Exhibit 10.1

EXECUTION VERSION

NOTES

PLEDGE AND SECURITY AGREEMENT

dated as of June 11, 2015

among

COMMSCOPE, INC.,

as a Grantor

and

EACH OF THE OTHER GRANTORS

FROM TIME TO TIME PARTY HERETO

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Collateral Agent

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TABLE OF CONTENTS

 

             Page  

SECTION 1.      DEFINITIONS; GRANT OF SECURITY.

     1     

1.1

 

Indenture Definitions

     1     

1.2

 

UCC Definitions

     1     

1.3

 

General Definitions

     2     

1.4

 

Interpretation

     10   

SECTION 2.      GRANT OF SECURITY.

     10     

2.1

 

Grant of Security

     10     

2.2

 

Certain Limited Exclusions

     11   

SECTION 3.      SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

     12     

3.1

 

Security for Obligations

     12     

3.2

 

Continuing Liability Under Collateral

     12   

SECTION 4.      REPRESENTATIONS AND WARRANTIES AND COVENANTS.

     12     

4.1

 

Generally

     12     

4.2

 

[Reserved]

     14     

4.3

 

Receivables

     14     

4.4

 

Investment Related Property

     15     

4.5

 

Delivery of Instruments and Chattel Paper

     17     

4.6

 

Investment Accounts

     17     

4.7

 

Letter of Credit Rights

     19     

4.8

 

Intellectual Property

     19     

4.9

 

Commercial Tort Claims

     21   

SECTION 5.      FURTHER ASSURANCES; ADDITIONAL GRANTORS.

     21     

5.1

 

Further Assurances

     21     

5.2

 

Additional Grantors

     22   

SECTION 6.      COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

     23     

6.1

 

Power of Attorney

     23     

6.2

 

No Duty on the Part of Collateral Agent or Secured Parties

     24     

6.3

 

Authority of Collateral Agent

     24   

SECTION 7.      REMEDIES.

     25     

7.1

 

Generally

     25     

7.2

 

Application of Proceeds

     27   

 

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                   7.3  

Sales on Credit

     27      7.4  

Deposit Accounts

     27      7.5  

Investment Related Property

     27      7.6  

Receivables

     29      7.7  

Intellectual Property

     30      7.8  

Cash Proceeds

     32   

SECTION 8.       COLLATERAL AGENT.

     32   

SECTION 9.       CONTINUING SECURITY INTEREST; TRANSFER OF NOTES.

     32   

SECTION 10.     STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.

     33   

SECTION 11.     MISCELLANEOUS.

     33      11.1  

Notices

     33      11.2  

Independent Effect

     33      11.3  

Successors and Assigns

     33      11.4  

No Assignment

     33      11.5  

Counterparts

     33      11.6  

Reinstatement

     34      11.7  

Other Agreements

     34      11.8  

Governing Law

     35   

 

EXHIBIT A   —   PLEDGE SUPPLEMENT EXHIBIT B   —   [RESERVED] EXHIBIT C   —  
COUNTERPART AGREEMENT EXHIBIT D   —   DEPOSIT ACCOUNT CONTROL AGREEMENT EXHIBIT
E   —   FORM OF PATENT SECURITY AGREEMENT EXHIBIT F   —   FORM OF COPYRIGHT
SECURITY AGREEMENT EXHIBIT G   —   FORM OF TRADEMARK SECURITY AGREEMENT

 

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This NOTES PLEDGE AND SECURITY AGREEMENT, dated as of June 11, 2015 (as amended,
amended and restated, supplemented or otherwise modified from time to time, this
“Agreement”), by COMMSCOPE, INC. (the “Issuer”), a Delaware corporation, and
EACH OF THE UNDERSIGNED, whether as an original signatory hereto or as an
Additional Grantor (as herein defined) (together with the Issuer, each, a
“Grantor”) in favor of WILMINGTON TRUST, NATIONAL ASSOCIATION (“Wilmington
Trust”), as collateral agent under the Indenture (as defined below) (in such
capacity as collateral agent, the “Collateral Agent”).

RECITALS:

WHEREAS, the Issuer, CommScope Holding Company, Inc., a Delaware corporation
(“Holdings”), the other Grantors party thereto and Wilmington Trust, as trustee
(in such capacity, the “Trustee”) and Collateral Agent, have entered into the
Indenture, dated as of the date hereof (as it may be amended, restated,
replaced, refinanced, supplemented or otherwise modified from time to time, the
“Indenture”), pursuant to which the Issuer issued its 4.375% Senior Secured
Notes due 2020 (the “Notes”); and

WHEREAS, in connection with the issuance of the Notes, each Grantor has agreed
to secure such Grantor’s obligations under the Indenture, the Notes and the
Guarantees as set forth herein.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, each Grantor hereby agrees with the Collateral
Agent as follows:

 

SECTION 1. DEFINITIONS; GRANT OF SECURITY.

1.1 Indenture Definitions. Unless otherwise defined herein, capitalized terms
used herein (including the preamble and recitals hereto) and not otherwise
defined herein shall have the meanings ascribed thereto in the Indenture.

1.2 UCC Definitions. Terms used herein without definition that are defined in
the UCC have the meanings given to them in the UCC, including the following
terms (which are capitalized herein):

“Account Debtor”

“Accounts”

“Certificated Security”

“Chattel Paper”

“Commercial Tort Claims”

“Commodities Accounts”

“Deposit Accounts”

“Documents”

“Equipment”

“Financial Asset”

“General Intangibles”

“Goods”

“Instruments”

 

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“Inventory”

“Investment Property”

“Letter of Credit Right”

“Money”

“Proceeds”

“Record”

“Securities Accounts”

“Securities Entitlement”

“Securities Intermediary”

“Supporting Obligations”

“Uncertificated Security”

1.3 General Definitions. In this Agreement, the following terms shall have the
following meanings:

“Additional Grantor” shall have the meaning assigned in Section 5.2.

“Agreement” shall have the meaning set forth in the preamble hereto.

“Approved Securities Intermediary” means a “securities intermediary” or
“commodity intermediary” (as such terms are defined in the UCC) selected by the
Grantors.

“Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;

(3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.

“Cash Proceeds” shall have the meaning assigned in Section 7.8.

“CFC” means a “controlled foreign corporation” within the meaning of
Section 957(a) of the Code.

“Collateral” shall have the meaning assigned in Section 2.1.

“Collateral Account” shall mean any account established by the Collateral Agent.

“Collateral Agent” shall have the meaning set forth in the preamble hereto.

 

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“Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and related data processing
software and similar items that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in the
collection thereof or realization thereupon.

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control Agreement” shall mean collectively, each Deposit Account Control
Agreement and each Securities Account Control Agreement.

“Copyright Licenses” shall mean any and all written agreements providing for the
granting of any right in or to Copyrights (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 10(c) to the Perfection Certificate (as such schedule may be amended
or supplemented from time to time).

“Copyrights” shall mean (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof and the
registrations, recordings and applications referred to in Schedule 10(b) to the
Perfection Certificate (as such schedule may be amended or supplemented from
time to time), and (ii) the right to obtain all renewals thereof.

“Deposit Account Control Agreement” shall mean a letter agreement substantially
in the form of Exhibit D (or such other form as may be reasonably agreed to by
the Collateral Agent), as it may be amended, supplemented, restated, replaced or
otherwise modified from time to time, executed by the relevant Grantor, the
Collateral Agents (as defined therein) and the relevant financial institution.

“Discharge of Revolving Credit Obligations” shall have the meaning set forth in
the ABL Intercreditor Agreement.

“Domestic Subsidiary” means a Restricted Subsidiary that is not a Foreign
Subsidiary.

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).

 

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“Excluded Accounts” means the deposit, securities and commodities accounts of
each Grantor that are either (x) payroll, disbursement or other fiduciary
accounts or (y) other accounts as long as the aggregate balance for all Grantors
in all such other accounts does not exceed $20.0 million at any time.

“Excluded Assets” means the collective reference to:

(1) any interest in leased real property;

(2) any fee interest in owned real property if the fair market value of such fee
interest is less than $5,000,000;

(3) any property or asset to the extent that the grant of a security interest in
such property or asset is prohibited by any Contractual Obligation, applicable
law, rule or regulation or requires a consent not obtained of any third party or
governmental authority pursuant to any Contractual Obligation, applicable law,
rule or regulation;

(4) those assets that would constitute Collateral but as to which the ABL
Collateral Agent (in the case of Current Asset Collateral) or the Term B Credit
Agreement Collateral Agent (in the case of Fixed Asset Collateral) does not
require a lien or security interest;

(5) any contract, license, lease, agreement, instrument or other document to the
extent that such grant of a security interest therein is (i) prohibited by, or
constitutes a breach or default under, or results in the termination of, or
requires any consent not obtained under, such contract, license, lease,
agreement, instrument or other document, or, in the case of any Equity Interests
or other securities, any applicable shareholder or similar agreement or
(ii) otherwise constitutes or results in the abandonment, invalidation or
unenforceability of any right, title or interest of the Issuer or any Grantor
under such contract, license, lease, agreement, instrument or other document,
except, in each case, to the extent that applicable law or the term in such
contract, license, lease, agreement, instrument or other document or shareholder
or similar agreement providing for such prohibition, breach, default or
termination or requiring such consent is ineffective under applicable law or
purports to prohibit the granting of a security interest over all or a material
portion of assets of the Issuer or any Grantor; provided, however, that the
foregoing exclusions shall not apply to the extent that any such prohibition,
default or other term would be rendered ineffective pursuant to Section 9-406,
9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other
applicable law or principles of equity; provided, further, that the security
interest shall attach immediately to any portion of such property that does not
result in any of the consequences specified above including, without limitation,
any proceeds of such property;

