Colt CZ : Agreement on pledge of receivables from relevant contracts

	CONTENTS
Clause		Page
1.	Interpretation	1
2.	Secured Debts	2
3.	Creation of pledge	3
4.	Restrictions on dealings	4
5.	Perfection, notification and further assurances	5
6.	Security representations	6
7.	Security Assets	7
8.	When Security becomes enforceable	8
9.	Enforcement of Security	8
10.	Application of proceeds	12
11.	Subordination of claims of the Security Provider	12
12.	Changes to the Parties	12
13.	Miscellaneous	13
14.	Release and termination	14
15.	Disapplication of certain provisions of the Civil Code	14
16.	Governing law	14
17.	Jurisdiction	14
Schedule
1.	Relevant Contracts	15
2.	Form of Pledge Notice	20
3.	Form of Transfer Certificate	24
Signatories	26

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THIS AGREEMENT (the Agreement) is made on 7 May 2024

BETWEEN:

1. Colt CZ Group SE, a company with its registered office at náměstí Republiky 2090/3a, Nové Město, 110 00 Prague 1, identification number 291 51 961, registered in the Commercial Register under file number H 962 kept by the Municipal Court in Prague, as pledgor (the Security Provider); and
2. Komerční banka, a.s., a company with its registered office at Na Příkopě 33 building number 969,
   114 07 Prague 1, identification number 453 17 054, registered in the Commercial Register under file number B 1360 kept by the Municipal Court in Prague, as pledgee (the Security Agent)

(the Security Provider and the Security Agent collectively the Parties and each of them a Party).

IT IS AGREED as follows:

1. INTERPRETATION

1.1 Definitions

In this Agreement:

Counterparty means each counterparty to each Relevant Contract other than the Security Agent and the Parent.

Credit Agreement means the EUR484,814,084.45 credit facilities agreement dated 7 May 2024 between, among others, the Security Provider as original borrower and original guarantor and the Security Agent as original lender, mandated lead arranger, facility agent and security agent.

Enforceability Notice means a notice from the Security Agent to a Counterparty, substantially in the form attached as schedule 1 to the Pledge Notice.

Expert means an independent expert selected by the Security Agent from the following entities or their successors: (i) PricewaterhouseCoopers Česká republika, s.r.o. (identification number: 610 63 029); (ii) KPMG Česká republika, s.r.o. (identification number: 005 53 115); (iii) Deloitte Advisory s.r.o. (identification number: 275 82 167); and (iv) E & Y Valuations s.r.o. (identification number: 161 90 581).

Pledge Notice means a notice from the Security Agent and the Security Provider to a Counterparty substantially in the form of Schedule 3 (Form of Pledge Notice).

Relevant Contract means an agreement specified in Schedule 1 (Relevant Contracts) under the heading Relevant Contracts.

Secured Debts means each debt specified in Clause 2 (Secured Debts) below.

Security Assets means each present and future monetary receivable of the Security Provider from each Counterparty created under or in connection with any Relevant Contract, including each receivable for:

1. the payment of any amount (including a receivable which results from unjust enrichment) if a Relevant Contract is void, non-existent (in Czech zdánlivý), ineffective or unenforceable, cancelled, rescinded or terminated in any other way;

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1. the payment of any amount on the basis of a contractual penalty or breach of contractual or statutory obligations by the relevant Counterparty,

including their accessions (in Czech příslušenství).

Security Period means the period beginning on the date of this Agreement and ending on the earliest of:

1. the date on which all the Secured Debts have been unconditionally and irrevocably paid and discharged in full and the Finance Parties are under no further obligation (whether existing or contingent) to provide any Loan or any other utilisation (including bank guarantee, letter of credit or overdraft loan) to the Borrowers or payment to a beneficiary under any bank guarantee or letter of credit issued under Finance Documents;
2. the date on which the Security Agent has unilaterally waived in writing its right to the Security; or
3. the date on which the Security otherwise terminated with the Security Agent's written consent.

1.2 Construction

1. Capitalised terms defined in the Credit Agreement have the same meaning in this Agreement, unless expressly defined in this Agreement.
2. The principles of construction set out in the Credit Agreement will have effect as if set out in this Agreement.
3. The term the Security or this Security means any security created under this Agreement.
4. When a provision of this Agreement applies to:
5. 1. the Security Assets, the provision applies to each receivable forming the Security Assets; or
   2. the pledge created under this Agreement, the provision applies to each pledge created under this Agreement.
6. Any obligation of the Security Provider under this Agreement remains in force during the Security Period.

