Common use of Encumbrances Clause in Contracts

Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”): (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind nature whatsoever on any of its assets or character upon any asset of property, including, without limitation, the BorrowerCollateral, whether owned at other than the date hereof or hereafter acquired except following (“Permitted Liens”): ): (a) Liens for securing the payment of taxes, assessments or other governmental charges either not yet due or the validity of which is being contested in good faith by appropriate proceedings, and as to which Borrower shall, if appropriate under GAAP, have set aside on its books and records adequate reserves, provided, that such contest does not have a material adverse effect on the ability of Borrower to pay any of the Liabilities, or the priority or value of Administrative Agent’s Lien in the Collateral (other than with respect to other Permitted Liens provided for herein); (b) deposits under workmen’s compensation, unemployment insurance, social security, leases and other similar laws; (c) Liens in favor of Administrative Agent (for the ratable benefit of Lenders and Administrative Agent); (d) liens imposed by law, such as mechanics’, materialmen’s, landlord’s, warehousemen’s, carriers’ and other similar liens, securing obligations incurred in the ordinary course of business that are not past due for more than ten (10) calendar days, that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established or that are not yet due and payable; (e) liens which arise by operation of law in the ordinary course of business, other then liens which arise by operation of Environmental Laws; (f) zoning restrictions, building codes, easements, rights of way, licenses, covenants and other similar restrictions affecting the use of real Property; (g) purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure the purchase price of such a manner as property so long as: (i) the aggregate indebtedness relating to such purchase money security interests and Capitalized Lease Obligations does not to make the property forfeitable; at any one time outstanding exceed Five Hundred Thousand Dollars (b$500,000) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from at any time, (ii) each such lien shall attach only to the value property (and the proceeds thereof) to be acquired; (iii) the principal amount of its property the indebtedness incurred shall not exceed one hundred percent (100%) of the purchase price of the item or assets items purchased and ( iv) such Lien shall be created within thirty (30) days of the acquisition of the related asset; (h) any Liens set forth on Schedule 9.1 and any renewal or materially impair refinancing of the use thereof in indebtedness for which such liens were granted provided that the operation amount of its business; (c) Liens arising out of judgments or awards against the Borrower such indebtedness with respect to which it shall concurrently therewith be prosecuting a timely appeal any renewal or proceeding for review refinancing is not increased and the liens with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which indebtedness do not extend beyond the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunderCollateral listed thereon; and (i) Liens set forth consisting of judgment liens that are inferior in Schedule 7.6 (but only remaining in effect right to the extent set forth in Liens of Lender hereunder and are with respect to judgments that do not constitute an Event of Default under Section 7.6(c10(e) and Section 7.20)hereof; or (j) any escrow arrangements (whether involving cash, stock or other Property) pursuant to any Acquisition Agreement.

Encumbrances. The Neither Borrower nor any of their Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge Encumbrance of any kind upon or character upon with respect to any asset of their property or assets, or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Receivables with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens Encumbrances in favor of the Agent or any of the Secured Parties to secure Obligations; (b) Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords’ and lessors’ liens in respect of rent not in default or which liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent or are being contested in good faith by appropriate proceedings in such a manner as not to make faith; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens other than for the payment of money); and liens securing statutory obligations or charges surety, indemnity, performance, or other similar bonds incidental to the conduct of its either Borrower’s or a Subsidiary’s business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgment liens securing judgments or awards against that are fully covered by insurance, and shall not have been in existence for a period longer than ten (10) days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than ten (10) days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the BorrowerBorrowers’ business; (g) Liens securing obligations permitted restrictions under Sections 8.1(d), and/or 8.1(f)federal and state securities laws regarding the transfer or issuance of securities; (h) Liens granted to the Bank hereunder; andliens constituting a renewal, extension or replacement of any Permitted Encumbrance; (i) Liens set forth sales permitted under Section 7.4(c) hereof, provided that no purchaser or other Person involved in Schedule 7.6 such transactions shall receive or retain any Encumbrance on Collateral; (but only remaining in effect j) Encumbrances securing Indebtedness permitted pursuant to Section 7.1(i); provided that such Encumbrances shall be subordinated to the extent set forth Encumbrances described in Section 7.6(c7.3(a) on terms and conditions reasonably satisfactory to the Agent; or (k) Encumbrances not otherwise permitted by this Section 7.20)7.3 that do not encumber any Collateral contained in the Borrowing Base, so long as the aggregate outstanding principal amount of the obligations secured thereby shall not exceed $5,000,000 at any time.

Encumbrances. The No Borrower shall notshall, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the BorrowerCollateral, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):except: (a) Liens created pursuant to the Loan Documents on behalf of the Agent, for the benefit of the Lenders; (b) Liens for or priority claims imposed by law which are incidental to the conduct of business or the ownership of properties and assets (including mechanic’s, warehousemen’s, attorneys’ and statutory and contractual landlords’ liens) and deposits, pledges, liens to secure statutory obligations, surety or appeal bonds or other liens of like general nature incurred in the ordinary course of business and not in connection with the borrowing of money; provided, that in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith and adequate reserves have been set up by the Borrowers or their Subsidiaries in accordance with GAAP, as the case may be; (c) Liens securing the payment of taxes, assessments or other and governmental charges or levies incurred in the ordinary course of business, either (i) not yet due delinquent, or which are (ii) being contested in good faith by appropriate legal or administrative proceedings and as to which the Borrowers or any Subsidiary, as the case may be, shall have set aside on its books adequate reserves in accordance with GAAP, and so long as .during the period of any such a manner as not to make the property forfeitable; (b) Liens contest, such Borrower or charges incidental to the conduct such Subsidiary shall suffer no loss of its any privilege of doing business or the ownership of its property and assets which were not incurred in connection with the borrowing of money any other right, power or the obtaining of an advance privilege necessary or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in material to the operation of its business; (cd) Liens arising out the Lien of judgments or awards against Bank of America, N.A. on deposit account number 8666827899 opened by the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay Bank of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationAmerica, N.A.; (e) good faith deposits extensions, renewals and replacements of Liens referred to in connection with lending contracts paragraphs (a) through (d) of this Section 8.2; provided, however, that any such extension, renewal or leases replacement Lien shall be limited to which the Borrower is a party;property or assets covered by the Lien extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Lien shall be in an amount not greater than the original amount of the obligations secured by the Lien extended, renewed or replaced; and (f) deposits to secure public or statutory obligations the Lien of Citibank filed with the Borrower; Delaware Department of State – initial filing number 525267899 — which shall be removed within ninety (g90) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to days following the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)Closing Date.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its Affiliates; (b) Liens Encumbrances existing as of the date hereof and disclosed in SCHEDULE 6.4 hereto and securing any refinancing of Indebtedness PROVIDED that such refinancing is permitted pursuant to Section 6.1(b); (c) Encumbrances for purchase money obligations or Capital Leases permitted pursuant to Section 6.1(d); PROVIDED that such Encumbrances shall not attach to property and assets of the Borrower or any Subsidiary not purchased with the proceeds of such purchase money obligations; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; and (e) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Borrower Neither any Credit Party nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind or character Encumbrance upon any asset of its properties and assets, or assign or otherwise convey any right to receive income, with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens Encumbrances in favor of the Administrative Agent under the Security Documents for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableratable benefit of the Lenders; (b) Liens Encumbrances existing as of the date of this Agreement, consented to by the Required Lenders and disclosed in Schedule 4.24. attached hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed, is being contested and is otherwise not required to be paid in accordance with the provisions of Section 7.6. hereof; (d) landlords' and lessors' liens in respect of rent not in default or charges liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partyattachments, garnishments and judgment liens not constituting an Event of Default; (f) deposits liens in favor of lessors under Capital Leases and sellers under motor vehicles installment sales contracts permitted under Section 8.9. hereof as long as the collateral subject thereto is limited solely to secure public the property that is the subject of such Capital Leases or statutory obligations sales contracts and secures only the amounts owing in respect of the Borrowersuch leases and contracts; (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f)rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (h) Liens granted Encumbrances on property or assets created in connection with the refinancing or refunding of Indebtedness referred to in Section 8.1.(b) hereof; provided, however, that the Bank hereunderamount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing or refunding and no such Encumbrance shall extend to property and assets of any such Credit Party or Subsidiary not encumbered prior to any such refinancing or refunding; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect Encumbrances securing Indebtedness for Capital Expenditures to the extent set forth in such Indebtedness is permitted under Section 7.6(c8.1 hereof, provided, that (i) each such Encumbrance is given solely to secure the purchase price of such property, does not extend to any other property and Section 7.20)is given at the time of acquisition of the property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition.

Encumbrances. The Borrower shall notCompany warrants that it has title to the Collateral purportedly owned by it and that there are no sums owed or claims, either directly liens, security interests or indirectlyother encumbrances against the Collateral other than as set forth in Exhibit A attached hereto and made a part hereof. The Company will notify Versant of any lien, security interest or other encumbrance against the Collateral securing any obligation of the Company, will defend the Collateral against any claim, lien, security interest or other encumbrance adverse to Versant, except for liens having priority thereover as set forth on Exhibit A, attached hereto and made a part hereof, and will not create, incur, assume, incur or suffer or permit to exist any Lien lien, security interest or charge of any kind or character upon any asset of other encumbrances against the BorrowerCollateral, whether now owned at the date hereof or hereafter acquired except (“Permitted Liens”):acquired, except: (a) Liens liens in favor of Versant and such other liens as are set forth on Exhibit A attached hereto and made a part hereof; (b) liens for taxes, taxes or assessments or other governmental government charges or levies if not yet due and payable or, if due and payable, if they are being contested in good faith by appropriate proceedings and for which appropriate reserves have previously been delivered by the Company to Versant; (c) liens imposed by law, such as mechanics’, materialmen’s, landlords’, warehousemen’s, and carriers’ liens, and other similar liens, securing obligations incurred in the ordinary course of business, which are not past due for more than 30 days or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or creditproceedings, and for which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect appropriate reserves have been previously delivered to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewVersant; (d) liens, deposits, or pledges or deposits to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases, public statutory obligations, surety, stay, appeal, indemnity, performance, or other similar bonds, or other similar obligations under worker’s compensation laws or similar legislationarising in the ordinary course of business; (e) good faith deposits judgments and other similar liens arising in connection with lending contracts court proceedings, provided that the execution or leases to which other enforcement of such liens is effectively stayed and the Borrower is a partyclaims secured thereby are being actively contested in good faith and by appropriate proceedings; (f) deposits to secure public or statutory obligations easements, right-of-way restrictions, and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment by the Company of the Borrower;property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto; and (g) Liens securing obligations permitted under Sections 8.1(dpurchase-money liens on any property hereafter acquired or the assumption of any lien on property existing at the time of such acquisition (and not created in contemplation of such acquisition), and/or 8.1(f)or a lien incurred in connection with any conditional sale or other title retention agreement or a capital lease; provided that: (i) any property subject to any of the foregoing is acquired by the Company in the ordinary course of its business and the lien on any such property attaches to such asset concurrently or within 90 days after the acquisition thereof; (hii) Liens granted the obligation secured by any lien so created, assumed, or existing shall not exceed 100% of the lesser of the cost or the fair market value as of the time of acquisition of the property covered thereby to the Bank hereunderCompany; and (iiii) Liens set forth in Schedule 7.6 (but each such lien shall attach only remaining in effect to the extent set forth in Section 7.6(c) property so acquired and Section 7.20)fixed improvements thereon.

Encumbrances. The Borrower shall not, either directly or indirectlynor shall permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets (including, without limitation, any asset of its intellectual property) (“Encumbrances”), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested Encumbrances in good faith by appropriate proceedings in such a manner as not to make favor of the property forfeitableLender under any Security Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Exhibit C hereto securing Indebtedness described therein; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required to be paid in accordance with the provisions of Section 5.4; (d) Landlords’ and lessors’ liens arising by statute, so long as the obligations of the Borrower or other member of the Borrower Affiliated Group under the applicable lease are not overdue, or liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, laborers’, carriers’, warehousemans’, materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 15 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 15 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Easements, rights of way, restrictions, minor defects or irregularities in title and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrowerits business; (g) Liens Encumbrances securing the purchase price of capital assets (including rights of lessors under capital leases) to the extent such purchase is permitted hereunder, provided, however, that (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations permitted under Sections 8.1(d)relating to, and/or 8.1(f)such property, does not extend to any other property and is given at the time of the acquisition of the property, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time such security interest attaches, and in any event, such Indebtedness does not exceed $500,000 in the aggregate outstanding at any time; (h) Liens granted Any interest of title of a lessor under, and Encumbrances arising from, Uniform Commercial Code financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to equipment leases permitted by this Agreement; (i) Normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (j) Encumbrances of a collection bank arising under Section 4-210 of the Bank hereunderUniform Commercial Code on items in the course of collection; and (k) Rights of service or indemnity payment setoffs customarily required in software license agreements; and (l) Any exception included in a title insurance policy approved by the Lender. In addition, the Borrower shall not, nor shall the Borrower permit any other member of the Borrower Affiliated Group to, enter into or permit to exist any arrangement or agreement which directly or indirectly prohibits the Borrower or any such other member of the Borrower Affiliated Group from creating or incurring any Encumbrance in favor of the Lender under the Loan Documents other than (i) Liens set forth customary anti-assignment provisions in Schedule 7.6 Leases or license agreements entered into by the Borrower or such other member of the Borrower Affiliated Group in the ordinary course of business, and (but only remaining ii) any agreements governing any purchase money liens or capital lease obligations otherwise permitted in effect to the extent set forth in Section 7.6(c) and Section 7.20)this Agreement.

Encumbrances. The Borrower shall not, either directly Create or indirectly, create, assume, incur allow any Encumbrances to be on or suffer otherwise affect any of its property or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):assets except: (a) Liens Encumbrances in favor of the Bank; (b) Encumbrances for taxes, assessments or and other governmental charges incurred in the ordinary course of business which are not yet due and payable or which are being properly contested in good faith by lawful and appropriate proceedings; (c) Pledges or deposits made in the ordinary course of business to secure payment of workmen's compensation or to participate in any fund in connection with workmen's compensation, unemployment insurance or other social security obligations; (d) Good faith pledges or deposits made in the ordinary course of business to secure performance of tenders, contracts (other than for the repayment of Indebtedness) or leases or to secure statutory obligations or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business; (e) Liens of mechanics, materialmen, warehousemen, carriers or other similar liens, securing obligations incurred in the ordinary course of business that are not yet due and payable or are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partylawful proceedings; (f) deposits to secure public or statutory obligations Encumbrances securing Indebtedness permitted under Section 7.2 (b), provided that (i) no other covenants of this Agreement are thereby violated and (ii) no equipment other than the Borrowerequipment so acquired secures such Indebtedness; (g) Liens securing obligations Encumbrances, if any, otherwise expressly permitted under Sections 8.1(d), and/or 8.1(f);by the Security Agreement or the Mortgage; and (h) Liens granted Encumbrances disclosed in the Financial Statements, and any subsequent interim financial statements which have been delivered to the Bank hereunder; and (i) Liens prior to the Closing Date, or as set forth in on Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)7.3 attached hereto.

Encumbrances. The Except for those liens, security interests and encumbrances presently in existence and reflected in Borrower’s financial statements referred to in Section 6.14 and disclosed in Exhibit 6A under Section 6.4, Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien security interest, mortgage, pledge, lien, capitalized lease, levy, assessment, attachment, seizure, writ, distress warrant, or charge other encumbrance of any kind nature whatsoever on or character upon with regard to any asset of Borrower’s assets (including without limitation, the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”): Collateral) other than: (a) Liens for liens securing the payment of taxes, assessments or other governmental charges either not yet due or the validity of which are is being contested in good faith by appropriate proceedings in such a manner proceedings, and as not to make the property forfeitable; which Borrower shall, if appropriate under generally accepted accounting principles, have set aside on Borrower’s books and records adequate reserves; (b) Liens liens securing deposits under workmen’s compensation, unemployment insurance, social security and other similar laws, or charges incidental securing the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or securing indemnity, performance or other similar bonds for the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or securing statutory obligations or surety bonds, or securing indemnity, performance or other similar bonds in the ordinary course of Borrower’s business, which are not past due; (c) liens securing appeal bonds securing judgments not in excess of $1,000,000; (d) liens and security interests in favor of U.S. Bank; (e) liens securing the interests of Broker in any Margin Account; (f) zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of Borrower’s real property, and other liens, security interests and encumbrances on property which are subordinate to the conduct liens and security interests of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, U.S. Bank and which do not not, in the aggregate materially detract from the value of its property or assets or U.S. Bank’s sole determination: (i) materially impair the use thereof in of such property, or (ii) materially lessen the operation value of its business; (c) Liens arising out of judgments or awards against such property for the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding purposes for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower same is a party; (f) deposits to secure public or statutory obligations of the held by Borrower; ; and (g) Liens purchase money security interests securing obligations permitted under Sections 8.1(d), and/or 8.1(f); amounts relating to such items of equipment as are specifically consented to by U.S. Bank (h) Liens granted provided that no such purchase money security interests shall extend to or cover other property of Borrower other than the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20items of equipment so acquired).

Encumbrances. The Borrower shall not, either directly or indirectlywill not grant, create, incur, assume, incur or suffer to exist and will not permit any of its Subsidiaries to grant, incur, assume or permit suffer to exist any Lien mortgage, pledge, lien, or charge other encumbrance of any kind upon, or character upon any asset security interest (collectively, "Liens") in any of its or their assets, whether now owned or hereafter acquired, except for the following (collectively, "Permitted Encumbrances") which Permitted Encumbrances, to the extent encumbering Collateral, shall be subordinate to the Lien in favor of the BorrowerAgent granted hereunder or under the Loan Documents except to the extent such Permitted Encumbrances may be granted statutory priority irrespective of order of perfection or are otherwise identified as senior or pari passu on Exhibit 6.4 attached hereto and made a part hereof: (A) Liens for taxes (1) not yet delinquent or (2) the nonpayment of which in the aggregate would not reasonably be expected to have a Material Adverse Effect, whether owned at provided that no taxing authority has begun proceedings to enforce or execute on such Lien against Collateral having a fair market value in excess of $100,000.00 in the date hereof aggregate; or hereafter acquired except (“Permitted Liens”): 3) being contested in good faith in appropriate proceedings provided that (a) Liens such proceedings have the effect of staying any right of the taxing authority to enforce or execute against such lien, (b) the Borrower or its Subsidiary, as the case may be, prosecutes such action diligently and without delay, (c) the Borrower or its Subsidiary, as the case may be, creates adequate reserves for the payment of all such contested taxes, assessments and (d) the Borrower or the Subsidiary, as the case may be, pays prior to delinquency any portion of such taxes not being contested in good faith; (B) pledges, deposits or other governmental charges Liens in connection with the Borrower's statutory obligations respecting worker's compensation, unemployment insurance, or other social security obligations (including, without limitation, pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements respecting such statutory obligations); (C) mechanic's, workman's, materialman's, landlor▇'▇, ▇▇▇▇ier's, warehouseman's, laborer's or other similar Liens arising in the ordinary course of business with respect to obligations that are not yet due overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings diligently conducted and in such a manner as not to make either case provided that adequate reserves have been established in accordance with GAAP; (D) easements, rights-of-way, zoning and other restrictions and other similar encumbrances on the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credituse of, and minor irregularities of title affecting, real property which do not in interfere with the aggregate ordinary conduct of the business of the Borrowers and do not materially detract from affect the value of its property or assets or materially impair the use thereof in the operation of its business; such property; (cE) Liens arising out in respect of judgments or awards against the Borrower with for which appeals or proceedings for review are being prosecuted diligently, in good faith and without delay and in respect to of which it shall concurrently therewith be prosecuting a timely stay of execution upon any such appeal or proceeding for review and with respect to which it shall have been secured a stay or the period within which such proceedings may be initiated shall not have expired; (F) Liens created in favor of execution pending such appeal manufacturers and/or manufacturers' representatives or proceedings for review; (d) pledges or deposits agents to secure obligations under worker’s compensation laws the purchase price of fixed assets acquired from such secured party by the Borrower or similar legislation; any of its Subsidiaries (e) good faith deposits or, to the extent assigned to and assumed by the Borrower or any of its Subsidiaries in connection with lending contracts a Permitted Acquisition, acquired from such secured party by the assignor) and incurred at the time of acquisition or leases to which within one hundred eighty (180) days thereafter, so long as each such Lien shall not exceed the Borrower is a party; (f) deposits to secure public or statutory obligations purchase price of the Borrower; asset or assets so acquired and shall at all times be confined solely to the asset or assets so acquired and provided that at no time shall such Liens collectively secure more than $4,000,000.00 of Indebtedness; (gG) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); in favor of the Agent for the benefit of the Lender Group and the Lien granted to each Lender pursuant to Section 9.3 hereof and Section 8.6 of the Guarantee; (hH) Liens granted to Mellon to secure the Bank hereunderBorrower's and its Subsidiaries' guaranty obligation with respect to the ESOT Loan, the priority of such Liens to be pari passu with the priority of Liens referred to in clause (G) above and otherwise to be governed by the Intercreditor Agreement; and (iI) Liens to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds, judgment and like bonds, replevin and similar bonds and other obligations of a like nature incurred in the ordinary course of business, (J) Liens in existence on the Closing Date and listed in Exhibit 6.4, provided that no such Lien is spread to cover any additional property after the Closing Date and that the amount of Indebtedness secured thereby is not increased; (K) Liens on patents, patent applications, trademarks, trademark applications, trade names, service marks, copyrights, technology, know-how and processes to the extent such Liens arise from the granting of licenses to use such patents, patent applications, trademarks, trademark applications, trade names, service marks, copyrights, technology, know-how and processes to any Person in the ordinary course of business of the Borrower and its Subsidiaries; and (L) Liens securing Contingent Liabilities permitted under Section 6.7(F) not exceeding (as to the Borrower and its Subsidiaries) $1,000,000.00 in the aggregate amount at any time outstanding. The Borrower will not enter into or permit any of its Subsidiaries to enter into any other agreement which prohibits or restricts the ability of such Person to create, incur, assume, grant, or suffer to exist any Liens upon, or any security interest in, any of its assets, whether now owned or hereafter acquired, except (1) as set forth in Schedule 7.6 the ESOT Assignment Documents and (but 2) as provided in any agreement respecting a Lien permitted pursuant to clause (F) above provided that such prohibition or limitation (a) is effective only remaining in effect with respect to the extent set forth assets so financed or acquired and (b) is ineffective against any Lien created hereby in Section 7.6(c) and Section 7.20)favor of the Agent.

