Exhibit 10.2

EXECUTION VERSION

COLLATERAL AGREEMENT

Dated and effective as of August 1, 2014,

among

VERSO PAPER HOLDINGS LLC,

VERSO PAPER INC.,

each Subsidiary of the Issuers

identified herein,

and

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Collateral Agent

THIS COLLATERAL AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT OF AUGUST 1, 2006 AMONG VERSO PAPER FINANCE HOLDINGS LLC, VERSO PAPER
HOLDINGS, LLC, CERTAIN OF ITS SUBSIDIARIES, CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, AS INTERCREDITOR AGENT AND WILMINGTON TRUST COMPANY, AS TRUSTEE, AS THE
SAME HAS BEEN AND MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, AS SET FORTH MORE FULLY IN SECTION 7.18 HEREOF.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST
GRANTED TO THE COLLATERAL AGENT, FOR THE RATABLE BENEFIT OF THE SECURED PARTIES,
PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE
COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT.

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS

     1   

Section 1.01.

  

Indenture

     1   

Section 1.02.

  

Other Defined Terms

     2   

ARTICLE II [RESERVED]

     9   

ARTICLE III PLEDGE OF SECURITIES

     9   

Section 3.01.

  

Pledge

     9   

Section 3.02.

  

Delivery of the Pledged Collateral

     10   

Section 3.03.

  

Representations, Warranties and Covenants

     11   

Section 3.04.

  

Registration in Nominee Name; Denominations

     13   

Section 3.05.

  

Voting Rights; Dividends and Interest, Etc.

     14   

ARTICLE IV SECURITY INTERESTS IN OTHER PERSONAL PROPERTY

     16   

Section 4.01.

  

Security Interest

     16   

Section 4.02.

  

Representations and Warranties

     19   

Section 4.03.

  

Covenants

     21   

Section 4.04.

  

Other Actions

     24   

Section 4.05.

  

Covenants Regarding Patent, Trademark and Copyright Collateral

     26   

ARTICLE V REMEDIES

     28   

Section 5.01.

  

Remedies Upon Default

     28   

Section 5.02.

  

Application of Proceeds

     30   

Section 5.03.

  

Securities Act, Etc.

     30   

ARTICLE VI [RESERVED]

     31   

ARTICLE VII MISCELLANEOUS

     31   

Section 7.01.

  

Notices

     31   

Section 7.02.

  

Security Interest Absolute

     31   

Section 7.03.

  

Limitation By Law

     31   

Section 7.04.

  

Binding Effect; Several Agreement

     32   

Section 7.05.

  

Successors and Assigns

     32   

Section 7.06.

  

Collateral Agent’s Fees and Expenses; Indemnification

     32   

Section 7.07.

  

Collateral Agent Appointed Attorney-in-Fact

     33   

Section 7.08.

  

GOVERNING LAW

     34   

Section 7.09.

  

Waivers; Amendment

     34   

 

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Section 7.10.

  

WAIVER OF JURY TRIAL

     35   

Section 7.11.

  

Severability

     35   

Section 7.12.

  

Counterparts

     35   

Section 7.13.

  

Headings

     35   

Section 7.14.

  

Jurisdiction; Consent to Service of Process

     36   

Section 7.15.

  

Termination or Release

     36   

Section 7.16.

  

Additional Subsidiaries

     37   

Section 7.17.

  

Right of Set-off

     37   

Section 7.18.

  

Subject to Intercreditor Agreement

     37   

Section 7.19.

  

Senior Collateral Documents

     38   

 

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COLLATERAL AGREEMENT dated and effective as of August 1, 2014 (this
“Agreement”), among VERSO PAPER HOLDINGS LLC, a Delaware limited liability
company (the “Company”), VERSO PAPER INC. (“Finance Co.” and, together with the
Company, the “Issuers”), a Delaware corporation, each Subsidiary of the Issuers
identified on Schedule I or otherwise identified herein as a party (each, a
“Subsidiary Party”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral
Agent (in such capacity, the “Collateral Agent”) for the Secured Parties (as
defined below).

WHEREAS, pursuant to the terms, conditions and provisions of the Indenture dated
as of the date hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Indenture”), among the Issuers, the Guarantors and
Wilmington Trust, National Association, as Trustee (the “Trustee”), the Issuers
are issuing Second Priority Adjustable Senior Secured Notes (the “Notes”), which
will be guaranteed on a senior secured basis by each of the Subsidiary Parties;

WHEREAS, the Issuers, the Subsidiary Parties, the Collateral Agent and the
Intercreditor Agent (as defined below) have entered into a joinder and
supplement dated as of the date hereof to the Intercreditor Agreement dated as
of August 1, 2006 (as amended, restated, supplemented or otherwise modified from
time to time, the “Intercreditor Agreement”), pursuant to which the lien upon
and security interest in the Collateral granted by this Agreement are and shall
be subordinated in all respects to the lien upon and security interest in the
Collateral granted pursuant to, and subject to the terms and conditions of, the
Senior Lender Documents (as defined below), and shall rank equally and ratably
in all respects to the lien upon and security interest in the Collateral granted
pursuant to, and subject to the terms and conditions of, the other
Second-Priority Collateral Documents (as defined in the Intercreditor
Agreement);

WHEREAS, each Pledgor is executing and delivering this Agreement, pursuant to
the terms of the Indenture to induce the Trustee to enter into the Indenture;

WHEREAS, the Subsidiary Parties are affiliates of the Issuers, will derive
substantial benefits from the extension of credit to the Issuers pursuant to the
Indenture and are willing to execute and deliver this Agreement in order to
induce the Trustee to enter into the Indenture;

WHEREAS, each Pledgor has duly authorized the execution, delivery and
performance of this Agreement.

NOW, THEREFORE, for and in consideration of the premises, and of the mutual
covenants herein contained, and in order to induce the Trustee to enter into the
Indenture, each Pledgor and the Collateral Agent, on behalf of itself and each
Secured Party (and each of their respective successors or assigns), hereby agree
as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Indenture. (a) Capitalized terms used in this Agreement and not
otherwise defined herein have the respective meanings assigned thereto in the

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Indenture. All terms defined in the New York UCC (as defined herein) and not
defined in this Agreement have the meanings specified therein. The term
“instrument” shall have the meaning specified in Article 9 of the New York UCC.
If the First-Lien Termination Date (as defined below) has occurred, a reference
in this Agreement to the Intercreditor Agent shall, unless the context requires
otherwise, be construed as a reference to the Collateral Agent and this
agreement shall be interpreted accordingly.

(b) The rules of construction specified in Section 1.04 of the Indenture also
apply to this Agreement.

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

“ABL Administrative Agent” has the meaning assigned to such term in the
definition of “ABL Credit Agreement”.

“ABL Collateral Agreement” means that certain Guarantee and Collateral
Agreement, dated as of May 4, 2012, by and among Verso Paper Finance Holdings
LLC, a Delaware limited liability company, the Company, and each other
Subsidiary of the Company from time to time party thereto, and the ABL
Administrative Agent, as amended, restated, supplemented or otherwise modified
from time to time.

“ABL Credit Agreement” means that certain Credit Agreement, dated as of May 4,
2012, by and among Verso Paper Finance Holdings, LLC, a Delaware limited
liability company, the Company, and each other Subsidiary of the Company from
time to time designated as “Borrower” thereunder, the lenders and agents party
thereto, and Citibank, N.A. (or an affiliate thereof), as administrative agent
(the “ABL Administrative Agent”), as amended, restated, supplemented or
otherwise modified from time to time.

“Account Debtor” means any person who is or who may become obligated to any
Pledgor under, with respect to or on account of an Account, Chattel Paper,
General Intangibles, Instruments or Investment Property.

“Article 9 Collateral” has the meaning assigned to such term in Section 4.01.

“Bucksport Co-Gen Assets” means all right, title and interest of Verso Bucksport
LLC in, to and under the Amended and Restated Co-Ownership, Operating & Mutual
Sales Agreement, dated as of July 27, 1999, by and between Champion
International Corporation and Bucksport Energy LLC (as the same may be amended
from time to time on terms, taken as a whole, not materially adverse to the
holders of Notes, in the good-faith determination of the Company), including
without limitation any ownership interests as tenants in common in the property
rights established pursuant thereto.