(6) any assets or property of the Issuer or any Restricted Subsidiary that is
subject to a Lien securing Indebtedness permitted to be Incurred pursuant to
clause (iv) of the definition of “Permitted Debt” in the Indenture to the extent
the documents relating to such Lien would not permit such assets or property to
be subject to the Liens created under the Security Documents; provided that
immediately upon the termination of any such restriction, such assets or
property shall cease to be an “Excluded Asset”; and

 

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(7) any vehicles and any other assets subject to certificate of title;

(8) any intellectual property, including any United States intent-to-use
trademark applications, to the extent and for so long as the creation of a
security interest therein would invalidate the Issuer’s or such Grantor’s right,
title or interest therein;

(9) assets to the extent a security interest in such assets would result in
costs or consequences (including material adverse tax consequences (including as
a result of the operation of Section 956 of the Code or any similar law, rule or
regulation in any applicable jurisdiction)) as reasonably determined by the
Issuer in writing delivered to the Collateral Agent with respect to the granting
or perfecting of a security interest that is excessive in view of the benefits
to be obtained by the holders of the Notes;

(10) Excluded Capital Stock;

(11) Excluded Accounts;

(12) Letter-of-credit rights with a value not in excess of $10,000,000 (except
for letter-of-credit rights that are perfected by filing UCC financing
statements);

(13) Commercial tort claims with a value not in excess of $10,000,000; and

(14) proceeds and products from any and all of the foregoing excluded collateral
described in clauses (1) through (13), unless such proceeds or products would
otherwise constitute Collateral;

provided, however, that Excluded Assets will not include (a) any proceeds,
substitutions or replacements of any Excluded Assets referred to in clause
(3) (unless such proceeds, substitutions or replacements would otherwise
constitute Excluded Assets) or (b) any asset of the Issuer or the Grantors that
secures Obligations with respect to the ABL Credit Agreement or the Term B
Credit Agreement.

“Excluded Capital Stock” means (a) any Capital Stock with respect to which the
Issuer reasonably determines in writing delivered to the Collateral Agent that
the costs (including any costs resulting from adverse tax consequences) of
pledging such Capital Stock shall be excessive in view of the benefits to be
obtained by the holders of the Notes therefrom and (b)(1) solely in the case of
any pledge of Capital Stock of any Subsidiary that either is a CFC or a Foreign
Subsidiary Holdco, any Capital Stock that is Voting Stock of such Subsidiary in
excess of 65% of the outstanding voting Capital Stock of such class, (2) any
Capital Stock to the extent the pledge thereof would be prohibited by any
applicable law, rule or regulation or contractual obligation existing on the
January 14, 2011 or on the date such Capital Stock is acquired (or, to the
extent acquired after January 14, 2011, was acquired) by the Issuer or a Grantor
or on the date the issuer of such Capital Stock is created, (3) the Capital
Stock of any Subsidiary that is not wholly owned by the Issuer and the Grantors
at the time such Subsidiary becomes a Subsidiary (for so long as such Subsidiary
remains a non-wholly owned Subsidiary) to the extent the pledge

 

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of such Capital Stock by the Issuer or Grantor is prohibited by the terms of
such Subsidiary’s organizational or joint venture documents, (4) the Capital
Stock of any Immaterial Subsidiary, (5) the Capital Stock of any Subsidiary of a
CFC and the Capital Stock of any Subsidiary of a Foreign Subsidiary Holdco,
(6) any Capital Stock of a Subsidiary to the extent the pledge of such Capital
Stock would result in adverse tax consequences to the Issuer or its
Subsidiaries, as reasonably determined by the Issuer and (7) the Capital Stock
of any Unrestricted Subsidiary.

“Foreign Subsidiary” means a Restricted Subsidiary not organized or existing
under the laws of the United States of America or any state or territory or the
District of Columbia thereof and any direct or indirect Subsidiary of such
Restricted Subsidiary.

“Grantor” shall have the meaning set forth in the preamble hereto.

“Holdings” shall mean CommScope Holding Company, Inc., or any successor thereof.

“Indenture” shall have the meaning set forth in the preamble hereto.

“Intellectual Property” shall mean, collectively, all rights, priorities and
privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses, Trade Secrets, Trade Secret Licenses and Internet domain names, and
all rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

“Intellectual Property Security Agreements” shall mean, collectively, those
certain agreements, substantially in the form of Exhibit E, Exhibit F and
Exhibit G, in each case, executed by the relevant Grantor and the Collateral
Agent, as it may be amended, supplemented or otherwise modified from time to
time.

“Investment Accounts” shall mean the Collateral Account, Securities Accounts,
Commodities Accounts and Deposit Accounts.

“Investment Related Property” shall mean: (i) all Investment Property and
(ii) all of the following (regardless of whether classified as investment
property under the UCC): all Pledged Equity Interests, Pledged Debt, the
Investment Accounts and certificates of deposit.

“Issuer” shall have the meaning set forth in the preamble hereto.

“Material Intellectual Property” means Intellectual Property owned by or
licensed to a Grantor and material to the conduct of any Grantor’s business.

“Notes” shall have the meaning set forth in the preamble hereto.

“Patent Licenses” shall mean all written agreements providing for the grant by
or to any Grantor of any right to manufacture, have manufactured, use, import,
sell or offer for sale any invention covered in whole or in part by a Patent,
including, without limitation, each agreement referred to in Schedule 10(c) to
the Perfection Certificate (as such schedule may be amended or supplemented from
time to time).

 

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“Patents” shall mean (i) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (ii) all applications for letters patent of the United States or any
other country and all divisionals, continuations and continuations-in-part
thereof and (iii) all rights to obtain any reissues, continuations or
continuations-in-part of the foregoing; including, with respect to (i) and
(ii) each letter patent and patent application referred to in Schedule 10(a) to
the Perfection Certificate (as such schedule may be amended or supplemented from
time to time).

“Perfection Certificate” has the meaning specified in Section 4.1(a)(ii) hereof.

“Pledge Supplement” shall mean any supplement to this agreement in substantially
the form of Exhibit A.

“Pledged Collateral” means, collectively, the Pledged Equity Interests, Pledged
Debt, any other Investment Property of any Grantor (other than Investment
Property whose value does not exceed $10,000,000 individually or $10,000,000 in
the aggregate), all Chattel Paper, certificates or other Instruments
representing any of the foregoing and all Security Entitlements of any Grantor
in respect of any of the foregoing. Pledged Collateral may be General
Intangibles, Instruments or Investment Property.

“Pledged Debt” shall mean all Indebtedness owed to such Grantor, including,
without limitation, all Indebtedness described on Schedule 9 to the Perfection
Certificate under the heading “Pledged Debt” (as such schedule may be amended or
supplemented from time to time), issued by the obligors named therein, the
instruments evidencing such Indebtedness, and all interest, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Indebtedness.

“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and Pledged Trust Interests.

“Pledged LLC Interests” shall mean all interests in any limited liability
company including, without limitation, all limited liability company interests
listed on Schedule 8 to the Perfection Certificate under the heading “Pledged
LLC Interests” (as such schedule may be amended or supplemented from time to
time) and the certificates, if any, representing such limited liability company
interests and any interest of such Grantor on the books and records of such
limited liability company or on the books and records of any Securities
Intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such limited liability company
interests.

“Pledged Partnership Interests” shall mean all interests in any general
partnership, limited partnership, limited liability partnership or other
partnership including, without limitation, all partnership interests listed on
Schedule 8 to the Perfection Certificate

 

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under the heading “Pledged Partnership Interests” (as such schedule may be
amended or supplemented from time to time) and the certificates, if any,
representing such partnership interests and any interest of such Grantor on the
books and records of such partnership or on the books and records of any
Securities Intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests.

“Pledged Stock” shall mean all shares of capital stock owned by such Grantor,
including, without limitation, all shares of capital stock described on Schedule
8 to the Perfection Certificate under the heading “Pledged Stock” (as such
schedule may be amended or supplemented from time to time), and the
certificates, if any, representing such shares and any interest of such Grantor
in the entries on the books of the issuer of such shares or on the books of any
Securities Intermediary pertaining to such shares, and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares.

“Pledged Trust Interests” shall mean all interests in a Delaware business trust
or other trust including, without limitation, all trust interests listed on
Schedule 8 to the Perfection Certificate under the heading “Pledged Trust
Interests” (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such trust interests and any interest
of such Grantor on the books and records of such trust or on the books and
records of any Securities Intermediary pertaining to such interest and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
trust interests.

“Receivables” shall mean all rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
transferred, or services rendered or to be rendered, including, without
limitation all such rights constituting or evidenced by any Account, Chattel
Paper, Instrument, General Intangible or Investment Related Property, together
with all of Grantor’s rights, if any, in any goods or other property giving rise
to such right to payment and all Collateral Support and Supporting Obligations
related thereto and all Receivables Records.

“Receivables Records” shall mean (i) all copies of all documents, instruments or
other writings or electronic records or other Records evidencing the
Receivables, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and other papers relating to Receivables,
including, without limitation, all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents relating to
the Receivables, whether in the possession or under the control of Grantor or
any computer bureau or agent from time to time acting for Grantor or otherwise,
(iii) all evidences of the filing of financing statements and the registration
of other instruments in connection therewith, and amendments, supplements or
other modifications thereto, notices to other creditors or secured parties, and
certificates, acknowledgments, or other writings, including, without limitation,
lien search reports, from filing or other registration officers, (iv) all credit
information, reports and memoranda relating thereto and (v) all other written or
non-written forms of information related in any way to the foregoing or any
Receivable.

 

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“Secured Obligations” shall have the meaning assigned in Section 3.1.

“Secured Parties” means, collectively, the Trustee, the Collateral Agent and the
Holders.

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Account Control Agreement” shall mean a letter agreement, as it may
be amended, supplemented or otherwise modified from time to time, executed by
each Grantor, the Collateral Agents (as defined therein) and the relevant
Approved Securities Intermediary.