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, ------------ create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (c) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen' s and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cd) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationstay; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party;rights of lessors under capital leases; and (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)its business.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of its property or assets (“Encumbrances”), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of accounts receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens Encumbrances created under the Security Documents; (b) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section ‎6.4; (c) landlords’ and lessors’ liens in respect of rent not in default or which liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent for more than 30 days or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established and are being maintained in such a manner as not to make accordance with GAAP; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens other than for the payment of money); and liens securing statutory obligations or charges surety, indemnity, performance, or other similar bonds incidental to the conduct of its business the Borrower’s or the ownership any of its property Subsidiaries’ business in the ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its their property or assets or materially impair the use thereof in the operation of its their business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationjudgment liens securing judgments that (i) are fully covered by insurance, and (ii) shall not have been in existence for a period longer than 30 days after the creation thereof or, if a stay of execution shall have been obtained, for a period longer than 10 days after the expiration of such stay; (e) good faith deposits in connection with lending contracts or leases rights of lessors under Capitalized Leases, to which the Borrower is a partyextent such Capitalized Leases are permitted hereunder; (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrower’s business; (g) Liens securing obligations permitted under Sections 8.1(d)Encumbrances constituting a renewal, and/or 8.1(f);extension or replacement of any Permitted Encumbrance; and (h) Liens granted Encumbrances securing Indebtedness for Capital Expenditures to the Bank hereunder; and extent such Indebtedness is permitted by Section ‎8.1(h), provided that (i) Liens set forth in Schedule 7.6 each Encumbrance is given solely to secure the purchase price of the property which is the subject of such Capital Expenditure, does not extend to any other property and is given at the time of acquisition of the property, and (but only remaining in effect to ii) the extent set forth in Section 7.6(c) and Section 7.20)Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition.

Encumbrances. The Borrower shall not, either directly or indirectlyand shall not permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor (by way of consignment or otherwise) upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of Accounts Receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Administrative Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableBanks under any Security Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Exhibit C hereto; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) Possessory liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments owned as of the date hereof and Qualified Investments, provided that such liens (a) attach only to such Investments and (b) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing; (e) Landlords' and lessors' liens in respect of rent not in default, or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers', carriers', warehousemans', materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cf) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 45 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 45 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrowerstay; (g) Liens securing obligations permitted under Sections 8.1(d)Easements, and/or 8.1(f)rights of way, zoning restrictions, licenses, restrictions on the use of property or minor imperfections in title thereto which, in the aggregate, do not interfere in a material way with the ordinary conduct of its business; (h) Liens granted Security interests and liens securing Indebtedness of the Borrower Affiliated Group permitted by Section 6.1(c) in an amount not to exceed $65,000,000 in the Bank hereunderaggregate outstanding at any time in addition to those Encumbrances permitted under subsection (a) through (f) of this Section, provided, however, that (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations relating to, such asset, does not extend to any other property, and is given at the time or within 30 days of the acquisition of such asset, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such asset or its fair market value at the time such security interest attaches; and provided, further, that the Indebtedness secured pursuant to this clause (h), together with any Indebtedness secured pursuant to clause (j) below, does not at any time exceed $65,000,000; (i) Security interests in favor of the issuer of any documentary letters of credit for the account of the Borrower covering only the following: (i) any documentation presented in connection with a drawing under such letter of credit, (ii) all goods which are described in such documents or any such letter of credit, and (iii) the proceeds thereof; (j) Encumbrances upon real property or other fixed assets acquired after the date hereof (by purchase, construction or otherwise) by the Borrower or any other member of the Borrower Affiliated Group, each of which Encumbrance was created solely for the purpose of securing Indebtedness permitted under Section 6.1(c) and representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such property or asset; provided that (i) no such Encumbrance shall extend to cover any property or asset of the Borrower or such member of the Borrower Affiliated Group other than the property or asset so acquired and improvements thereon, (ii) the principal amount of Indebtedness secured by any such Encumbrance shall not exceed 100% of the lesser of the cost of such asset or its fair market value (as determined in good faith by a senior financial officer of the Borrower) of such property or asset at the time it was acquired (by purchase, construction or otherwise), and (iii) the security interest is given at the time or within 60 days of the construction or acquisition of such property or asset; and provided, further, that the Indebtedness secured pursuant to this clause (j), together with any Indebtedness secured pursuant to clause (h) above, does not at any time exceed $65,000,000; (k) Encumbrances in connection with any sale-leasebacks permitted by Section 6.2; provided that no such Encumbrance shall extend to cover any property or asset of the Borrower or such member of the Borrower Affiliated Group other than the lease entered into in connection with any such sale-leaseback; and (il) Liens set forth Any extension, renewal or replacement of the foregoing; provided that the Encumbrances permitted by this paragraph (l) shall not extend to or cover any additional Indebtedness or property (other than a substitution of like property). In addition, the Borrower shall not, nor shall the Borrower permit any other member of the Borrower Affiliated Group or any of its other Subsidiaries to, enter into or permit to exist any arrangement or agreement which directly or indirectly prohibits the Borrower or any such other member of the Borrower Affiliated Group or Subsidiary from creating or incurring any Encumbrance in Schedule 7.6 (but only remaining in effect to favor of the extent set forth in Section 7.6(c) Administrative Agent for the benefit of the Banks and Section 7.20)the Administrative Agent under the Loan Documents.

Encumbrances. The Borrower Each Loan Party shall not, either directly or indirectly, not create, assumegrant, incur incur, assume or suffer or permit to exist any Lien direct or indirect mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including any negative pledge or character any lien or retained security title of a conditional vendor, upon or with respect to any asset of its property or assets (“Encumbrances”), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of accounts receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens liens of the Administrative Agent (for taxesthe benefit of the Lenders) under this Agreement, assessments the other Loan Documents and any other document contemplated hereby or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitablethereby; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not liens incurred in connection with the borrowing posting of money cash collateral to support the surety bonds set forth on Schedule 6.2, together with any replacement, extension or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its businessrenewal thereof; (c) Liens liens existing as of the date of this Agreement and disclosed on Schedule 6.3, together with any replacement, extension or renewal thereof upon or in the same property subject thereto arising out of judgments the extension, renewal or awards against replacement of the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have Indebtedness secured a stay of execution pending such appeal or proceedings for reviewthereby; (d) pledges liens for Taxes to the extent that payment of the same may be postponed or deposits to secure obligations under worker’s compensation laws or similar legislation;is not required in accordance with the provisions of Section 5.3; and (e) any Encumbrances arising by mandatory provision of law securing obligations incurred in the ordinary course of business that (i) do not interfere with the ordinary conduct of the business of any Loan Party, (ii) are not yet more than 90 days overdue or that are being contested or litigated in good faith deposits faith, including (A) Encumbrances of carriers, warehousemen, mechanics, laborers, and materialmen incurred in the ordinary course of business for sums not yet due, (B) Encumbrances on real estate for real estate taxes not yet delinquent, (C) Encumbrances incurred in the ordinary course of business in connection with lending contracts or leases to which worker’s compensation and unemployment insurance, (D) easements, rights-of-way, restrictions, and other similar encumbrances on the Borrower is a party; use of real property approved in advance by the Lenders, and (fE) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) employee claims regarding wages and Section 7.20)benefits.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge Encumbrance of any kind upon or character upon with respect to any asset of their property or assets, or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Receivables with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens Encumbrances in favor of the Agent or any of the Lenders to secure Obligations; (b) Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords’ and lessors’ liens in respect of rent not in default or which liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent or are being contested in good faith by appropriate proceedings in such a manner as not to make faith; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens other than for the payment of money); and liens securing statutory obligations or charges surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower’s or a Subsidiary’s business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgment liens securing judgments or awards against that are fully covered by insurance, and shall not have been in existence for a period longer than 10 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrower’s business; (g) Liens securing obligations permitted restrictions under Sections 8.1(d), and/or 8.1(f)federal and state securities laws regarding the transfer or issuance of securities; (h) Liens granted to the Bank hereunderliens constituting a renewal, extension or replacement of any Permitted Encumbrance; andor (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in sales permitted under Section 7.6(c7.4(c) and Section 7.20)hereof.

Encumbrances. The Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit ------------ to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), ------------ or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens for taxesEncumbrances in favor of the Bank, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make any of the property forfeitableBank's affiliates; (b) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (c) Landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cd) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 60 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 60 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationstay; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party;Rights of lessors under capital leases; and (f) deposits to secure public or statutory Encumbrances in respect of any purchase money obligations for (i) any equipment used in the business of the Borrower; Borrower which at any time shall not exceed $100,000 in the aggregate, and (gii) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted inventory supplied by a vendor who has delivered to the Bank hereunder; and either (iA) Liens set forth a Vendor Subordination Letter, substantially in Schedule 7.6 the form of Exhibit 6.3(f)(ii) hereto, or (but only remaining B) if such vendor's ------------------ security interest in effect such inventory has not been perfected by the filing of a Form-1 Uniform Commercial Code Financing Statement, a letter acknowledging that notices, if any, given by such vendor to the extent set forth Bank will be delivered to the address specified in Section 7.6(c9.1(d) hereof, provided that any such Encumbrance -------- ---- shall not extend to property and Section 7.20)assets not financed by such a purchase money obligation.

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not any of its affiliates to make secure the property forfeitableObligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT F hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 6.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases permitted under Section 7.6; (g) Liens securing Encumbrances in respect of any purchase money obligations permitted under Sections 8.1(d)for tangible property used in its business (other than purchases of inventory in the ordinary course of business) that at any time shall not exceed $5,000,000, and/or 8.1(f)PROVIDED that any such Encumbrances shall not extend to property and assets of the Company or any such Subsidiary not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of its business; (i) Encumbrances arising from the sale or discount without recourse of accounts receivable generated in connection with the Company's vendor leasing programs; and (ij) Liens set forth Encumbrances on its property or assets created in Schedule 7.6 (but only remaining in effect connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, PROVIDED that the amount of Indebtedness secured by any 41 such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of the extent set forth in Section 7.6(c) and Section 7.20)Company or any such Subsidiary not encumbered prior to any such refinancing.

Encumbrances. The Neither the Borrower nor any of its Material Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens Encumbrances existing as of the date of this Agreement, not otherwise described in Section 6.1, and disclosed in Exhibit B hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits judgment and other similar liens, singly or in the aggregate in excess of $5,000,000.00, arising in connection with lending contracts court proceedings, provided that the execution or leases to which other enforcement of such judgment or similar lien has been in existence for less than 30 days or is effectively stayed and the Borrower is a partyclaims secured thereby are being actively contested in good faith and by appropriate proceedings; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capitalized leases; (g) Liens Encumbrances securing obligations permitted under Sections 8.1(d)indebtedness for borrowed money incurred in connection with the purchase of real or personal property used in its business, and/or 8.1(f)provided that any such Encumbrances shall not extend to assets of the Borrower or any such Subsidiary not financed by such indebtedness; (h) Liens easements, rights of way, restrictions and other similar charges or Encumbrances relating to real or personal property and not interfering in a material way with the ordinary conduct of its business; (i) other than as permitted in accordance with Section 6.1(j), Encumbrances on its assets created in connection with the refinancing of indebtedness secured by Permitted Encumbrances on such assets, provided that the amount of indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of the Borrower or any such Subsidiary not encumbered prior to any such refinancing; (j) Encumbrances incurred in connection with repurchase agreements; liens incurred in connection with asset securitizations; Encumbrances incurred in connection with the holding of municipal deposits subject to the New York State Comptroller's guidelines for collateralization; Encumbrances granted to a Federal Reserve Bank, a Federal Home Loan Bank or the Bank hereunderFederal Agricultural Mortgage Corporation to secure advances or other transactions incidental to the conduct of the banking business of the Borrower or any such Subsidiary, including loans to meet liquidity requirements; (k) Encumbrances securing obligations of a Subsidiary to the Borrower or another Subsidiary; and (il) Liens set forth in Schedule 7.6 (but only remaining in effect other Encumbrances which are incidental to the extent set forth conduct of its business on an ongoing basis and that do not in Section 7.6(c) and Section 7.20)the aggregate have a material adverse effect on its assets, business or prospects.

Encumbrances. The Borrower and the Guarantor shall not, either directly or indirectly, not create, assumeincur, incur or suffer assume or permit to exist any Lien or charge Encumbrances on any of any kind or character upon any asset of the Borrower, whether their property now owned at the date hereof or hereafter acquired acquired, except for the following (“hereinafter referred to as the "Permitted Liens”Encumbrances"): (a) Liens Encumbrances for taxes, assessments assessments, or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in action promptly initiated and diligently conducted, if such a manner reserves as not to make the property forfeitableshall be required by GAAP shall have been made therefor; (b) Liens or charges incidental to the conduct Encumbrances of its business or the ownership of its property landlords, vendors, carriers, warehousemen, mechanics, laborers and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not materialmen arising by law in the aggregate materially detract from the value ordinary course of its property business for sums either not yet due or assets or materially impair the use thereof being contested in the operation of its businessgood faith by appropriate action promptly initiated and diligently conducted, if such reserve as shall be required by GAAP shall have been made therefor; (c) Liens Inchoate liens arising out of judgments or awards against under ERISA to secure the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewcontingent liabilities, if any, permitted by this Agreement; (d) pledges or deposits The Collateral Documents and any other liens in favor of the Bank to secure obligations under worker’s compensation laws or similar legislationthe Indebtedness of the Borrower to the Bank; (e) good faith deposits Liens in connection with lending contracts or leases favor of the Advantage Capital Group, so long as such liens are expressly subordinated in favor of Bank; provided, however, the provisions of this subpart (e) of Section 11.4. shall not apply to which any Receivables of Borrower that are not (pursuant to a filed UCC-3 release signed by Bank) part of the Borrower is a party;Collateral; or (f) deposits to secure public or statutory obligations Liens in favor of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to Advantage Capital Group affecting certain Receivables of the Borrower for which the Bank hereunder; and has released (ipursuant to a filed UCC-3) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)its security interest.

Encumbrances. The Each Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist exist, any Lien or charge other encumbrance of any kind or character upon nature whatsoever on any asset of its assets, including without limitation the BorrowerCollateral, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”): other than: (a) Liens for securing the payment of taxes, assessments or other governmental charges either not yet due or the validity of which are is being contested in good faith by appropriate proceedings in proceedings, and as to which the applicable Borrower shall, if appropriate under GAAP, have set aside on its books and records adequate reserves; provided that such contest does not have a manner as not to make the property forfeitable; Material Adverse Effect; (b) deposits under worker's compensation, unemployment insurance, social security and other similar Laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations or surety or appeal bonds, or to secure indemnity, performance or other similar bonds in the ordinary course of business, and Liens securing judgments that have not resulted in an Event of Default under clause (d) of subsection 8.1 hereof; (c) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen or charges incidental to suppliers incurred in the conduct ordinary course of its business or for sums not yet delinquent; (d) Liens in favor of the ownership of its property Administrative Agent and assets which were not incurred the Banks; (e) purchase money security interests arising in connection with the borrowing Equipment or real estate purchases or lease financings made as permitted by this Agreement, not to exceed an aggregate of money or the obtaining of an advance or credit, Five Million and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; 00/100 Dollars (c$5,000,000.00) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; outstanding at any time; (f) deposits to secure public or statutory obligations of the Borrower; Liens described on Schedule 7.2; and (g) Liens other than those permitted in subsections 7.2(a) through (f), inclusive, securing obligations permitted under Sections 8.1(d), and/or 8.1(f); in an aggregate outstanding amount of no more than Two Hundred Fifty Thousand and 00/100 Dollars (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20$250,000.00).

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not any of the Lenders to make the property forfeitablesecure Obligations; (b) Liens or charges incidental to Encumbrances existing as of the conduct date of its business or the ownership of its property this Agreement and assets which were not incurred disclosed in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its businessExhibit C hereto; (c) Liens arising out liens for taxes, fees, assessments and other governmental charges to the extent that payment of judgments the same may be postponed or awards against is not required in accordance with the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay provisions of execution pending such appeal or proceedings for reviewSection 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits to secure obligations under worker’s compensation laws workmen's compensation, unemployment insurance, social security laws, or similar legislation;legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the (e) good faith deposits judgment liens securing judgments that (i) are not fully covered by insurance, and (ii) shall not have been in connection with lending contracts or leases to which existence for a period longer than 10 days after the Borrower is creation thereof or, if a partystay of execution shall have been obtained, for a period longer than 10 days after the expiration of such stay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases; (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f)rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of the Borrower' business; (h) Liens granted to any Encumbrance on any Eligible Lease, Eligible Rental Contract and Eligible Equipment created by the Bank hereundersale, transfer, assignment or disposition of such Eligible Lease, Eligible Rental Contract or Eligible Equipment in compliance with Section 7.4(ii) hereof; (i) liens constituting a renewal, extension or replacement of any Permitted Encumbrance; and (ij) Liens set forth in Schedule 7.6 (but only remaining in effect Encumbrances granted with respect to any Indebtedness permitted under Section 7.1(g), provided that no such Encumbrance attaches to any part of the extent set forth in Section 7.6(c) and Section 7.20)Collateral.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, ------------ create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of its property or assets ("Encumbrances"), or assign or otherwise convey any right ------------ to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested Encumbrances in good faith by appropriate proceedings in such a manner as not favor of the Lender to make the property forfeitablesecure Obligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; --------- (c) Encumbrances securing Indebtedness for Capital Expenditures to the extent such Indebtedness is permitted by Section 7.1(e), provided that -------- (i) each such Encumbrance is given solely to secure the purchase price of such property, does not extend to any other property (other than substitutions, replacements and proceeds thereof) and is given at the time of acquisition of the property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; (e) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower's or a Subsidiary's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cf) Liens arising out judgment liens securing judgments not in excess of $250,000 in the aggregate unless such judgments or awards against (i) are fully covered by insurance, and (ii) shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrowerstay; (g) Liens securing obligations rights of lessors and Permitted Systems Financiers under Permitted Systems Financing Facilities and other capital leases to the extent such Permitted Systems Financing Facilities and capital leases are permitted under Sections 8.1(d), and/or 8.1(f)hereunder; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of the Borrower's business; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)liens constituting a renewal, extension or replacement of any Permitted Encumbrance.

Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer Create or permit to exist any Lien or charge otherwise encumber any of any kind or character upon any asset such Person’s assets except under the provisions of the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):this Agreement and except: (a) Liens for taxes, assessments or other governmental charges or levies on its property if the same shall not yet due at the time be delinquent or which thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property imposed by law, such as carriers, warehousemen’s and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, mechanic’s liens and which do not other similar liens arising in the aggregate materially detract from ordinary course of business which secure payment of obligations not more than sixty (60) days past due, or are being contested in good faith and by appropriate proceedings in such a manner as not to make the value of its property or assets or materially impair the use thereof in the operation of its businessforfeitable; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws laws, unemployment insurance, old age pensions or other social security or retirement benefits, or similar legislation; (d) utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character in which do not in a material way affect the marketability of the same or interfere with the use thereof in the business of Borrower; (e) good faith deposits in connection with lending contracts or leases to which Liens securing the Borrower is a party;Pac-Van Indebtedness; and (f) deposits subject to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(dlimitation set forth in Section 8.07(c), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth arising in Schedule 7.6 connection with Capitalized Leases (but and attaching only remaining in effect to the extent set forth in Section 7.6(cproperty being leased), and (ii) Liens that constitute purchase money security interests on any property securing debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such Lien attaches to such property within 20 days of the acquisition thereof and Section 7.20).attaches solely to the property so acquired;

Encumbrances. The Borrower shall notDirectly or indirectly create, either directly or indirectly, createincur, assume, incur or suffer or permit to exist continue in existence any Lien mortgage, lien, charge or charge of any kind encumbrance on, or character upon any asset of security interest in, or pledge or deposit of, or conditional sale or other title retention agreement with respect to the BorrowerCollateral, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):for: (ai) Liens liens for taxes, assessments or other governmental charges the payment of which is not at the time required by SECTION 3.2; (ii) statutory liens of landlords and liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or which are being contested in good faith and by appropriate proceedings in promptly initiated and diligently conducted, for which it has made such a manner reserve or other appropriate provision, if any, as not to make the property forfeitableshall be required by generally accepted accounting principles; (iii) liens incurred or deposits made in the ordinary course of business in connection with workmen's compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (iv) any attachment lien being contested in good faith and by proceedings promptly initiated and diligently conducted, unless the attachment giving rise thereto shall not, within sixty (60) days after the entry thereof, have been discharged or fully funded or shall not have been discharged within sixty (60) days after the termination of such bond; (v) any judgment lien, unless the judgment it secures shall not, within sixty (60) days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within sixty (60) days after the expiration of any such stay; (vi) easements, rights-of-way, restrictions and other similar charges or encumbrances incurred in the ordinary course of business and not interfering with the ordinary conduct of the business of Debtor; (vii) liens securing motor vehicle loans and leases provided that any such lien shall at all times be confined to the motor vehicle or vehicles being purchased with the proceeds of such indebtedness or leased; (viii) liens which (a) secure loans for the purchase of equipment other than equipment which is purchased to replace equipment comprising the Collateral, (b) Liens or charges are confined to the equipment so purchased, and (c) are incurred with the Secured Party's prior written consent, which consent shall not be unreasonably withheld; (ix) liens, charges, encumbrances and priority claims junior to those of the Secured Party and which are incidental to the conduct of its the business or of Debtor and the ownership of its property properties and assets which were not and incurred in connection with the borrowing ordinary course of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its Debtor's business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (ix) Liens set forth in Schedule 7.6 (but only remaining in effect to mortgages, liens and security interests securing the extent set forth in Section 7.6(c) and Section 7.20)payment of the Secured Obligations.

