use any Trademark (except as disclosed to
Agent in writing on or prior to the date of this Agreement). The
Patents are valid and subsisting and in full force and effect and
have not been adjudged or, to Grantor’s knowledge, claimed
invalid or unenforceable in whole or in part (except for Permitted
Liens). Grantor has not granted a license or otherwise agreed to
allow any third party to use any Patent (except as disclosed to
Agent in writing on or prior to the date of this Agreement). None
of the Patents has been abandoned or dedicated.
(d) This
Agreement creates a security interest in the Collateral of Grantor,
to the extent a security interest therein can be created under the
Code, securing the payment of the Secured Obligations. Upon:
(i)
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the filing of
financing statements listing Grantor, as a debtor, and Agent, as
secured party, in the jurisdictions listed next to such
Grantor’s name on Schedule 4 attached hereto; and
(ii) the recording in the US Copyright Office and the US
Patent and Trademark Office of a notice of Agent’s security
interest in pertinent Intellectual Property, Agent shall have a
first priority perfected security interest in the Collateral
(subject only to Permitted Liens) of Grantor to the extent such
security interest can be perfected by the filing of a financing
statement or recordation in the US Copyright Office or the US
Patent and Trademark Office.
(e) Except
for the Security Interest created hereby, Grantor is and will at
all times be the sole holder of record and the legal and beneficial
owner, free and clear of all Liens other than Permitted Liens, of
the Pledged Interests indicated on Schedule 1 as being
owned by Grantor and, when acquired by Grantor, any Pledged
Interests acquired after the Closing Date; (ii) all of the
Pledged Interests are duly authorized, validly issued, fully paid
and nonassessable and the Pledged Interests constitute or will
constitute the percentage of the issued and outstanding equity
interests of the Pledged Companies of Grantor identified on
Schedule 1 hereto as supplemented or modified by any
Pledged Interests Addendum or any Supplement to this Agreement;
(ii) Grantor has the right and requisite authority to pledge
the Investment Related Property pledged by Grantor to Agent as
provided herein; (iii) all actions necessary or desirable to
perfect or establish the first priority of Agent’s Liens in
the Investment Related Property (subject to Permitted Liens), and
the proceeds thereof, have been duly taken, (A) upon the
execution and delivery of this Agreement; (B) upon the taking
of possession by Agent of any certificates constituting the Pledged
Interests, to the extent such Pledged Interests are represented by
certificates, together with undated powers endorsed in blank by
Grantor; (C) upon the filing of financing statements in the
applicable jurisdiction set forth on Schedule 4
attached hereto for Grantor with respect to the Pledged Interests
of Grantor that are not represented by certificates, and
(D) with respect to any Securities Accounts, upon the delivery
of Control Agreements with respect thereto; and (iv) Grantor
has delivered to and deposited with Agent (or, with respect to any
Pledged Interests created after the Closing Date, will deliver and
deposit in accordance with Sections 6 and 8
hereof) all certificates representing the Pledged Interests owned
by Grantor to the extent such Pledged Interests are represented by
certificates, and undated powers endorsed in blank with respect to
such certificates.
(f) Other
than execution and delivery of the Subordination Agreements, the
filing of financing statements, Mortgages and the security
agreements attached hereto as Exhibits B , C and
E and any requirement under applicable law to register Stock
and the other consents and filings identified on
Schedule 4.9(c) to the Credit Agreement, to the best of
Grantor’s knowledge, no consent, approval, authorization, or
other order or other action by, and no notice to or filing with,
any Governmental Authority or any other Person is required
(i) for the grant of a Security Interest by Grantor in and to
the Collateral pursuant to this Agreement or for the execution,
delivery, or performance of this Agreement by Grantor, or
(ii) for the exercise by Agent of the voting or other rights
provided for in this Agreement with respect to the Investment
Related Property or the remedies in respect of the Collateral
pursuant to this Agreement, except (x) as may be required in
connection with such disposition of Investment Related Property by
laws affecting the offering and sale of securities generally; and
(y) for consents and approvals that have been obtained and
that are still in force and effect.
6.