2. SECURED DEBTS

1. The pledge created under this Agreement secures all monetary debts of each Obligor to the Security Agent that have arisen under, or in connection with, the Finance Documents and that exist on the date of this Agreement.
2. The pledge created under this Agreement further secures, up to an aggregate amount not exceeding EUR1,262,500,000 at any time, all monetary debts of each Obligor to the Security Agent that will arise under, or in connection with, the Finance Documents in the future at any time up to and including 7 May 2039, and that are of the following type:
3. 1. the principal of any loan (in Czech úvěr) or simple loan (in Czech zápůjčka);
   2. debts arising in connection with an issued financial or bank guarantee or letter of credit, including debts arising due to a payment being made under that guarantee or letter of credit;

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1. interest or default interest;
2. debts resulting from derivative transactions, including debts from closing out those transactions;
3. debts under a guarantee or financial guarantee;
4. debts resulting from an indemnity or another arrangement with a similar effect;
5. commitment fee, arrangement fee, agent fee or other fee;
6. costs or expenses incurred in connection with the protection, preservation or enforcement of rights or security;
7. damages including loss of profit and other than proprietary harm;
8. debts resulting from unjust enrichment;
9. contractual penalty;
10. debts arising due to a party rescinding an agreement (in Czech odstoupení) or the invalidity, non-existence (in Czech zdánlivost), ineffectiveness, illegality or unenforceability of an agreement or other legal act; or
11. credit card debts.

3. CREATION OF PLEDGE

3.1 Pledge

1. Under Section 1309 et seq. of the Civil Code, for the purposes of securing the Secured Debts, the Security Provider pledges the Security Assets to the Security Agent.
2. The Security Agent accepts the pledge created under this Agreement.

1. General
   This Security is:
2. 1. continuing security for the payment, discharge and performance of the Secured Debts and will extend to the ultimate balance of all sums due as the Secured Debts regardless of any intermediate payment or discharge in whole or in part; and
   2. in addition to, and is not in any way prejudiced by, any other security now or subsequently held by any Finance Party.
3. Relevant Contracts entered into in the future

1. The Security Provider must, at its own cost, on the last Business Day of each quarter send to the Security Agent a proposed amendment to this Agreement, substantially in the form of Schedule 1 (Form of Amendment).
2. The amendment under paragraph (a) above must be signed by the Security Provider's authorised signatories and must, for the purposes of creating a pledge over the new receivables, list:

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1. each amendment to an existing Relevant Contract;
2. each new relevant contract;

that the Security Provider entered into in the period from the date of this Agreement or from the date of the preceding amendment entered into pursuant to this Clause; and

1. each existing relevant contract that prohibits the Security Provider from assigning its receivables from it, after the prohibition has expired

(the New Relevant Contracts).

1. The amendment under paragraph (a) above is entered into and takes effect when signed by the Security Agent.
2. By execution of the amendment under paragraph (a) above, each present and future receivable of the Security Provider arising under or in connection with any New Relevant Contract from the relevant counterparty of the New Relevant Contract (the New Counterparty), including any receivable for:
3. 1. the payment of any amount (including a receivable which results from unjust enrichment) if a New Relevant Contract is void, non-existent (in Czech zdánlivý), ineffective or unenforceable, cancelled, rescinded or terminated in any other way; and
   2. the payment of any amount on the basis of a contractual penalty or breach of contractual or statutory obligations by the relevant New Counterparty,

including their accessions (in Czech příslušenství) (the New Receivable), becomes part of the Security Assets and any provisions of this Agreement relating to:

1. the Security Assets apply to each New Receivable;
2. the Relevant Contracts apply to each New Relevant Contract; and
3. the Counterparty apply to each New Counterparty.