Encumbrances. The Neither Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Banks or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of their affiliates hereunder; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed on Schedule 6.4 hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than thirty (30) consecutive days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than thirty (30) consecutive days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits rights of lessors under capital leases to secure public or statutory obligations of the Borrower; (g) Liens securing Encumbrances in respect of any purchase money obligations permitted under Sections 8.1(d)of Borrower and its Subsidiaries for tangible property used in its business that have been approved by the requisite Banks; provided, and/or 8.1(f)however, that any such Encumbrances shall not extend to property and assets of Borrower not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunder; andordinary conduct of its business; (i) Liens set forth Encumbrances in Schedule 7.6 (but only remaining favor of customs and revenue authorities arising in effect a matter of law to secure payment of customs duties in connection with the importation of goods and Encumbrances on insurance proceeds in favor of insurance companies with respect to the extent set forth financing of insurance premiums; (j) Encumbrances which constitute rights of set-off of a customary nature or bankers' liens with respect to amounts on deposit, whether arising by operation of law or by contract, in Section 7.6(cconnection with arrangements entered into with banks or investment firms in the ordinary course of business; (k) non-exclusive licenses and Section 7.20).sublicenses granted to others not interfering in any material respect with the business of Borrower or any of its Subsidiaries and any interest or title of a licensor or under any license; (l) Encumbrances on its property or assets created in connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result

Encumbrances. The Borrower Neither the Parent nor any of its Subsidiaries ------------ shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens Encumbrances in favor of the Lenders; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default, or which are in default and being contested in good faith faith, or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA), or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by appropriate proceedings such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens in such a manner as not to make the property forfeitable; (b) Liens or charges connection with statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits rights of lessors under capital leases with Subsidiaries in an aggregate principal amount not to secure public or statutory obligations of the Borrowerexceed $4,000,000; (g) Liens securing security interests created by any Subsidiary in respect of any purchase money obligations permitted under Sections 8.1(d)of any Subsidiary for tangible property used in its business that at any time shall not exceed $3,200,000 in the aggregate for all Subsidiaries, and/or 8.1(f)provided that any such security interests shall not extend to -------- property and assets of such Subsidiary not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (i) Encumbrances on its property or assets created in connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such -------- Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of any such Subsidiary not encumbered prior to any such refinancing; (j) Encumbrances in the nature of a security interest in checks created or to be created in connection with a certain Welcome Check Warranty Agreement dated September 1, 1994 between the Company and Equifax Check Services, Inc. (the "Equifax Agreement") or similar agreements relating to the Bank hereunderdiscounting of customer checks; and (ik) Liens set forth rights of a lessor under a capital lease with a Borrower, or a mortgagor in Schedule 7.6 (but only remaining respect of mortgage financing with a Borrower, in effect either case to the extent set forth such financing (i) is used for the construction of a new distribution facility and (ii) is not in Section 7.6(c) excess of $17,000,000 in the aggregate, and Section 7.20)also to the extent the liens created in respect thereof extend only to such distribution facility.

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien Encumbrance upon or charge with respect to any of its property or assets (real or personal, tangible or intangible), whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to it), or assign any right to receive income or permit the filing of any kind financing statement under the UCC or character upon any asset other similar notice of Encumbrance under any similar recording or notice statute; provided that the provisions of this Section 7.1 shall not prevent the creation, incurrence, assumption or existence of the Borrower, whether owned at the date hereof or hereafter acquired except following (“Encumbrances described below are herein referred to as "Permitted Liens”Encumbrances"): (a) Liens inchoate Encumbrances for taxes, assessments or other governmental charges or levies not yet due or which are Encumbrances for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in such a manner accordance with GAAP, with respect to the Company and its Domestic Subsidiaries, or International GAAP, with respect to Foreign Subsidiaries, as not to make the property forfeitableapplicable; (b) Liens or charges incidental to the conduct of its business or the ownership Encumbrances in respect of its property and or assets imposed by law, which were not incurred in connection with the borrowing ordinary course of money or business and do not secure Indebtedness for borrowed money, such as carriers', warehousemen's, materialmen's and mechanics' Encumbrances and other similar Encumbrances arising in the obtaining ordinary course of an advance or creditbusiness, and (i) which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its businessbusiness or (ii) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Encumbrance; (c) Liens Encumbrances created by or pursuant to this Agreement and the Loan Documents; (d) easements, rights-of-way, restrictions, encroachments and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of its business; and (e) Encumbrances arising out of the existence of judgments or awards against the Borrower with in respect to of which it shall concurrently therewith in good faith be prosecuting a timely an appeal or proceeding proceedings for review and with in respect to of which it there shall have been secured a subsisting stay of execution pending such appeal or proceedings for review; (d) pledges or deposits proceedings; provided that the aggregate amount of all cash and the Fair Market Value of all other property subject to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)such Encumbrances does not exceed $100,000 at any time outstanding.

Encumbrances. The Each Borrower and Guarantor shall not, either directly or indirectlyand shall not permit any Subsidiary to, create, assumeincur, incur assume or suffer to exist any security interest, mortgage, pledge, lien, statutory deemed trust, charge, hypothec or other encumbrance of any nature whatsoever on any of its assets or properties, including the Collateral, or file or permit the filing of, or permit to exist remain in effect, any Lien financing statement or charge other similar notice of any kind security interest or character upon lien with respect to any asset of the Borrowersuch assets or properties, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):except: (a) Liens the security interests, liens and hypothecs of Agent for itself and the benefit of Secured Parties; (b) liens securing the payment of taxes, assessments or other governmental charges or levies either not yet due overdue or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, or Guarantor or Subsidiary, as the case may be, which proceedings (or orders entered in connection with such a manner as not to make proceedings) have the effect of preventing the forfeiture or sale of the property forfeitablesubject to any such Lien and with respect to which adequate reserves have been set aside on its books in accordance with GAAP; (bc) Liens non-consensual statutory liens (other than liens arising under ERISA or charges incidental securing the payment of taxes) arising in the ordinary course of such Borrower’s, Guarantor’s or Subsidiary’s business that do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s suppliers’, repairmen’s and mechanics’ liens, to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which extent: (i) such liens do not in the aggregate materially detract from the value of its the property or assets or of Borrowers and Guarantors taken as a whole and do not materially impair the use thereof in the operation of its business; Borrowers and Guarantors taken as a whole, and (cii) Liens arising out such liens secure liabilities which are (A) not overdue or (B) are fully insured and being defended at the sole cost and expense and at the sole risk of judgments the insurer or awards against (C) being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor or such Subsidiary, in each case prior to the Borrower commencement of foreclosure or other similar proceedings, which proceedings (or orders entered in connection with respect such proceeding) have the effect of preventing the forfeiture or sale of the property subject to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review any such lien and with respect to which it shall adequate reserves have secured a stay of execution pending such appeal or proceedings for reviewbeen set aside on its books in accordance with GAAP; (d) pledges reservations in the original grant of a Real Property or deposits to secure obligations under worker’s compensation laws letters patent from the Crown as well as, zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of Real Property which do not interfere in any material respect with the use of such Real Property or similar legislationordinary conduct of the business of such Borrower, Guarantor or such Subsidiary as presently conducted thereon or materially impair the value of the Real Property which may be subject thereto; (e) good faith deposits purchase money security interests in connection with lending contracts or leases Equipment (including Capital Leases) and purchase money mortgages on Real Property to which the Borrower is a partysecure Indebtedness permitted under Section 9.9(b) hereof; (f) pledges and deposits to secure public of cash by any Borrower or statutory obligations Guarantor after the date hereof in the ordinary course of the Borrowerbusiness in connection with workers’ compensation, unemployment insurance and other types of social security benefits; (g) Liens securing obligations permitted under Sections 8.1(dpledges and deposits of cash or letters of credit by any Borrower or Guarantor after the date hereof to secure the performance of tenders, bids, leases, trade contracts (other than for the repayment of Indebtedness), and/or 8.1(f)statutory obligations, surety, stay, customs and appeal bonds, and liability for premiums to insurance carriers, in each case in the ordinary course of business of such Borrower or Guarantor as of the date hereof; provided, that, in connection with any performance bonds issued by a surety or other person, the issuer of such bond shall have waived in writing any rights in or to, or other interest in, any of the Collateral in an agreement, in form and substance satisfactory to Agent; (h) Liens liens arising from (i) operating leases and the precautionary UCC or PPSA, as applicable, financing statement filings in respect thereof and (ii) equipment or other materials which are not owned by any Borrower or Guarantor located on the premises of such Borrower or Guarantor (but not in connection with, or as part of, the financing thereof) from time to time in the ordinary course of business and consistent with current practices of such Borrower or Guarantor and the precautionary UCC or PPSA, as applicable, financing statement filings in respect thereof; (i) judgments and other similar liens arising in connection with court proceedings that do not constitute an Event of Default; provided, that, (i) such liens are being contested in good faith and by appropriate proceedings diligently pursued, (ii) adequate reserves or other appropriate provision, if any, as are required by GAAP have been made therefor, (iii) a stay of enforcement of any such liens is in effect and (iv) Agent may establish a Reserve with respect thereto; (j) statutory or common law liens or rights of setoff of depository banks with respect to funds of any Borrower, Guarantor or Subsidiary at such banks to secure fees and charges in connection with returned items or the standard fees and charges of such banks in connection with the deposit accounts maintained by such Borrower, Guarantor or Subsidiary at such banks (but not any other Indebtedness or obligations); (k) leases or subleases of Real Property granted by any Borrower or Guarantor in the ordinary course of business and consistent with past practice to any Person so long as any such leases or subleases are subordinate in all respects to the security interests and liens granted to Agent and Secured Parties and do not interfere in any material respect with the Bank hereunderordinary conduct of the business of such Borrower or Guarantor or materially impair the value or marketability of the Real Property subject thereto; (l) liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Borrower or Guarantor in the ordinary course of business in accordance with the past practices of such Borrower or Guarantor; (m) liens securing Indebtedness permitted under Section 9.9; (n) the security interests and liens pursuant to and in accordance with the terms of the Faunus Factoring Documents as in effect on the date hereof and subject to the terms of the Faunus Intercreditor Agreement as in effect on the date hereof to secure the Indebtedness permitted under Section 9.9(k) hereof; provided, that, the Faunus Intercreditor Agreement shall remain in full force and effect and enforceable in accordance with its terms; and (io) Liens the security interests and liens set forth in on Schedule 7.6 (but only remaining in effect 8.4 to the extent set forth in Section 7.6(c) and Section 7.20)Information Certificate.

Encumbrances. The Borrower shall not, either directly or indirectly, will not create, assumeincur, incur or suffer assume or permit to exist any Lien mortgage, pledge, lien or charge encumbrance on any of any kind its properties or character upon any asset of the Borrower, whether assets (now owned at the date hereof or hereafter acquired acquired), nor acquire or agree to acquire property or assets under any conditional sale agreement or title retention contract, except (“Permitted Liens”):that the foregoing restrictions shall not apply to: (a) Liens liens of vendors, carriers, warehousemen, mechanics, laborers and materialmen arising by law in the ordinary course of business for taxes, assessments or other governmental charges sums not yet due or which are being diligently contested in good faith; (b) liens for taxes not yet due or which are being diligently contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its businessproceedings; (c) Liens arising out of judgments pledges or awards against the Borrower deposits in connection with respect or to which it shall concurrently therewith be prosecuting a timely appeal secure workmen's compensation, unemployment insurance, pensions or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewother employee benefits; (d) pledges liens required by this Agreement or deposits to secure obligations under worker’s compensation laws or similar legislationany of the Security Instruments; (e) good faith deposits statutory liens and easements or other servitudes arising in connection with lending contracts the ordinary course of business and minor irregularities of title which do not materially impair the ownership or leases to use of the property subject thereto for the purposes for which such property is owned and held by the Borrower is a partyor limit or restrict Lender's remedies hereunder; (f) deposits liens incurred in the ordinary course of business, not on any of the collateral, to secure public performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or statutory to secure obligations of the Borroweron appeal bonds; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f);judgments in existence less than 30 days after the entry thereof or with respect to which execution has been properly stayed; and (h) Liens granted liens securing the Obligations under the Loan Documents as those terms are defined in the Master Credit Support Agreement. As to the Bank hereunder; and liens and encumbrances permitted pursuant to paragraphs (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(ca) and Section 7.20)(b) above, Borrower's right to contest diligently in good faith by appropriate proceedings is conditioned upon the Borrower setting up appropriate reserves under generally accepted accounting principles and upon stay of levy and execution thereon.

Encumbrances. The Borrower None of the Loan Parties shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of their property or assets ("Encumbrances"), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not any of the Lenders to make the property forfeitablesecure Obligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C to this Agreement, which secures Indebtedness permitted under Section 7.1(b); (c) Encumbrances securing Indebtedness for Capital Expenditures to the extent such Indebtedness is permitted by Section 7.1(e), provided that (i) each such Encumbrance is given solely to secure the purchase price of such property, does not extend to any other property and is given contemporaneously with the acquisition of the property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; (e) landlords' and lessors' liens with respect to rent not in default or liens with respect to pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Loan Party's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cf) Liens arising out judgment liens securing judgments that (i) are fully covered by insurance, and (ii) shall not have been in existence for a period longer than 10 days after the creation of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured this Agreement or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrowerstay; (g) Liens securing obligations rights of lessors under capital leases to the extent such capital leases are permitted under Sections 8.1(d), and/or 8.1(f)this Agreement; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of the Borrower's business; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth liens constituting a renewal, extension or replacement of any Permitted Encumbrance other than those Permitted Encumbrances described in Section 7.6(c) and Section 7.207.3(f).

Encumbrances. The Borrower Neither Back Bay nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”" PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT T hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers', materialmen's and warehousemen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that do not exceed, in the Borrower with respect to which it aggregate, $100,000 and that shall concurrently therewith be prosecuting not have been in existence for a timely appeal or proceeding for review and with respect to which it shall have secured period longer than 30 days after the creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases; (g) Liens securing Encumbrances in respect of any purchase money obligations permitted under Sections 8.1(d)for tangible property used in its business, and/or 8.1(f)PROVIDED that any such Encumbrances shall not extend to property and assets of any Company not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of its business; and (i) Liens set forth Encumbrances on any Company's property or assets created in Schedule 7.6 (but only remaining in effect connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, PROVIDED that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to the extent set forth in Section 7.6(c) property and Section 7.20)assets of any Company not encumbered prior to any such refinancing.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not any of the Lenders to make the property forfeitablesecure Obligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT C hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower's or a Subsidiary's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgment liens securing judgments or awards against that (i) are not fully covered by insurance, and (ii) shall not have been in existence for a period longer than 10 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases; (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f)rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of the Borrower' business; (h) Liens granted to any Encumbrance on any Eligible Lease, Eligible Rental Contract and Eligible Equipment created by the Bank hereundersale, transfer, assignment or disposition of such Eligible Lease, Eligible Rental Contract or Eligible Equipment in compliance with Section 7.4(ii) hereof; (i) liens constituting a renewal, extension or replacement of any Permitted Encumbrance; and (ij) Liens set forth in Schedule 7.6 (but only remaining in effect Encumbrances granted with respect to any Indebtedness permitted under Section 7.1(g), PROVIDED that no such Encumbrance attaches to any part of the extent set forth in Section 7.6(c) and Section 7.20)Collateral.

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capitalized leases permitted by Section 6.1(d); (g) Liens Encumbrances securing obligations Indebtedness permitted under Sections 8.1(dby Section 6.1(c), and/or 8.1(f)provided that any such Encumbrances shall not extend to property and assets of the Company or any such Subsidiary not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of its business; and (i) Liens set forth Encumbrances on its property or assets created in Schedule 7.6 (but only remaining in effect connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of the extent set forth in Section 7.6(c) and Section 7.20)Company or any such Subsidiary not encumbered prior to any such refinancing.

Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”): (a) Liens for taxes, assessments Execute or otherwise enter into an agreement with any Person which prohibits or otherwise restricts the Borrower's ability to create or allow any Encumbrances to be on or otherwise effect any of its properties other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not than pursuant to make the property forfeitablethis Agreement; (b) Liens Create or charges incidental allow any Encumbrances to the conduct of its business be on or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value otherwise affect any of its property or assets or materially impair except the use thereof following (collectively, "Permitted Encumbrances"): (i) Encumbrances in favor of the operation of its businessBank; (cii) Liens arising out Encumbrances for taxes, assessments and other governmental charges incurred in the ordinary course of judgments business which are not yet due and payable or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review are being diligently contested in good faith and by appropriate proceedings and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewadequate reserves are being maintained; (diii) Pledges or deposits made in the ordinary course of business to secure payment of worker's compensation or to participate in any fund in connection with worker's compensation, unemployment insurance or other social security obligations; (iv) Good faith pledges or deposits made in the ordinary course of business to secure performance of tenders, contracts (other than for the repayment of Indebtedness) or leases or to secure statutory obligations under worker’s compensation laws or surety, appeal, indemnity, performance or other similar legislationbonds required in the ordinary course of business; (ev) good faith deposits Liens of mechanics, materialmen, warehousemen, carriers or other similar liens, securing obligations incurred in connection with lending contracts or leases to which the Borrower is a partyordinary course of business that are not yet due and payable; (fvi) deposits to secure public or statutory obligations Encumbrances securing Indebtedness permitted under Section 6.2(c), provided that (A) no other covenants of this Agreement are thereby violated and (B) in the Borrowercase of Encumbrances over equipment, no equipment other than the equipment so acquired secures such Indebtedness; (gvii) Liens securing obligations Encumbrances, if any, otherwise expressly permitted under Sections 8.1(d), and/or 8.1(f)by this Agreement; (hviii) Liens granted to the Bank hereunderEncumbrances set forth on Schedule 6.3 of this Agreement; and (iix) Liens set forth in Schedule 7.6 Judgment liens of less than Five Hundred Thousand Dollars (but only remaining in effect to the extent set forth in Section 7.6(c$500,000) and Section 7.20)or judgment liens that have been unstayed for less than thirty (30) days.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor, upon or with respect to any asset of its property or assets (“Encumbrances”), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested Encumbrances in good faith by appropriate proceedings in such a manner as not favor of the Lender to make the property forfeitablesecure Obligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) Encumbrances securing Indebtedness for Capital Expenditures to the extent such Indebtedness is permitted by Section 7.1(e), provided that (i) each such Encumbrance is given solely to secure the purchase price of the property acquired, does not extend to any other property and is given at the time of acquisition of the property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; (e) landlords’ and lessors’ liens in respect of rent not in default or liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance or other similar bonds incidental to the conduct of its the Borrower’s or a Subsidiary’s business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cf) Liens arising out of judgment liens securing judgments or awards against that (i) are not fully covered by insurance, and (ii) shall not have been in existence for a period longer than 10 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrowerstay; (g) Liens securing obligations rights of lessors under capital leases to the extent such capital leases are permitted under Sections 8.1(d), and/or 8.1(f)hereunder; (h) Liens easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of the Borrower’s business; (i) liens constituting a renewal, extension or replacement of any Permitted Encumbrance; (j) leases, subleases or licenses granted to others not interfering in any material respect with the Bank hereunderbusiness of the Borrower and its Subsidiaries taken as a whole; and (ik) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)arising from UCC financing statements regarding leases permitted by this Agreement.

Encumbrances. The Borrower shall it will not, either directly or indirectlyand will ensure that no Obligor will, without the prior consent of the Agent, create, assume, incur or suffer agree to create or permit to exist subsist any Lien encumbrance on or charge over their respective assets to secure any indebtedness of any kind or character upon any asset of person other than the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):following: (a) Liens any encumbrance on or over the assets of any Obligor subsisting at the date of this Agreement or, in the case of Open PSL Limited, at the date of the Second Supplemental Agreement and agreed to by the Agent (and in the case of the encumbrances held by the Chessington Mortgagee or the St. Crispin Mortgagee, any replacement thereof) provided that, (save for taxesindebtedness secured as at the date of this Agreement by any encumbrance created in favour of the Chessington Mortgagee, assessments which may be increased by up to L500,000), the principal, capital or other governmental charges nominal amount secured by any such encumbrance may not yet due or which are being contested be increased beyond the amount currently secured by the relevant encumbrance as at the date of this Agreement or, in good faith the case of encumbrances created by appropriate proceedings in such a manner as not to make Open PSL Limited, the property forfeitabledate of the Second Supplemental Agreement, without the prior written consent of the Agent; (b) Liens encumbrances in favour of the Security Trustee; (c) the Pledge Agreements; (d) liens or charges incidental to rights of set-off arising solely by operation of law incurred in the conduct ordinary course of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or creditmoney, and which do for sums not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationmore than 30 days overdue; (e) good faith deposits encumbrances arising out of title retention provisions in connection with lending contracts or leases to which a supplier's standard conditions of supply in respect of goods acquired by the Borrower is a partyrelevant person in the ordinary course of trading; (f) deposits to secure public any other encumbrance created or statutory obligations outstanding with the prior written consent of the BorrowerAgent; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f)agreements and arrangements of the type referred to in clause 16.3.5(d) to the extent that the same constitute security; (h) Liens granted any encumbrance over any asset (other than Accounts or Inventory) acquired by any Obligor after the date of this Agreement and subject to which such asset is acquired provided that (1) except with the Bank hereunder; andprior consent of the Agent, the principal, capital or nominal amount secured by such encumbrance may not be increased beyond the amount secured thereby at the date of such acquisition and (2) the same is discharged within 90 days of the date of such acquisition; (i) Liens set forth in Schedule 7.6 (but only remaining in effect any encumbrance over the assets of any company which becomes a Subsidiary after the date of this Agreement pursuant to the extent set forth in Section 7.6(c) and Section 7.20)clause 16.

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien or charge of any kind or character Encumbrance upon any asset of the Borrowerits properties or assets, whether now owned at the date hereof or hereafter acquired except (“Permitted Liens”): acquired; provided, however, (a) Liens RTL may grant liens on its real property located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as security for taxes, assessments or the Permitted Indebtedness and all interest and other governmental charges indebtedness related thereto; and (b) the following additional Encumbrances shall be permitted: (i) Encumbrances for taxes not yet due and payable or which that are being contested in good faith by appropriate proceedings proceedings, provided that adequate reserves with respect thereto are maintained on the books of Borrower or its Subsidiaries, as the case may be, in such conformity with GAAP; (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Encumbrances arising in the ordinary course of business that are not overdue for a manner period of more than 30 days or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of Borrower or its Subsidiaries, as not to make the property forfeitable; case may be, in conformity with GAAP; (biii) Liens pledges or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred deposits in connection with workers’ compensation, unemployment insurance and other social security legislation; (iv) deposits to secure the borrowing performance of money or bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the obtaining ordinary course of an advance or creditbusiness; (v) easements, rights-of-way, restrictions and which other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in the aggregate any case materially detract from the value of its the property or assets subject thereto or materially impair interfere with the use thereof ordinary conduct of the business of Borrower or any of its Subsidiaries; (vi) liens and security interests securing any Purchase Money Obligations permitted under clause (a) of Section 7.1 hereof; and (vii) Encumbrances in existence on the date hereof listed on Schedule 7.2 hereto, provided that no such Encumbrance is spread to cover any additional property after the Closing Date and that the amount of Debt secured thereby is not increased (the items referred to in the operation of its business; immediately preceding clauses (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(ca) and Section 7.20(b) collectively, the “Permitted Liens”).