“Trademark Licenses” shall mean any and all agreements providing for the
granting of any right to use any Trademarks (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule 10(c) to the Perfection Certificate (as such schedule may be amended
or supplemented from time to time).

“Trademarks” shall mean (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and, in each case, all
goodwill associated therewith, whether now existing or hereafter adopted or
acquired, all registrations and recordings thereof and all applications in
connection therewith, in each case whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, including each registration, recording and application referred to in
Schedule 10(a) to the Perfection Certificate (as such schedule may be amended or
supplemented from time to time) and all common-law rights related thereto, and
(ii) the right to obtain all renewals thereof.

“Trade Secret Licenses” shall mean any and all agreements providing for the
granting of any right in or to Trade Secrets (whether such Grantor is licensee
or licensor thereunder).

“Trade Secrets” shall mean (A) all trade secrets and (B) all other confidential
or proprietary information and know-how relating to the design, manufacture,
assembly, installation, use, operation, marketing, sale and/or servicing of any
products or business of any Grantor whether or not such trade secret,
information or know-how has been reduced to a writing or other tangible form,
including all documents and things embodying, incorporating, or referring in any
way to such trade secret, information or know-how, including but not limited to:
(i) the right to sue for past, present and future misappropriation or other
violation of any such trade secret, information or know-how and (ii) all
Proceeds of the foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages, and proceeds of suit.

“Trustee” shall have the meaning set forth in the preamble hereto.

 

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“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the State of New York; provided, however, that, in the event that, by reason of
mandatory provisions of law, any of the attachment, perfection or priority of
the Collateral Agent’s and the Secured Parties’ security interest in any
Collateral is governed by the Uniform Commercial Code as in effect from time to
time in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.

“United States” shall mean the United States of America.

“Voting Stock” shall mean, as to any issuer, the issued and outstanding shares
of each class of capital stock or other ownership interests of such issuer
entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).

1.4 Interpretation. References to “Sections,” “Exhibits” and “Schedules” shall
be to Sections, Exhibits and Schedules, as the case may be, of this Agreement
unless otherwise specifically provided. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
Any of the terms defined herein may, unless the context otherwise requires, be
used in the singular or the plural, depending on the reference. The use herein
of the word “include” or “including,” when following any general statement, term
or matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not non-limiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter. If any conflict or inconsistency exists between this Agreement
and the Indenture, the Indenture shall govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC. Unless the prior
written consent of the Holders is required hereunder for an amendment,
restatement, supplement or other modification to any agreement and such consent
is not obtained, references in this Agreement to any agreement shall be to such
agreement as so amended, restated, supplemented or modified.

 

SECTION 2. GRANT OF SECURITY.

2.1 Grant of Security. Each Grantor hereby grants to the Collateral Agent for
the benefit of the Secured Parties a security interest in all of such Grantor’s
right, title and interest in, to and under all of the following personal
property of such Grantor, in each case whether now owned or existing or
hereafter acquired or arising and wherever located (all of which being
hereinafter collectively referred to as the “Collateral”):

(a) Accounts;

(b) Chattel Paper;

(c) Deposit Accounts;

 

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(d) Documents;

(e) Equipment;

(f) General Intangibles;

(g) Goods;

(h) Instruments;

(i) Inventory;

(j) Intellectual Property;

(k) Investment Related Property;

(l) Letter of Credit Rights;

(m) Money;

(n) Receivables and Receivable Records;

(o) Commercial Tort Claims listed on Schedule 11 to the Perfection Certificate
and on any supplement thereto received by the Collateral Agent pursuant to
Section 4.9(b);

(p) to the extent not otherwise included above, all Collateral Records,
Collateral Support and Supporting Obligations relating to any of the foregoing;

(q) all personal property of any Grantor held by the Term B Credit Agreement
Collateral Agent, the Collateral Agent or any other Secured Party, including all
property of every description, in the possession or custody of or in transit to
the Term B Credit Agreement Collateral Agent, the Collateral Agent or such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right or
power;

(r) all other Goods and personal property of such Grantor, whether tangible or
intangible and wherever located; and

(s) to the extent not otherwise included above, all Proceeds, products,
accessions, rents and profits of or in respect of any of the foregoing.

2.2 Certain Limited Exclusions. Notwithstanding anything herein to the contrary,
in no event shall the Collateral include or the security interest granted under
Section 2.1 hereof attach to Excluded Assets.

 

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SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

3.1 Security for Obligations. This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. § 362(a) (and any successor provision thereof)),
of all Obligations of every Grantor under the Indenture, the Notes and the
Guarantees (the “Secured Obligations”).

3.2 Continuing Liability Under Collateral. Notwithstanding anything herein to
the contrary, (a) each Grantor shall remain liable for all obligations under the
Collateral and nothing contained herein is intended or shall be a delegation of
duties to the Collateral Agent or any other Secured Party, (b) each Grantor
shall remain liable under each of the agreements included in the Collateral,
including, without limitation, any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests, to perform all of the obligations undertaken
by it thereunder all in accordance with and pursuant to the terms and provisions
thereof and neither the Collateral Agent nor any Secured Party shall have any
obligation or liability under any of such agreements by reason of or arising out
of this Agreement or any other document related thereto nor shall the Collateral
Agent nor any Secured Party have any obligation to make any inquiry as to the
nature or sufficiency of any payment received by it or have any obligation to
take any action to collect or enforce any rights under any agreement included in
the Collateral, including, without limitation, any agreements relating to
Pledged Partnership Interests or Pledged LLC Interests, and (c) the exercise by
the Collateral Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral, in each case, unless the Collateral Agent becomes
the absolute owner of such Collateral pursuant to the exercise of remedies under
Section 7.

 

SECTION 4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.

4.1 Generally.

(a) Representations and Warranties. Each Grantor hereby represents and warrants,
on the Issue Date, that:

(i) it has rights in and the power to transfer each item of the Collateral as
and when it obtains an interest therein and upon which it purports to grant a
Lien hereunder, free and clear of any and all Liens other than Permitted Liens;

(ii) set forth on Schedule 1(a) to the Perfection Certificate, dated as of the
date hereof, executed and delivered to the Collateral Agent by Holdings, the
Issuer and the other Grantors party thereto in connection with the Indenture and
the issuance of the Notes (the “Perfection Certificate”) with respect to each
Grantor is: (w) the type of organization of such Grantor, (x) the jurisdiction
of organization of such Grantor, (y) the organizational identification number of
such Grantor;

(iii) the full legal name of such Grantor is as set forth on Schedule 1(a) to
the Perfection Certificate and it has not done in the last five (5) years
preceding the

 

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date hereof, and does not do, as of the date hereof, business under any other
corporate or organizational name except for those names set forth on Schedule
1(a) or 1(b) to the Perfection Certificate;

(iv) except as provided on Schedule 1(b) or (c) to the Perfection Certificate it
has not changed its name, jurisdiction of organization, chief executive office
or sole place of business (or principal residence if such Grantor is a natural
person) or its corporate form within the five (5) years preceding the date
hereof;

(v) set forth on Schedule 2 to the Perfection Certificate the jurisdiction where
the chief executive office or sole place of business, as the case may be, of
such Grantor is located;

(vi) (A) this Agreement is effective to create in favor of the Collateral Agent
for the benefit of the Secured Parties, legal, valid and enforceable Liens on,
and security interest in, the Collateral and, (i) when financing statements and
other filings in appropriate form are filed in the offices specified on Schedule
6 to the Perfection Certificate, and (ii) upon the taking of possession or
control by the Collateral Agent of the Collateral with respect to which a
security interest may be perfected only by possession or control (which
possession or control shall be given to the Collateral Agent to the extent
possession or control by the Collateral Agent is required by this Agreement,
subject to the Intercreditor Agreements), the Liens created by this Agreement
shall constitute fully perfected Liens on, and security interests in, all right,
title and interest of the grantors in the Collateral to the extent perfection is
required in accordance with the terms of this Agreement (other than such
Collateral in which a security interest cannot be perfected under the UCC as in
effect at the relevant time in the relevant jurisdiction by the filing of a
financing statement or possession or control by the secured party), in each case
subject to (i) no Liens other than Permitted Liens and (ii) the terms of the
Intercreditor Agreements;

(B) When each Intellectual Property Security Agreement is filed in the United
States Patent and Trademark Office and the United States Copyright Office, as
applicable, such Intellectual Property Security Agreement shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in such of the Intellectual Property as consists of
Patents and Trademarks registered or applied for with the United States Patent
and Trademark Office or Copyrights registered or applied for with the United
States Copyright Office, as the case may be, in each case to the extent
perfection is required in accordance with the terms of this Agreement and in
each case subject to no Liens other than Permitted Liens; and

(C) Each Security Document (other than Mortgages) delivered pursuant to
Section 3.11 and Article XI of the Indenture creates in favor of the Collateral
Agent, for the benefit of the Secured Parties, legal, valid and enforceable
Liens on, and security interests in, all of the Grantors’ right, title and
interest in and to the Collateral described thereunder, and such Security
Document constitutes fully perfected Liens on, and security interests in, all
right, title and interest of the Grantors in such Collateral (to the extent
intended to be created thereby and required to be perfected under the
Indenture), in each case subject to no Liens other than Permitted Liens;

 

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(vii) the fair market value of Collateral that constitutes, or is the Proceeds
of, “farm products” (as defined in the UCC) does not exceed $10,000,000 in the
aggregate;

(viii) the fair market value of Collateral that is “as extracted collateral” (as
defined in the UCC) and any timber to be cut does not exceed $10,000,000 in the
aggregate; and

(ix) no Pledged Debt (other than promissory notes with a face amount not in
excess of $10,000,000 in the aggregate issued in connection with the extension
of trade credit by any Grantor in the ordinary course of business) in excess of
$10,000,000 in the aggregate is evidenced by any Instrument or Chattel Paper
that has not been delivered to the Collateral Agent, properly endorsed for
transfer, to the extent delivery is required by Section 4.4.