4. RESTRICTIONS ON DEALINGS

4.1 Restrictions on dealings with the Security Assets

1. Except as expressly allowed, in each case, under the Credit Agreement or this Agreement, the Security Provider may not, without the prior written consent of the Security Agent:
2. 1. create or permit to subsist any other pledge of the Security Assets;
   2. create or permit to subsist any other encumbrance on the Security Assets;
   3. sell, transfer or otherwise dispose of the Security Assets;
   4. assign any Relevant Contract;
   5. attach (in Czech připojit) the Security Assets to any collective business asset (in Czech věc hromadná) that is encumbered by a security interest created earlier than the Security Agent's pledge of the Security Assets;
   6. waive any right or debt from any Relevant Contract; or

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1. 1. perform any act which:
   2. 1. may result in a reduction in the value of the Security Assets; or
      2. may adversely affect any right of the Security Agent under this Agreement.
2. The restrictions under paragraph (a) above are agreed for the benefit of the Security Agent and restriction under paragraph (a)(i) above is, in addition, agreed with right-in-rem effects.

4.2 Term and purpose of restrictions on dealings

The restrictions under Clause 4.1 (Restrictions on dealings with the Security Assets) above are agreed for the Security Period in order to strengthen the position of the Security Agent as a secured creditor.

5. PERFECTION, NOTIFICATION AND FURTHER ASSURANCES

1. Perfection of the pledge and negative pledge
   The pledge created under this Agreement is perfected by this Agreement coming into effect and the negative pledge of the Security Assets created under this Agreement (to the extent it is purported to be created as a right in rem) is perfected by registration in the Pledge Register.
2. Registration in the Pledge Register

1. The Security Provider must, at its own cost ensure that, without undue delay following the execution of this Agreement (or, in relation to the New Relevant Contracts, of an amendment under Clause 3.3 (Relevant Contracts entered into in the future)), each negative pledge created under this Agreement is registered in the Pledge Register in the form satisfactory to the Security Agent.
2. For the purposes of paragraph (a) above, the Security Agent authorises the Security Provider to do any act necessary or desirable in connection with the registration proceedings.

1. Evidencing the perfection of the negative pledge
   The Security Provider must deliver to the Security Agent evidence of the registration of the negative pledge in the Pledge Register, or a copy of the entry in the Pledge Register evidencing the registration, within two Business Days after the date of this Agreement (or, in relation to the New Relevant Contracts, of an amendment under Clause 3.3 (Relevant Contracts entered into in the future)).
2. Notification of the pledge The Security Provider:
3. 1. must at its own cost, as soon as practicable, and no later than five Business Days after the date of this Agreement (or, in relation to the New Relevant Contracts, of an amendment under Clause 3.3 (Relevant Contracts entered into in the future)), send the Pledge Notice to each Counterparty; and
   2. undertakes that each Counterparty will acknowledge the Pledge Notice, by delivering to the Security Agent an acknowledgement substantially in the form of schedule 2 to the Pledge Notice, within ten Business Days after the date of this Agreement (or, in relation to the New

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Relevant Contracts, of an amendment under Clause 3.3 (Relevant Contracts entered into in the future)).

5.5 Further assurances

1. The Security Provider must, at its own costs and without undue delay (and in any event within any applicable time limit) perform whatever act the Security Agent may require for:
2. 1. perfecting and protecting any security intended to be created under this Agreement;
   2. facilitating the enforcement of this Security or the exercise of any right, power or discretion exercisable by the Security Agent in respect of any Security Asset; and
   3. facilitating the assignment or transfer of any rights or obligations of the Security Agent under this Agreement.

This includes the execution of any transfer or assignment, whether to the Security Agent or its nominee, or any amendment to this Agreement which the Security Agent may think expedient.

1. The Security Provider must promptly notify the Security Agent in writing of any circumstance that may endanger the existence or enforceability of the Security or of any rights under this Agreement.

6. SECURITY REPRESENTATIONS

1. Representations
   The representations set out in this Agreement are made by the Security Provider to the Security Agent on the date of this Agreement, on each Utilisation Date, on the first day of each Interest Period and on the Closing Date.
2. Nature of security
   This Agreement creates a pledge over the Security Assets on the terms of this Agreement and this Agreement is not liable to be avoided, declared non-existent (in Czech zdánlivá), ineffective or otherwise set aside, in particular on the Security Provider's insolvency, bankruptcy, dissolution, winding-up, administration or reorganisation.
3. Title

1. (i) The Security Provider has full and exclusive title to the Security Assets, free of any defect in the sense of Section 1107 of the Civil Code and free of any right from an obligation or right in rem or other right for the benefit of any other person, and no steps have been taken to create any such defect or any such right in the Security Assets for the benefit of any other person, except for this Security and other restrictions created or permitted under this Agreement; and
2. 1. it has not created a pledge over its enterprise, any of its parts or a collective business asset that is (in whole or in part) formed by any Security Asset.
3. (i) It is not aware of any adverse claim by any person in respect of its exclusive title to the Security Assets;
4. 1. no Security Asset is the subject of a dispute or claim; and
   2. there are no overdue debts in relation to the Security Assets.