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets including without limitation any asset of trademark, tradename or other intellectual property ("ENCUMBRANCES"), except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens Encumbrances in favor of the Agent or any of its affiliates or Lenders under the Security Agreement; (b) Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT C and renewals, extensions or replacements thereof reasonably acceptable to the Agent; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same is not yet due delinquent or is not required in accordance with the provisions of SECTION 5.4; (d) landlords' and lessors' liens in respect of rent not in default or which are being contested in good faith or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', carriers', warehousemans', laborers', and materialmen's and similar liens, if the obligations secured by appropriate proceedings such liens are not then delinquent or are being contested in such a manner as not to make good faith; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens or charges other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out judgment liens not in excess of judgments or awards against $ 2,000,000 that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for reviewstay; (df) pledges or deposits rights of lessors under Capital Leases to secure obligations the extent permitted under worker’s compensation laws or similar legislationSECTION 6.1; (eg) Encumbrances in respect of any purchase money obligations for tangible property used in its business to the extent permitted under SECTION 6.1 PROVIDED that any such Encumbrances shall not extend to property and assets of the Company or any such Subsidiary not financed by such a purchase money obligation; (h) easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (i) Encumbrances on any property acquired after the date hereof by the Company or any of its Subsidiaries created contemporaneously with such acquisition to secure or provide for the payment or financing of all or any part of the purchase price thereof, or the assumption of any Encumbrance upon any property hereinafter acquired and existing at the time of such acquisition, or the acquisition of such property subject to an Encumbrance without the assumption thereof, and any refinancing thereof to the extent the related Indebtedness is permitted under SECTION 6.1; (j) Encumbrances securing Indebtedness not prohibited by SECTION 6.1 hereto; (k) inchoate Encumbrances incident to construction or maintenance of real property, or Encumbrances incident to construction or maintenance of real property now or hereafter filed of record for which adequate reserves have been set aside and which are being contested in good faith by appropriate proceedings and have not proceeded to judgment; (l) minor defects and irregularities in title to any real property which in the aggregate do not materially impair the fair market value of such real property; (m) rights reserved to or vested in any governmental agency by law or regulation to control or regulate, or obligations or duties under law or regulation to any governmental agency with respect to, the use of any real property; (n) rights reserved to or vested in any governmental agency by law or regulation to control or regulate, or obligations or duties under law or regulation to any governmental agency with respect to any right, power, franchise, grant, license, or permit; (o) present or future zoning laws or regulations or other laws or regulations restricting the occupancy, use, or enjoyment of real property; (p) liens consisting of deposits of property to secure (or in connection with lending contracts lieu of) surety, appeal or leases customs bonds in proceedings to which the Borrower Company is a party; (fq) deposits to secure public or statutory obligations rights of licensees under license agreements entered into in the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunderordinary course of business; and (ir) Liens set forth the sale or factoring (including any conditional sale) by Guess Italia or ▇▇▇▇▇▇▇▇ of accounts receivable and the granting of liens to secure Indebtedness referred to in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(cSECTION 6.1(h), provided it does not violate SECTION 6.5(i) and Section 7.20)hereof.

Encumbrances. The No Borrower shall, nor shall not, either directly or indirectlyit permit any of its Subsidiaries to, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind nature whatsoever on any of its Property, including, without limitation, the Collateral, other than the following "Permitted Liens": (i) Liens (other than Liens relating to Environmental Laws or character upon any asset ERISA) securing the payment of Charges not yet due and payable; (ii) pledges or deposits under workmen's compensation, unemployment insurance, old age pensions, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations or surety or appeal bonds, or to secure indemnity, performance or other similar bonds in the ordinary course of business; (iii) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen or other similar Liens imposed by law, which are incurred in the ordinary course of business for sums not more than 30 days delinquent; (iv) the Liens in favor of the BorrowerAgent, whether owned for the benefit of the Lenders; (v) purchase money Liens (including capitalized leases and other forms of installment purchase financing) granted to the Person financing a purchase of Equipment so long as the Lien granted is limited to the specific Equipment so acquired, the debt secured by the Lien is not more than the lesser of the acquisition cost or the fair market value of the specific item of Equipment on which the Lien is granted, the aggregate amount of Indebtedness secured by such Liens as a result of purchases shall not exceed One Million Dollars ($1,000,000) at any time during the date hereof or hereafter acquired except term hereof, and the transaction does not violate any other provision of this Agreement (“Permitted Liens”): notification of such purchase money Lien to be provided to the Agent and each Lender within ten (10) days of acquisition of such Equipment); (vi) Liens permitted in accordance with subsection 7.4(a); (vii) other Liens on Real Estate, which do not, in the Agent's sole determination, (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof of such property, or (b) materially lessen the value of such property for the purposes for which the same is held by a Borrower or such Subsidiary, (vii) a pledge of cash or Cash Equivalents in the operation aggregate amount of its business; $150,000 to secure the Chase Letter of Credit and (cviii) Liens arising out of judgments or awards against existing on the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review Closing Date and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)disclosed on Exhibit 8.1.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not any of the Lenders to make the property forfeitablesecure Obligations; (b) Encumbrances (other than Encumbrances arising under the NatWest Facility) existing as of the date of this Agreement and disclosed in EXHIBIT C hereto; (c) liens for taxes, fees, assessments and governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of section 5.4; (d) landlords' and lessors' Liens in respect of rent not in default or charges liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower s or a Subsidiary's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgment liens securing judgments or awards against that (i) are not fully covered by insurance, and (ii) shall not have been in existence for a period longer than 10 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases; (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f)rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct the Borrower' business; (h) Liens granted any Encumbrance on any Eligible Lease, Eligible Rental Contract and Eligible Equipment created by the sale, transfer, assignment or disposition of such Eligible Lease, Eligible Rental Contract or Eligible Equipment in compliance with Section 7.4(ii) hereof; (i) liens constituting a renewal, extension or replacement of any Permitted Encumbrance; (j) Encumbrances arising under the NatWest Facility, that no such Encumbrance attaches to any part of the Bank hereunderCollateral; and (ik) Liens set forth in Schedule 7.6 (but only remaining in effect Encumbrances granted with respect to any Indebtedness permitted under Section 7.1(h), PROVIDED that no such Encumbrance attaches to any part of the extent set forth in Section 7.6(c) and Section 7.20)Collateral.

Encumbrances. The Borrower Neither any Credit Party nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind or character Encumbrance upon any asset of its properties and assets, or assign or otherwise convey any right to receive income, with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens Encumbrances in favor of the Administrative Agent under the Security Documents for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableratable benefit of the Lenders; (b) Liens Encumbrances existing as of the date of this Agreement, consented to by the Required Lenders and disclosed in SCHEDULE 4.24. attached hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed, is being contested and is otherwise not required to be paid in accordance with the provisions of Section 7.6. hereof; (d) landlords' and lessors' liens in respect of rent not in default or charges liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partyattachments, garnishments and judgment liens not constituting an Event of Default; (f) deposits liens in favor of lessors under Capital Leases and sellers under motor vehicles installment sales contracts permitted under Section 8.9. hereof as long as the collateral subject thereto is limited solely to secure public the property that is the subject of such Capital Leases or statutory obligations sales contracts and secures only the amounts owing in respect of the Borrowersuch leases and contracts; (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f)rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (h) Liens granted Encumbrances on property or assets created in connection with the refinancing or refunding of Indebtedness referred to in Section 8.1.(b) hereof; PROVIDED, HOWEVER, that the Bank hereunderamount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing or refunding and no such Encumbrance shall extend to property and assets of any such Credit Party or Subsidiary not encumbered prior to any such refinancing or refunding; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect Encumbrances securing Indebtedness for Capital Expenditures to the extent set forth in such Indebtedness is permitted under Section 7.6(c8.1 hereof, provided, that (i) each such Encumbrance is given solely to secure the purchase price of such property, does not extend to any other property and Section 7.20)is given at the time of acquisition of the property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition.

Encumbrances. The (a) Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of its property or assets ("ENCUMBRANCES"), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of accounts receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (ai) Liens Encumbrances in favor of the Lender or the Issuing Bank to secure Obligations; (ii) Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT C hereto; (iii) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due or which are being contested required in good faith by appropriate proceedings in such a manner as not to make accordance with the property forfeitableprovisions of Section 5.4; (biv) Liens landlords' and lessors' liens in respect of rent not in default or charges liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its business the Borrower's or the ownership any of its property Subsidiaries' business in the ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cv) Liens arising out of judgment liens securing judgments or awards against that (i) are not fully covered by insurance, and (ii) shall not have been in existence for a period longer than ten (10) days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than ten (10) days after the expiration of such appeal or proceedings for reviewstay; (dvi) pledges or deposits rights of lessors under capital leases to secure obligations under worker’s compensation laws or similar legislationthe extent such capital leases are permitted hereunder; (evii) good faith deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in connection a material way with lending contracts or leases to which the Borrower is ordinary conduct of the Borrower's and its Subsidiaries business taken as a partywhole; (fviii) deposits Encumbrances securing Indebtedness for Capital Expenditures to the extent such Indebtedness is permitted by Section 7.1(h) provided that (x) each such Encumbrance is given solely to secure public or statutory obligations the purchase price of the Borrowerproperty acquired, does not extend to any other property and is given at the time of acquisition of the property, and (y) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition; (gix) Liens securing obligations Encumbrances in favor of the Borrower or any of its Subsidiaries to secure Indebtedness permitted under Sections 8.1(dby Section 7.1(i), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (ix) Liens set forth in Schedule 7.6 liens constituting a renewal, extension or replacement of any Permitted Encumbrance. (but only remaining in effect b) The Borrower shall not, and shall not permit any of its Subsidiaries to, covenant or agree with any Person not to the extent set forth in Section 7.6(c) and Section 7.20)create, incur, assume or suffer to exist any Encumbrances.

Encumbrances. The No Borrower shall, nor shall not, either directly or indirectlyit permit any of its Subsidiaries to, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind nature whatsoever on any of its Property, including, without limitation, the Collateral, other than the following "Permitted Liens": (i) Liens (other than Liens relating to Environmental Laws or character upon any asset ERISA) securing the payment of Charges not yet due and payable; (ii) pledges or deposits under workmen's compensation, unemployment insurance, old age pensions, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations or surety or appeal bonds, or to secure indemnity, performance or other similar bonds in the ordinary course of business; (iii) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen or other similar Liens imposed by law, which are incurred in the ordinary course of business for sums not more than 30 days delinquent; (iv) the Liens in favor of the BorrowerAgent, whether owned for the benefit of the Lenders; (v) purchase money Liens (including capitalized leases and other forms of installment purchase financing) granted to the Person financing a purchase of Equipment so long as the Lien granted is limited to the specific Equipment so acquired, the debt secured by the Lien is not more than the lesser of the acquisition cost or the fair market value of the specific item of Equipment on which the Lien is granted, the aggregate amount of Indebtedness secured by such Liens as a result of purchases shall not exceed One Million Dollars ($1,000,000) at any time during the date hereof or hereafter acquired except term hereof, and the transaction does not violate any other provision of this Agreement (“Permitted Liens”): notification of such purchase money Lien to be provided to the Agent and each Lender within ten (10) days of acquisition of such Equipment); (vi) Liens permitted in accordance with SUBSECTION 7.4(A); (vii) other Liens on Real Estate, which do not, in the Agent's sole determination, (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof of such property, or (b) materially lessen the value of such property for the purposes for which the same is held by a Borrower or such Subsidiary, (vii) a pledge of cash or Cash Equivalents in the operation aggregate amount of its business; $150,000 to secure the Chase Letter of Credit and (cviii) Liens arising out of judgments or awards against existing on the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review Closing Date and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)disclosed on EXHIBIT 8.1.

Encumbrances. The Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind nature whatsoever on any of its assets or character upon any asset of property, including, without limitation, the BorrowerCollateral, whether owned at other than the date hereof or hereafter acquired except following (“Permitted Liens”): ): (ai) Liens for securing the payment of taxes, assessments or other governmental charges either not yet due or the validity of which is being contested in good faith by appropriate proceedings, and as to which the Borrower shall, if appropriate under GAAP, have set aside on its books and records adequate reserves, provided, that such contest does not have a material adverse effect on the ability of the Borrower to pay any of the Liabilities, or the priority or value of the Administrative Agent’s Lien in the Collateral; (ii) deposits under workmen’s compensation, unemployment insurance, social security and other similar laws; (iii) Liens in favor of the Administrative Agent (for the ratable benefit of Lenders and Administrative Agent); (iv) liens imposed by law, such as mechanics’, materialmen’s, landlord’s, warehousemen’s, carriers’ and other similar liens, securing obligations incurred in the ordinary course of business that are not past due for more than thirty (30) calendar days, or that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established, or that are not yet due and payable; (v) purchase money security interests upon or in any property acquired or held by the Borrower in the ordinary course of business to secure the purchase price of such a manner as property so long as: (a) the aggregate indebtedness relating to such purchase money security interests and Capitalized Lease Obligations does not to make at any time exceed Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00) in the property forfeitable; aggregate at any time, (b) Liens or charges incidental each such lien shall only attach to the conduct of its business or the ownership of its property to be acquired; and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out the indebtedness incurred shall not exceed one hundred percent (100%) of judgments the purchase price of the item or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; items purchased; (dv) pledges and deposits made in the ordinary course of business in compliance with workmen’s compensation laws, unemployment insurance and other social security laws or regulations, or deposits to secure obligations under worker’s compensation laws or similar legislation; performance of tenders, statutory obligations, trade contracts (e) good faith deposits in connection with lending contracts or other than for Indebtedness), leases to which the Borrower is a party; (f) deposits to secure public or statutory other than Capital Lease Obligations), surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of Borrower; ’s business as presently conducted; (gvi) Liens any Lien securing obligations permitted under Sections 8.1(d)a judgment; provided, and/or 8.1(f); that any Lien securing a judgment in excess of Two Hundred Fifty Thousand Dollars (h$250,000.00) Liens granted that remains unsatisfied or undischarged for more than thirty (30) days shall not be a Permitted Lien, unless such judgment is either (x) fully insured and such insurer has admitted liability or (y) is being contested or appealed by appropriate proceedings and the enforcement of such judgment is stayed during the course of such contest or appeal, provided that Borrower has established reserves adequate for payment of such judgment and in the event such contest or appeal is ultimately unsuccessful pays such judgment within ten (10) days of the final, non- appealable ruling rendered in such contest or appeal; and (vii) financing statements with respect to a lessor’s rights in and to personal property leased to a Borrower in the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)ordinary course of business other than through a Capitalized Lease Obligations.

Encumbrances. The Borrower No Issuer Related Party shall, nor shall not, either directly or indirectlyit permit any of its Subsidiaries to, create, assumeincur, incur assume or suffer to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of its assets or properties, including the Collateral, or file or permit the filing of, or permit to exist remain in effect, any Lien financing statement or charge other similar notice of any kind security interest or character lien with respect to any such assets or properties, except upon any asset such Issuer Related Party or such Subsidiary obtaining all requisite approvals from the Bankruptcy Court and solely to the extent that the Indebtedness and other obligations or liabilities secured by such security interest, mortgage, pledge, lien, charge or other encumbrance are contemplated under the Monthly Forecast and 13-Week Projection (with the exception of the Borrowerclauses (c), whether owned at the date hereof or hereafter acquired except (d), (g)(ii), (i) and (j) of this Section 10.8) (“Permitted Liens”): (a) Liens the security interests and liens of the Collateral Agent for itself and the benefit of the Administrative Agent and the Note Purchasers; (b) liens arising under applicable Gaming Laws; provided, that no such lien constitutes a lien securing repayment of Indebtedness; (c) licenses of Intellectual Property granted by such Issuer Related Party or any of its Subsidiaries in the ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of such Issuer Related Party or such Subsidiary; (d) liens securing the payment of taxes, assessments or other governmental charges or levies either not yet due overdue or the validity of which are being contested in good faith by appropriate proceedings in diligently pursued and available to such a manner Issuer Related Party or Subsidiary, as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith case may be prosecuting a timely appeal or proceeding for review and with respect to which it shall adequate reserves have secured a stay of execution pending such appeal been set aside on its books, or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationthat are immaterial in amount; (e) non-consensual statutory liens (other than liens securing the payment of taxes) arising in the ordinary course of such Issuer Related Party’s or Subsidiary’s business to the extent: (i) such liens secure Indebtedness which is not overdue or (ii) such liens secure Indebtedness relating to claims or liabilities which are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or are being contested in good faith deposits by appropriate proceedings diligently pursued and available to such Issuer Related Party or such Subsidiary, in connection each case prior to the commencement of foreclosure or other similar proceedings and with lending contracts or leases respect to which the Borrower is a partyadequate reserves have been set aside on its books; (f) deposits to secure public zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of Real Property which do not interfere in any material respect with the use of such Real Property or statutory obligations ordinary conduct of the Borrowerbusiness of such Issuer Related Party or such Subsidiary as presently conducted thereon or materially impair the value of such Real Property; (g) Liens securing obligations permitted under Sections 8.1(d)pledges and deposits of cash by such Issuer Related Party after the date hereof in the ordinary course of business in connection with workers’ compensation, and/or 8.1(f)unemployment insurance and other types of social security benefits consistent with the current practices of such Issuer Related Party as of the date hereof; (h) Liens granted pledges and deposits of cash by such Issuer Related Party after the date hereof to secure the performance of tenders, bids, leases, trade contracts (other than for the repayment of Indebtedness), statutory obligations and other similar obligations in each case in the ordinary course of business consistent with the current practices of such Issuer Related Party as of the date hereof; provided, that in connection with any performance bonds issued by a surety or other person, the issuer of such bond shall have waived in writing any rights in or to, or other interest in, any of the Collateral in an agreement, in form and substance reasonably satisfactory to the Bank Required Note Purchasers; (i) liens arising from (i) Operating Leases and the precautionary UCC financing statement filings in respect thereof and (ii) equipment or other materials which are not owned by any Issuer Related Party located on the premises of such Issuer Related Party (but not in connection with, or as part of, the financing thereof) from time to time in the ordinary course of business and consistent with current practices of such Issuer Related Party and the precautionary UCC financing statement filings in respect thereof; (j) liens securing the Prepetition First Lien Obligations solely to the extent in accordance with the Prepetition First Lien Financing Agreements, and the Final Cash Collateral Order, in effect on the date hereof (unless the amendment thereof is permitted hereunder) and the date of the DIP Order; (k) liens securing the Second Lien Notes solely to the extent in accordance with the Second Lien Note Indenture, in effect on the date hereof (unless the amendment thereof is permitted hereunder) and the DIP Order; and (il) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)Supplemental DIP Liens.

Encumbrances. The Borrower shall not, either directly or indirectly, No Company nor the Principal on behalf of any Restaurant will create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested Encumbrances in good faith by appropriate proceedings in such a manner as not to make favor of the property forfeitableAgent under the Loan Documents; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Schedule 7.3; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 6.4; (d) landlord's and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out judgment liens that shall not have been in existence for a period of judgments or awards against longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Encumbrances in respect of Capital Leases and purchase money obligations incurred within 90 days of purchase which in the aggregate do not secure Indebtedness in excess of $500,000 for tangible personal property other than inventory used in its business, provided that any such Encumbrances shall not extend to property and assets not financed by such Capitalized Lease or purchase money obligation and shall not secure public or statutory obligations Indebtedness greater than the lesser of the Borrower;cost or fair market value of such tangible personal property so acquired; and (g) Liens securing obligations easements, rights of way, restrictions and other similar Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business, if the same were permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted exceptions to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect title insurance policies deemed by Agent to the extent set forth in Section 7.6(c) and Section 7.20)be satisfactory.