“Capital Stock” means (1) in the case of a corporation, corporate stock or
shares; (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

 

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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.

“CFC” means a “controlled foreign corporation” within the meaning of
section 957(a) of the Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated and rulings issued thereunder.

“CFC Holding Company” means any Subsidiary of the Company that (i) is a
disregarded entity or partnership for U.S. Federal income tax purposes and
(ii) owns one or more CFCs, either directly or indirectly through other entities
that are disregarded entities or partnerships for U.S. Federal income tax
purposes, and all such entities have no material assets (excluding equity
interests in each other) other than equity interests of such CFCs.

“Collateral” means Article 9 Collateral and Pledged Collateral.

“Collateral Agent” means the party named as such in this Agreement until a
successor replaces it and, thereafter, means the successor.

“Collateral Agreements” means the ABL Collateral Agreement and the First-Lien
Collateral Agreement.

“Control Agreement” means a deposit account control agreement, a securities
account control agreement or a commodity account control agreement, as
applicable, enabling the Collateral Agent to obtain “control” (within the
meaning of the New York UCC) of any such accounts, in form and substance
reasonably satisfactory to the Collateral Agent.

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any Pledgor under any Copyright now or hereafter owned by
any third party, and all rights of any Pledgor under any such agreement
(including, without limitation, any such rights that such Pledgor has the right
to license).

“Copyrights” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all copyright rights in any work subject to the copyright laws of
the United States or any other country, whether as author, assignee, transferee
or otherwise, (b) all registrations and applications for registration of any
such Copyright in the United States or any other country, including
registrations, supplemental registrations and pending applications for
registration in the United States Copyright Office and the right to obtain all
renewals thereof, including those listed on Schedule III, (c) all claims for,
and rights to sue for, past or future infringements of any of the foregoing and
(d) all income, royalties, damages and payments now or hereafter due and payable
with respect to any of the foregoing, including damages and payments for past or
future infringement thereof.

 

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“Credit Agreements” means the ABL Credit Agreement and the First-Lien Credit
Agreement.

“Discharge of Senior Lender Claims” has the meaning assigned to such term in the
Intercreditor Agreement.

“Excluded Equity” means:

(1) the issued and outstanding voting equity interests of any Foreign Subsidiary
directly owned by a Pledgor, to the extent the pledge of any such equity
interest would cause more than 65% of the outstanding voting equity interests of
such Foreign Subsidiary to be pledged;

(2) to the extent applicable law requires that a Subsidiary of a Pledgor issue
director’ qualifying shares, such shares or nominee or other similar shares,

(3) any equity interests of a Subsidiary to the extent that, as of the Issue
Date, and for so long as, such a pledge of such equity interests would violate
applicable law or an enforceable contractual obligation binding on or relating
to such equity interests;

(4) any equity interests acquired after the Issue Date in a person that is not a
Subsidiary if, and to the extent that, and for so long as, a grant of a security
interest in such equity interest would violate applicable law or an enforceable
contractual obligation binding on or relating to such equity interests (if such
obligation existed at the time of acquisition of such equity interests and was
not created or made binding on such equity interests in contemplation of or in
connection with the acquisition of such equity interests); and

(5) equity interests owned by Verso Paper LLC in each of (a) Androscoggin
Reservoir Company and (b) Gulf Island Oxygenation Project L.P., for so long as
such interests are subject to an enforceable contractual obligation (including
rights of first refusal) restricting the grant of a security interest therein.

“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).

“Federal Securities Laws” has the meaning assigned to such term in Section 5.03.

“First-Lien Administrative Agent” has the meaning assigned to such term in the
definition of “First-Lien Credit Agreement”.

“First-Lien Collateral Agreement” means that certain Guarantee and Collateral
Agreement, dated as of May 4, 2012, by and among Verso Paper Finance Holdings
LLC, a Delaware limited liability company, the Company, and each other
Subsidiary of the Company from time to time party thereto, and the First-Lien
Administrative Agent, as amended, restated, supplemented or otherwise modified
from time to time.

 

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“First-Lien Credit Agreement” means that certain Credit Agreement, dated as of
May 4, 2012, by and among the Issuers and each other Subsidiary of the Company
from time to time designated as “Borrower” thereunder, the lenders and agents
party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative
agent (the “First-Lien Administrative Agent”), as amended, restated,
supplemented or otherwise modified from time to time.

“First-Lien Notes Collateral Agent” has the meaning assigned to such term in the
definition of “First-Lien Notes Collateral Agreement”.

“First-Lien Notes Collateral Agreement” means that certain Collateral Agreement
dated as of May 4, 2012, by and among Verso Paper Holdings LLC, each other
pledger party thereto, and Wilmington Trust, National Association as collateral
agent (the “First-Lien Notes Collateral Agent”).

“First-Lien Termination Date” means, subject to Section 5.7 of the Intercreditor
Agreement, the date on which the Discharge of Senior Lender Claims occurs;
provided that if, at any time after the First-Lien Termination Date, the
Discharge of Senior Lender Claims is deemed not to have occurred pursuant to
Section 5.7 of the Intercreditor Agreement, the First-Lien Termination Date
shall automatically be deemed not to have occurred for all purposes of this
Agreement (other than with respect to any actions taken prior to the date of
incurrence and designation of any Future First-Lien Indebtedness as a result of
the occurrence of such first Discharge of Senior Lender Claims).

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

“General Intangibles” means all “General Intangibles” as defined in the New York
UCC, including all choses in action and causes of action and all other
intangible personal property of any Pledgor of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Pledgor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Swap Agreements
and other agreements), Intellectual Property (but excluding “intent-to-use”
applications for trademark or service mark registrations filed pursuant to
Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment
to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of Lanham Act
has been filed, to extent that, and solely during the period for which, any
assignment of an “intent-to-use” application prior to such filing would violate
the Lanham Act), goodwill, registrations, franchises, tax refund claims and any
guarantee, claim, security interest or other security held by or granted to any
Pledgor to secure payment by an Account Debtor of any of the Accounts.

 

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“Governmental Authority” shall mean any federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory or legislative
body.

“Holder” has the meaning assigned to such term in the Indenture.

“Indenture” has the meaning assigned to such term in the recitals of this
Agreement.

“Indenture Documents” means (a) the Indenture, the Notes, the Security Documents
and this Agreement and (b) any other related documents or instruments executed
and delivered pursuant to the Indenture or any Security Document, in each case,
as such agreements may be amended, restated, supplemented or otherwise modified
from time to time.

“Indenture Parties” means the Issuers and the Subsidiary Parties.

“Intellectual Property” means all intellectual property of every kind and nature
now owned or hereafter acquired by any Pledgor, including, inventions, designs,
Patents, Copyrights, Trademarks, Patent Licenses, Copyright Licenses, Trademark
Licenses, trade secrets, domain names, confidential or proprietary technical and
business information, know-how, show-how or other data or information and all
related documentation.

“Intellectual Property Security Agreement” means a security agreement in the
form hereof or a short form hereof, in each case, which form shall be reasonably
acceptable to the Collateral Agent.

“Intercreditor Agent” has the meaning assigned to such term in the Intercreditor
Agreement.

“Intercreditor Agreement” has the meaning assigned to such term in the recitals
of this Agreement.

“IP Agreements” means all material Copyright Licenses, Patent Licenses,
Trademark Licenses, and all other agreements, permits, consents, orders and
franchises relating to the license, development, use or disclosure of any
material Intellectual Property to which a Pledgor, now or hereafter, is a party
or a beneficiary, including, without limitation, the agreements set forth on
Schedule III hereto.

“Issue Date” means the date on which the Notes are initially issued.

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

“Material Adverse Effect” means a material adverse effect on the business,
property, operations or condition of Finance Co., the Company and their
Subsidiaries, taken as a whole, or the validity or enforceability of any of the
material Note Documents or the rights and remedies of the Secured Parties
thereunder.

 

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

“Notes” has the meaning assigned to such term in the recitals of this Agreement.