(b) Covenants and Agreements. Each Grantor hereby covenants and agrees:

(i) that, except for the security interest created by this Agreement, it shall
not create or suffer to exist any Lien upon or with respect to any of the
Collateral, except Permitted Liens, and such Grantor shall maintain the security
interest created by this Agreement as a perfected security interest having at
least the priority described in Section 4.1(a)(vi) of this Agreement; and

(ii) to deliver to the Collateral Agent after the occurrence of any of the
changes described in Section 3.11 or Section 11.5 of the Indenture, a completed
Pledge Supplement, duly executed by such Grantor, together with all applicable
supplements to Schedules thereto, in each case, within the time period set forth
therein.

4.2 [Reserved].

4.3 Receivables.

(a) Representations and Warranties. Subject to the Intercreditor Agreements,
each Grantor represents and warrants, on the Issue Date, that no Receivables in
excess of $10,000,000 in the aggregate is evidenced by, or constitutes, an
Instrument or Chattel Paper which has not been delivered to, or otherwise
subjected to the control of, the Collateral Agent to the extent required by, and
in accordance with Section 4.3(b) or Section 4.5.

(b) Delivery and Control of Electronic Chattel Paper Relating to Receivables.
During the continuance of an Event of Default and upon the request of the
Collateral Agent, but subject to the Intercreditor Agreements, with respect to
any Receivables in excess of $10,000,000 in the aggregate which would constitute
“electronic chattel paper” under Article 9 of the UCC (but not otherwise
required to be delivered or subjected to the control of the Collateral Agent
pursuant to Section 4.5 hereof), each Grantor shall take all necessary steps to
give the Collateral Agent control over such Receivables (within the meaning of
Section 9-105 of

 

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the UCC): (i) with respect to any such Receivables in existence on the date
hereof, to the extent required by the Indenture and (ii) with respect to any
such Receivables hereafter arising, promptly upon such Grantor acquiring rights
therein.

4.4 Investment Related Property.

(a) Representations and Warranties. Each Grantor represents and warrants on the
Issue Date that:

(i) as of the 14th day following the Issue Date, Schedules 8(a) and 8(b) to the
Perfection Certificate shall set forth under the headings “Pledged Stock,”
“Pledged LLC Interests,” “Pledged Partnership Interests” and “Pledged Trust
Interests,” respectively, all of the Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and Pledged Trust Interests owned by any Grantor
and such Pledged Equity Interests of the Issuer or any Restricted Subsidiary
shall constitute the percentage of issued and outstanding shares of stock,
percentage of membership interests, percentage of partnership interests or
percentage of beneficial interest of the Issuer or such Restricted Subsidiary
indicated on such Schedules 8(a) and 8(b) to the Perfection Certificate;

(ii) all of the Pledged Equity Securities, to the extent the issuer of such
Pledged Equity Securities is, or becomes, a Subsidiary of Holdings, has been, in
the case of Pledged Stock, duly authorized, validly issued and is fully paid and
nonassessable (in each case, to the extent such concepts are applicable);

(iii) without limiting the generality of Section 4.1(a)(vi) above, no consent
required by the organizational documents of any Person (excluding any joint
ventures) including any other general or limited partner, any other member of a
limited liability company, any other shareholder or any other trust beneficiary
is necessary in connection with the creation or perfection of the security
interest of the Collateral Agent in any Pledged Equity Interests (to the extent
issued by a Grantor), the first priority status (with respect to Fixed Asset
Collateral) and second priority status (with respect to Current Asset
Collateral), the status of the security interest of the Collateral Agent in the
Pledged Equity Interests (to the extent issued by a Grantor), or the exercise by
the Collateral Agent of the voting or other rights provided for in this
Agreement or the exercise of remedies in respect thereof; and

(iv) Schedule 9 to the Perfection Certificate sets forth under the heading
“Pledged Debt” all of the Pledged Debt (other than promissory notes with a face
amount not in excess of $10,000,000 in the aggregate issued in connection with
the extension of trade credit by any Grantor in the ordinary course of business)
in excess of $10,000,000 in the aggregate owned by any Grantor.

(b) Covenants and Agreements. Each Grantor hereby covenants and agrees that:

(i) in the event such Grantor receives any dividends, interest or distributions
on any Investment Related Property, or any securities or other property upon the
merger, consolidation, liquidation or dissolution of any issuer of any
Investment

 

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Related Property, then such dividends, interest or distributions and securities
or other property (except to the extent constituting Excluded Capital Stock or
Excluded Assets) shall be included in the definition of Collateral without
further action;

(ii) each Grantor consents to the grant by each other Grantor of a security
interest in all Investment Related Property constituting Collateral hereunder to
the Collateral Agent and, without limiting the foregoing, consents to the
transfer of any Pledged Partnership Interest and any Pledged LLC Interest, in
each case to the extent constituting Collateral hereunder, to the Collateral
Agent or its nominee following the occurrence and during the continuance of an
Event of Default and to the substitution of the Collateral Agent or its nominee
as a partner in any partnership or as a member in any limited liability company
with all the rights and powers related thereto;

(iii) each Grantor agrees that it shall not grant “control” (within the meaning
of such term under Article 9-106 of the UCC) over any Investment Related
Property to any Person other than the Collateral Agent (except to the extent
permitted by the Indenture and the Intercreditor Agreements, including without
limitation, with respect to any Investment Related Property that is subject to a
Permitted Lien).

(c) Delivery and Control. Subject to the Intercreditor Agreements, with respect
to any Investment Related Property of any Grantor constituting Collateral in an
amount in excess of $10,000,000 (which limitation shall not apply to any Equity
Interests in Subsidiaries) that is (A) represented by a certificate or an
Instrument (other than any Investment Related Property credited to a Securities
Account), such Grantor shall cause such certificate or Instrument to be
delivered to the Collateral Agent, indorsed in blank by an “effective
indorsement” (as defined in Section 8-107 of the UCC) or (B) an Uncertificated
Security (other than any Uncertificated Securities credited to a Securities
Account), such Grantor shall cause the issuer of such Uncertificated Security to
register the Collateral Agent as the registered owner thereof on the books and
records of the issuer. In the event any such Investment Related Property is
acquired after the date hereof, the applicable Grantor shall deliver to the
Collateral Agent a completed Pledge Supplement, duly executed by such Grantor,
together with all applicable supplements to Schedules thereto, reflecting such
new Investment Related Property, in each case, to the extent otherwise required
by the Indenture and/or the Intercreditor Agreements; provided, that it is
understood and agreed that, notwithstanding the foregoing, the security interest
of the Collateral Agent shall attach to all Investment Related Property
constituting Collateral immediately upon any Grantor’s acquisition of rights
therein and shall not be affected by the failure of any Grantor to deliver a
Pledge Supplement as required hereby. Notwithstanding anything to the contrary
in the foregoing, in no event shall any Grantor be required to deliver any
certificates or Instruments evidencing any Excluded Capital Stock or Excluded
Assets pursuant to this Section 4.4(c).

(d) Voting and Distributions. So long as no Event of Default shall have occurred
and be continuing and such Grantor has received notice from the Collateral Agent
to refrain from doing so, each Grantor shall be entitled to exercise or refrain
from exercising any and all voting and other consensual rights pertaining to the
Investment Related Property or any part thereof.

 

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4.5 Delivery of Instruments and Chattel Paper. Subject to the Intercreditor
Agreements, if any amount in excess of $10,000,000 payable under or in
connection with any Collateral owned by any Grantor shall be or become evidenced
by an Instrument or Chattel Paper, such Grantor shall promptly deliver such
Instrument or Chattel Paper to the Collateral Agent, duly indorsed in a manner
reasonably satisfactory to the Collateral Agent, or, if requested by the
Collateral Agent after the occurrence and during the continuance of an Event of
Default, shall mark all such Instruments and Chattel Paper with the following
legend: “This writing and the obligations evidenced or secured hereby are
subject to the security interest of Wilmington Trust, National Association, as
Collateral Agent.”

4.6 Investment Accounts.

(a) Representations and Warranties. Each Grantor hereby represents and warrants,
on the Issue Date that:

(i) Schedule 12 to the Perfection Certificate sets forth under the headings
“Securities Accounts” and “Commodities Accounts,” respectively, all of the
Securities Accounts and Commodities Accounts in which each Grantor has an
interest. Each Grantor is the sole entitlement holder of each such Securities
Account and Commodity Account, and such Grantor has not consented to, and is not
otherwise aware of, any Person (other than the Collateral Agent pursuant hereto
and, subject to the Intercreditor Agreements, the ABL Collateral Agent and the
Term B Credit Agreement Collateral Agent) having “control” (within the meanings
of Sections 8-106 and 9-106 of the UCC) over, or any other interest in (other
than Permitted Liens), any such Securities Account or Commodity Account or
securities or other property credited thereto; and

(ii) Schedule 12 to the Perfection Certificate sets forth under the headings
“Deposit Accounts” all of the Deposit Accounts in which each Grantor has an
interest. Each Grantor is the sole account holder of each such Deposit Account,
and such Grantor has not consented to, and is not otherwise aware of, any Person
(other than the Collateral Agent pursuant hereto and, subject to the
Intercreditor Agreements, the ABL Collateral Agent and the Term B Credit
Agreement Collateral Agent) having either sole dominion and control (within the
meaning of common law) or “control” (within the meanings of Section 9-104 of the
UCC) over, or any other interest in (other than Permitted Liens), any such
Deposit Account or any money or other property deposited therein.