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien or charge of any kind or character Encumbrance upon any asset of its properties or assets (including without limitation, the BorrowerCollateral), whether now owned at the date hereof or hereafter acquired acquired, except (“Permitted Liens”): for the following: (a) Liens Encumbrances created in connection with the Loan Documents; (b) Mechanic's, warehouseman's, and statutory landlords' Encumbrances arising as an incident to the normal and customary conduct of Borrower's business or the ownership of properties and assets by Borrower, and deposits and pledges incurred in the ordinary course of business and not in connection with the borrowing of money; provided, however, that (i) in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith and adequate reserves have been set aside by the Borrower as the case may be, and (ii), in the case of warehousemen's or landlord's Encumbrances, written subordination agreements providing for taxesthe subordination or waiver of the warehousemen's or landlord's Encumbrances to the security interests and liens provided by Borrower to Lender under this Agreement and the other Loan Documents shall have been executed by the warehousemen and/or landlords (as applicable) and Borrower and delivered to Lender, assessments and are in form and substance satisfactory to Lender; (c) Encumbrances securing the payments of taxes or other governmental charges incurred in the ordinary course of business that either (1) are not yet due delinquent, or which (2) are being contested in good faith by appropriate legal or administrative proceedings in such a manner and as not to make the property forfeitable; (b) Liens or charges incidental which adequate reserves have been set aside on their books to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or creditextent required by GAAP, and which do not result in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; Material Adverse Effect; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; Encumbrances listed on the schedule attached hereto as Schedule 7.2; (e) good faith Encumbrances in respect of pledges or deposits in connection with lending contracts workers compensation, unemployment insurance and other social security legislation; (f) Encumbrances in respect of precautionary UCC filings in respect of leases; and (g) Extensions, renewals and replacements of Encumbrances referred to in clauses (a) through (e) of this Section 7.2; provided, however, that any such extension, renewal or leases replacement Encumbrance shall be limited to the property or assets and proceeds thereof covered by the Encumbrance extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Encumbrance shall be in an amount not greater than the amount of the obligations secured by the Encumbrance extended, renewed or replaced. Fundamental Changes. Amend its Articles or Certificate of Incorporation or Articles of Organization (as applicable) by any amendment which would adversely affect Borrower's ability to perform or comply with any of the terms, conditions or agreements to be performed or complied with by Borrower hereunder or to perform any of the transactions contemplated hereby; change its fiscal year, name, or key management; convert its organizational form into another entity form or establish any new entity to perform the business or similar business of Borrower; reorganize, consolidate or merge with any other corporation or company; or change the state of incorporation or organization/formation of Borrower. Varsity Group Inc. shall not change from a corporation publicly traded in the United States under and in accordance with applicable securities and other laws and regulations. Furthermore, there shall not occur any change in ownership of the Borrower that would result in a change in control of the Borrower. For purposes of this covenant, a change in control of the Borrower shall occur if more than a thirty five percent (35%) aggregate interest in ownership in the Borrower is transferred to a party; person or entity and/or any affiliates of such person or entity, except as a result of the Merger. Furthermore, Borrower shall not materially engage in any business other than the business in which Borrower is actively engaged as of the date of this Agreement, which business the Borrower has fully disclosed to Lender Acquisitions. Purchase, lease or otherwise acquire the assets, business, goodwill or securities of any other Person, including, without limitation, shares of stock in corporations, partnership interests in general or limited partnerships or membership interests in limited liability companies, or acquire any other business. Transfer of Assets. Sell, lease, assign, pledge or otherwise dispose of any of its properties, stock or assets (including without limitation, the Collateral), whether now owned or hereafter acquired, except (a) in the ordinary course of business and for fair market value, (b) any subsidiary may be merged with or into any entity comprising the Borrower, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to the Borrower; provided that, in the case of such a merger or other transaction with the Borrower, the Borrower shall be the continuing or surviving corporation or limited liability company; (c) dispositions of obsolete, worn out or surplus property in the ordinary course of business; (d) the licensing of Intellectual Property or software in the ordinary course of business; (e) the disposition of cash equivalents or any other investment permitted hereunder; provided Borrower retains ownership of the property received in exchange for or as a result of such disposition, and further provided that such property received as a result of such disposition has a value equal to or greater than the value of the cash equivalents or other investment which is the subject of such disposition; (f) deposits intercompany transfers of assets or property among the entities comprising the Borrower; (g) investments, loans and advances permitted by Sections 7.6 and 7.7 of this Agreement; (h) stock purchases permitted by Section 7.9 of this Agreement; (i) the granting of Encumbrances permitted under this Agreement; (j) discounts or forgiveness of accounts receivable in the ordinary course of business in connection with the collection or compromise thereof; provided the discount or forgiveness of an account receivable does not exceed five percent (5%) of the amount of such account receivable; (k) the sale, shut-down or liquidation of Campus Outfitters, L.L.C. so long as the net cash flow generated from such sale, shut-down or liquidation (including any cash needed to secure public pay any liabilities or statutory obligations incurred in connection with or arising as a result of such sale, shut-down or liquidation) is not less than negative $300,000. Investments. Purchase or hold any stock, or evidence of indebtedness of any other Person or entity except the following: (a) investments in direct obligations of the Borrower; United States Government and certificates of deposit of United States commercial banks insured by the Federal Deposit Insurance Corporation; (b) investments in United States dollar-denominated time deposits, certificates of deposit and bankers acceptances of any bank whose short-term debt rating from Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P"), is at least A-1 or the equivalent or whose short-term debt rating from ▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇") is at least P-1 or the equivalent with maturities of not more than six (6) months from the date of acquisition; (c) investments in commercial paper with a rating of at least A-1 or the equivalent by S&P or at least P-1 or the equivalent by Moody's maturing within six (6) months after the date of acquisition; (d) investments in money market funds substantially all the assets of which are comprised of securities of the types described in clauses (a) through (d) above; (e) investments in deposit accounts in which the Lender has been granted a security interest under the Loan Documents; (f) investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); receivables owing to the Borrower created or acquired in the ordinary course of business and payable on customary trade terms of the Borrower; (h) Liens granted to the Bank hereunderguarantees permitted by Section 7.1 of this Agreement; and (i) Liens set forth pledges and deposits permitted by Section 7.2 of this Agreement; (j) loans permitted under Section 7.7 of this Agreement; (k) securities or limited liability company membership interests issued by the Borrower or any of its subsidiaries; provided that the proceeds from all payments made for such issuance shall be paid directly to Lender and shall be used to reduce the principal amount owing under the Line of Credit, and shall further result in Schedule 7.6 (but only remaining a dollar for dollar permanent reduction in effect the amount of the Line of Credit Amount. For purposes of this Section 7.6, the amount of any investment shall be equal to the extent set forth initial investment less all repayments, returns, dividends, distributions or reimbursements in Section 7.6(c) and Section 7.20)respect thereof.

Encumbrances. The Borrower No Restricted Person shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien security interest, mortgage, pledge, lien, charge or charge other encumbrance of any kind nature whatsoever on any of its assets or character upon any asset of properties, including, without limitation, the BorrowerCollateral, whether owned at except for the date hereof or hereafter acquired except (“Permitted Liens”):following: (a) Liens for (i) liens and security interests in favor of the Secured Parties or the UK Secured Parties; and (ii) in the case of the assets and properties of the UK Loan Parties (other than the Borrower and the Guarantors), liens and security interests in favor of any Loan Party to secure the GIFL US Intercompany Obligations; (b) liens and security interests on the Collateral securing indebtedness of the Senior Secured Parties under the Senior Secured Documents, to the extent such liens, security interest and indebtedness are subject to any Intercreditor Agreement; (c) liens securing the payment of taxes, assessments or other governmental charges either not yet due overdue or the validity of which are being contested in good faith by appropriate proceedings in diligently pursued and available to such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review Restricted Person and with respect to which it shall adequate reserves have secured a stay of execution pending such appeal or proceedings for reviewbeen set aside on its books; (d) pledges or security deposits to secure obligations under worker’s compensation laws or similar legislationin the ordinary course of business; (e) non-consensual statutory liens (other than liens securing the payment of taxes) arising in the ordinary course of such Restricted Person’s business to the extent: (i) such liens secure obligations that are not yet overdue; (ii) such liens are not in imminent danger of foreclosure; or (iii) such liens secure indebtedness relating to claims or liabilities that are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer (subject to applicable deductibles) or being contested in good faith deposits by appropriate proceedings diligently pursued and available to such Restricted Person, in connection each case prior to the commencement of foreclosure or other similar proceedings and with lending contracts or leases respect to which the Borrower is a partyadequate reserves have been set aside on its books; (f) deposits to secure public zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of real property that do not interfere in any material respect with the use of such real property or statutory obligations ordinary conduct of the Borrowerbusiness of such Restricted Person as presently conducted thereon or materially impair the value of the real property that may he subject thereto; (g) Liens securing obligations purchase money security interests in equipment (including Capital Leases) and purchase money mortgages on real property to secure indebtedness permitted under Sections 8.1(d), and/or 8.1(fSection 6.8 (Indebtedness); (h) Liens granted the security interests and liens set forth on Schedule 6.7 or replacements therefor that do not extend to any other property or increase the Bank hereunderamounts secured; and (i) Liens set forth in Schedule 7.6 security interests and liens on the assets of any Other Restricted Person having entered into any financing transaction permitted pursuant to Section 6.6(b)(i) (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).Sale of

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (c) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cd) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationstay; (e) good faith deposits liens in connection with lending contracts or leases favor of lessors under Capitalized Leases on assets subject to which the Borrower is a party;Capitalized Leases permitted by Sections 6.1 and 6.3 hereof; and (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)its business.

Encumbrances. The Borrower shall not, either directly or indirectlynor shall permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets (including, without limitation, any asset of its intellectual property) (“Encumbrances”), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested Encumbrances in good faith by appropriate proceedings in such a manner as not to make favor of the property forfeitableSenior Lender under any Senior Debt Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Schedule 7.5 hereto securing Indebtedness described therein; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required to be paid in accordance with the provisions of Section 6.4; (d) Landlords’ and lessors’ liens arising by statute, so long as the obligations of the Borrower or other member of the Borrower Affiliated Group under the applicable lease are not overdue, or liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, laborers’, carriers’, warehousemans’, materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Easements, rights of way, restrictions, minor defects or irregularities in title and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrowerits business; (g) Liens Encumbrances securing the purchase price of capital assets (including rights of lessors under capital leases) to the extent such purchase is not otherwise prohibited hereunder, provided, however, that (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations permitted under Sections 8.1(d)relating to, and/or 8.1(f)such property, does not extend to any other property and is given at the time of the acquisition of the property, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time such security interest attaches, and in any event, such Indebtedness does not exceed $1,000,000 in the aggregate outstanding at any time; (h) Liens granted Any interest of title of a lessor under, and Encumbrances arising from, Uniform Commercial Code financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to equipment leases not otherwise prohibited by this Agreement; (i) Normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (j) Encumbrances of a collection bank arising under Section 4-210 of the Bank hereunderUniform Commercial Code on items in the course of collection; and (ik) Liens set forth Rights of service or indemnity payment setoffs customarily required in Schedule 7.6 software license agreements; and (but only remaining l) Any exception included in effect to a title insurance policy approved by the extent set forth in Section 7.6(c) and Section 7.20)Noteholders.

Encumbrances. The Borrower shall not, either directly or indirectlynor shall permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets (“Encumbrances”), or assign or otherwise convey any asset right to receive income, including the sale or discount of Accounts Receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens for taxes, assessments Encumbrances in favor of the Administrative Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableBanks under any Security Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Exhibit C hereto; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) Landlords’ and lessors’ liens in respect of rent not in default, to the extent Landlord Waivers shall have been delivered to the Administrative Agent, or liens in respect of pledges or deposits under worker’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, laborers’, carriers’, warehousemans’, materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrowerits business; (g) Liens Encumbrances securing the purchase price of capital assets (including rights of lessors under capital leases) to the extent such purchase is permitted hereunder, provided, however, that (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations permitted under Sections 8.1(drelating to, such property, does not extend to any other property and is given at the time of the acquisition of the property, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time such security interest attaches, and in any event, such Indebtedness does not exceed (i) $3,000,000 in the case of vehicle capital leases or purchase money security interests which exist on the Closing Date (and refinancings thereof in the ordinary course of business, provided that the aggregate $3,000,000 limit is not exceeded), and/or 8.1(f);and (ii) $1,000,000 for all other purposes, in the aggregate outstanding at any time; and (h) Liens granted Encumbrances expressly permitted under Section 6.1(g). In addition, the Borrower shall not, nor shall the Borrower permit any other member of the Borrower Affiliated Group or any of its other Subsidiaries to, enter into or permit to exist any arrangement or agreement which directly or indirectly prohibits the Bank hereunder; and (i) Liens set forth Borrower or any such other member of the Borrower Affiliated Group or Subsidiary from creating or incurring any Encumbrance in Schedule 7.6 (but only remaining in effect to favor of the extent set forth in Section 7.6(c) Administrative Agent for the benefit of the Banks and Section 7.20)the Administrative Agent under the Loan Documents.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of its property or assets ("ENCUMBRANCES"), including without limitation any Accounts Receivable, Intellectual Property or contracts, or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Lender or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not the Issuing Bank to make the property forfeitablesecure Obligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT C hereto; (c) Encumbrances securing Indebtedness permitted by Section 7.1(e), PROVIDED that (i) each such Encumbrance is given solely to secure the purchase price of the property acquired, does not extend to any other property and is given at the time of acquisition of the property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; (e) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower's or a Subsidiary's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cf) Liens arising out of judgment liens securing judgments or awards against that (i) are not fully covered by insurance, and (ii) shall not have been in existence for a period longer than 10 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrowerstay; (g) Liens securing obligations rights of lessors under capital leases to the extent such capital leases are permitted under Sections 8.1(d), and/or 8.1(fSection 7.1(e); (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of the Borrower's business; (i) liens constituting a renewal, extension or replacement of any Permitted Encumbrance; and (ij) Liens set forth Encumbrances in Schedule 7.6 (favor of reputable financial institutions in connection with the Borrower's factoring of Accounts Receivable and Qualified Multiyear License Agreements in the ordinary course, but only remaining in effect to the extent set forth that the Borrower at all times maintains a Borrowing Base sufficient in Section 7.6(c) and Section 7.20)amount to cover the full amount of the Commitment.

Encumbrances. The Borrower Neither of the Borrowers nor any of their Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of its property or assets (“Encumbrances”), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of accounts receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens Encumbrances created under the Security Documents; (b) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 6.4; (c) landlords’ and lessors’ liens in respect of rent not in default; liens in respect of pledges or which deposits made in the ordinary course of business in compliance with workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent for more than 30 days or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established and are being maintained in such a manner as not to make accordance with GAAP; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens other than for the payment of money); and liens securing statutory obligations or charges surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrowers’ or any of their Subsidiaries’ business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its their property or assets or materially impair the use thereof in the operation of its their business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationjudgment liens securing judgments that (i) are fully covered by insurance, and (ii) shall not have been in existence for a period longer than 45 days after the creation thereof or, if a stay of execution shall have been obtained, for a period longer than 10 days after the expiration of such stay; (e) good faith deposits in connection with lending contracts or leases rights of lessors under Capitalized Leases, to which the Borrower is a partyextent such Capitalized Leases are permitted hereunder; (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the BorrowerBorrowers’ business; (g) Liens securing obligations Encumbrances constituting a renewal, extension or replacement of any Permitted Encumbrance if otherwise permitted under Sections 8.1(d), and/or 8.1(f);hereby and not in conflict with the terms hereof; and (h) Liens granted to Encumbrances existing on the Bank hereunder; and (i) Liens date of this Agreement and set forth in on Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.208.3(h).

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien on any of its property or charge of any kind or character upon any asset of the Borrowerassets, whether now owned at the date hereof or hereafter acquired owned or acquired, except the following (collectively, “Permitted Liens”): (a) Liens for taxes, assessments or other governmental charges taxes not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitabledelinquent; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;Reserved (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewReserved; (d) pledges or deposits to secure the performance of tenders, bids or leases, trade contracts (other than for borrowed money), statutory obligations, surety, customs, stay and appeal bonds, performance and return of money bonds, government contracts and other obligations under worker’s compensation laws or similar legislationof a like nature; (e) good faith deposits in connection Liens securing Indebtedness permitted by Sections 6.1 hereof, provided that as to Liens securing Indebtedness permitted by Section 6.1(c) only, (i) such Liens shall be created substantially simultaneously with lending contracts the acquisition of such fixed or leases to which capital asset, (ii) such Liens do not at any time encumber any property other than the Borrower is a partyproperty, equipment or improvements financed by such Indebtedness, and (iii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 100% of the original purchase price of such property, Inventory, equipment or improvements and related costs and charges imposed by vendors thereof; (f) deposits to secure public or statutory obligations Liens in favor of the BorrowerL▇▇▇▇▇; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f)arising from precautionary UCC financing statements regarding operating leases; (h) Liens granted Any interest of a licensor or sublicensor, with respect to any assets under any license entered into in the Bank hereunder; andordinary course of business and covering only the licensed or sublicensed assets; (i) Licenses of patents, trademarks and other intellectual property rights granted by the Borrower or by any Subsidiary in the ordinary course of business; (j) Other Liens securing Indebtedness not to exceed $150,000; (k) Liens set forth in on Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c6.2(o) and Section 7.20).hereof; and

Encumbrances. The Neither Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of Lender or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens Encumbrances existing as of the date of this Agreement and specifically disclosed in Schedule 4.5 hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases; (g) Subordinated Liens securing obligations on the Collateral to the extent permitted under Sections 8.1(d), and/or 8.1(f)the German Security Agreement; (h) Liens granted Encumbrances in respect of any purchase money obligations for tangible property used in its business that at any time shall not exceed $100,000 in the aggregate unless otherwise consistent with the Mission Statement, provided that any such Encumbrances shall not extend to the Bank hereunderCollateral or to property and assets of Borrower or any such Subsidiary not financed by such a purchase money obligation; and (i) Liens set forth easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in Schedule 7.6 (but only remaining in effect to a material way with the extent set forth in Section 7.6(c) and Section 7.20)ordinary conduct of its business.

Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):except: (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make any property of Borrower forfeitable and for which adequate reserves for such contest are maintained by the property forfeitableBorrower; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect and pre-judgment attachments not constituting an Event of Default under Section 11.8 to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (dc) pledges or deposits to secure obligations under worker’s 's compensation laws or similar legislation; (ed) good faith deposits in connection with lending contracts (other than contracts for the payment of money) or leases to which the Borrower is a party; (e) carriers,' warehousemen's, suppliers' or similar possessing liens existing in the ordinary course of Borrower's business; (f) deposits Liens existing on the date hereof and disclosed on Schedule 8.2 referred to secure public or statutory obligations of the Borrowerin Section 7; (g) Liens securing on fixed assets acquired in connection with incurring obligations permitted under Sections 8.1(dSection 8.1(f), and/or 8.1(f)to secure such obligations; (h) Liens granted to zoning restrictions, easements, licenses, or other restrictions on the Bank hereunderuse of any real estate or other minor irregularities in title (including leasehold title) thereto, so long as the same do not materially impair the use, value, or marketability of such real estate; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect granted to the extent set forth in Section 7.6(c) and Section 7.20)Bank.

Encumbrances. The Borrower shall not, either directly or indirectly, not create, assumeincur, incur or suffer assume or permit to exist any Lien or charge Encumbrances on any of any kind or character upon any asset of the Borrower, whether its property now owned at the date hereof or hereafter acquired acquired, except for the following (“hereinafter referred to as the "Permitted Liens”Encumbrances"): (a) Liens Encumbrances for taxes, assessments assessments, or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in action promptly initiated and diligently conducted, if such a manner reserves as not to make the property forfeitableshall be required by GAAP shall have been made therefor; (b) Liens or charges incidental to the conduct Encumbrances of its business or the ownership of its property landlords, vendors, carriers, warehousemen, mechanics, laborers and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not materialmen arising by law in the aggregate materially detract from the value ordinary course of its property business for sums either not yet due or assets or materially impair the use thereof being contested in the operation of its businessgood faith by appropriate action promptly initiated and diligently conducted, if such reserve as shall be required by GAAP shall have been made therefor; (c) Liens Inchoate liens arising out of judgments or awards against under ERISA to secure the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewcontingent liabilities, if any, permitted by this Agreement; (d) pledges or deposits The Collateral Documents and any other Encumbrances in favor of the Bank to secure obligations under worker’s compensation laws or similar legislationthe Indebtedness of the Borrower to the Bank; (e) good faith deposits Encumbrances in connection with lending contracts or leases favor of EnCap, provided such Encumbrances are subordinated in favor of Bank pursuant to which the Borrower is a partySubordination Agreement; (f) deposits Encumbrances granted prior to the date of this Agreement to secure public or statutory obligations non-recourse Debt, and/or Encumbrances granted after the date of the Borrowerthis Agreement to secure non-recourse Debt; (g) Liens securing obligations permitted under Sections 8.1(d), Encumbrances existing as of the date of this Agreement in favor of Hibernia Corporation and/or 8.1(f);Hibernia Energy Investment Corporation; and (h) Liens granted to Encumbrance evidenced by that certain UCC-1 financing statement by PEO in favor of Linc Monex, recorded with the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)Secretary of State of Texas under No. 98-215813.

Encumbrances. The Borrower shall not, either directly or indirectly, No Company will create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments or other governmental charges not yet due or which are being contested Encumbrances in good faith by appropriate proceedings in such a manner as not to make favor of the property forfeitableLender under the Loan Documents; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Schedule 7.3; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 6.4; (d) landlord's and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent or are released by appropriate statutory release bonds; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out judgment liens that shall not have been in existence for a period of judgments or awards against longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Encumbrances in respect of Capital Leases and purchase money obligations incurred within 120 days of purchase which in the aggregate do not secure Indebtedness in excess of $1,000,000 as provided in Section 7.1(d), provided that any such Encumbrances shall not extend to property and assets not financed by such Capitalized Lease or purchase money obligation and shall not secure public or statutory obligations Indebtedness greater than the lesser of the Borrowercost or fair market value of such tangible personal property so acquired; (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f)rights of way, restrictions and other similar Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (h) Liens Encumbrances granted by CBB Acquisition in the Acquired Assets pursuant to the Bank hereunderAFC Debt Instruments; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect Encumbrances granted pursuant to the extent set forth in Section 7.6(c) and Section 7.20)Subordinated Loan Agreements.

Encumbrances. The Borrower Borrowers shall not, either directly or indirectlyand shall not permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor (by way of consignment or otherwise) upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of Accounts Receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Administrative Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableBanks under any Security Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Exhibit C hereto; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) Possessory liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments owned as of the date hereof and Qualified Investments, provided that such liens (a) attach only to such Investments and (b) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing; (e) Landlords' and lessors' liens in respect of rent not in default, or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers', carriers', warehousemans', materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (cf) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 45 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 45 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrowerstay; (g) Liens securing obligations permitted under Sections 8.1(d)Easements, and/or 8.1(f)rights of way, zoning restrictions, licenses, restrictions on the use of property or minor imperfections in title thereto which, in the aggregate, do not interfere in a material way with the ordinary conduct of its business; (h) Liens granted Security interests and liens securing Indebtedness of the Borrower Affiliated Group permitted by Section 6.1(c) in an amount not to exceed $65,000,000 in the Bank hereunderaggregate outstanding at any time in addition to those Encumbrances permitted under subsection (a) through (f) of this Section, provided, however, that (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations relating to, such asset, does not extend to any other property, and is given at the time or within 30 days of the acquisition of such asset, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such asset or its fair market value at the time such security interest attaches; and provided, further, that the Indebtedness secured pursuant to this clause (h), together with any Indebtedness secured pursuant to clause (j) below, does not at any time exceed $65,000,000; (i) Security interests in favor of the issuer of any documentary letters of credit for the account of B&N covering only the following: (i) any documentation presented in connection with a drawing under such letter of credit, (ii) all goods which are described in such documents or any such letter of credit, and (iii) the proceeds thereof; (j) Encumbrances upon real property or other fixed assets acquired after the date hereof (by purchase, construction or otherwise) by the Borrowers or any other member of the Borrower Affiliated Group, each of which Encumbrance was created solely for the purpose of securing Indebtedness permitted under Section 6.1(c) and representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such property or asset; provided that (i) no such Encumbrance shall extend to cover any property or asset of any Borrower or such member of the Borrower Affiliated Group other than the property or asset so acquired and improvements thereon, (ii) the principal amount of Indebtedness secured by any such Encumbrance shall not exceed 100% of the lesser of the cost of such asset or its fair market value (as determined in good faith by a Financial Officer) of such property or asset at the time it was acquired (by purchase, construction or otherwise), and (iii) the security interest is given at the time or within 60 days of the construction or acquisition of such property or asset; and provided, further, that the Indebtedness secured pursuant to this clause (j), together with any Indebtedness secured pursuant to clause (h) above, does not at any time exceed $65,000,000; (k) Encumbrances in connection with any sale-leasebacks permitted by Section 6.2; provided that no such Encumbrance shall extend to cover any property or asset of the Borrower or such member of the Borrower Affiliated Group other than the lease entered into in connection with any such sale-leaseback; and (il) Liens set forth Any extension, renewal or replacement of the foregoing; provided that the Encumbrances permitted by this paragraph (l) shall not extend to or cover any additional Indebtedness or property (other than a substitution of like property). In addition, the Borrowers shall not, nor shall the Borrowers permit any other member of the Borrower Affiliated Group or any of its other Subsidiaries to, enter into or permit to exist any arrangement or agreement which directly or indirectly prohibits the Borrowers or any such other member of the Borrower Affiliated Group or Subsidiary from creating or incurring any Encumbrance in Schedule 7.6 (but only remaining in effect to favor of the extent set forth in Section 7.6(c) Administrative Agent for the benefit of the Banks and Section 7.20)the Administrative Agent under the Loan Documents.