“Obligations” has the meaning set forth in the definition of “Note Obligations”
assigned to such term in the Indenture.

“Patent License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to make, use or sell any invention covered by
a Patent, now or hereafter owned by any third party (including, without
limitation, any such rights that such Pledgor has the right to license).

“Patents” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all letters patent of the United States or the equivalent thereof
in any other country or jurisdiction, including those listed on Schedule III,
and all applications for letters patent of the United States or the equivalent
thereof in any other country or jurisdiction, including those listed on Schedule
III, (b) all provisionals, reissues, extensions, continuations, divisions,
continuations-in- part, reexaminations or revisions thereof, and the inventions
disclosed or claimed therein, including the right to make, use, import and/or
sell the inventions disclosed or claimed therein, (c) all claims for, and rights
to sue for, past or future infringements of any of the foregoing and (d) all
income, royalties, damages and payments now or hereafter due and payable with
respect to any of the foregoing, including damages and payments for past or
future infringement thereof.

“Pledged Collateral” has the meaning assigned to such term in Section 3.01.

“Pledged Debt Securities” has the meaning assigned to such term in Section 3.01.

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

“Pledged Stock” has the meaning assigned to such term in Section 3.01.

“Pledgor” shall mean the Issuers and each Subsidiary Party.

“Secured Parties” means (a) the Collateral Agent, (b) each Holder, (c) the
beneficiaries of each indemnification obligation undertaken by any Indenture
Party under any Indenture Document, (d) the Trustee and (e) the successors and
permitted assigns of each of the foregoing.

 

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“Security Documents” means this Agreement, any agreement pursuant to which
assets are added to the Collateral and any other instruments or documents
entered into and delivered in connection with any of the foregoing, as such
agreements, instruments or documents may from time to time be amended.

“Security Interest” has the meaning assigned to such term in Section 4.01.

“Senior Collateral Documents” has the meaning assigned to such term in the
Intercreditor Agreement.

“Senior Lender Claims” has the meaning assigned to such term in the
Intercreditor Agreement.

“Senior Lender Documents” has the meaning assigned to such term in the
Intercreditor Agreement.

“Senior Lenders” has the meaning assigned to such term in the Intercreditor
Agreement.

“Subsidiary Party” has the meaning assigned to such term in the preliminary
statement of this Agreement, and any Subsidiary that becomes a party hereto
pursuant to Section 7.16.

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to use any Trademark now or hereafter owned by
any third party (including, without limitation, any such rights that such
Pledgor has the right to license).

“Trademarks” means all of the following now owned or hereafter acquired by any
Pledgor: (a) all trademarks, service marks, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos,
other source or business identifiers, designs and general intangibles of like
nature, now existing or hereafter adopted or acquired, all registrations thereof
(if any), and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United
States Patent and Trademark Office or any similar offices in any State of the
United States or any other country or any political subdivision thereof (except
for “intent-to-use” applications for trademark or service mark registrations
filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and
until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and
1(d) of Lanham Act has been filed, to extent that, and solely during the period
for which, any assignment of an “intent-to-use” application prior to such filing
would violate the Lanham Act), and all renewals thereof, including those listed
on Schedule III, (b) all goodwill associated therewith or symbolized thereby,
(c) all claims for, and rights to sue for, past or future infringements of any
of the foregoing and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including
damages and payments for past or future infringement thereof.

 

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“1.5 Lien Notes Collateral Agent” has the meaning assigned to such term in the
definition of “1.5 Lien Notes Collateral Agreement”.

“1.5 Lien Notes Collateral Agreement” means that certain Collateral Agreement
dated as of May 11, 2012, by and among Verso Paper Holdings LLC, each other
pledger party thereto, and Wilmington Trust, National Association as collateral
agent (the “1.5 Lien Notes Collateral Agent”).

ARTICLE II

[RESERVED]

ARTICLE III

PLEDGE OF SECURITIES

Section 3.01. Pledge. As security for the payment or performance, as the case
may be, in full of its Obligations, each Pledgor hereby assigns and pledges to
the Collateral Agent, its successors and permitted assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Secured
Parties, a security interest in all of such Pledgor’s right, title and interest
in, to and under (a) the Equity Interests directly owned by it (including those
listed on Schedule II) and any other Equity Interests obtained in the future by
such Pledgor and any certificates representing all such Equity Interests (the
“Pledged Stock”); provided that the Pledged Stock shall not include (i) (A) more
than 65% of the issued and outstanding voting Equity Interests of any “first
tier” Foreign Subsidiary directly owned by such Pledgor, (B) more than 65% of
the issued and outstanding voting Equity Interests of any “first tier” CFC
Holding Company directly owned by such Pledgor, (C) any issued and outstanding
Equity Interest of any Foreign Subsidiary that is not a “first tier” Foreign
Subsidiary, and (D) any issued and outstanding Equity Interests of any CFC
Holding Company that is not a “first tier” CFC Holding Company, (ii) to the
extent applicable law requires that a Subsidiary of such Pledgor issue
directors’ qualifying shares, such shares or nominee or other similar shares,
(iii) any Equity Interests of a Subsidiary to the extent that, as of the Issue
Date, and for so long as, such a pledge of such Equity Interests would violate
applicable law or an enforceable contractual obligation binding on or relating
to such Equity Interests, or (iv) any Equity Interests of a person that is not
directly or indirectly a Subsidiary, as to which Article 4 shall apply;
(b) (i) the debt obligations listed opposite the name of such Pledgor on
Schedule II, (ii) any debt securities in the future issued to such Pledgor
having, in the case of each instance of debt securities, an aggregate principal
amount in excess of $5.0 million, and (iii) the certificates, promissory notes
and any other instruments, if any, evidencing such debt securities (the “Pledged
Debt Securities”); (c) subject to Section 3.05 hereof, all payments of principal
or interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other proceeds received in respect of, the
securities referred to in clauses (a) and (b) above; (d) subject to Section 3.05
hereof, all rights and privileges of such Pledgor with respect to the securities
and other property referred to in clauses (a), (b) and (c) above; and (e) all
proceeds of any of the foregoing (the items referred to in clauses (a) through
(c) above being collectively referred to as the “Pledged Collateral”).

 

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

Notwithstanding anything else contained in this Agreement in the event that
Rule 3-16 of Regulation S-X under the United States Securities Act of 1933 would
require (or is replaced with another rule or regulation, or any other law,
rule or regulation is adopted, which would require) (such law, rule or
regulation, as amended or replaced with another rule or regulation, “Rule 3-16”)
the filing with the SEC of separate financial statements of any Subsidiary of
the Company due to the fact that a security interest in such Subsidiary’s Equity
Interests or other securities has been granted hereunder as security for the
payment or performance of the Note Obligations, then, solely to the extent
securing the Note Obligations, the Lien granted pursuant to this Agreement or
any other Security Document in such Equity Interests (the “Rule 3-16 Excluded
Collateral”) shall not secure, or constitute “Collateral” with respect to the
Note Obligations solely to the extent necessary and only for so long as required
to cause the Company and its Subsidiaries to not be subject to such requirement.
In such event, the Collateral Agent may and (at the written request and expense
of the Company) shall take actions, without the consent of any Secured Party, to
the extent necessary to evidence such exclusion from the Lien granted hereunder
in favor of the Collateral Agent of the Rule 3-16 Excluded Collateral solely
with respect to the Note Obligations; provided that the Collateral Agent shall
not be required to take any such action unless the Company shall have delivered
to the Collateral Agent, together with such written request, a certificate of an
Officer of the Company certifying that such action is permitted by the Note
Documents, and any such action taken by the Collateral Agent shall be without
recourse to or warranty by the Collateral Agent. In the event that Rule 3-16 is
amended, modified or interpreted by the SEC to permit (or is replaced with
another rule or regulation, or any other law, rule or regulation is adopted,
which would permit) any Rule 3-16 Excluded Collateral to secure the Note
Obligations in excess of the amount then pledged without the filing with the SEC
(or any other Governmental Authority) of separate financial statements for such
Subsidiary of the Company, then the Equity Interest of such Subsidiary will
automatically be deemed to be a part of the Collateral for the Note Obligations,
to the extent otherwise required by this Agreement.