Covenants . Grantor covenants and agrees with Agent and the
Lender Group that from and after the date of this Agreement and
until the date of termination of this Agreement in accordance with
Section 22 hereof:
(a)
Possession of Collateral . In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable
Collateral, Investment Related Property, or Chattel Paper, and if
and to the extent that perfection or priority of Agent’s
Security Interest is dependent on or enhanced by possession,
Grantor, to the extent required by the Subordination Agreements,
promptly upon the request of Agent and in accordance with
Section 8 hereof, shall execute such other documents as
shall be reasonably requested by Agent or, if applicable, endorse
and deliver physical possession of such Negotiable Collateral,
Investment Related Property, or Chattel Paper to Agent, together
with such undated powers endorsed in blank as shall be requested by
Agent;
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(i) Upon
the request of Agent, Grantor shall take all steps reasonably
necessary to grant Agent control of all electronic Chattel Paper in
accordance with the Code and all “transferable records”
as that term is defined in Section 16 of the Uniform
Electronic Transaction Act and Section 201 of the federal
Electronic Signatures in Global and National Commerce Act as in
effect in any relevant jurisdiction;
(ii) If
Grantor retains possession of any Chattel Paper or instruments
(which retention of possession shall be subject to the extent
permitted hereby and by the Credit Agreement), promptly upon the
request of Agent, and to the extent the same is practicable, such
Chattel Paper and instruments shall be marked with the following
legend: “This writing and the obligations evidenced or
secured hereby are subject to the Security Interest of Private
Equity Management Group INC., as Agent for the benefit of the
Lender Group”;
(i) To
the extent required by the Credit Agreement and permitted by the
Subordination Agreements, Grantor shall obtain an authenticated
Control Agreement, from each bank holding a Deposit Account for
Grantor;
(ii) To
the extent required by the Credit Agreement and permitted by the
Subordination Agreements, Grantor shall obtain authenticated
Control Agreements, from each issuer of uncertificated securities,
securities intermediary, or commodities intermediary issuing or
holding any financial assets or commodities to or for
Grantor;
(d)
Letter of Credit Rights . Subject to the rights of the
Senior Lender, if Grantor is or becomes the beneficiary of a letter
of credit in excess of $100,000, Grantor shall promptly (and in any
event within 5 Business Days after becoming a beneficiary), notify
Agent thereof and, upon the request by Agent, use commercially
reasonable efforts to enter into a tri-party agreement with Agent
and the issuer and/or confirmation bank with respect to
letter-of-credit rights (as that term is defined in the Code)
assigning such letter-of-credit rights to Agent and directing all
payments thereunder to Agent’s Account, all in form and
substance satisfactory to Agent;
(e)
Commercial Tort Claims . Grantor shall promptly (and in any
event within 5 Business Days of receipt thereof), notify Agent in
writing upon incurring or otherwise obtaining a Commercial Tort
Claim after the date hereof against any third party in an amount
exceeding $100,000 and, upon request of Agent, promptly amend
Schedule 2 to this Agreement, authorize the filing of
additional or amendments to existing financing statements and do
such other acts or things deemed reasonably necessary or desirable
by Agent to give Agent a security interest in any such Commercial
Tort Claim;
(f)
Investment Related Property .
(i) If
Grantor shall receive or become entitled to receive any Pledged
Interests after the Closing Date, it shall promptly (and in any
event within 5 Business Days of receipt thereof) deliver to Agent a
duly executed Pledged Interests Addendum identifying such Pledged
Interests;
(ii) Grantor
agrees that it will cooperate with Agent in obtaining all necessary
approvals and making all necessary filings under federal, state,
local, or foreign law in connection with the Security Interest on
the Investment Related Property or any sale or transfer
thereof;
(iii) As
to all limited liability company or partnership interests issued
under any Pledged Operating Agreement or Pledged Partnership
Agreement, Grantor hereby represents, warrants and covenants that
the Pledged Interests issued pursuant to such agreement
(A) are not and shall not be dealt in or traded on securities
exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and
will not be held by such Pledgor in a securities account. In
addition, none of the Pledged Operating Agreements, the Pledged
Partnership Agreements, or any other agreements governing any of
the Pledged Interests issued under any Pledged Operating Agreement
or Pledged Partnership Agreement, provide or shall
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provide that
such Pledged Interests are securities governed by Article 8 of
the Uniform Commercial Code as in effect in any relevant
jurisdiction;
(g)
Real Property; Fixtures. Grantor covenants and agrees that
upon the acquisition of any fee interest in Real Property it will
promptly (and in any event within 10 Business Days of acquisition)
notify Agent of the acquisition of such Real Property and will
grant to Agent, for the benefit of the Lender Group, a Mortgage
(subject to existing Liens) on each fee interest in Real Property
now or hereafter owned by Grantor and shall deliver such other
documentation and opinions, in form and substance reasonably
satisfactory to Agent, in connection with the grant of such
Mortgage as Agent shall request in its Permitted Discretion,
including, without limitation, title insurance policies, financing
statements, fixture filings and environmental audits and Grantor
shall pay all recording costs, intangible taxes and other fees and
costs (including reasonable attorneys fees and expenses) incurred
in connection therewith. Grantor acknowledges and agrees that, to
the extent permitted by applicable law, all of the Collateral shall
remain personal property regardless of the manner of its attachment
or affixation to real property.
(h)
Transfers and Other Liens . Grantor shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Collateral, except
as expressly permitted by the Credit Agreement, or (ii) create
or permit to exist any Lien upon or with respect to the Collateral
of Grantor, except for Permitted Liens. The inclusion of Proceeds
in the Collateral shall not be deemed to constitute Agent’s
consent to any sale or other disposition of any of the Collateral
except as expressly permitted in this Agreement or the other Loan
Documents.
(i)
Other Actions as to Any and All Collateral . Grantor shall
promptly (and in any event within 5 Business Days of acquiring or
obtaining such Collateral) notify Agent in writing upon acquiring
or otherwise obtaining any Collateral after the date hereof
consisting of Investment Related Property, Chattel Paper
(electronic, tangible or otherwise), documents (as defined in the
Code), or instruments (as defined in the Code) and, upon the
request of Agent and in accordance with Section 8
hereof, promptly execute such other documents, or if applicable,
deliver such Chattel Paper, other documents or certificates
evidencing any Investment Related Property in accordance with
Section 6 hereof and do such other acts or things
deemed reasonably necessary or desirable by Agent to protect
Agent’s Security Interest therein.
(j)
Intellectual Property Collateral .
(i) Grantor
(either itself or through its licensees) will place appropriate
notice of Copyright on all copies embodying material copyrighted
works covered by the Copyright which are publicly distributed, and
Grantor will not (and will not permit any licensee thereof to) do
any act or knowingly omit to do any act whereby any Copyright may
become invalidated or dedicated to the public domain. Grantor will
continue to use standards of quality in the manufacture of products
sold under the Trademarks that are at least equal to those
standards in effect as of the date of this Agreement. Grantor
(eithe
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