Encumbrances. The Borrower Tenant shall not, either directly or indirectly, create, assume, incur not at any time create or suffer or permit to exist any Lien on any of its properties or charge of any kind or character upon any asset of the Borrowerassets, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):except: (a1) Permitted Encumbrances; (2) Liens in favor of Landlord; (3) Liens for taxes, taxes or assessments or other governmental charges or levies, if payment shall not at the time be required to be made in accordance with Article 8 hereof and the other applicable provisions --------- of the Transaction Documents; (4) Liens in respect of judgments or awards and liens of appeal and similar bonds incident to the conduct of litigation, so long as and to the extent that such judgments or awards, or the judgments or awards secured by such bonds, are permitted as Indebtedness by Section ------- 24.12(d) or are otherwise permitted under the Transaction Documents; -------- (5) Liens of carriers, warehousemen, mechanics, laborers and materialmen and similar liens incurred in the ordinary course of business for sums not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make accordance with the property forfeitableapplicable provisions of this Agreement and the other Transaction Documents; (b6) Liens (other than liens created by Section 302(f) or charges Section 4068 of ERISA or Section 412(n) of the Code) incurred on pledges or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance, social security laws or similar legislation, and other liens incidental to the conduct of its the business or the ownership of its property and assets Tenant which were not incurred in connection with the borrowing of money or the obtaining of an advance advances or credit, credits and which do not in the aggregate materially detract from the value of its any material property or assets of Tenant or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (7) Security interests in its capital stock and in its personal property (excluding collateral under the HRP Shares Pledge Agreement and the Cash Collateral Pledge) securing the Indebtedness incurred in compliance with clauses (i) Liens set forth and (ii) of Section 24.12(g); provided, ----------- ---- ---------------- -------- however, that (i) such security interest shall at all times be junior ------- to the liens and security interests in Schedule 7.6 favor of Landlord, and confined solely to such assets, and (but only remaining ii) that the enforcement of such junior liens and security interests, and all claims secured thereby, shall at all times be subject to the terms of an intercreditor agreement in effect substantially the form (to the extent set forth in Section 7.6(capplicable) of the Intercreditor Agreement dated as of February 12, 1997 among Tenant, GCIHCC, GranCare, First Union National Bank of North Carolina, as agent, and Section 7.20)Landlord.

Encumbrances. The Borrower shall not, either directly or indirectly, createCreate, assume, incur or suffer or permit to exist any Lien mortgage, security deed, deed of trust, pledge, lien, charge or charge other encumbrance on the ▇▇▇▇▇▇▇▇ Property or the “Collateral” (as defined in the Security Agreement), other than: (i) security interests required by the Loan Documents; (ii) liens for taxes contested in good faith; (iii) Permitted Liens, (iv) capitalized lease obligations and purchase money liens on and security interests in equipment in the ordinary course of any kind business, (v) mechanics’, materialmen’s, warehousemen’s, carriers’ or character upon any asset other like liens arising in the ordinary course of business of the BorrowerBorrower or any subsidiary, whether owned at the date hereof or hereafter acquired except if any, arising with respect to obligations which are not overdue for a period longer than thirty (“Permitted Liens”): (a30) Liens for taxes, assessments or other governmental charges not yet due days or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided on the books of the Borrower or a subsidiary, (vi) pledges or deposits in such connection with workers’ compensation, unemployment insurance, or other forms of governmental insurance or benefits or deposits or pledges to secure the performance of bids, tenders, contracts, leases, public or statutory obligations, surety or appeal bonds or other deposits or pledges for purposes of a manner as like general nature or given in the ordinary course of a business by the Borrower or any subsidiary, or (vii) other encumbrances consisting of zoning restrictions, easements, rights-of-way, restrictions on the use of real property or minor irregularities in the title thereto, which do not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred arise in connection with the borrowing of of, or any obligation for the payment of, money or the obtaining of an advance or credit, and which in the aggregate, do not in the aggregate materially detract from the value of its property the business, properties or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Borrower None of the Borrowers shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of Accounts Receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Agent or other governmental charges not yet due the Banks or which are being contested in good faith by appropriate proceedings in such a manner as not to make any of their respective Affiliates under the property forfeitableLoan Documents; (b) Liens Encumbrances existing on the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default, to the extent Landlord Waivers shall have been delivered to the Agent and the Banks, provided, however, that Landlord Waivers shall not be required for leased premises located outside of the United States, or if the value of all assets on or in all such leased premises in the aggregate (measured at the greater of cost or fair market value) is less than $1,000,000, provided further that the Borrower shall have ninety (90) days from the date hereof to provide a Landlord Waiver with respect to the U.S. Borrower's chief executive office set forth in the preamble hereto (failure to timely obtain or deliver such Landlord Waiver or to provide the notice required under Section 5.12 that the U.S. Borrower has changed its chief executive office shall constitute an Event of Default hereunder); or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent or are being contested by a Borrower in good faith; liens securing the performance of bids, tenders, contracts (other than for the payment of money); third party possessory liens, to the extent Bailee Waivers shall have been delivered to the Agent and the Banks, provided, however, that Bailee Waivers shall not be required if the value of all assets subject to all third party possessory liens in the aggregate (measured at the greater of cost or fair market value) is less than $1,000,000; and statutory obligations incidental to the conduct of its business or the ownership of its property any Borrower and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its the property or assets of any Borrower or materially impair the use thereof in the operation of its such Borrower's business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits judgment liens up to and including (i) $500,000 for any single judgment, or (ii) $2,000,000 in connection with lending contracts or leases to which the Borrower is aggregate, that shall not have been in existence for a partyperiod longer than 30 days after the creation thereof or, if a stay of execution shall have been obtained, for a period longer than 30 days after the expiration of such stay; (f) deposits Encumbrances securing Indebtedness for the purchase price of capital assets to the extent such Indebtedness is permitted by Section 6.17, provided that (i) each such Encumbrance is given solely to secure public or statutory obligations the purchase price of such property, does not extend to any other property and is given at the time of acquisition of the Borrower;property, and (ii) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time of acquisition; and (g) Liens securing obligations permitted under Sections 8.1(d)easements, and/or 8.1(f); (h) Liens granted rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)ordinary conduct of its business.

Encumbrances. The (A) No Borrower shall not, either directly or indirectly, will create, assumeincur, incur assume or suffer to exist, any mortgage, pledge, judgment, lien or permit to exist any Lien or charge other encumbrance of any kind upon, or character upon any asset security interest in, any of its property, or assets, including, without limitation, patents, trademarks, copyrights or any other general intangible except for (1) liens for taxes not yet delinquent or being contested in good faith and by appropriate proceedings, (2) liens solely securing the Borrowerperformance of bids, whether owned at tender contracts, surety and appeal bonds, or similar obligations, arising in the date hereof ordinary course of business, provided that the Borrowers remain in compliance with the terms of such obligations, (3) liens in connection with workmen's or hereafter acquired except (“Permitted Liens”): (a) Liens for taxesworker's compensation, assessments unemployment insurance or other governmental charges social security obligations, (4) mechanic's, materialman's, landlord's, carrier's, or other similar liens arising in the ordinary course of business with respect to obligations that are not yet due due, or which are being contested diligently, in good faith and by appropriate proceedings, provided that (a) such proceedings in have the effect of staying execution on such a manner as not to make the property forfeitable; liens, and (b) Liens or charges incidental to the conduct of its business adequate reserves have been set aside or the ownership obligation being contested has been bonded against, (5) the encumbrances mentioned in Section 4.8 hereof, (6) purchase money liens in amounts not to exceed, in the aggregate, 15% of its property and assets which were not Tangible Net Worth at any time outstanding, on any Capital Asset hereafter acquired including the assumption of any lien on such Capital Assets existing at the time of such acquisition, any lien incurred in connection with any conditional sale or other title retention agreement, a capital lease, or construction loans or permanent financing for new construction; provided that (a) any property subject to any of the borrowing foregoing is acquired by a Borrower in the ordinary course of money its business and the lien on any such property is created contemporaneously with such acquisition or in accordance with the obtaining construction financing or permanent financing of an advance a newly constructed facility; (b) the obligation secured by any lien so created, assumed or creditexisting shall not exceed 100% of the lesser of cost or fair market value as of the time of acquisition of the property covered thereby to the Borrower acquiring the same; and (c) each such lien shall attach only to the Capital Asset so acquired and fixed improvements thereon, and which do not (7) liens in favor of the aggregate materially detract from Collateral Agent. (B) No Borrower will agree with any Person other than the value Noteholders to restrict its ability to grant mortgages, pledges, liens, or other encumbrances upon, or security interests in, any of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank Banks hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens Encumbrances in favor of the Agent or any of the Lenders to secure Obligations; (b) Encumbrances existing as of the date of this Agreement and disclosed in EXHIBIT C hereto; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or which liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent or are being contested in good faith by appropriate proceedings proceedings, with adequate reserves maintained in such a manner as not to make accordance with GAAP; deposits, pledges and other liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens other than for the payment of money); and deposits, pledges and other liens securing statutory obligations or charges surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower's or a Subsidiary's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgment liens securing judgments or awards against unless (i) such liens are not fully covered by insurance, and shall not have been in existence for a period longer than 10 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 10 days after the expiration of such appeal stay, or proceedings for review; (dii) pledges or deposits do not give rise to secure obligations an Event of Default under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party;Section 8.1 (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capital leases; (g) Liens easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of the Borrower' business or arising in the ordinary course of business and not securing obligations permitted under Sections 8.1(d), and/or 8.1(f)monetary obligations; (h) Liens granted to the Bank hereunderliens constituting a renewal, extension or replacement of any Permitted Encumbrance; andor (i) Liens set forth in Schedule 7.6 (but only remaining in effect to restrictions under federal and state securities laws regarding the extent set forth in Section 7.6(c) and Section 7.20)transfer of securities.

Encumbrances. The Borrower shall ADT Limited will not, either directly or indirectlyand will not permit any of its subsidiaries to, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge of any kind or character encumbrance upon any asset of the Borrowerits property, revenues or assets (including Capital Stock of subsidiaries of ADT Limited), whether now owned at the date hereof or hereafter acquired except (“Permitted Liens”):acquired, except: (a) Liens encumbrances securing any obligation under any Finance Document; (b) encumbrances granted prior to 23 August 1995 to secure Indebtedness of the type permitted and described in clause (c) of Section 4.2.2 and encumbrances securing refinancings thereof permitted by clause (o) of Section 4.2.2 and sub-paragraph (i) of the definition of "Permitted Indebtedness" of the Facility Agreement respectively; (c) encumbrances granted to secure Indebtedness of the type permitted and described in clause (h) of Section 4.2.2 and sub-paragraph (f) of the definition of "Permitted Indebtedness" of the Facility Agreement and covering only those assets acquired with the proceeds of such Indebtedness and encumbrances with respect to such assets securing refinancings of such Indebtedness permitted by clause (o) of Section 4.2.2, respectively; (d) encumbrances for taxes, assessments or other governmental charges or levies not yet due at the time delinquent or which are thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection accordance with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it GAAP shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationbeen set aside on its books; (e) encumbrances of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith deposits by appropriate proceedings and for which adequate reserves in connection accordance with lending contracts or leases to which the Borrower is a partyGAAP shall have been set aside on its books; (f) deposits encumbrances incurred in the ordinary course of business in connection with workmen's compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure public performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or statutory to secure obligations of the Borroweron surety or appeal bonds; (g) Liens securing obligations permitted under Sections 8.1(d)judgment encumbrances (i) in an aggregate amount not in excess of $15,000,000, and/or 8.1(f)(ii) as to which enforcement proceedings shall not have commenced and there shall not have been a period of 30 consecutive days during which such judgment was not stayed or (iii) the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies; (h) Liens encumbrances with respect to assets of a subsidiary of ADT Limited (other than any member of the Group) granted to secure Indebtedness owing to the Bank Borrower or any other Obligor or any of the Obligors under the US $200 million Credit Facility or under any other Indebtedness described at clause (q) of Section 4.2.2; (i) encumbrances with respect to assets of a subsidiary of ADT Limited (other than any member of the Group) granted to secure Indebtedness owing to ADT Limited or a wholly owned subsidiary of ADT Limited; (j) encumbrances (i) existing at the time that a person becomes a subsidiary of ADT Limited in a transaction permitted hereunder or (ii) assumed in connection with an acquisition of assets permitted hereunder; provided, however, that any such encumbrance covers only assets that were subject to such encumbrance prior to the related transaction and was not created, assumed or incurred in contemplation of such transaction; (k) easements, rights-of-way, restrictions and other similar charges or encumbrances not interfering in any material respect with the business of ADT Limited or any of its subsidiaries and incurred in the ordinary course of business; (l) the encumbrance inherent in the right of any bank to set off deposits against debts owed to such bank; (m) encumbrances in favour of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (n) encumbrances arising by operation of law incurred in the ordinary course of business and which encumbrances, singly or in the aggregate, do not interfere in any material respect with the business of ADT Limited or any of its subsidiaries; (o) encumbrances created by ADT Operations, Inc. or any of its subsidiaries to secure Indebtedness referred to in Section 4.2.2(q); and (ip) Liens set forth other encumbrances securing Indebtedness in Schedule 7.6 (but only remaining in effect an aggregate amount not to the extent set forth in Section 7.6(c) and Section 7.20)exceed $15,000,000 at any time outstanding.

Encumbrances. The Borrower shall not, either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):6 Other Encumbrances{tc \l 2 ".6 Other Encumbrances"}. (a) Liens for taxesNotwithstanding any other provision in this Article VII respecting the transfer of a Member's interest in the Company in other circumstances, assessments in the event that any Member (an "Encumbering Member") desires hereafter to encumber in any way all or any part of its Units or the capital improvements of such Encumbering Member on or appurtenant to the Property as contemplated by Section 3.2(d), it shall be able to do so only if it gives written notice (an "Encumbrance Notice") to the other Member at least 30 days prior to granting or otherwise creating such encumbrance and obtains the written consent of the other Member to such encumbrance, which consent may be granted or withheld at the sole discretion of such other Member. The Encumbrance Notice shall set forth or otherwise include (i) the number or other governmental charges not yet due amount of Units or which are being contested in good faith the capital improvements of such Encumbering Member on or appurtenant to the Property as contemplated by appropriate proceedings in Section 3.2(d) that the Encumbering Member desires to encumber (the "Collateral"); (ii) a description of the proposed encumbrance; (iii) the identity and address of the person to whom or for whose benefit such encumbrance is to be granted or created (the "Secured Party"); (iv) the amount of the indebtedness (the "Secured Indebtedness") to be secured by such encumbrance and the principal terms thereof to be secured by such encumbrance; and (v) a manner as not to make true copy of the property forfeitable;definitive Secured Party Undertaking (hereafter defined) duly executed by the Secured Party. (b) Liens The Secured Party Undertaking (herein so called) shall evidence the obligation of the Secured Party (or charges incidental any assignee or successor thereof), before taking any action to enforce any right which the Secured Party may have to execute on such encumbrance, including a conveyance in lieu of foreclosure, against the Collateral, to (i) give written notice (a "Sale Notice") to the conduct other Member and Refinery Technologies, Inc. ("RTI") and (ii) afford to the other Member and RTI successive options to purchase the Collateral and the right to notice of its business any execution or the ownership of its property foreclosure sale or conveyance in lieu thereof and assets which were not incurred as hereinafter provided in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;this Section 7.4. (c) Liens arising out The Sale Notice shall set forth (i) the identity and address of judgments the Encumbering Member or awards against other then current holder of the Borrower with respect Collateral; (ii) the number or other amount of Units or the capital improvements of such Encumbering Member on or appurtenant to which it shall concurrently therewith be prosecuting the Property as contemplated by Section 3.2(d) then comprising the Collateral; (iii) the fair market value of such Collateral as determined by a timely appeal or proceeding for review qualified independent appraiser engaged by the Secured Party; and with respect to which it shall have secured a stay (iv) the identity and address of execution pending such appeal or proceedings for review;the Secured Party. (d) pledges During the period consisting of 30 days after the delivery of the Sale Notice to the other Member and RTI and the date of the proposed foreclosure sale or deposits conveyance in lieu thereof as provided in subparagraph (c) above, first the other Member and, if not exercised by such other Member, then RTI shall have the right to secure obligations purchase all, but not less than all, of the Collateral from the Secured Party at a price agreed to by them or, in the absence of such agreement, at the fair market value of such Collateral as set forth in the Sale Notice. If, however, the other Member or RTI shall object to such appraisal of the Collateral within five days after receipt of such Sale Notice, the other Member (but not RTI) shall within such five days appoint an independent appraiser to determine such fair market value. In the event that the independent appraisers selected by each of the Secured Party and the other Member cannot agree on the fair market value, then the two independent appraisers shall mutually select a third independent appraiser to determine the fair market value, and the value selected by such third independent appraiser shall be binding on all of the parties hereto. Each such independent appraiser may use any customary and accepted method of determining fair market value. The Secured Party and the other Member each shall bear the cost of the independent appraiser selected by it, and the cost of the independent appraiser, if any, mutually selected by the two independent appraisers shall be paid one-half by the Secured Party and one-half by the other Member. The election of the other Member or RTI to purchase the Collateral shall be evidenced by its timely written notice to the Secured Party at its address set forth in the Sale Notice. In the event both the other Member and RTI both elect to purchase the Collateral, the election of the other Member shall be accepted, and the Collateral shall be sold to the other Member on the terms and conditions set forth herein. Capco's and Foreco's rights under worker’s compensation laws or similar legislation;this Section 7.4 with respect to any sale of the Collateral by Secured Party shall be in lieu of, and not in addition to, Capco's, Foreco's and RTI's respective rights under the Assignment and Agreement entered into September 11, 1998, a copy of which is attached hereto as Exhibit "D" (the "Assignment and Agreement"), which shall otherwise remain in full force and effect. (e) good faith deposits If the Collateral is not sold to the other Member or RTI in connection accordance with lending contracts subparagraph (d) above, the Secured Party shall have the right to take a conveyance in lieu of foreclosure or leases to which dispose of such Collateral (w) at either private or public sale, (x) by way of one or more contracts, (y) as a unit or in parcels, and (z) on any terms, all as the Borrower is Secured Party may determine; provided that such disposition, including the method, manner, time, place and terms of sale are commercially reasonable. All of the Collateral shall be offered and sold separate from and not as part of a party;unit including other collateral of the Secured Party. (f) deposits to secure public If all or statutory obligations any portion of the Borrower;Collateral is to be sold to the other Member or RTI in accordance with this Section 7.4, then such sale shall be closed not more than 60 days after the determination of the purchase price in accordance with Section 7.4(d) on a date and at a time designated by the Secured Party in a written notice given by the Secured Party to the purchasing other Member or RTI, as the case may be. On such date and at such time, payment of such purchase price in cash or other immediately available funds shall be made to the Secured Party at its office, against receipt of documents evidencing and assigning to the purchasing Company, other Members or RTI, as the case may be, the Collateral being purchased and all encumbrances securing the same (or corresponding part thereof proportional to the Secured Indebtedness so purchased), without restriction. (g) Liens securing If the sale to the other Member or RTI, as the case may be, is not closed within the 60-day period provided for in subparagraph (f) of this Section 7.4, Secured Party shall be entitled to exercise its rights under paragraph (e) of this Section 7.4; provided that RTI shall not have the right to exercise its rights under the Assignment and Agreement more than once. Any transfer of any or all of the Collateral upon foreclosure by the Secured Party following compliance with the preceding provisions of this Section 7.4 shall thereafter continue to be subject to the provisions of this Agreement, and the transferee shall assume all obligations permitted under Sections 8.1(d), and/or 8.1(f);hereunder. (h) Liens granted Upon compliance by the Secured Party with the provisions of this Article VII, such Secured Party, or the purchaser on any foreclosure sale, shall be admitted as a Member of the Company on its written notice to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect Company of its election to become a Member, without the extent set forth in Section 7.6(c) and Section 7.20)consent of either the Company or any other Member.

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its Affiliates; (b) Liens Encumbrances existing as of the date hereof and disclosed in SCHEDULE 6.4 hereto and securing any refinancing of Indebtedness provided that such refinancing is permitted pursuant to Section 6.1(b); (c) Encumbrances for purchase money obligations or Capital Leases permitted pursuant to Section 6.1(f); PROVIDED that such Encumbrances shall not attach to property and assets of the Company or any Subsidiary not purchased with the proceeds of such purchase money obligations; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; and (e) landlords' and lessors' liens in respect of rent not in default or liens 36 42 in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Until all obligations of the Borrower under the Loan Documents are paid and performed in full, the Borrower hereby covenants and agrees that it shall not, either directly or indirectlyunless the Lender otherwise consents in advance in writing, create, assume, incur assume or suffer or permit to exist exist, any Lien or charge Encumbrance of any kind or character kind, upon any asset of its properties, assets or Collateral, whether now owned or hereafter acquired, except: (i) Encumbrances securing the Toyo Loan; (ii) when the Toyo Loan is repaid in full, Encumbrances securing the Senior Loan; (iii) the Encumbrances granted in favor of the Borrower, whether owned at Lender under the date hereof or hereafter acquired except Mortgage and other Security Documents; (“Permitted Liens”): (aiv) Liens Encumbrances for taxes, assessments or and other governmental charges not yet due and payable or due and payable, but not yet delinquent, or that are being contested in good faith by appropriate proceedings; (v) deposits or pledges to secure the payment of workmen's compensation, unemployment insurance or other social security benefits or obligations, or to secure the performance of trade contracts, leases, public or statutory obligations, surety or appeal bonds or other obligations of a like general nature incurred in the ordinary course of business; (vi) landlords', mechanics', materialmen's, warehousemen's, carriers', or other like Encumbrances arising in the ordinary course of business securing obligations which are not overdue for a period longer than 30 days, or which are being contested in good faith by appropriate proceedings in such a manner which are being diligently pursued or as not to make which the property forfeitable; (b) Liens or charges incidental Encumbrances are bonded to the conduct satisfaction of its business or the ownership Lender; (vii) easements, rights of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or creditway, zoning, similar restrictions, and which other similar encumbrances or title defects that, singly or in the aggregate, do not in the aggregate any case materially detract from the value of its the property or assets or materially impair subject thereto (as such property is used by the use thereof in the Borrower); (viii) Encumbrances arising by operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits law in connection with lending contracts or leases judgments, only to which the Borrower is extent, for an amount, and for a party; period not resulting in an Event of Default; (fix) deposits Encumbrances securing capitalized lease obligations insofar as such Encumbrances cover assets acquired pursuant to secure public or statutory obligations of such capitalized lease obligations; (x) Encumbrances described in EXHIBIT B to the Borrower; Mortgage; and (gxi) Liens securing obligations --------- other Encumbrances permitted under Sections 8.1(d), and/or 8.1(f); the Security Documents (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20collectively "PERMITTED ENCUMBRANCES").