(b) Delivery and Control

(i) Except as otherwise permitted under the Indenture (including, without
limitation, with respect to any Investment Related Property subject to a
Permitted Lien), no Grantor shall grant “control” (within the meaning of such
term under Article 9-106 of the UCC) over any Investment Related Property to any
Person other than the Collateral Agent or its nominee, and, subject to the
Intercreditor Agreements, the ABL Collateral Agent and the Term B Credit
Agreement Collateral Agent.

 

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(ii) Upon entering into a Deposit Account Control Agreement covering a Deposit
Account, the Collateral Agent will have a security interest in each such Deposit
Account (other than the Excluded Accounts), which security interest is perfected
by “control” (within the meaning of such term under Article 9-106 of the UCC).
So long as any Obligations under the ABL Credit Agreement are outstanding and
similar requirements on the Grantors exist with respect thereto, no Grantor
shall hereafter establish and maintain any Deposit Account (other than any
Excluded Account) unless such Bank and such Grantor shall promptly enter into
and deliver to the Collateral Agent a Deposit Account Control Agreement with
respect to such Deposit Account. The Collateral Agent agrees with each Grantor
that the Collateral Agent shall not give any instructions directing the
disposition of funds from time to time credited to any Deposit Account or
withhold any withdrawal rights from such Grantor with respect to funds from time
to time credited to any Deposit Account (A) at any time, in the case of an
Excluded Account, and (B) unless an Event of Default has occurred and is
continuing. Each Grantor agrees that once the Collateral Agent sends an
instruction or notice to a Bank exercising its “control” (within the meaning of
such term under Article 9-106 of the UCC) over any Deposit Account (that is not
any Excluded Account)) such Grantor shall not give any instructions or orders
with respect to such Deposit Account including, without limitation, instructions
for distribution or transfer of any funds in such Deposit Account.

(iii) Upon entering into an applicable Control Agreement covering a Securities
Account or Commodity Account, the Collateral Agent will have a security interest
in each such Securities Account and Commodity Account, which security interest
is perfected by “control” (within the meaning of such term under Article 9-106
of the UCC). So long as any Obligations under the ABL Credit Agreement are
outstanding and similar requirements on the Grantors exist with respect thereto,
no Grantor shall hereafter establish and maintain any Securities Account or
Commodity Account with any Securities Intermediary or Commodity Intermediary
unless such Securities Intermediary or Commodity Intermediary, as the case may
be, and such Grantor shall promptly enter into and deliver a Control Agreement
with respect to such Securities Account or Commodity Account, as the case may
be. The Collateral Agent agrees with each Grantor that the Collateral Agent
shall not give any entitlement orders or instructions or directions to any
issuer of uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by such Grantor, unless an Event of Default has
occurred and is continuing or, after giving effect to any such investment and
withdrawal rights, would occur. Each Grantor agrees that once the Collateral
Agent sends an instruction or notice to a Securities Intermediary or Commodity
Intermediary exercising its “control” (within the meaning of such term under
Article 9-106 of the UCC) over any Securities Account and Commodity Account such
Grantor shall not give any instructions or orders with respect to such
Securities Account and Commodity Account including, without limitation,
instructions for investment, distribution or transfer of any Investment Property
or financial asset maintained in such Securities Account or Commodity Account.

(iv) As between the Collateral Agent and the Grantors, the Grantors shall bear
the investment risk with respect to the Investment Property and Pledged

 

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Securities, and the risk of loss of, damage to, or the destruction of the
Investment Property and Pledged Securities, whether in the possession of, or
maintained as a Security Entitlement or deposit by, or subject to the “control”
(within the meaning of such term under Article 9-106 of the UCC) of, the
Collateral Agent, a Securities Intermediary, a Commodity Intermediary, any
Grantor or any other person.

4.7 Letter of Credit Rights.

Each Grantor hereby represents and warrants, on the Issue Date that all letters
of credit with a face amount in excess of $10,000,000 to which such Grantor has
rights are listed on Schedule 13 to the Perfection Certificate.

4.8 Intellectual Property.

(a) Representations and Warranties. Each Grantor hereby represents and warrants,
on the Issue Date that, except as could not reasonably be expected to have a
Material Adverse Effect, no settlements or consents, covenants not to sue,
non-assertion assurances, or releases have been entered into by Grantor or to
which Grantor is bound that materially and adversely affect Grantor’s rights to
own or use any Material Intellectual Property.

(b) Covenants and Agreements. Each Grantor hereby covenants and agrees as
follows:

(i) except where such act, failure or omission could not reasonably be expected
to have a Material Adverse Effect, it shall not do any act or omit to do any act
whereby any of the Material Intellectual Property of such Grantor may lapse, or
become abandoned, dedicated to the public, invalid, or unenforceable, or placed
in the public domain, or, in the case of a Trade Secret, lose its competitive
value, or which would adversely affect the validity, grant, or enforceability of
the security interest granted therein;

(ii) except as could not reasonably be expected to have a Material Adverse
Effect, it shall not, with respect to any Trademarks constituting Material
Intellectual Property, cease the use of any of such Trademarks or fail to
maintain the level of the quality of products sold and services rendered under
any of such Trademark at a level at least substantially consistent with the
quality of such products and services as of the date hereof, and each Grantor
shall take all steps necessary to insure that licensees of such Trademarks use
such consistent standards of quality;

(iii) except where such failure to register could not reasonably be expected to
have a Material Adverse Effect, it shall, promptly following the creation or
acquisition of any Copyrightable work constituting Material Intellectual
Property, apply to register the Copyright in the United States Copyright Office;

(iv) except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect, it shall promptly notify the Collateral Agent if it
knows that any item of Material Intellectual Property may become (x) abandoned
or dedicated to the public or placed in the public domain, (y) invalid or
unenforceable, or (z)

 

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subject to any adverse determination or development (including the institution
of proceedings) in any action or proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any state registry;

(v) except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect, it shall take all reasonable steps in the United States
Patent and Trademark Office, the United States Copyright Office or any state
registry, to pursue any application and maintain any registration of each
Trademark, Patent, and Copyright owned by any Grantor and material to its
business which is now or shall become included in the Material Intellectual
Property including, but not limited to, those items on Schedules 10(a), 10(b),
and 10(c) to the Perfection Certificate (as such schedules may be amended or
supplemented from time to time);

(vi) except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect, in the event that any Material Intellectual Property
owned by or exclusively licensed to any Grantor is or has been infringed,
misappropriated, or diluted by a third party, such Grantor shall promptly take
all reasonable actions to stop such infringement, misappropriation, or dilution
and protect its rights in such Material Intellectual Property including, but not
limited to, the initiation of a suit for injunctive relief and to recover
damages;

(vii) except as could not reasonably be expected to have a Material Adverse
Effect, it shall not (and shall not permit any licensee or sublicensee thereof
under its control to) (A) do any act or omit to do any act whereby any portion
of the Copyrights may become invalidated or otherwise impaired and (B) do any
act or omit to do any act whereby any portion of the Copyrights may fall into
the public domain;

(viii) except as could not reasonably be expected to have a Material Adverse
Effect, it shall not (nor shall the licensees or sublicensees under its control)
do any act that uses any Material Intellectual Property to infringe,
misappropriate, or violate the intellectual property rights of any other Person;

(ix) except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect, it shall take all steps reasonably necessary to
protect the secrecy of all Trade Secrets, including, without limitation,
entering into confidentiality agreements with employees and labeling and
restricting access to secret information and documents;

(x) each Grantor agrees, within fourteen (14) days of the Issue Date, to provide
the Collateral Agent with a complete and accurate list of all U.S. registered
and applied for Intellectual Property owned by such Grantor, and to execute all
documents necessary to perfect the security interest granted herein; and

(xi) Each Grantor will take reasonable steps to clear and correct defects in the
chain of title (including any Liens other than Permitted Liens) of the
Intellectual Property owned by such Grantor by making appropriate filings with
the United States Patent and Trademark Office and United States Copyright Office
promptly upon learning

 

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of such defect and will provide evidence of such filings promptly upon receipt
thereof from the United States Patent and Trademark Office and United States
Copyright Office, as applicable.

4.9 Commercial Tort Claims.

(a) Representations and Warranties. Each Grantor hereby represents and warrants,
on the Issue Date that Schedule 11 to the Perfection Certificate sets forth all
Commercial Tort Claims of each Grantor on and as of the Issue Date in excess of
$10,000,000 individually.

(b) Covenants and Agreements. Each Grantor hereby covenants and agrees that if
it shall acquire any interest in any Commercial Tort Claim in excess of
$10,000,000 individually (whether from another Person or because such Commercial
Tort Claim shall have come into existence) hereafter arising (i) it shall
deliver, at such time as it is required to deliver an Officer’s Certificate
pursuant to Section 11.10(b) of the Indenture, to the Collateral Agent a notice
of the existence and nature of such Commercial Tort Claim, along with a
completed Pledge Supplement, duly executed by such Grantor, together with all
applicable supplements to Schedules thereto, identifying such new Commercial
Tort Claims, (ii) the provisions of Section 2.1 shall apply to such Commercial
Tort Claim and (iii) such Grantor shall authenticate, deliver to the Collateral
Agent and file with the applicable filing office, an appropriately completed
UCC-1 financing statement with respect to such Commercial Tort Claims to the
extent necessary to obtain, on behalf of the Secured Parties, a perfected
security interest in all such Commercial Tort Claims having the priority
specified in the ABL Intercreditor Agreement.

 

SECTION 5. FURTHER ASSURANCES; ADDITIONAL GRANTORS.