Section 3.02. Delivery of the Pledged Collateral.

(a) Each Pledgor agrees promptly to deliver or cause to be delivered to the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent), for the ratable benefit of the Secured Parties, any and all
Pledged Securities to the extent such Pledged Securities, in the case of
promissory notes or other instruments evidencing Indebtedness, are required to
be delivered pursuant to paragraph (b) of this Section 3.02.

 

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(b) Each Pledgor will cause any Indebtedness for borrowed money having an
aggregate principal amount in excess of $5.0 million (other than
(i) intercompany current liabilities incurred in the ordinary course of business
in connection with the cash management operations and intercompany sales of
Holdings, the Issuers and their Subsidiaries or (ii) to the extent that a pledge
of such promissory note or instrument would violate applicable law) owed to such
Pledgor by any person to be evidenced by a duly executed promissory note that is
pledged and delivered to the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent), for the ratable benefit of
the Secured Parties, pursuant to the terms hereof. To the extent any such
promissory note is a demand note, each Pledgor party thereto agrees, if
requested by the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), to immediately demand payment thereunder upon
an Event of Default specified under Section 6.01(a), (b), (f), (g) or (h) of the
Indenture unless such demand would not be commercially reasonable or would
otherwise expose Pledgor to liability to the maker.

(c) Upon delivery to the Intercreditor Agent (or, if the First-Lien Termination
Date has occurred, the Collateral Agent), (i) any Pledged Securities required to
be delivered pursuant to the foregoing paragraphs (a) and (b) of this
Section 3.02 shall be accompanied by stock powers or note powers, as applicable,
duly executed in blank or other instruments of transfer reasonably satisfactory
to the Intercreditor Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent) and by such other instruments and documents as the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) may reasonably request and (ii) all other property composing
part of the Pledged Collateral delivered pursuant to the terms of this Agreement
shall be accompanied to the extent necessary to perfect the security interest in
or allow realization on the Pledged Collateral by proper instruments of
assignment duly executed by the applicable Pledgor and such other instruments or
documents (including issuer acknowledgments in respect of uncertificated
securities in the form of Exhibit II hereto) as the Intercreditor Agent (or, if
the First-Lien Termination Date has occurred, the Collateral Agent) may
reasonably request. Each delivery of Pledged Securities shall be accompanied by
a schedule describing the securities, which schedule shall be attached hereto as
Schedule II (or a supplement to Schedule II, as applicable) and made a part
hereof; provided that failure to attach any such schedule hereto shall not
affect the validity of such pledge of such Pledged Securities. Each schedule so
delivered shall supplement any prior schedules so delivered.

Section 3.03. Representations, Warranties and Covenants. The Pledgors, jointly
and severally, represent, warrant and covenant to and with the Collateral Agent,
for the ratable benefit of the Secured Parties, that:

(a) Schedule II correctly sets forth the percentage of the issued and
outstanding shares of each class of Equity Interests of the issuer thereof
represented by such Pledged Stock and includes all Equity Interests, debt
securities and promissory notes or instruments evidencing Indebtedness required
to be (i) pledged in order to satisfy the requirements of the Note Documents, or
(ii) delivered pursuant to Section 3.02(b);

 

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(b) the Pledged Stock and the Pledged Debt Securities (solely with respect to
Pledged Debt Securities issued by a person that is not a Subsidiary of Holdings
or an Affiliate of any such Subsidiary, to the best of each Pledgor’s knowledge)
have been duly and validly authorized and issued by the issuers thereof and
(i) in the case of Pledged Stock, are fully paid and nonassessable (other than
with respect to Pledged Stock consisting of membership interests of limited
liability companies to the extent provided in Sections 18-502 and 18-607 of the
Delaware Limited Liability Company Act) and (ii) in the case of Pledged Debt
Securities (solely with respect to Pledged Debt Securities issued by a person
that is not a Subsidiary of Holdings or an Affiliate of any such subsidiary, to
the best of each Pledgor’s knowledge) are legal, valid and binding obligations
of the issuers thereof, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding at law or in equity) and an
implied covenant of good faith and fair dealing;

(c) except for the security interests granted hereunder, each Pledgor (i) is
and, subject to any transfers made in compliance with the Indenture, will
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II as owned by such Pledgor, (ii) holds the
same free and clear of all Liens, other than Permitted Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Pledged Collateral, other than
pursuant to a transaction permitted by the Indenture and other than Permitted
Liens and (iv) subject to the rights of such Pledgor under the Indenture
Documents to dispose of Pledged Collateral, will use commercially reasonable
efforts to defend its title or interest hereto or therein against any and all
Liens (other than Permitted Liens), however arising, of all persons;

(d) other than as set forth in the Credit Agreements or the schedules thereto,
and except for restrictions and limitations imposed by the Notes Documents or
securities laws generally or otherwise permitted to exist pursuant to the terms
of the Notes Documents, the Pledged Stock (other than partnership interests) is
and will continue to be freely transferable and assignable, and none of the
Pledged Stock is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provisions or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Stock hereunder, the sale or disposition thereof pursuant hereto
or the exercise by the Collateral Agent of rights and remedies hereunder;

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

(f) no action, consent or approval of, registration or filing with or any other
action by any Governmental Authority is or will be required in connection with
the perfection or maintenance of the Liens created hereunder or the exercise by
the Collateral Agent or any Secured Party of its rights hereunder or the
remedies in respect of the Collateral, except for (a) the filing of Uniform
Commercial Code financing statements, (b) filings with the United States Patent
and Trademark Office and the United

 

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States Copyright Office and comparable offices in foreign jurisdictions and
equivalent filings in foreign jurisdictions, (c) such actions, consents,
approvals, registrations and filings as have been made or obtained and are in
full force and effect and (d) such actions, consents, approvals, registrations
and filings the failure of which to be obtained or made would not reasonably be
expected to have a Material Adverse Effect;

(g) by virtue of the execution and delivery by the Pledgors of this Agreement
and any pledge agreement governed by foreign law, when any Pledged Securities
(including foreign stock covered by a pledge agreement governed by foreign law)
are delivered to the Collateral Agent, for the ratable benefit of the Secured
Parties, in accordance with this Agreement and a financing statement covering
such Pledged Securities is filed in the appropriate filing office, the
Collateral Agent will obtain, for the ratable benefit of the Secured Parties, a
legal, valid and perfected lien upon and security interest in such Pledged
Securities under the New York UCC, subject only to Liens permitted under the
Indenture, as security for the payment and performance of the Obligations;

(h) each Pledgor that is an issuer of the Pledged Collateral confirms that it
has received notice of the security interest granted hereunder;

(i) as of the Issue Date, none of the Equity Interests in limited liability
companies or partnerships that is pledged by the Pledgors hereunder constitutes
a security under Section 8-103 of the New York UCC or the corresponding code or
statute of any other applicable jurisdiction; and

(j) the Pledgors shall not amend, or permit to be amended, the limited liability
company agreement (or operating agreement or similar agreement) or partnership
agreement of any Subsidiary of any Issuer whose Equity Interests are, or are
required to be, Collateral in a manner to cause such Equity Interests to
constitute a security under Section 8-103 of the New York UCC or the
corresponding code or statute of any other applicable jurisdiction unless such
Loan Party shall have first delivered 10 days written notice to the Collateral
Agent and shall have taken all actions contemplated hereby and as otherwise
reasonably required by the Collateral Agent to maintain the security interest of
the Collateral Agent therein as a valid, perfected security interest.

Section 3.04. Registration in Nominee Name; Denominations. The Intercreditor
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent), on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in the name of the
applicable Pledgor, endorsed or assigned in blank or in favor of the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) or, if an Event of Default shall have occurred and be
continuing, in its own name as pledgee or the name of its nominee (as pledgee or
as sub-agent). Each Pledgor will promptly give to the Intercreditor Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) copies of
any notices or other communications received by it with respect to Pledged
Securities registered in the name of such Pledgor. If an Event of Default shall
have occurred and be

 

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continuing, the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) shall have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement. Each
Pledgor shall use its commercially reasonable efforts to cause any Indenture
Party that is not a party to this Agreement to comply with a request by the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent), pursuant to this Section 3.04, to exchange certificates
representing Pledged Securities of such Indenture Party for certificates of
smaller or larger denominations.