Encumbrances. The Borrower shall not, either directly or indirectlyand shall not allow, any of its Significant Subsidiaries to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens Encumbrances in favor of the Administrative Agent for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitablebenefit of the Lenders; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default; liens incurred or deposits made in the ordinary course of business in connection with workmen's compensation, unemployment insurance, social security and other like laws; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits liens existing on property of any Person at the time such Person becomes a Significant Subsidiary, but only so long as the obligation secured by any such lien is not in connection with lending contracts or leases default and such lien is and will remain confined to which the Borrower is property subject to it at the time such Person becomes a partySignificant Subsidiary and to fixed improvements thereafter erected on such property; (f) deposits liens existing on any property prior to secure public the acquisition thereof by the Borrower or statutory obligations any Significant Subsidiary and not created in contemplation of such 35 128 acquisition, provided that any such lien does not extend to any other property of the BorrowerBorrower or any Significant Subsidiary; (g) Liens securing obligations permitted under Sections 8.1(d)judgment liens that shall not have been in existence for a period longer than 30 days after the creation thereof or, and/or 8.1(f)if a stay of execution shall have been obtained, for a period longer than 30 days after the expiration of such stay; (h) Liens granted rights of lessors under capital leases; (i) Encumbrances in respect of any purchase money obligations for tangible property used in its business, provided that any such Encumbrances shall not extend to property and assets of the Bank hereunderBorrower or any such Significant Subsidiary not financed by such a purchase money obligation; (j) easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (k) Encumbrances on the common stock of the Borrower purchased with any of the proceeds of the Loans; (l) Encumbrances in favor of the United States of America or any State thereof or any political subdivision, agency or instrumentality of any thereof (each hereinafter called a "Government") on any property or assets hereafter acquired, constructed, installed or purchased by the Borrower or a Significant Subsidiary primarily for the purpose of manufacturing or producing any product, or performing any research or development work, directly or indirectly, for such Government; (m) Encumbrances on its property or assets created in connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of the Borrower or any such Significant Subsidiary not encumbered prior to any such refinancing; and (in) Liens set forth Encumbrances securing Indebtedness of the kind described in Schedule 7.6 Section 6.3 to the extent (but only remaining in effect to the extent set forth in extent) permitted by Section 7.6(c) and Section 7.20)6.3.

Encumbrances. The Neither Borrower nor any of its Subsidiaries shall not, either directly or indirectly, (i) create, assumeincur, incur assume or suffer or permit to exist any Lien Encumbrance, or charge of (ii) assign or otherwise convey any kind right to receive income, including the Accounts Receivable, with or character upon any asset of without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany Bank Affiliates; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Schedule 4.24. attached hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 7.5. hereof; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation or liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out judgment, mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of judgments or awards against bids, tenders, contracts (other than for the Borrower with respect to which it payment of money) that shall concurrently therewith be prosecuting not have been in existence for a timely appeal or proceeding for review and with respect to which it shall have secured period longer than thirty (30) days after the creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than thirty (30) days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under Capital Leases; (g) Liens securing Encumbrances in respect of any purchase money obligations for tangible property used in its business incurred as permitted under Sections 8.1(d)Section 8.1. hereof; provided, and/or 8.1(f)however, that any such Encumbrances shall not extend to properties and assets of Borrower or any such Subsidiary not financed by such purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of its business; and (i) Liens set forth Encumbrances on its property or assets created in Schedule 7.6 (but only remaining in effect connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property; provided, however, that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to the extent set forth in Section 7.6(c) property and Section 7.20)assets of Borrower or any such Subsidiary not encumbered prior to any such refinancing.

Encumbrances. The Except for those liens, security interests and encumbrances presently in existence and reflected in Borrower’s financial statements referred to in Section 4.12, and those created by the Security Agreement and the Mortgage, Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien security interest, mortgage, pledge, lien, capitalized lease, levy, assessment, attachment, seizure, writ, distress warrant, or charge other encumbrance of any kind nature whatsoever on or character upon with regard to any asset of Borrower’s assets (and, for this purpose, the Borrower, whether owned at Company’s “priced as sold” arrangements with respect to its purchases of almonds and walnuts from growers in the date hereof ordinary course of business as customarily conducted in the past shall not be considered an assignment or hereafter acquired except (“Permitted Liens”): a conveyance of a right to receive income or profits) other than: (a) Liens for liens securing the payment of taxes, assessments or other governmental charges either not yet due or the validity of which are is being contested in good faith by appropriate proceedings in such a manner proceedings, and as not to make the property forfeitable; which Borrower shall, if appropriate under GAAP, have set aside on Borrower’s books and records adequate reserves; (b) Liens liens securing deposits with insurance carriers or charges incidental under workmen’s compensation, unemployment insurance, social security and other similar laws, or securing the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or securing indemnity, performance or other similar bonds for the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or securing statutory obligations (including obligations to landlords, warehousemen and mechanics) or surety bonds, or securing indemnity, performance or other similar bonds in the conduct ordinary course of its business or Borrower’s business, which are not past due; (c) liens securing appeal bonds securing judgments not in excess of $1,000,000; (d) liens and security interests in favor of the ownership Agent for the ratable benefit of its the Lenders; (e) liens securing the interests of Broker in any Margin Account; (f) zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of Borrower’s real property, and other liens, security interests and encumbrances on property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not not, in the aggregate materially detract from the value of its property or assets or Agent’s reasonable determination: (i) materially impair the use thereof in of such property, or (ii) materially lessen the operation value of its business; (c) Liens arising out of judgments or awards against such property for the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding purposes for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower same is a party; (f) deposits to secure public or statutory obligations of the held by Borrower; ; (g) Liens purchase money security interests securing obligations permitted under Sections 8.1(d), and/or 8.1(f); amounts not exceeding $1,500,000 in the aggregate during any fiscal year of Borrower; and (h) Liens granted to liens and encumbrances as described as part of the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)Project.

Encumbrances. The Borrower shall not, either directly or indirectlynor shall permit any ------------ other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), ------------ or assign or otherwise convey any asset right to receive income, including the sale or discount of Accounts Receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Encumbrances in favor of the Administrative Agent or the Banks under any Loan Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Exhibit C hereto securing Indebtedness described therein, and refinancings, --------- extensions and renewals of any such Indebtedness secured by such Encumbrances, provided that the principal amount of Indebtedness so secured and the fees -------- thereon (except for reasonable and customary fees) and the amortization thereof are not increased, or the maturity date thereof is not shortened other than, if as a result of such shortening, the maturity date of such Indebtedness is a date after the date which is 6 months after the Term Loan B Maturity Date; (c) Liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due or which are being contested required to be paid in good faith by appropriate proceedings in such a manner as not to make accordance with the property forfeitableprovisions of Section 5.4; (bd) Liens Landlords' and lessors' liens in respect of rent not in default, or charges liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers', carriers', warehousemans', materialmen's and similar liens, if the obligations secured by such liens are not then delinquent, or are either unfiled or no other action has been taken to enforce the same; liens securing the performance of surety bonds, appeal bonds, performance bond, bids, tenders, leases and contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits easements, rights of way, licenses, covenants, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrowerits business; (g) Liens Encumbrances securing obligations the purchase price of capital assets and inventory (including rights of lessors under capital leases) and encumbrances created by conditional sale or other title retention agreements, in each case to the extent the Indebtedness to which such Encumbrance applies is permitted under Sections 8.1(dSection 6.1(c), and/or 8.1(fprovided, however, that (A) each such Encumbrance is given -------- ------- solely to secure the purchase price of, or the lease obligations relating to, such property, does not extend to any other property and is given at the time or within 30 days of the acquisition of the property, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time such security interest attaches, and in any event, such Indebtedness does not exceed the $5,000,000 aggregate limitation contained in Section 6.1(c); (h) Liens Encumbrances securing Indebtedness permitted by Section 6.1(j), so long as such Encumbrances are of the kind permitted by this Section 6.5 and cover only the real or personal property acquired in such Permitted Acquisitions and not any other property; (i) leases or subleases granted by a member of the Borrower Affiliated Group to others not interfering with the business of the Borrower or a member of the Borrower Affiliated Group, provided that such leases are subject -------- to the Bank hereunderapplicable Fee Mortgages and Leasehold Mortgages, and provided, further, -------- ------- that the Borrower has notified the Administrative Agent prior to entering into any such lease and that the form of such lease is reasonably satisfactory to the Administrative Agent; (j) any interest of title of a lessor under, and Encumbrances arising from precautionary Uniform Commercial Code financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to equipment leases permitted by this Agreement; (k) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (l) Encumbrances of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection; (m) any exception included in a title insurance policy approved by the Administrative Agent or the Encumbrance of any Lease approved by the Administrative Agent; and (in) Liens set forth discounts of Accounts Receivable payable to a Credit Party not in Schedule 7.6 (but only remaining excess of $25,000 in effect the aggregate in any fiscal year of the Borrower. In addition, the Borrower shall not, nor shall the Borrower permit any other member of the Borrower Affiliated Group to, enter into or permit to exist any arrangement or agreement which directly or indirectly prohibits the extent set forth Borrower or any such other member of the Borrower Affiliated Group from creating or incurring any Encumbrance in Section 7.6(c) favor of the Administrative Agent for the benefit of the Banks and Section 7.20)the Administrative Agent under the Loan Documents.

Encumbrances. The Borrower Neither the Parent nor any of its Subsidiaries shall not, either directly or indirectly, ------------ create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to ------------ receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens Encumbrances in favor of the Lenders; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or which are in default and being contested in good faith or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by appropriate proceedings in such a manner as liens are not to make then delinquent; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens or charges other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits rights of lessors under capital leases with Subsidiaries in an aggregate principal amount not to secure public or statutory obligations of the Borrowerexceed $4,000,000; (g) Liens securing Encumbrances in respect of any purchase money obligations permitted under Sections 8.1(d)of any Subsidiary for tangible property used in its business that at any time shall not exceed $200,000 in the aggregate for all Subsidiaries, and/or 8.1(f)provided that any such -------- Encumbrances shall not extend to property and assets of any such Subsidiary not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (i) Encumbrances on its property or assets created in connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such Encumbrance shall -------- not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of any such Subsidiary not encumbered prior to any such refinancing; (j) Encumbrances in the nature of a security interest in checks created or to be created in connection with a certain Welcome Check Warranty Agreement dated September 1, 1994 between the Company and Equifax Check Services, Inc. (the "Equifax Agreement") or similar agreements relating to the Bank hereunderdiscounting of customer checks; and (ik) Liens set forth the grant by Stores of security interests in Schedule 7.6 (but only remaining in effect inventory to the extent set forth in Section 7.6(c) and Section 7.20)Company pursuant to the Subsidiary Inventory Security Agreement.

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset of right to receive income, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workers' compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics' and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its the property or assets of the Borrowers, or materially impair the use thereof in the operation of its businessthe businesses of the Borrowers; (b) judgment liens that shall not have been in existence for a period longer than 30 days after the creation thereof or, if a stay of execution shall have been obtained, for a period longer than 30 days after the expiration of such stay; (c) Liens arising out Encumbrances against any Company securing purchase money Indebtedness for tangible personal property (other than inventory) in the ordinary course of judgments business in an aggregate amount (for the Companies as a group) of no more than $5,000,000, provided that (i) the obligations secured by any such Encumbrance shall not exceed 100% of the lesser of cost or awards against fair market value as of the Borrower with respect time of the acquisition of such property covered thereby, and (ii) each such Encumbrance shall at all times be limited solely to which it shall concurrently therewith be prosecuting a timely appeal the item or proceeding for review and with respect to which it shall have secured a stay items of execution pending such appeal or proceedings for reviewproperty so acquired; (d) pledges or deposits to secure obligations Encumbrances on certain assets of the Borrowers (other than accounts and inventory and proceeds thereof) securing only the Indebtedness permitted under worker’s compensation laws or similar legislation;Section 6.1(b); and (e) good faith deposits Easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in connection a material way with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations ordinary conduct of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to business of the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to Borrowers and the extent set forth in Section 7.6(c) and Section 7.20)Subsidiaries.

Encumbrances. The Borrower shall not, either directly or indirectlynor shall permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("ENCUMBRANCES"), or assign or otherwise convey any asset right to receive income, including the sale or discount of Accounts Receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“Permitted Liens”"PERMITTED ENCUMBRANCES"): (a) Liens for taxes, assessments Encumbrances in favor of the Administrative Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableBanks under any Security Document; (b) Encumbrances existing on the date of this Agreement and disclosed in EXHIBIT C hereto; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) Landlords' and lessors' liens in respect of rent not in default, to the extent Landlord Waivers shall have been delivered to the Administrative Agent, or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers', carriers', warehousemans', materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrower;its business; and (g) Liens Encumbrances securing obligations permitted the purchase price of capital assets (including rights of lessors under Sections 8.1(d), and/or 8.1(f); (hcapital leases) Liens granted to the Bank extent such purchase is permitted hereunder; and , PROVIDED, HOWEVER, that (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations relating to, such property, does not extend to any other property and is given at the time of the acquisition of the property, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such property or its fair market value at the time such security interest attaches, and in any event, such Indebtedness does not exceed (i) Liens set forth $2,000,000 in Schedule 7.6 the case of vehicle capital leases or purchase money security interests which exist on the Closing Date (but only remaining and refinancings thereof in effect the ordinary course of business, PROVIDED that the aggregate $2,000,000 limit is not exceeded), and (ii) $500,000 for all other purposes, in the aggregate outstanding at any time. In addition, the Borrower shall not, nor shall the Borrower permit any other member of the Borrower Affiliated Group or any of its other Subsidiaries to, enter into or permit to exist any arrangement or agreement which directly or indirectly prohibits the extent set forth Borrower or any such other member of the Borrower Affiliated Group or Subsidiary from creating or incurring any Encumbrance in Section 7.6(c) favor of the Administrative Agent for the benefit of the Banks and Section 7.20)the Administrative Agent under the Loan Documents.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien or charge Encumbrance of any kind upon or character upon with respect to any asset of their property or assets, or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Receivables with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“Permitted LiensEncumbrances”): (a) Liens Encumbrances in favor of the Agent or any of the Lenders to secure Obligations; (b) Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords’ and lessors’ liens in respect of rent not in default or which liens in respect of pledges or deposits under workmen’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, warehouseman’s, laborers’ and materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent or are being contested in good faith by appropriate proceedings in such a manner as not to make faith; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens other than for the payment of money); and liens securing statutory obligations or charges surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrower’s or a Subsidiary’s business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgment liens securing judgments or awards against that are fully covered by insurance, and shall not have been in existence for a period longer than ten (10) days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than ten (10) days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits easements, rights of way, restrictions and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrower’s business; (g) Liens securing obligations permitted restrictions under Sections 8.1(d), and/or 8.1(f)federal and state securities laws regarding the transfer or issuance of securities; (h) Liens granted to the Bank hereunderliens constituting a renewal, extension or replacement of any Permitted Encumbrance; andor (i) Liens set forth sales permitted under Section 7.4(c) hereof, provided that no purchaser or other Person involved in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)such transactions shall receive or retain any Encumbrance on Collateral.

Encumbrances. The Borrower shall notCompany warrants that it has title to the Collateral purportedly owned by it and that there are no sums owed or claims, either directly liens, security interests or indirectlyother encumbrances against the Collateral other than as set forth in Exhibit A attached hereto and made a part hereof. The Company will notify Versant of any lien, security interest or other encumbrance against the Collateral securing any obligation of the Company, will defend the Collateral against any claim, lien, security interest or other encumbrance adverse to Versant, except for liens having priority there over as set forth on Exhibit A, attached hereto and made a part hereof, and will not create, incur, assume, incur or suffer or permit to exist any Lien lien, security interest or charge of any kind or character upon any asset of other encumbrances against the BorrowerCollateral, whether now owned at the date hereof or hereafter acquired except (“Permitted Liens”):acquired, except: (a) Liens liens in favor of Versant and such other liens as are set forth on Exhibit A attached hereto and made a part hereof; (b) liens for taxes, taxes or assessments or other governmental government charges or levies if not yet due and payable or, if due and payable, if they are being contested in good faith by appropriate proceedings and for which appropriate reserves have previously been delivered by the Company to Versant; (c) liens imposed by law, such as mechanics', material men's, landlords', warehousemen's, and carriers' liens, and other similar liens, securing obligations incurred in the ordinary course of business, which are not past due for more than 30 days or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or creditproceedings, and for which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect appropriate reserves have been previously delivered to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for reviewVersant; (d) liens, deposits, or pledges or deposits to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases, public statutory obligations, surety, stay, appeal, indemnity, performance, or other similar bonds or other similar obligations under worker’s compensation laws or similar legislationarising in the ordinary course of business; (e) good faith deposits judgments and other similar liens arising in connection with lending contracts court proceedings, provided that the execution or leases to which other enforcement of such liens is effectively stayed and the Borrower is a partyclaims secured thereby are being actively contested in good faith and by appropriate proceedings; (f) deposits to secure public or statutory obligations easements, right-of-way restrictions, and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use, and enjoyment by the Company of the Borrower;property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto; and (g) Liens securing obligations permitted under Sections 8.1(dpurchase-money liens on any property hereafter acquired or the assumption of any lien on property existing at the time of such acquisition (and not created in contemplation of such acquisition), and/or 8.1(f)or a lien incurred in connection with any conditional sale or other title retention agreement or a capital lease; provided that: (i) any property subject to any of the foregoing is acquired by the Company in the ordinary course of its business and the lien on any such property attaches to such asset concurrently or within 90 days after the acquisition thereof; (hii) Liens granted the obligation secured by any lien so created, assumed, or existing shall not exceed 100% of the lesser ofthe cost or the fair market value as of the time of acquisition of the property covered thereby to the Bank hereunderCompany; and (iiii) Liens set forth in Schedule 7.6 (but each such lien shall attach only remaining in effect to the extent set forth in Section 7.6(c) property so acquired and Section 7.20)fixed improvements thereon.

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens Encumbrances existing as of the date hereof and disclosed in Schedule 6.4 hereto and securing any refinancing of Indebtedness provided that such refinancing is permitted pursuant to Section 6.1(b); (c) Encumbrances for purchase money obligations or Capital Leases permitted pursuant to Section 6.1(e); provided that such Encumbrances shall not attach to property and assets of the Company or any Subsidiary not purchased with the proceeds of such purchase money obligations; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; and (e) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Neither Borrower nor any of its ------------ Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien Encumbrance, or charge of assign or otherwise convey any kind right to receive income, including the Accounts Receivable, with or character upon any asset of without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany Bank Affiliates; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Schedule 4.24. attached hereto; ------------- (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 8.4. hereof; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under worker's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than thirty (30) days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than thirty (30) days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under Capital Leases; (g) Liens securing Encumbrances in respect of any purchase money obligations permitted under Sections 8.1(d)for tangible property used in its business that at any time shall not exceed TWENTY FIVE THOUSAND AND NO/100 DOLLARS -50- ($25,000.00) in any one (1) instance or ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) in the aggregate during any twelve (12) month period; provided, and/or 8.1(f)however, that any such Encumbrances shall not extend to -------- ------- properties and assets of Borrower or any such Subsidiary not financed by such purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of its business; and (i) Liens set forth Encumbrances on its property or assets created in Schedule 7.6 (but only remaining in effect connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property; provided, however, that the amount of -------- ------- Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to the extent set forth in Section 7.6(c) property and Section 7.20)assets of Borrower or any such Subsidiary not encumbered prior to any such refinancing.

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien Encumbrance upon or charge with respect to any of its property or assets (real or personal, tangible or intangible), whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to it), or assign any right to receive income or permit the filing of any kind financing statement under the UCC or character upon any asset other similar notice of Encumbrance under any similar recording or notice statute; provided that the provisions of this Section 7.1 shall not prevent the creation, incurrence, assumption or existence of the Borrower, whether owned at the date hereof or hereafter acquired except following (Encumbrances described below are herein referred to as “Permitted LiensEncumbrances”): (a) Liens inchoate Encumbrances for taxes, assessments or other governmental charges or levies not yet due or which are Encumbrances for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in such a manner accordance with GAAP, with respect to the Company and its Domestic Subsidiaries, or International GAAP, with respect to Foreign Subsidiaries, as not to make the property forfeitableapplicable; (b) Liens or charges incidental to the conduct of its business or the ownership Encumbrances in respect of its property and or assets imposed by law, which were not incurred in connection with the borrowing ordinary course of money or business and do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Encumbrances and other similar Encumbrances arising in the obtaining ordinary course of an advance or creditbusiness, and (i) which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its businessbusiness or (ii) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Encumbrance; (c) Liens Encumbrances created by or pursuant to this Agreement and the Loan Documents; (d) easements, rights-of-way, restrictions, encroachments and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of its business; and (e) Encumbrances arising out of the existence of judgments or awards against the Borrower with in respect to of which it shall concurrently therewith in good faith be prosecuting a timely an appeal or proceeding proceedings for review and with in respect to of which it there shall have been secured a subsisting stay of execution pending such appeal or proceedings for review; (d) pledges or deposits proceedings; provided that the aggregate amount of all cash and the Fair Market Value of all other property subject to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)such Encumbrances does not exceed $100,000 at any time outstanding.