5.1 Further Assurances.

(a) Each Grantor agrees that from time to time, at the expense of such Grantor,
that it shall promptly execute and deliver all further instruments and documents
to the extent necessary to comply with Section 11.4 of the Indenture. Without
limiting the generality of the foregoing, each Grantor shall:

(i) file such financing or continuation statements, or amendments thereto, and
execute and deliver such other agreements, instruments, endorsements, powers of
attorney or notices, as may be necessary, or as the Collateral Agent may
reasonably request, in order to perfect and preserve the security interests
granted or purported to be granted hereby;

(ii) upon the reasonable request by the Collateral Agent, allow inspection of
the Collateral by the Collateral Agent, or persons designated by the Collateral
Agent provided, that the Collateral Agent (or persons designated by the
Collateral Agent) may make no more than one inspection per calendar year unless
an Event of Default has occurred and is continuing; and

(iii) upon the occurrence and during the continuance of any Event of Default, at
the Collateral Agent’s reasonable request, appear in and defend any action or

 

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proceeding that may affect such Grantor’s interest in or the Collateral Agent’s
security interest in all or any part of the Collateral (other than any action or
proceeding involving the holder of a Permitted Lien, solely to the extent
related to the Collateral that is the subject of such Permitted Lien).

(b) Irrespective of any request by the Collateral Agent or the Trustee pursuant
to Section 11.4 of the Indenture, each Grantor shall take all actions necessary
to ensure the recordation of appropriate evidence of the liens and security
interest granted hereunder in the Intellectual Property with any intellectual
property registry in which said Intellectual Property is registered or in which
an application for registration is pending including, without limitation, the
United States Patent and Trademark Office, the United States Copyright Office,
the various Secretaries of State and the foreign counterparts on any of the
foregoing;

(c) Each Grantor hereby authorizes the Collateral Agent and its Affiliates,
counsel and other representatives, at any such time and from time to time, to
file a Record or Records, including, without limitation, financing or
continuation statements, and amendments thereto or any other filing or recording
documents or instruments with respect to the Collateral, in any jurisdictions
and with any filing offices as the Collateral Agent may determine, in its sole
discretion, are necessary or advisable to perfect or otherwise protect the
security interest granted to the Collateral Agent herein. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Collateral Agent may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to the Collateral Agent herein,
including, without limitation, describing such property as “all assets” or “all
personal property, whether now owned or hereafter acquired, developed or
created” or words of similar effect. A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.

(d) Each Grantor hereby authorizes the Collateral Agent to modify this Agreement
after obtaining such Grantor’s approval of or signature to such modification by
amending Schedule 10(a), 10(b), or 10(c) to the Perfection Certificate, as
applicable (as such schedules may be amended or supplemented from time to time)
to include reference to any right, title or interest in any existing
Intellectual Property or any Intellectual Property acquired or developed by any
Grantor after the execution hereof or to delete any reference to any right,
title or interest in any Intellectual Property in which any Grantor no longer
has or claims any right, title or interest.

5.2 Additional Grantors. From time to time subsequent to the date hereof,
additional Persons may become parties hereto as additional Grantors (each, an
“Additional Grantor”), by executing a Counterpart Agreement in the form attached
hereto as Exhibit C. Upon delivery of any such Counterpart Agreement to the
Collateral Agent, notice of which is hereby waived by Grantors, each Additional
Grantor shall be a Grantor and shall be as fully a party hereto as if the
Additional Grantor were an original signatory hereto. Each Grantor expressly
agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by any
election of Collateral Agent not to cause any Subsidiary of the Issuer to become
an Additional Grantor hereunder. This Agreement shall be fully effective as to
any Grantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Grantor hereunder.

 

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SECTION 6. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

6.1 Power of Attorney.

(a) Subject to the terms of the Intercreditor Agreements, each Grantor hereby
irrevocably appoints the Collateral Agent and any officer or agent thereof (such
appointment being coupled with an interest) as such Grantor’s attorney-in-fact,
with full authority in the place and stead of such Grantor and in the name of
such Grantor, to take any action and to execute any instrument that the
Collateral Agent may deem reasonably necessary or advisable, in each case
without notice to or assent by such Grantor, to accomplish the purposes of this
Agreement, including, without limitation, the following:

(i) upon the occurrence and during the continuance of any Event of Default, to
obtain and adjust insurance required to be maintained by such Grantor or paid to
the Collateral Agent pursuant to the Indenture or otherwise deemed necessary by
the Collateral Agent to preserve the value of the Collateral;

(ii) upon the occurrence and during the continuance of any Event of Default, to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(iii) upon the occurrence and during the continuance of any Event of Default, to
receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clause (ii) above;

(iv) upon the occurrence and during the continuance of any Event of Default, to
(A) file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Collateral and (B) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral and settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem
appropriate;

(v) upon the occurrence and during the continuance of any Event of Default,
direct any party liable for any payment under any Collateral to make payment of
any moneys due or to become due thereunder directly to the Collateral Agent or
as the Collateral Agent may direct;

(vi) upon the occurrence and during the continuance of any Event of Default, to
execute, in connection with any sale provided for in Section 7.1 or 7.5, any
endorsement, assignment or other instrument of conveyance or transfer with
respect to the Collateral;

 

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(vii) upon the occurrence and during the continuance of an Event of Default,
assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Trademark pertains) throughout the world for such
term or terms, on such conditions, and in such manner as the Collateral Agent
shall in its sole discretion determine, including the execution and filing of
any document necessary to effectuate or record such assignment;

(viii) to prepare and file any UCC financing statements against such Grantor as
debtor;

(ix) to prepare, sign, and file for recordation in any intellectual property
registry, appropriate evidence of the lien and security interest granted herein
in the Intellectual Property and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby in the name of such Grantor as
debtor;

(x) upon the occurrence and during the continuance of any Event of Default, to
pay or discharge taxes and Liens (other than Permitted Liens) levied or placed
on or threatened against the Collateral; and

(xi) upon the occurrence and during the continuance of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
the Collateral Agent’s option and such Grantor’s expense, at any time or from
time to time, all acts and things that the Collateral Agent deems reasonably
necessary to protect, preserve or realize upon the Collateral and the Collateral
Agent’s security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

(b) The reasonable, out-of-pocket expenses of the Collateral Agent incurred in
connection with actions undertaken as provided in this Section 6.1 shall be
payable by such Grantor to the Collateral Agent promptly following the receipt
of a reasonably detailed written invoice therefor.

(c) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof.

6.2 No Duty on the Part of Collateral Agent or Secured Parties. The powers
conferred on the Collateral Agent hereunder are solely to protect the interests
of the Secured Parties in the Collateral and shall not impose any duty upon the
Collateral Agent or any Secured Party to exercise any such powers. The
Collateral Agent and the Secured Parties shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their respective officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct or the
gross negligence or willful misconduct of their officers, directors, employees
or agents.

6.3 Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Agreement with respect to
any action taken by

 

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the Collateral Agent or the exercise or non-exercise by the Collateral Agent of
any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between the
Collateral Agent and the other Secured Parties, be governed by the Indenture and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Collateral Agent and the Grantors, the
Collateral Agent shall be conclusively presumed to be acting as agent for the
Secured Parties with full and valid authority so to act or refrain from acting,
and no Grantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

 

SECTION 7. REMEDIES.

7.1 Generally.

(a) If any Event of Default shall have occurred and be continuing, subject to
the terms of the Intercreditor Agreements, the Collateral Agent may exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations or otherwise available to it at law or in
equity, all the rights and remedies of the Collateral Agent on default under the
UCC (whether or not the UCC applies to the affected Collateral) to collect,
enforce or satisfy any Secured Obligations then owing, whether by acceleration
or otherwise, and also may pursue any of the following separately, successively
or simultaneously:

(i) require any Grantor to, and each Grantor hereby agrees that it shall at its
expense and promptly upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated by the Collateral
Agent that is reasonably convenient to both parties, whether at such Grantor’s
premises or elsewhere;

(ii) peacefully enter onto the property where any Collateral is located and take
possession thereof with or without judicial process;

(iii) prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent the Collateral Agent reasonably deems necessary; and

(iv) without notice except as specified below or under the UCC, sell, assign,
lease, give option or options to purchase, license (on an exclusive or
nonexclusive basis) or otherwise dispose of the Collateral or any part thereof
(or contract to do any of the following) in one or more parcels at public or
private sale or sales, at any exchange, broker’s board, any of the Collateral
Agent’s offices or elsewhere, for cash or on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as the
Collateral Agent may deem commercially reasonable without assumption of any
credit risk.

(b) If any Event of Default shall have occurred and be continuing, the
Collateral Agent or any Secured Party may be the purchaser of any or all of the
Collateral at any public or private (to the extent the portion of the Collateral
being privately sold is of a kind that is customarily sold on a recognized
market or the subject of widely distributed standard price

 

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quotations) sale in accordance with the UCC and the Collateral Agent, as
collateral agent for and representative of the Secured Parties, shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such sale
made in accordance with the UCC, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable by the
Collateral Agent at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of a proposed
sale or other disposition shall be required by law, at least ten (10) days’
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable and
proper notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Grantor agrees that it would not be commercially unreasonable for the Collateral
Agent to dispose of the Collateral or any portion thereof by using Internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets. Each Grantor hereby waives any claims against the
Collateral Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Collateral Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, each Grantor shall be
liable for the deficiency and the fees and disbursements of any attorneys
employed by the Collateral Agent or any other Secured Party to collect such
deficiency. Nothing in this Section shall in any way alter the rights of the
Collateral Agent hereunder.

(c) If any Event of Default shall have occurred and be continuing, the
Collateral Agent may sell the Collateral without giving any warranties as to the
Collateral. The Collateral Agent may specifically disclaim or modify any
warranties of title or the like. This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

(d) The Collateral Agent shall have no obligation to marshal any of the
Collateral.

(e) To the extent permitted by applicable law, no Grantor shall assert, and each
Grantor hereby waives, any claim against the Collateral Agent, and each of its
Affiliates, directors, employees, attorneys, agents or sub-agents, on any theory
of liability, for special, indirect, consequential or punitive damages
(including, without limitation, any loss of profits, business or anticipated
savings) (as opposed to direct or actual damages), whether or not the claim
therefor is based on contract, tort or duty imposed by any applicable legal
requirement, arising out of, in connection with, arising out of, as a result of,
or in any way related to, this Agreement or any agreement or instrument
contemplated hereby or referred to herein, the transactions contemplated hereby,
or any act or omission or event occurring in connection

 

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therewith, and each Grantor hereby waives, releases and agrees not to sue upon
any such claim or any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.