Section 3.05. Voting Rights; Dividends and Interest, Etc.

(a) Unless and until an Event of Default shall have occurred and be continuing
and the Collateral Agent shall have given notice to the relevant Pledgors of the
Collateral Agent’s intention to exercise its rights hereunder:

(i) Each Pledgor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose consistent with the terms of this Agreement, the
Indenture and the other Indenture Documents; provided, that, except as permitted
under the Indenture, such rights and powers shall not be exercised in any manner
that could materially and adversely affect the rights inuring to a holder of any
Pledged Collateral, the rights and remedies of any of the Collateral Agent or
the other Secured Parties under this Agreement, the Indenture or any other
Indenture Document or the ability of the Secured Parties to exercise the same.

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

(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Collateral to the extent and only to the extent that such
dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Indenture, the other Indenture Documents and applicable laws; provided, that
(A) any noncash dividends, interest, principal or other distributions, payments
or other consideration in respect thereof, including any rights to receive the
same to the extent not so distributed or paid, that would constitute Pledged
Securities, whether resulting from a subdivision, combination or
reclassification of the outstanding Equity Interests of the issuer of any
Pledged Securities, received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise or (B) any non-cash dividends and other distributions paid or payable
in respect of any Pledged Securities that would constitute Pledged Securities in
connection with a partial or total liquidation or

 

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dissolution or in connection with a reduction of capital, capital surplus or
paid in surplus, shall be and become part of the Pledged Collateral, and, if
received by any Pledgor, shall not be commingled by such Pledgor with any of its
other funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Intercreditor Agent and the Collateral
Agent, for the ratable benefit of the Secured Parties, and shall be forthwith
delivered to the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), for the ratable benefit of the Secured Parties,
in the same form as so received (endorsed in a manner reasonably satisfactory to
the Intercreditor Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent)).

(b) In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, upon the occurrence and during the continuance of an
Event of Default and after notice by the Collateral Agent to the Issuers of the
Collateral Agent’s intention to exercise its rights hereunder, all rights of any
Pledgor to dividends, interest, principal or other distributions that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this
Section 3.05 shall cease, and all such rights shall thereupon become vested, for
the ratable benefit of the Secured Parties, in the Intercreditor Agent (or, if
the First-Lien Termination Date has occurred, the Collateral Agent) which shall
have the sole and exclusive right and authority to receive and retain such
dividends, interest, principal or other distributions; provided, however, that
even after the occurrence of an Event of Default, any Pledgor may continue to
exercise dividend and distribution rights solely to the extent permitted under
subclause (xii) and subclause (xiii)(A) of Sections 4A.04(b) and 4B.04(b) of the
Indenture. All dividends, interest, principal or other distributions received by
any Pledgor contrary to the provisions of this Section 3.05 shall not be
commingled by such Pledgor with any of its other funds or property but shall be
held separate and apart therefrom, shall be held in trust for the benefit of the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent), for the ratable benefit of the Secured Parties, and shall be
forthwith delivered to the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent), for the ratable benefit of
the Secured Parties, in the same form as so received (endorsed in a manner
reasonably satisfactory to the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent)). Any and all money and
other property paid over to or received by the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) pursuant to the
provisions of this paragraph (b) shall be retained by the Intercreditor Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent) in
an account to be established by the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) upon receipt of such money
or other property and shall be applied in accordance with the provisions of
Section 5.02 hereof. After all Events of Default have been cured or waived and
the Issuers have delivered to the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) a certificate to that
effect, the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) shall promptly release to each Pledgor (without
interest) all dividends, interest, principal or other distributions that such
Pledgor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) of this Section 3.05 and that remain in such account.

 

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(c) In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, upon the occurrence and during the continuance of an
Event of Default and after notice by the Collateral Agent to the Issuers of the
Collateral Agent’s intention to exercise its rights hereunder, all rights of any
Pledgor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this Section 3.05, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this
Section 3.05, shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, for the ratable benefit of the Secured Parties, which
shall have the sole and exclusive right and authority to exercise such voting
and consensual rights and powers; provided that, to the extent consistent with,
the terms of the Intercreditor Agreement and the Indenture, unless the
Collateral Agent shall have received written objections from Holders of at least
25% in principal amount of the Notes, the Collateral Agent shall have the right
from time to time following and during the continuance of an Event of Default to
permit the Pledgors to exercise such rights. After all Events of Default have
been cured or waived and the Issuers have delivered to the Collateral Agent a
certificate to that effect, each Pledgor shall have the right to exercise the
voting and/or consensual rights and powers that such Pledgor would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above.

ARTICLE IV

SECURITY INTERESTS IN OTHER PERSONAL PROPERTY

Section 4.01. Security Interest.

(a) As security for the payment or performance when due (whether at the stated
maturity, by acceleration or otherwise), as the case may be, in full of its
Obligations, each Pledgor hereby assigns and pledges to the Collateral Agent,
its successors and permitted assigns, for the ratable benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and permitted
assigns, for the ratable benefit of the Secured Parties, a security interest
(the “Security Interest”) in all right, title and interest in or to any and all
of the following assets and properties now owned or at any time hereafter
acquired by such Pledgor or in which such Pledgor now has or at any time in the
future may acquire any right, title or interest (collectively, the “Article 9
Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all cash and Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all General Intangibles;

(vii) all Instruments;

 

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(viii) all Inventory;

(ix) all Investment Property;

(x) all Letter of Credit Rights;

(xi) all Commercial Tort Claims;

(xii) (1) Securities Accounts, (2) Financial Assets credited to Securities
Accounts or Deposit Accounts from time to time and all Security Entitlements in
respect thereof, (3) all cash held any Securities Account or Deposit Account and
(4) all other money in the possession of the Collateral Agent;

(xiii) all timber to be cut;

(xiv) all other personal property not otherwise described above (except for
property specifically excluded from any defined term used in any of the
foregoing clauses);

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

(xvi) to the extent not otherwise included, all proceeds, Supporting Obligations
and products of any and all of the foregoing and all collateral security and
guarantees given by any person with respect to any of the foregoing.

Notwithstanding anything to the contrary in this Agreement, this Agreement shall
not constitute a grant of a security interest in (a) any property or assets
owned by any Foreign Subsidiaries, (b) Excluded Equity; (c) any debt securities
issued to a Pledgor having, in the case of each instance of debt securities, an
aggregate principal amount not in excess of $5.0 million; (d) any securities of
any of the Company’s Subsidiaries to the extent a pledge of such securities to
secure any of the Notes would require the filing of financial statements
pursuant to Rule 3-16 of Regulation S-X; (e) any vehicle covered by a
certificate of title or ownership; (f) the Bucksport Co-Gen Assets; (g) any
assets acquired after the Issue Date to the extent that, and for so long as
granting a security interest in such assets would violate an enforceable
contractual obligation binding on such assets that existed at the time of
acquisition thereof and was not created or made binding on such assets in
contemplation or in connection with the acquisition of such assets (except in
the case of assets acquired with indebtedness pursuant clause (b)(iv) of
Section 4A.03 and 4B.03 of the Indenture or any equivalent exception in any
other Note Document that is secured by a Permitted Lien); (h) any letter of
credit rights to the extent any Pledgor is required by applicable law to apply
the proceeds of a drawing of such letter of credit for a specified purpose; and
(i) any Pledgor’s right, title or interest in any license, contract or agreement
to which such Pledgor is a party to the extent that such a grant would, under
the terms of such license, contract or agreement, result in a breach of the
terms of, or constitute a default under, or result in the abandonment,
invalidation or unenforceability of such license, contract or agreement (other
than to the extent that any such term would be rendered ineffective pursuant to
Section 9-406, 9-407, 9-408 or 9-409

 

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of the New York Uniform Commercial Code or any other applicable law (including,
without limitation, the Bankruptcy Code or principles of equity), provided that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Pledgor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.