Encumbrances. The Each Borrower and Guarantor shall not, either directly or indirectlyand shall not permit any of its Subsidiaries to, create, assumeincur, incur assume or suffer or permit to exist any Lien security interest, mortgage, pledge, lien, charge or charge other encumbrance of any kind nature whatsoever on any of its assets or character upon any asset of properties, including, without limitation, the BorrowerCollateral, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):except: (a) Liens liens and security interests of Agent for taxes, assessments itself and the ratable benefit of Lenders; (b) liens for taxes or other governmental charges not yet due payable or which are liens for taxes or other governmental charges being contested in good faith and by proper proceedings diligently pursued, provided, that, a reserve or other appropriate proceedings provision, if any, as shall be required by GAAP shall have been made therefor on the applicable financial statements of the applicable Borrower or Guarantor and that a stay of enforcement of any such lien is in such a manner as not to make the property forfeitableeffect; (bc) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred liens upon equipment granted in connection with the borrowing acquisition of money or such equipment after the obtaining date hereof (including, without limitation, pursuant to Capital Leases), provided, that: (i) the aggregate amount of an advance or creditthe Indebtedness secured by such liens does not exceed $30,000,000, (ii) each such lien attaches only to the equipment acquired with the Indebtedness secured thereby, and which (iii) the principal amount of the Indebtedness secured by any item of equipment shall not exceed one hundred percent (100%) of the cost thereof; (d) reservations, exceptions, encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other similar title exceptions or encumbrances affecting any real property of Edison or any of its Subsidiaries, provided, that, they do not in the aggregate materially detract from the value of its property or assets said properties or materially impair the interfere with their use thereof in the operation ordinary conduct of its business; (c) Liens arising out the businesses of judgments any Borrower or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationGuarantor; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partyunder workmen's compensation, unemployment insurance, social security and other similar laws; (f) deposits liens relating to secure public or statutory obligations with respect to surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the Borrowerordinary course of business; (g) Liens carriers', warehousemen's, mechanics, materialmen's or other similar liens arising in the ordinary course of business securing obligations permitted under Sections 8.1(d)sums which are not overdue or are being diligently contested in good faith by Borrowers or Guarantors and if such lien is being contested, and/or 8.1(f)so long as the holder of such lien has not obtained any judgment or taken any action adversely affecting the assets of Borrowers or Guarantors; (h) Liens granted to judgment liens on assets of any Borrower or Guarantor being contested in good faith and by proper proceedings diligently pursued, provided, that, (i) a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor on the Bank hereunder; andapplicable financial statements of such Borrower or Guarantor, (ii) a stay of enforcement of any such lien is in effect and (iii) if any such judgment lien is on any of the Collateral, such lien or liens, either singly or in the aggregate, are not in excess of $1,000,000; (i) Liens set forth the liens and security interests upon the Edbro Missouri Facility in Schedule 7.6 favor of the City of ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ County, Missouri to secure the Indebtedness of Edbro Missouri permitted under Section 9.9(d) hereof; (but only remaining in effect j) the mortgages, liens and security interests of the Funding Escrow Agent on the Funding Escrow Properties to secure the payment of interest by Edison on the New Notes from the date of the issuance thereof through and including July 1, 2000, to the extent required by the Plan (as in effect on the date hereof); or (k) the liens and security interests set forth in Section 7.6(c) and Section 7.20)on Schedule 8.4 hereto.

Encumbrances. The Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien security interest, mortgage, pledge, lien, charge or charge other encumbrance of any kind nature whatsoever on any of its assets or character upon properties, including, without limitation, any asset of the BorrowerCollateral, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”):except: (a) Liens for liens and security interests of Lender; (b) liens securing the payment of taxes, assessments or other governmental charges either not yet due overdue or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to Borrower and with respect to which reserves have been set aside on its books in such a manner as not to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection accordance with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its businessGAAP; (c) Liens non-consensual statutory liens (other than liens pursuant to ERISA or environmental laws or securing the payment of taxes) arising out in the ordinary course of judgments Borrower's business to the extent: (i) such liens secure indebtedness which is not overdue for a period of more than thirty (30) days, or (ii) such liens secure indebtedness relating to claims or awards against liabilities which are fully insured and being defended at the Borrower with respect sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued and available to which it shall concurrently therewith be prosecuting a timely appeal Borrower, in each case under clauses (i) and (ii), prior to the commencement of foreclosure or proceeding for review other similar proceedings and with respect to which it shall reserves have secured a stay of execution pending such appeal or proceedings for reviewbeen set aside on its books in accordance with GAAP; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislationliens on property, other than any Collateral, incurred in the ordinary course of business in respect of Hedging Obligations; (e) good faith deposits liens on property, other than any Collateral, securing surety or appeal bonds, performance bonds, insurance obligations, or other obligations of a like nature incurred in connection with lending contracts or leases to which the Borrower is a partyordinary course of business; (f) deposits liens on property, other than any Collateral, arising by reason of any judgment, decree or order of any court with respect to secure public or statutory obligations of the Borrower;which Borrower is then in good faith prosecuting (g) Liens securing obligations permitted under Sections 8.1(d)encumbrances on or with respect to real property consisting of zoning restrictions, and/or 8.1(f)survey exceptions, utility easements, access licenses, rights of way, easements of ingress or egress over real property of Borrower or restrictions of record on the use of real property, minor defects in title to real property, mechanics' liens and vendors' liens on real property, in each case to the extent the same do not interfere in any material respect with the ordinary conduct of the business of Borrower and do not impair the value of any Collateral or the rights of Lender therein or thereto; (h) Liens granted liens upon, or deposits of, property other than any Collateral, made in connection with or to secure the Bank hereunderperformance of tenders, bids, and government contracts and leases and subleases; (i) pledges or deposits of property, other than any Collateral, under worker's compensation, unemployment or other social security legislation; (j) purchase money security interests in Equipment of Borrower (including capital leases) and purchase money mortgages on real estate, so long as such security interests and mortgages do not apply to any property of Borrower other than the Equipment of Borrower or real estate so acquired, and the indebtedness secured thereby does not exceed the cost of the Equipment or real estate so acquired, as the case may be; and (ik) Liens the security interests and liens set forth in Schedule 7.6 (but only remaining in effect to on the extent set forth in Section 7.6(c) and Section 7.20)Information Certificate.

Encumbrances. The Borrower Neither the Parent nor any of its Subsidiaries shall not, either directly or indirectly, ------------ create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or wit recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”):Encumbrances"): ---------------------- (a) Liens Encumbrances in favor of the Lenders; (c) liens for taxes, fees, assessments or and other governmental charges to the extent that payment of the same may be postponed or is not yet due required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or which are in default and being contested in good faith or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by appropriate proceedings in such a manner as liens are not to make 106 then delinquent; liens securing the property forfeitable; performance of bids, tenders, contracts (b) Liens or charges other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits rights of lessors under capital leases with Subsidiaries in an aggregate principal amount not to secure public or statutory obligations of the Borrowerexceed $4,000,000; (g) Liens securing security interests created by any Subsidiary in respect of any purchase money obligations permitted under Sections 8.1(d)of any Subsidiary for tangible property used in its business that at any time shall not exceed (i) $200,000 in the aggregate for all Subsidiaries, and/or 8.1(f)other than GE, and (ii) $3,000,000 in the aggregate for GE, provided that any such security interests shall not extend to property and assets of auch Subsidiary not financed by such a purchase money obligation; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the ordinary conduct of its business; (i) Encumbrances on its property or assets created in connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such property, provided that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of any such Subsidiary not encumbered prior to any such refinancing; (j) Encumbrances in the nature of a security interest in checks created or to be created in connection with a certain Welcome Check Warranty Agreement dated September 1, 1994 between the Company and Equifax Check Services, Inc. (the "Equifax Agreement") or similar agreements relating to the Bank hereunderdiscounting of customer checks; (k) the grant by Stores of security interests in inventory to any pursuant to the Subsidiary Inventory Security Agreement; and (il) Liens set forth the grant by Stores of security interests in Schedule 7.6 (but only remaining in effect inventory to GE pursuant to the extent set forth in Section 7.6(c) and Section 7.20)GE Subsidiary Inventory Security Agreement.

Encumbrances. The Neither the Borrower nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its Affiliates; (b) Liens Encumbrances existing as of the date hereof and disclosed in Schedule 6.4 hereto and securing any refinancing of Indebtedness provided that such refinancing is permitted pursuant to Section 6.1(b); (c) Encumbrances for purchase money obligations or Capital Leases permitted pursuant to Section 6.1(d); provided that such Encumbrances shall not attach to property and assets of the Borrower or any Subsidiary not purchased with the proceeds of such purchase money obligations; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or is not required in accordance with the provisions of Section 5.4; and (e) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20).

Encumbrances. The Borrower Neither the Company nor any of its Subsidiaries shall not, either directly or indirectly, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon assets ("Encumbrances"), or assign or otherwise convey any asset right to receive income, including the sale or discount of accounts receivable with or without recourse, except the Borrower, whether owned at the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxes, assessments Encumbrances in favor of the Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableany of its affiliates; (b) Liens Encumbrances created by the Indenture and other Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (d) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits to secure public or statutory obligations rights of the Borrowerlessors under capitalized leases permitted by Section 6.1(f); (g) Liens Encumbrances securing obligations Indebtedness permitted under Sections 8.1(dby Section 6.1(d), and/or 8.1(f)provided that any such Encumbrances shall not extend to assets of the Company or any such Subsidiary not financed by such Indebtedness; (h) Liens granted Encumbrances securing Indebtedness permitted by Section 6.1(e); (i) easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of its business; and (ij) Liens set forth Encumbrances on its assets created in Schedule 7.6 (but only remaining in effect connection with the refinancing of Indebtedness secured by Permitted Encumbrances on such assets, provided that the amount of Indebtedness secured by any such Encumbrance shall not be increased as a result of such refinancing and no such Encumbrance shall extend to property and assets of the extent set forth in Section 7.6(c) and Section 7.20)Company or any such Subsidiary not encumbered prior to any such refinancing.

Encumbrances. The Borrower shall not, either directly or indirectlynor shall permit any other member of the Borrower Affiliated Group to, create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance, including the lien or retained security title of a conditional vendor upon or with respect to any kind of its property or character upon any asset of the Borrower, whether owned at the date hereof or hereafter acquired except assets (“Encumbrances”), or assign or otherwise convey any right to receive income, including the sale or discount of accounts receivable with or without recourse, except the following (each, a “Permitted LiensEncumbrance”): (a) Liens for taxes, assessments Encumbrances in favor of the Administrative Agent or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableBanks under any Loan Document; (b) Encumbrances existing on the date of this Agreement and disclosed in Exhibit B hereto; (c) Liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required, in accordance with the provisions of Section 5.4, and liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties or in connection with the importation of goods in the ordinary course of business; (d) Landlords’ and lessors’ liens in respect of rent not in default; liens in respect of pledges or deposits under worker’s compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics’, laborers’, carriers’, warehousemans’, materialmen’s and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and statutory obligations incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (ce) Liens arising out of judgments or awards against Judgment liens that shall not have been in existence for a period longer than 30 days after the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured creation thereof or, if a stay of execution pending shall have been obtained, for a period longer than 30 days after the expiration of such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a partystay; (f) deposits Easements, rights of way, restrictions, encroachments, covenants running with the land and other similar charges or Encumbrances relating to secure public or statutory obligations real property and not interfering in a material way with the ordinary conduct of the Borrowerits business; (g) Liens Purchase money liens and liens on real property securing obligations permitted construction or permanent real estate financing where: (i) with respect to liens on real property under Sections 8.1(d)Synthetic Leases, and/or 8.1(f)any such lien does not exceed an amount equal to 100% of the lessor’s (or the lessor’s lender’s) contribution to the costs of the real property and improvements under the Synthetic Lease agreements, including amounts incurred under such Synthetic Leases on account of bank fees, closing expenses, capitalized interest and other similar obligations; and (ii) in all other cases, the lien does not exceed 100% of the cost of the real property and all improvements thereon and does not extend beyond the property purchased or constructed; (h) Liens granted Security interests and liens securing charges or obligations of the Borrower Affiliated Group in amounts not to exceed $15,000,000 in the Bank hereunderaggregate outstanding at any time in addition to those Encumbrances permitted under subsections (a) through (g) of this Section, provided, however, that with respect to purchase money liens securing the purchase price of capital assets (including rights of lessors under capital leases), (A) each such Encumbrance is given solely to secure the purchase price of, or the lease obligations relating to, such asset, does not extend to any other property and is given at the time or within 30 days of the acquisition of such asset, and (B) the Indebtedness secured thereby does not exceed the lesser of the cost of such asset or its fair market value at the time such security interest attaches; and (i) Liens set forth Security interests in Schedule 7.6 (but only remaining favor of the issuer of any documentary letters of credit for the account of the Borrower covering any documents presented in effect to connection with a drawing under any such letter of credit; all goods which are described in such documents or any such letter of credit; and the extent set forth in Section 7.6(c) and Section 7.20)proceeds thereof.

Encumbrances. The Borrower shall notCreate, either directly or indirectlyincur, create, assume, incur assume or suffer or permit to exist any Lien or charge of any kind or character Encumbrance upon any asset of its properties or assets (including without limitation, the BorrowerCollateral), whether now owned at the date hereof or hereafter acquired acquired, except (“Permitted Liens”): for the following: (a) Liens Encumbrances created in connection with the Loan Documents; (b) Mechanic’s, warehouseman’s, and statutory landlords’ Encumbrances arising as an incident to the normal and customary conduct of Borrower’s business or the ownership of properties and assets by Borrower, and deposits and pledges incurred in the ordinary course of business and not in connection with the borrowing of money; provided, however, that (i) in each case, the obligation secured is not overdue or, if overdue, is being contested in good faith and adequate reserves have been set aside by the Borrower as the case may be, and (ii), in the case of warehousemen’s or landlord’s Encumbrances, written subordination agreements providing for taxesthe subordination or waiver of the warehousemen’s or landlord’s Encumbrances to the security interests and liens provided by Borrower to Lender under this Agreement and the other Loan Documents shall have been executed by the warehousemen and/or landlords (as applicable) and Borrower and delivered to Lender, assessments and are in form and substance satisfactory to Lender; (c) Encumbrances securing the payments of taxes or other governmental charges incurred in the ordinary course of business that either (1) are not yet due delinquent, or which (2) are being contested in good faith by appropriate legal or administrative proceedings in such a manner and as not to make the property forfeitable; (b) Liens or charges incidental which adequate reserves have been set aside on their books to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or creditextent required by GAAP, and which do not result in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; Material Adverse Effect; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; Encumbrances listed on the schedule attached hereto as Schedule 7.2; (e) good faith Encumbrances in respect of pledges or deposits in connection with lending contracts or leases to which the Borrower is a party; workers compensation, unemployment insurance and other social security legislation; (f) deposits Encumbrances securing Capital Leases or purchase money security interests securing amounts not to secure public or statutory obligations of exceed in the Borrower; aggregate Five Hundred Thousand and 00/100 Dollars ($500,000.00) at any time outstanding; (g) Liens securing obligations Encumbrances not otherwise permitted under Sections 8.1(d), and/or 8.1(f); hereunder that do not in the aggregate exceed Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) at any time outstanding; (h) Liens granted to the Bank hereunderEncumbrances in respect of precautionary UCC filings in respect of leases; and and (i) Liens set forth Extensions, renewals and replacements of Encumbrances referred to in Schedule 7.6 clauses (but only remaining in effect a) through (h) of this Section 7.2; provided, however, that any such extension, renewal or replacement Encumbrance shall be limited to the extent set forth property or assets and proceeds thereof covered by the Encumbrance extended, renewed or replaced and that the obligations secured by any such extension, renewal or replacement Encumbrance shall be in Section 7.6(c) and Section 7.20)an amount not greater than the amount of the obligations secured by the Encumbrance extended, renewed or replaced.

Encumbrances. The Borrower shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien security interest, mortgage, pledge, lien, charge or charge other encumbrance of any kind nature whatsoever on any of its assets or character upon any asset of properties, including the BorrowerCollateral, whether owned at the date hereof or hereafter acquired except (“Permitted Liens”): except: (a) Liens for the liens and security interests of Agent; (b) liens securing the payment of taxes, assessments or other governmental charges either not yet due overdue or the validity of which are being contested in good faith by appropriate proceedings in such a manner as not diligently pursued and available to make the property forfeitable; (b) Liens or charges incidental to the conduct of its business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall adequate reserves have secured a stay been set aside on its books; (c) non-consensual statutory liens (other than liens securing the payment of execution pending taxes) arising in the ordinary course of Borrower's business to the extent: (i) such appeal liens secure indebtedness which is not overdue or (ii) such liens secure indebtedness relating to claims or liabilities which are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings for review; diligently pursued and available to Borrower, in each case prior to the commencement of foreclosure or other similar proceedings and with respect to which adequate reserves have been set aside on its books; (d) pledges zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of real property which do not interfere in any material respect with the use of such real property or deposits to secure obligations under worker’s compensation laws ordinary conduct of the business of Borrower as presently conducted thereon or similar legislation; materially impair the value of the real property which may be subject thereto; (e) good faith deposits purchase money liens and security interests as permitted in connection with lending contracts or leases to which the Borrower is a party; Section 9.9(c) below; and (f) deposits to secure public or statutory obligations of the Borrower; (g) Liens securing obligations permitted under Sections 8.1(d), and/or 8.1(f); (h) Liens granted to the Bank hereunder; and (i) Liens security interests and liens set forth in on Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)8.4 hereto.

Encumbrances. The Borrower shall notnot (and shall not permit any Domestic Subsidiaries to), either directly or indirectly, create, assume, incur or suffer or permit to exist any Lien or charge of any kind or character upon any asset of Borrower (or any Domestic Subsidiaries, as the Borrowercase may be), whether owned at the date hereof or hereafter acquired except (all of the following, collectively, “Permitted Liens”): (a) the Liens listed on Schedule 8.2; I\15453359.12 (b) Liens for taxes, assessments or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not to make the property forfeitableproceedings; (bc) Liens or charges incidental to the conduct of its business or the ownership of its property and assets assets, including easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title or other similar charges or encumbrances, which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which any Borrower (or any Domestic Subsidiaries, as the Borrower case may be) is a party; (fe) deposits to secure public or statutory obligations of any Borrower (or any Domestic Subsidiaries, as the Borrowercase may be), including, without limitation, Liens arising under workers' compensation, unemployment insurance, social security, and other similar laws and regulations; (f) Liens existing on the date hereof and disclosed on the financial statements referred to in Section 7.6; (g) Liens granted to the Bank hereunder and Liens securing obligations purchase money indebtedness, permitted under Sections 8.1(d), and/or Section 8.1(f); (h) Liens mechanics' or materialmen's liens, landlords' liens, carriers' liens and software licenses, in each case incurred or granted to in the Bank hereunder; andordinary course of business; (i) Liens set forth to which the Bank consents in Schedule 7.6 writing; and (but only remaining in effect to j) extensions, renewals or replacements of any of the extent set forth in Section 7.6(c) and Section 7.20)foregoing.

Encumbrances. The Borrower Borrowers shall not, either directly or indirectly, not create, assumeincur, incur assume or suffer or permit to exist any Lien mortgage, pledge, security interest, lien or other charge or encumbrance of any kind kind, including the lien or character retained security title of a conditional vendor upon or with respect to any asset of their property or assets ("Encumbrances"), or assign or otherwise convey any right to receive income, including the Borrowersale or discount of Accounts Receivable with or without recourse, whether owned at except the date hereof or hereafter acquired except following (“"Permitted Liens”Encumbrances"): (a) Liens for taxesEncumbrances in favor of the Administrative Agent, assessments the Issuing Bank or other governmental charges not yet due or which are being contested in good faith by appropriate proceedings in such a manner as not any of the Lenders to make the property forfeitablesecure Obligations; (b) Liens Encumbrances existing as of the date of this Agreement and disclosed in Exhibit C hereto; (c) Encumbrances securing Indebtedness for Capital Expenditures to the extent such Indebtedness is permitted by Section 7.1(c), provided that no such Encumbrance attaches to any Collateral; (d) liens for taxes, fees, assessments and other governmental charges to the extent that payment of the same may be postponed or charges is not required in accordance with the provisions of Section 5.4; (e) landlords' and lessors' liens in respect of rent not in default or liens in respect of pledges or deposits under workmen's compensation, unemployment insurance, social security laws, or similar legislation (other than ERISA) or in connection with appeal and similar bonds incidental to litigation; mechanics', warehouseman's, laborers' and materialmen's and similar liens, if the obligations secured by such liens are not then delinquent; liens securing the performance of bids, tenders, contracts (other than for the payment of money); and liens securing statutory obligations or surety, indemnity, performance, or other similar bonds incidental to the conduct of its the Borrowers' or a Subsidiary's business or in the ownership of its property ordinary course and assets which were not incurred in connection with the borrowing of money or the obtaining of an advance or credit, and which that do not in the aggregate materially detract from the value of its their property or assets or materially impair the use thereof in the operation of its their business; (c) Liens arising out of judgments or awards against the Borrower with respect to which it shall concurrently therewith be prosecuting a timely appeal or proceeding for review and with respect to which it shall have secured a stay of execution pending such appeal or proceedings for review; (d) pledges or deposits to secure obligations under worker’s compensation laws or similar legislation; (e) good faith deposits in connection with lending contracts or leases to which the Borrower is a party; (f) deposits to secure public or statutory obligations judgment liens securing judgments that (i) are not fully covered by insurance, and (ii) shall not have been in existence for a period longer than 30 days after the creation thereof or, if a stay of execution shall have been obtained, for a period longer than 30 days after the Borrowerexpiration of such stay; (g) Liens securing obligations rights of lessors under capital leases to the extent such capital leases are permitted under Sections 8.1(d), and/or 8.1(f)hereunder; (h) Liens granted easements, rights of way, restrictions and other similar charges or Encumbrances relating to real property and not interfering in a material way with the Bank hereunderordinary conduct of the Borrowers' business; (i) Encumbrances securing the Permitted Guarantees as set forth in the Senior Debt Security Documents and the Hydro Debt Documents, provided that no such Encumbrance attaches to any Collateral; and (ij) Liens set forth in Schedule 7.6 (but only remaining in effect to the extent set forth in Section 7.6(c) and Section 7.20)liens constituting a renewal, extension or replacement of any Permitted Encumbrance.