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1. Ranking
   The pledge created under this Agreement is a first ranking pledge over the Security Assets.
2. Non-conflict

1. No breach of any law or regulation is outstanding which may adversely affect the value of any Security Asset.
2. Neither the articles of association of the Security Provider nor any agreement, arrangement or licence applicable to the Security Provider contains any provision which could adversely affect or restrict the creation or enforcement of the Security.

7. SECURITY ASSETS

1. Representations - Relevant Contracts
   The Security Provider represents to the Security Agent that:
2. 1. no payments to it by any Counterparty are subject to any right of set-off or similar rights;
   2. each of the Relevant Contracts is its valid and enforceable obligation;
   3. it is not in default of any of its obligations under any of the Relevant Contracts;
   4. there is no prohibition on assignment or creation of any security interest in any of the Relevant Contracts or, if consent is required for the assignment or creation of any security interest in any of the Relevant Contracts, it has been validly granted; and
   5. its entry into and performance of this Agreement will not conflict with any term of any of the Relevant Contracts, unless such act has no effect on the Security.
3. Preservation of Relevant Contracts
   The Security Provider may not, without the prior written consent of the Security Agent:
4. 1. amend or waive any term of, or terminate, any of its Relevant Contracts or waive any debt under any of its Relevant Contracts; or
   2. make any act which might jeopardise the existence or enforceability of any Relevant Contract.
5. Other obligations
   The Security Provider must:
6. 1. duly and promptly perform its obligations, and diligently pursue its rights, under each of its Relevant Contracts;
   2. diligently and promptly defend its rights, and the rights pledged under this Agreement, under the Relevant Contracts, from any claim or action which is made or threatened by any person;
   3. at the Security Agent's request supply the Security Agent with copies of each Relevant Contract and any information and documentation relating to any Relevant Contract; and

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1. promptly notify the Security Agent of any event or circumstance that may result in:
2. 1. the termination of any Relevant Contract;
   2. any delay in the performance of any Relevant Contract;
   3. any Relevant Contract becoming unlawful, non-existent (in Czech zdánlivý) or ineffective; or
   4. a material breach of any Relevant Contract unless such act affects the Security.

7.4 Collection of receivables

1. Before the Security becomes enforceable pursuant to Clause 8 (When Security becomes enforceable) below and the Security Agent delivers an Enforceability Notice to a Counterparty, all amounts payable under each Relevant Contract to the Security Provider must be used in accordance with the Credit Agreement.
2. After the Security becomes enforceable pursuant to Clause 8 (When Security becomes enforceable) below and the Security Agent delivers the Enforceability Notice to a Counterparty, all payments under the Relevant Contracts of that Counterparty must be made to the Security Agent or as it directs. If the receivables arising under the Relevant Contracts are not yet due, the Security Agent may require the receivables to be assigned to it or as it directs.
3. If, after this Security has become enforceable pursuant to Clause 8 (When Security becomes enforceable) below and the Security Agent delivers an Enforceability Notice to a Counterparty, the Security Provider receives any payment relating to the Security Assets, it must immediately transfer an amount equal to that payment to the Security Agent. This is without prejudice to any right the Security Agent may have against the person who has made that payment.
4. If the Security Agent receives any payment in connection with the Security Assets without any Secured Debt (or its part) being due and payable, the Security Agent may keep the amount as security for the duration of the Security Period and may use the amount at any time in future to discharge any Secured Debt, unless otherwise agreed with the Security Provider.

1. WHEN SECURITY BECOMES ENFORCEABLE
   This Security will become immediately enforceable if any Obligor fails to pay in full any Secured Debt when due.
2. ENFORCEMENT OF SECURITY

9.1 General

1. After this Security has become enforceable, the Security Agent may immediately exercise any rights under and in accordance with this Agreement or applicable law.
2. This includes:
3. 1. sending a notice to any person in connection with enforcing the Security;
   2. the right to collect and enforce any amounts payable in respect of any Security Asset determined by the Security Agent in the notice under Clause 9.2 (Collection of payments of payable receivables) below;

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