7.2 Application of Proceeds. Subject to the terms of the Intercreditor
Agreements, if any Event of Default shall have occurred and be continuing, all
proceeds received by the Collateral Agent in respect of any sale, any collection
from, or other realization upon all or any part of the Collateral shall be
applied in full or in part by the Collateral Agent against, the Secured
Obligations in the order of priority set forth in Section 6.10 of the Indenture.

7.3 Sales on Credit. If Collateral Agent sells any of the Collateral upon credit
in connection with the exercise of remedies pursuant to this Section 7, Grantor
will be credited only with payments actually made by purchaser and received by
Collateral Agent and applied to indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, Collateral Agent may resell the
Collateral and Grantor shall be credited with proceeds of the sale.

7.4 Deposit Accounts. If any Event of Default shall have occurred and be
continuing, the Collateral Agent, subject to the Intercreditor Agreements, may
apply the balance from any Deposit Account or instruct the bank at which any
Deposit Account is maintained to pay the balance of any Deposit Account to or
for the benefit of the Collateral Agent to be applied subject to the
Intercreditor Agreements to the Secured Obligations in the order of priority set
forth in Section 6.10 of the Indenture.

7.5 Investment Related Property.

(a) If an Event of Default has occurred and is continuing, each Grantor
recognizes that the Collateral Agent may be unable to effect a public sale of
any Investment Related Property by reason of certain prohibitions contained in
the Securities Act and applicable state securities laws or may determine that a
public sale is impracticable or not commercially reasonable and accordingly may
resort to one or more private sales thereof to a restricted purchaser or group
of purchasers who will agree, among other things, to acquire the Investment
Related Property for their own account, for investment and not with a view to
the distribution or resale thereof. Each Grantor acknowledges that any such
private sale may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions (including a public offering
made pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, each Grantor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that the Collateral Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Investment Related Property for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it.

(b) [Intentionally Omitted].

(c) During the continuance of an Event of Default, and subject to the terms of
the Intercreditor Agreements, upon notice by the Collateral Agent to the
relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to
receive any Proceeds of the Pledged

 

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Collateral and make application thereof to the Obligations in the order set
forth in the Indenture and (ii) the Collateral Agent or its nominee may exercise
(A) any voting, consent, corporate and other right pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case may
be, of the relevant issuer or issuers of Pledged Collateral or otherwise and
(B) any right of conversion, exchange and subscription and any other right,
privilege or option pertaining to the Pledged Collateral as if it were the
absolute owner thereof (including the right to exchange at its discretion any of
the Pledged Collateral upon the merger, amalgamation, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
equivalent structure of any issuer of Pledged Stock, the right to deposit and
deliver any Pledged Collateral with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Collateral Agent may determine), all without liability except to account for
property actually received by it; provided, however, that the Collateral Agent
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

(d) In order to permit the Collateral Agent to exercise the voting and other
consensual rights that it may be entitled to exercise pursuant hereto after an
Event of Default has occurred and is continuing and to receive all dividends and
other distributions that it may be entitled to receive hereunder, (i) each
Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to the Collateral Agent all such proxies, dividend payment orders and
other instruments as the Collateral Agent may from time to time reasonably
request and (ii) without limiting the effect of clause (i) above, such Grantor
hereby grants to the Collateral Agent an irrevocable proxy to vote all or any
part of the Pledged Collateral and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Collateral would be
entitled (including giving or withholding written consents of shareholders,
partners or members, as the case may be, calling special meetings of
shareholders, partners or members, as the case may be, and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Collateral on the
record books of the issuer thereof) by any other person (including the issuer of
such Pledged Collateral or any officer or agent thereof) during the continuance
of an Event of Default.

(e) Each Grantor hereby expressly authorizes and instructs each issuer of any
Pledged Collateral constituting Collateral pledged hereunder by such Grantor to
(i) comply with any instruction received by it from the Collateral Agent in
writing that (A) states that an Event of Default has occurred and is continuing
and (B) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from such Grantor, and each Grantor agrees that
such issuer shall be fully protected in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividend or other payment with respect to
such Pledged Collateral directly to the Collateral Agent.

(f) The Collateral Agent shall have the right at any time following the
occurrence and during the continuance of an Event of Default, in its discretion
and without notice to the Grantor, to transfer to or to register in its name or
in the name of its nominees any Investment Related Property constituting
Collateral;

(g) The Collateral Agent shall have the right at any time following the
occurrence and during the continuance of an Event of Default, to exchange any
certificate or instrument representing or evidencing any Investment Related
Property constituting Collateral for certificates or instruments of smaller or
larger denominations.

 

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7.6 Receivables.

(a) In addition to, and not in substitution for, any similar requirement in the
Indenture, subject to the terms of the Intercreditor Agreements, if required by
the Collateral Agent at any time during the continuance of an Event of Default
and upon the exercise of remedies pursuant to this Section 7, any payment of
Receivables, when collected by any Grantor, shall be forthwith deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent, in an Approved Deposit Account or a Cash Collateral Account,
subject to withdrawal by the Collateral Agent as provided in Section 7.8).

(b) Subject to the terms of the Intercreditor Agreements, at the Collateral
Agent’s request, during the continuance of an Event of Default and upon the
exercise of remedies pursuant to this Section 7, the Collateral Agent may
notify, or require any Grantor to notify, each Person maintaining a lockbox or
similar arrangement to which Account Debtors under any Receivables have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to the Collateral Agent to be applied to the
Secured Obligations in the order of priority set forth in the Indenture.

(c) Subject to the terms of the Intercreditor Agreements, at the Collateral
Agent’s request, during the continuance of an Event of Default, the Collateral
Agent may enforce, at the expense of such Grantor, collection of any such
Receivables and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done.

(d) Subject to the terms of the Intercreditor Agreements, at the Collateral
Agent’s request, during the continuance of an Event of Default, upon the
exercise of remedies pursuant to this Section 7 and subject to the Intercreditor
Agreements, each Grantor shall deliver to the Collateral Agent all available
original and other documents evidencing, and relating to, the agreements and
transactions that gave rise to the payments in respect of Receivables, including
all available original orders, invoices and shipping receipts.

(e) Subject to the terms of the Intercreditor Agreements, the Collateral Agent
may, upon notice, at any time during the continuance of an Event of Default and
upon the exercise of remedies pursuant to this Section 7, limit or terminate the
authority of a Grantor to collect its amounts with respect to Receivables.

(f) Subject to the terms of the Intercreditor Agreements, the Collateral Agent
in its own name or in the name of others may at any time during the continuance
of an Event of Default communicate, in coordination with the applicable Grantor,
with Account Debtors to verify with them to the Collateral Agent’s satisfaction
the existence, amount and terms of any amounts due with respect to any
Receivable.

(g) Upon the request of the Collateral Agent at any time during the continuance
of an Event of Default and upon the exercise of remedies pursuant to this
Section 7,

 

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each Grantor shall notify Account Debtors that the Receivables have been
collaterally assigned to the Collateral Agent and that payments in respect
thereof shall be made directly to the Collateral Agent. In addition, the
Collateral Agent may at any time during the continuance of an Event of Default
(A) enforce such Grantor’s rights against such Account Debtors and (B) notify,
or require any Grantor to notify, any Account Debtor of the Collateral Agent’s
security interest in the Receivables and any Supporting Obligation and use
commercially reasonable efforts to keep in full force and effect any Supporting
Obligation or Collateral Support relating to any Receivable.

(h) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable for payments in respect of Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Collateral Agent nor any other Secured Party shall have any obligation or
liability under any agreement giving rise to a payment in respect of a
Receivable by reason of or arising out of this Agreement or the receipt by the
Collateral Agent nor any other Secured Party of any payment relating thereto,
nor shall the Collateral Agent nor any other Secured Party be obligated in any
manner to perform any obligation of any Grantor under or pursuant to any
agreement giving rise to a payment in respect of a Receivable, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts that may have been assigned
to it or to which it may be entitled at any time or times.

7.7 Intellectual Property.

(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default and upon the
exercise of remedies pursuant to this Section 7, subject to the terms of the
Intercreditor Agreements:

(i) the Collateral Agent shall have the right (but not the obligation) to bring
suit or otherwise commence any action or proceeding in the name of any Grantor,
the Collateral Agent or otherwise, in the Collateral Agent’s sole discretion, to
enforce any Intellectual Property, in which event such Grantor shall, at the
request of the Collateral Agent, do any and all lawful acts and execute any and
all documents required by the Collateral Agent in aid of such enforcement and
such Grantor shall promptly reimburse and indemnify the Collateral Agent as
provided in Section 7.6 of the Indenture in connection with the exercise of its
rights under this Section, and, to the extent that the Collateral Agent shall
elect not to bring suit to enforce any Intellectual Property as provided in this
Section, each Grantor agrees to use all reasonable measures, whether by action,
suit, proceeding or otherwise, to prevent the infringement or other violation of
any of such Grantor’s rights in the Material Intellectual Property by others and
for that purpose agrees to diligently maintain any action, suit or proceeding
against any Person so infringing as shall be necessary to prevent such
infringement or violation;

(ii) upon written demand from the Collateral Agent, each Grantor shall grant,
assign, convey or otherwise transfer to the Collateral Agent or such Collateral
Agent’s designee all of such Grantor’s right, title and interest in and to the
Material

 

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Intellectual Property and shall execute and deliver to the Collateral Agent such
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement;

(iii) each Grantor agrees that such an assignment and/or recording shall be
applied to reduce the Secured Obligations outstanding only to the extent that
the Collateral Agent (or any Secured Party) receives cash proceeds in respect of
the sale of, or other realization upon, the Material Intellectual Property;

(iv) the Collateral Agent shall have the right to notify, or require each
Grantor to notify, any obligors with respect to amounts due or to become due to
such Grantor in respect of the Material Intellectual Property, of the existence
of the security interest created herein, to direct such obligors to make payment
of all such amounts directly to the Collateral Agent, and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such amounts and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as such Grantor might have done; and

(v) all amounts and proceeds (including checks and other instruments) received
by Grantor in respect of amounts due to such Grantor in respect of the
Collateral or any portion thereof shall be received in trust for the benefit of
the Collateral Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to the Collateral Agent in
the same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 7.8 hereof.