(b) Each Pledgor hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction any financing
statements (including fixture filings and filings with respect to timber to be
cut) with respect to the Article 9 Collateral or any part thereof and amendments
thereto that contain the information required by Article 9 of the Uniform
Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment, including (i) whether such Pledgor is an organization,
the type of organization and any organizational identification number issued to
such Pledgor, (ii) in the case of a financing statement filed as a fixture
filing, a sufficient description of the real property to which such Article 9
Collateral relates and (iii) a description of collateral that describes such
property in any other manner as the Collateral Agent may reasonably determine is
necessary or advisable to ensure the perfection of the security interest in the
Article 9 Collateral granted under this Agreement, including describing such
property as “all assets” or “all property”. Each Pledgor agrees to provide such
information to the Collateral Agent promptly upon request, including providing
within 30 days of any reasonable request therefor legal descriptions of real
property (other than real property subject to a mortgage in favor of the
Collateral Agent) on which timber to be cut of such Pledgor is located.

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office)
such documents as may be reasonably necessary or advisable for the purpose of
perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by each Pledgor, without the signature of any Pledgor, and
naming any Pledgor or the Pledgors as debtors and the Collateral Agent as
secured party. Notwithstanding anything to the contrary herein, no Pledgor shall
be required to take any action under the laws of any jurisdiction other than the
United States (or any political subdivision thereof) and its territories and
possessions for the purpose of perfecting the Security Interest in any Article 9
Collateral of such Pledgor constituting Patents, Trademarks or Copyrights.

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

(d) Notwithstanding anything to the contrary in this Agreement or the Indenture,
none of the Pledgors shall be required to enter into any Control Agreement with
respect to any cash or Deposit Account or (except as otherwise provided in
Section 4.04(b)) any Securities Account.

 

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Section 4.02. Representations and Warranties. The Pledgors jointly and severally
represent and warrant to the Collateral Agent and the other Secured Parties
that:

(a) Each Pledgor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent the
Security Interest in such Article 9 Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any other person other than any
consent or approval that has been obtained and is in full force and effect or
has otherwise been disclosed herein or in the Indenture.

(b) The information set forth in the Schedules attached hereto is correct and
complete, in all material respects, as of the Issue Date. The Uniform Commercial
Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Article 9 Collateral that have been prepared by the Issuers for filing in each
governmental, municipal or other office specified in Schedule IV (or specified
by notice from the Issuers to the Collateral Agent after the Issue Date in the
case of filings, recordings or registrations required by Section 4A.10,
Section 4B.10, Section 4A.16 or Section 4B.16 of the Indenture) and in each
relevant governmental, municipal or other office pertaining to real property for
which a legal description is provided pursuant to Section 4.01(b) constitute all
the filings, recordings and registrations (except to the extent that filings are
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office, or any similar office in any other jurisdiction,
in order to perfect the Security Interest in Article 9 Collateral consisting of
United States Patents, United States registered Trademarks and United States
registered Copyrights) that are necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent (for the ratable benefit of the Secured Parties)
in respect of all Article 9 Collateral in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements or
amendments. Each Pledgor represents and warrants that a fully executed
Intellectual Property Security Agreement containing a description of all Article
9 Collateral consisting of Intellectual Property with respect to United States
Patents (and Patents for which United States applications are pending), United
States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
(and Copyrights for which United States registration applications are pending)
has been delivered to the Collateral Agent for recording with the United States
Patent and Trademark Office and the United States Copyright Office pursuant to
35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations
thereunder, as applicable, and reasonably requested by the Collateral Agent, to
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, in respect of all Article 9 Collateral consisting of such
Intellectual Property in which a security interest may be perfected by recording
with the United States Patent and

 

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Trademark Office and the United States Copyright Office, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than the Uniform Commercial Code financing
statements referred to above, and other than such actions as are necessary to
perfect the Security Interest with respect to any Article 9 Collateral
consisting of United States Patents, Trademarks and Copyrights (or registration
or application for registration thereof) acquired or developed after the date
hereof).

(c) The Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of the
Intellectual Property Security Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable. The
Security Interest is and shall be a second-priority Security Interest, prior to
any other Lien on any of the Article 9 Collateral, other than Liens in respect
of Senior Lender Claims, subject to Permitted Liens.

(d) The Article 9 Collateral is owned by the Pledgors free and clear of any
Lien, other than Permitted Liens. None of the Pledgors has filed or consented to
the filing of (i) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any Article 9
Collateral, (ii) any assignment in which any Pledgor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article
9 Collateral with the United States Patent and Trademark Office or the United
States Copyright Office or (iii) any assignment in which any Pledgor assigns any
Article 9 Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with any foreign governmental, municipal or other
office, which financing statement or analogous document, assignment, security
agreement or similar instrument is still in effect, except, in each case, for
Permitted Liens.

(e) None of the Pledgors holds any Commercial Tort Claim individually in excess
of $5.0 million as of the Issue Date except as indicated on Schedule V.

(f) Except as set forth in Schedule VI, as of the Issue Date, all Accounts have
been originated by the Pledgors and all Inventory has been produced or acquired
by the Pledgors in the ordinary course of business.

(g) As to itself and its Article 9 Collateral consisting of Intellectual
Property (the “Intellectual Property Collateral”), to the best of each Pledgor’s
knowledge:

(i) The Intellectual Property Collateral set forth on Schedule III includes all
of the material Patents, Trademarks, Copyrights and IP Agreements owned by such
Pledgor as of the date hereof.

 

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(ii) The Intellectual Property Collateral is subsisting and, to the best of such
Pledgor’s knowledge, has not been adjudged invalid or unenforceable in whole or
part (except for office actions issued in the ordinary course by the United
States Patent and Trademark Office or any similar office in any foreign
jurisdiction), and to the best of such Pledgor’s knowledge, is valid and
enforceable, except as would not reasonably be expected to have a Material
Adverse Effect. Such Pledgor is not aware of any uses of any item of
Intellectual Property Collateral that would be expected to lead to such item
becoming invalid or unenforceable, except as would not reasonably be expected to
have a Material Adverse Effect.

(iii) Such Pledgor has made or performed all commercially reasonable acts,
including without limitation filings, recordings and payment of all required
fees and taxes, required to maintain and protect its interest in each and every
item of Intellectual Property Collateral in full force and effect in the United
States and such Pledgor has used proper statutory notice in connection with its
use of each Patent, Trademark and Copyright in the Intellectual Property
Collateral, in each case, except to the extent that the failure to do so would
not reasonably be expected to have a Material Adverse Effect.

(iv) With respect to each IP Agreement, the absence, termination or violation of
which would reasonably be expected to have a Material Adverse Effect: (A) such
Pledgor has not received any notice of termination or cancellation under such IP
Agreement; (B) such Pledgor has not received any notice of a breach or default
under such IP Agreement, which breach or default has not been cured or waived;
and (C) to the knowledge of such Pledgor, neither such Pledgor nor any other
party to such IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination, modification or
acceleration under such IP Agreement.

(v) Except as would not reasonably be expected to have a Material Adverse
Effect, no Pledgor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral or that would impair
the validity or enforceability of such Intellectual Property Collateral.

Section 4.03. Covenants.

(a) Each Pledgor agrees to provide at least 10 days’ prior written notice to the
Collateral Agent of any change (i) in its corporate or organization name,
(ii) in its identity or type of organization or corporate structure, (iii) in
its Federal Taxpayer Identification Number or organizational identification
number or (iv) in its “location” (determined as provided in UCC Section 9-307).
Each Pledgor agrees

 

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promptly to provide the Collateral Agent with certified organizational documents
reflecting any of the changes described in the immediately preceding sentence.
Each Pledgor agrees not to effect or permit any change referred to in the first
sentence of this paragraph (a) unless all filings have been made, or will have
been made within any applicable statutory period, under the Uniform Commercial
Code or otherwise that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected
security interest in all the Article 9 Collateral, for the ratable benefit of
the Secured Parties. Each Pledgor agrees promptly to notify the Collateral Agent
if any material portion of the Article 9 Collateral owned or held by such
Pledgor is damaged or destroyed.

(b) Subject to the rights of such Pledgor under the Indenture Documents to
dispose of Collateral, each Pledgor shall, at its own expense, use commercially
reasonable efforts to defend title to the Article 9 Collateral against all
persons and to defend the Security Interest of the Collateral Agent, for the
ratable benefit of the Secured Parties, in the Article 9 Collateral and the
priority thereof against any Lien that is not a Permitted Lien.

(c) Each Pledgor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions that in accordance with, and to the extent consistent with, the
terms of the Intercreditor Agreement and the Indenture, the Holders of at least
25% in principal amount of the Notes or the Collateral Agent may from time to
time reasonably request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement and the granting of the Security Interest and the
filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Article 9 Collateral that is in excess of $5.0
million shall be or become evidenced by any promissory note or other instrument,
such note or instrument shall be promptly pledged to the Collateral Agent and
delivered to the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), for the ratable benefit of the Secured Parties,
duly endorsed in a manner reasonably satisfactory to the Intercreditor Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent).

Without limiting the generality of the foregoing, each Pledgor hereby authorizes
the Intercreditor Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent), with prompt notice thereof to the Pledgors, to supplement
this Agreement by supplementing Schedule III or adding additional schedules
hereto to specifically identify any asset or item that may constitute material
Copyrights, Patents, Trademarks, Copyright Licenses, Patent Licenses or
Trademark Licenses; provided that any Pledgor shall have the right, exercisable
within 30 days after the Issuers has been notified by the Intercreditor Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent) of
the specific identification of such Article 9 Collateral, to advise the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) in writing of any inaccuracy of the representations and
warranties made by such

 

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Pledgor hereunder with respect to such Article 9 Collateral. Each Pledgor agrees
that it will use its commercially reasonable efforts to take such action as
shall be necessary in order that all representations and warranties hereunder
shall be true and correct with respect to such Article 9 Collateral within 30
days after the date it has been notified by the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) of the specific
identification of such Article 9 Collateral.

(d) In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, after the occurrence of an Event of Default and during
the continuance thereof, the Collateral Agent shall have the right to verify
under reasonable procedures the validity, amount, quality, quantity, value,
condition and status of, or any other matter relating to, the Article 9
Collateral, including, in the case of Accounts or Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification. The Collateral Agent shall have the right to share any information
it gains from such inspection or verification with any Secured Party.

(e) In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, at its option, the Collateral Agent may discharge past
due taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Article 9 Collateral and not a
Permitted Lien, and may pay for the maintenance and preservation of the Article
9 Collateral to the extent any Pledgor fails to do so as required by the
Indenture or this Agreement, and each Pledgor jointly and severally agrees to
reimburse the Collateral Agent on demand for any reasonable payment made or any
reasonable expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.03(e) shall be
interpreted as excusing any Pledgor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Pledgor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Indenture Documents.

(f) Each Pledgor (rather than the Collateral Agent or any other Secured Party)
shall remain liable for the observance and performance of all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral and each Pledgor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.

(g) None of the Pledgors shall make or permit to be made an assignment, pledge
or hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as permitted by the Indenture and
the other provisions hereof. None of the Pledgors shall make or permit to be
made any transfer of the Article 9 Collateral and each Pledgor shall remain at
all times in possession of the Article 9 Collateral owned by it, except as
permitted by the Indenture and the other provisions hereof.

 

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(h) None of the Pledgors will, without the Collateral Agent’s prior written
consent (which consent shall not be unreasonably withheld), grant any extension
of the time of payment of any Accounts included in the Article 9 Collateral,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course of
business and consistent with prudent business practices or as otherwise
permitted under the Indenture.

(i) Each Pledgor irrevocably makes, constitutes and appoints the Intercreditor
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) (and all officers, employees or agents designated by the Intercreditor
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent)) as such Pledgor’s true and lawful agent (and attorney-in-fact) for the
purpose, during the continuance of an Event of Default, of making, settling and
adjusting claims in respect of Article 9 Collateral under policies of insurance,
endorsing the name of such Pledgor on any check, draft, instrument or other item
of payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto. In the event that any Pledgor
at any time or times shall fail to obtain or maintain any of the policies of
insurance required hereby or to pay any premium in whole or part relating
thereto, the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) may, without waiving or releasing any obligation
or liability of the Pledgors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Intercreditor Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent)
reasonably deems advisable. All sums disbursed by the Intercreditor Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) in
connection with this Section 4.03(i), including reasonable attorneys’ fees,
court costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Pledgors to the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) and shall be additional
Obligations secured hereby.

Section 4.04. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
for the ratable benefit of the Secured Parties, the Collateral Agent’s security
interest in the Article 9 Collateral, each Pledgor agrees, in each case at such
Pledgor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:

(a) Instruments and Tangible Chattel Paper. If any Pledgor shall at any time
hold or acquire any Instruments (other than checks received and processed in the
ordinary course of business) or Tangible Chattel Paper evidencing an amount in
excess of $5.0 million, such Pledgor shall forthwith endorse, assign and deliver
the same to the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), accompanied by such instruments of transfer or
assignment duly executed in blank as the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) may from time to
time reasonably request.

 

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(b) Investment Property. Except to the extent otherwise provided in Article III,
if any Pledgor shall at any time hold or acquire any Certificated Security
constituting Pledged Collateral or Article 9 Collateral, such Pledgor shall
forthwith endorse, assign and deliver the same to the Intercreditor Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent),
accompanied by such instruments of transfer or assignment duly executed in blank
as the Intercreditor Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent) may from time to time reasonably specify. If any security
of a domestic issuer now owned or hereafter acquired by any Pledgor is
uncertificated and is issued to such Pledgor or its nominee directly by the
issuer thereof, such Pledgor shall promptly notify the Intercreditor Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) of such
uncertificated securities and (i) upon the Intercreditor Agent’s (or, if the
First-Lien Termination Date has occurred, the Collateral Agent’s) reasonable
request or (ii) upon the occurrence and during the continuance of an Event of
Default, such Pledgor shall pursuant to an agreement in form and substance
reasonably satisfactory to the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent), either (x) cause the
issuer thereof to execute and deliver to the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) an issuer
acknowledgement in respect of such uncertificated securities in the form of
Exhibit II hereto or (y) cause the issuer to register the Intercreditor Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent) as
the registered owner of such security. If any security or other Investment
Property, whether certificated or uncertificated, representing an Equity
Interest in a third party and having a fair market value in excess of $5.0
million now or hereafter acquired by any Pledgor is held by such Pledgor or its
nominee through a securities intermediary or commodity intermediary, such
Pledgor shall promptly notify the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) thereof and, at the
Intercreditor Agent’s (or, if the First-Lien Termination Date has occurred, the
Collateral Agent’s) request and option, pursuant to a Control Agreement in form
and substance reasonably satisfactory to the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent), either
(A) cause such securities intermediary or commodity intermediary, as applicable,
to agree, in the case of a securities intermediary, to comply with entitlement
orders or other instructions from the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) to such securities
intermediary as to such securities or other Investment Property or, in the case
of a commodity intermediary, to apply any value distributed on account of any
commodity contract as directed by the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) to such commodity
intermediary, in each case without further consent of any Pledgor or such
nominee, or (B) in the case of Financial Assets or other Investment Property
held through a securities intermediary, arrange for the Intercreditor Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) to become
the entitlement holder with respect to such Investment Property, for the ratable
benefit of the Secured Parties, with such Pledgor being permitted, only with the
consent of the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), to exercise rights to withdraw or otherwise
deal with such Investment Property. The Intercreditor Agent (or, if the
First-Lien Termination Date has

 

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occurred, the Collateral Agent) agrees with each of the Pledgors that the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) shall not give any such entitlement orders or instructions or
directions to any such issuer, securities intermediary or commodity
intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by any Pledgor, unless an Event of Default has
occurred and is continuing or, after giving effect to any such withdrawal or
dealing rights, would occur. The provisions of this paragraph (b) shall not
apply to any Financial Assets credited to a Securities Account for which the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) is the securities intermediary.

(c) Commercial Tort Claims. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $5.0 million,
such Pledgor shall promptly notify the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) thereof in a
writing signed by such Pledgor, including a summary description of such claim,
and grant to the Intercreditor Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) in writing a security interest therein for the
ratable benefit of the Secured Parties and in the proceeds thereof, all under
the terms and provisions of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent).