(b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Collateral Agent of any rights, title and
interests in and to the Intellectual Property shall have been previously made
and shall have become absolute and effective, and (iv) the Secured Obligations
shall not then be immediately due and payable, upon the written request of any
Grantor, the Collateral Agent shall promptly execute and deliver to such
Grantor, at such Grantor’s sole cost and expense, such assignments or other
transfer as may be necessary to reassign to such Grantor any such rights, title
and interests as may have been assigned to the Collateral Agent as aforesaid,
subject to any disposition thereof that may have been made by the Collateral
Agent; provided, after giving effect to such reassignment, the Collateral
Agent’s security interest granted pursuant hereto, as well as all other rights
and remedies of the Collateral Agent granted hereunder, shall continue to be in
full force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of any other Liens granted by or on behalf of
the Collateral Agent and the Secured Parties.

(c) Solely for the purpose of enabling the Collateral Agent to exercise rights
and remedies under this Section 7 and at such time as the Collateral Agent shall
be lawfully entitled, and permitted under the Indenture, to exercise such rights
and remedies, each Grantor hereby grants to the Collateral Agent, to the extent
it has the right to do so, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to such

 

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Grantor), subject, in the case of Trademarks, to sufficient rights to quality
control and inspection in favor of such Grantor to avoid the risk of
invalidation of said Trademarks, to use, operate under, license, or sublicense
any Material Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located.

7.8 Cash Proceeds. If an Event of Default has occurred and is continuing and
upon the request of the Collateral Agent, in addition to the rights of the
Collateral Agent specified in Section 4.3 with respect to payments of
Receivables, all proceeds of any Collateral received by any Grantor consisting
of cash, checks and other non-cash items (collectively, “Cash Proceeds”) shall
be held by such Grantor in trust for the Collateral Agent, and deposited in the
Cash Collateral Account or a Deposit Account subject to an effective Deposit
Account Control Agreement or otherwise be segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, unless otherwise
provided pursuant to the Intercreditor Agreements, be turned over to the
Collateral Agent in the exact form received by such Grantor (duly indorsed by
such Grantor to the Collateral Agent, if required) and held by the Collateral
Agent in the Collateral Account. Subject to the terms of the Intercreditor
Agreements, any Cash Proceeds received by the Collateral Agent (whether from a
Grantor or otherwise) shall be applied by the Collateral Agent in the manner
prescribed by the Indenture.

 

SECTION 8. COLLATERAL AGENT.

The Collateral Agent has been appointed to act as Collateral Agent hereunder by
the Secured Parties. The Collateral Agent shall be obligated, and shall have the
right hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement, the Indenture and the Intercreditor Agreements.
In furtherance of the foregoing provisions of this Section, each Secured Party,
by its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by the Collateral Agent for the benefit of
Secured Parties in accordance with the terms of this Section. The Collateral
Agent may resign in accordance with the terms of the Indenture.

 

SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES.

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment in full of all Secured
Obligations (other than contingent indemnity obligations not then due and
payable), be binding upon each Grantor, its successors and permitted assigns,
and inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent and its successors, permitted
transferees and permitted assigns. Upon the payment in full of all Secured
Obligations (other than contingent indemnity obligations not then due and
payable) and to the extent otherwise contemplated by Section 11.8 of the
Indenture, the security interest granted hereby shall, subject to Section 11.6
hereof and the terms of the Indenture, automatically terminate hereunder and of
record and all rights to the Collateral shall revert to Grantors. Upon any such
termination the Collateral Agent shall, at Grantors’ expense, execute and
deliver to Grantors or otherwise authorize the filing of such documents as
Grantors shall reasonably request, including financing

 

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statement amendments to evidence such termination. Upon any disposition of
property permitted by the Indenture (other than any such disposition to another
Grantor), the Liens granted herein shall be deemed to be automatically released
and such property shall automatically revert to the applicable Grantor with no
further action on the part of any Person. The Collateral Agent shall, at
Grantor’s expense, execute and deliver or otherwise authorize the filing of such
documents as Grantors shall reasonably request, including financing statement
amendments to evidence such release.

 

SECTION 10. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.

The powers conferred on the Collateral Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property.
Neither the Collateral Agent nor any of its directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or otherwise. If any Grantor fails to perform any agreement
contained herein beyond the expiration of any applicable cure or grace period
pursuant to Section 6.1 of the Indenture, the Collateral Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Collateral Agent incurred in connection therewith shall be payable by each
Grantor under Section 7.6 of the Indenture.

 

SECTION 11. MISCELLANEOUS.

11.1 Notices. Any notice required or permitted to be given under this Agreement
shall be given in accordance with Section 12.1 of the Indenture.

11.2 Independent Effect. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.

11.3 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Collateral Agent and Grantors and their respective successors
and permitted assigns.

11.4 No Assignment. No Grantor shall, without the prior written consent of the
Collateral Agent given in accordance with the Indenture, assign any right, duty
or obligation hereunder other than in connection with a transaction permitted by
the Indenture.

11.5 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such

 

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counterparts together shall constitute but one and the same instrument.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission or electronic mail shall be as effective as delivery of a manually
executed counterpart hereof.

11.6 Reinstatement. Each Grantor further agrees that, if any payment made by any
Grantor or other Person and applied to the Obligations under the Indenture and
the Notes is at any time annulled, avoided, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be refunded
or repaid, or the proceeds of Collateral are required to be returned by any
Secured Party to such Grantor, its estate, trustee, receiver or any other party,
including any Grantor, under any bankruptcy law, state or federal law, common
law or equitable cause, then, to the extent of such payment or repayment, any
Lien or other Collateral securing such liability shall be and remain in full
force and effect, as fully as if such payment had never been made or, if prior
thereto the Lien granted hereby or other Collateral securing such liability
hereunder shall have been released or terminated by virtue of such cancellation
or surrender, such Lien or other Collateral shall be reinstated in full force
and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect any Lien or other Collateral
securing the obligations of any Grantor in respect of the amount of such
payment.

11.7 Other Agreements. This Agreement and each other Security Document are
subject to the terms and conditions set forth in the Intercreditor Agreements in
all respects and, in the event of any conflict between the terms of the
applicable Intercreditor Agreement and this Agreement, the terms of such
Intercreditor Agreement shall govern. Notwithstanding anything herein to the
contrary, the Lien and security interest granted to the Collateral Agent
pursuant to any Security Document and the exercise of any right or remedy in
respect of the Collateral by the Collateral Agent hereunder or under any other
Security Document are subject to the provisions of the Intercreditor Agreements.
In the event of any conflict between the terms of the applicable Intercreditor
Agreement, this Agreement and any other Security Document, the terms of such
Intercreditor Agreement shall govern and control with respect to any right or
remedy. Without limiting the generality of the foregoing, and notwithstanding
anything herein to the contrary, all rights and remedies with respect to the
Collateral of the Collateral Agent (and the Secured Parties) shall be subject to
the terms of the Intercreditor Agreements, and no Grantor shall be required
hereunder or under any Security Document to take any action with respect to the
Collateral that is inconsistent with such Grantor’s obligations under the ABL
Credit Agreement or the Term B Credit Agreement, as applicable. The Collateral
Agent may not require any Grantor to take any action with respect to the
creation, perfection or priority of its security interest, whether pursuant to
the express terms hereof or of any other Security Document or pursuant to the
further assurance provisions hereof or any other Security Document, to the
extent that such action would be violative of either Intercreditor Agreement or
such Grantor’s obligations under the ABL Credit Agreement or the Term B Credit
Agreement, as applicable. The delivery of any Collateral to the collateral agent
under the ABL Credit Agreement or the Term B Credit Agreement pursuant to the
ABL Credit Agreement or the Term B Credit Agreement, as applicable, shall
satisfy any delivery requirement hereunder or under any other Security Document
to the extent that such delivery is consistent with the terms of the applicable
Intercreditor Agreement.

 

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11.8 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
hereunto duly authorized as of the date first written above.

 

COMMSCOPE HOLDING COMPANY, INC. By:

/s/ Frank B. Wyatt, II

Name: Frank B. Wyatt, II Title: Secretary COMMSCOPE, INC. By:

/s/ Frank B. Wyatt, II

Name: Frank B. Wyatt, II Title: Senior Vice President, General Counsel and
Secretary ALLEN TELECOM LLC ANDREW SYSTEMS INC. CABLE TRANSPORT, INC. COMMSCOPE,
INC. OF NORTH CAROLINA COMMSCOPE TECHNOLOGIES LLC CONNECTIVITY SOLUTIONS
MANUFACTURING LLC REDWOOD SYSTEMS, INC. VEXTRA TECHNOLOGIES, LLC By:

/s/ Frank B. Wyatt, II

Name: Frank B. Wyatt, II Title: Senior Vice President and Secretary

 

Signature Page to Notes Pledge and Security Agreement

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WILMINGTON TRUST, NATIONAL ASSOCIATION,

as the Collateral Agent

By:

/s/ Joseph P. O’Donnell

Name: Joseph P. O’Donnell Title: Vice President

 

Signature Page to Notes Pledge and Security Agreement