Section 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral.
Except as permitted by the Indenture:

(a) Each Pledgor agrees that it will not knowingly do any act or omit to do any
act (and will exercise commercially reasonable efforts to prevent its licensees
from doing any act or omitting to do any act) whereby any Patent that is
material to the normal conduct of such Pledgor’s business may become prematurely
invalidated, abandoned, lapsed or dedicated to the public, and agrees that it
shall take commercially reasonable steps with respect to any material products
covered by any such Patent as necessary and sufficient to establish and preserve
its rights under applicable patent laws.

(b) Each Pledgor will, and will use its commercially reasonable efforts to cause
its licensees or its sublicensees to, for each material Trademark necessary to
the normal conduct of such Pledgor’s business, (i) maintain such Trademark in
full force free from any adjudication of abandonment or invalidity for non-use,
(ii) maintain the quality of products and services offered under such Trademark,
(iii) display such Trademark with notice of federal or foreign registration or
claim of trademark or service mark as required under applicable law and (iv) not
knowingly use or knowingly permit its licensees’ use of such Trademark in
violation of any third-party rights.

(c) Each Pledgor will, and will use its commercially reasonable efforts to cause
its licensees or its sublicensees to, for each work covered by a material
Copyright necessary to the normal conduct of such Pledgor’s business that it
publishes, displays and distributes, use a copyright notice as provided by
applicable copyright laws.

 

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(d) Each Pledgor shall notify the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) promptly if it knows that
any Patent, Trademark or Copyright material to the normal conduct of such
Pledgor’s business may imminently become abandoned, lapsed or dedicated to the
public, or of any materially adverse determination or development, excluding
office actions and similar determinations or developments in the United States
Patent and Trademark Office, United States Copyright Office, any court or any
similar office of any country, regarding such Pledgor’s ownership of any such
material Patent, Trademark or Copyright or its right to register or to maintain
the same.

(e) Each Pledgor, either itself or through any agent, employee, licensee or
designee, shall (i) inform the Intercreditor Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) on an annual basis of each
application by itself, or through any agent, employee, licensee or designee, for
any Patent with the United States Patent and Trademark Office and each
registration of any Trademark or Copyright with the United States Patent and
Trademark Office, the United States Copyright Office or any comparable office or
agency in any other country filed during the preceding twelve-month period, and
(ii) upon the reasonable request of the Intercreditor Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent), execute and
deliver any and all agreements, instruments, documents and papers as the
Intercreditor Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) may reasonably request to evidence the Intercreditor Agent’s
(or, if the First-Lien Termination Date has occurred, the Collateral Agent’s)
security interest for the ratable benefit of the Secured Parties in such Patent,
Trademark or Copyright.

(f) Each Pledgor shall exercise its reasonable business judgment consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any comparable office or agency in
any other country with respect to maintaining and pursuing each application
relating to any Patent, Trademark and/or Copyright (and obtaining the relevant
grant or registration) material to the normal conduct of such Pledgor’s business
and to maintain (i) each issued Patent and (ii) the registrations of each
Trademark and each Copyright that is material to the normal conduct of such
Pledgor’s business, including, when applicable and necessary in such Pledgor’s
reasonable business judgment, timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if any Pledgor believes necessary in its reasonable business
judgment, to initiate opposition, interference and cancellation proceedings
against third parties.

(g) In the event that any Pledgor knows or has reason to know that any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the normal
conduct of its business has been or is about to be materially infringed,
misappropriated or diluted by a third party, such Pledgor shall promptly notify
the Intercreditor Agent (or, if the First-Lien Termination Date has occurred,
the Collateral Agent) and shall, if such Pledgor deems it necessary in its
reasonable business judgment, promptly sue and recover any and all damages, and
take such other actions as are reasonably appropriate under the circumstances.

 

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ARTICLE V

REMEDIES

Section 5.01. Remedies Upon Default. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, each Pledgor agrees to
deliver each item of Collateral to the Collateral Agent on demand, and it is
agreed that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times:

(a) with respect to any Article 9 Collateral consisting of Intellectual
Property, on demand, to cause the Security Interest to become an assignment,
transfer and conveyance of any of or all such Article 9 Collateral by the
applicable Pledgors to the Collateral Agent or to license or sublicense, whether
general, special or otherwise, and whether on an exclusive or a nonexclusive
basis, any such Article 9 Collateral throughout the world on such terms and
conditions and in such manner as the Collateral Agent shall determine (other
than in violation of any then-existing licensing arrangements to the extent that
waivers thereunder cannot be obtained with the use of commercially reasonable
efforts, which each Pledgor hereby agrees to use) and

(b) with or without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to the applicable Pledgor to enter any premises where the
Article 9 Collateral may be located for the purpose of taking possession of or
removing the Article 9 Collateral and, generally, to exercise any and all rights
afforded to a secured party under the applicable Uniform Commercial Code or
other applicable law. Without limiting the generality of the foregoing, each
Pledgor agrees that the Collateral Agent shall have the right, subject to the
mandatory requirements of applicable law, to sell or otherwise dispose of all or
any part of the Collateral at a public or private sale or at any broker’s board
or on any securities exchange, for cash, upon credit or for future delivery as
the Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized in connection with any sale of a security (if it deems it advisable
to do so) pursuant to the foregoing to restrict the prospective bidders or
purchasers to persons who represent and agree that they are purchasing such
security for their own account, for investment, and not with a view to the
distribution or sale thereof. Upon consummation of any such sale of Collateral
pursuant to this Section 5.01 the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives and releases (to the extent permitted by law) all
rights of redemption, stay, valuation and appraisal that such Pledgor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.

The Collateral Agent shall, except in the case of Collateral that is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market, give the applicable Pledgors 10 Business Days’ written notice
(which

 

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each Pledgor agrees is reasonable notice within the meaning of Section 9-611 of
the New York UCC or its equivalent in other jurisdictions) of the Collateral
Agent’s intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a
sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
the portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In the case of
any sale of all or any part of the Collateral made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in the event that any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in the case of any such failure, such Collateral may be sold again upon
notice given in accordance with provisions above. At any public (or, to the
extent permitted by law, private) sale made pursuant to this Section 5.01, any
Secured Party may bid for or purchase for cash, free (to the extent permitted by
law) from any right of redemption, stay, valuation or appraisal on the part of
any Pledgor (all such rights being also hereby waived and released to the extent
permitted by law), the Collateral or any part thereof offered for sale and such
Secured Party may, upon compliance with the terms of sale, hold, retain and
dispose of such property in accordance with Section 5.02 hereof without further
accountability to any Pledgor therefor. For purposes hereof, a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Pledgor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver. Any sale pursuant to the provisions of this
Section 5.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

 

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Section 5.02. Application of Proceeds. The Collateral Agent shall promptly apply
the proceeds, moneys or balances of any collection or sale of Collateral, as
well as any Collateral consisting of cash, as follows:

FIRST, to the payment of all costs and expenses incurred by the Collateral Agent
in connection with such collection or sale or otherwise in connection with this
Agreement, any other Indenture Document or any of the Obligations, including
without limitation all court costs and the fees and expenses of its agents and
legal counsel, the repayment of all advances made by the Collateral Agent
hereunder or under any other Indenture Document on behalf of any Pledgor, any
other costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Indenture Document, and all other fees,
indemnities and other amounts owing or reimbursable to the Collateral Agent
under any Indenture Document in its capacity as such;

SECOND, to interest due in respect of the Obligations which such Collateral
secures;

THIRD, to the principal of the Obligations which such Collateral secures; and

FOURTH, to the Pledgors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.

Section 5.03. Securities Act, Etc. In view of the position of the Pledgors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar federal statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor acknowledges and agrees that in light of such restrictions
and limitations, the Collateral Agent, in its sole and absolute discretion,
(a) may proceed to make such a sale whether or not a registration statement for
the purpose of registering such Pledged Collateral or part thereof shall have
been filed

 

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under the Federal Securities Laws or, to the extent applicable, Blue Sky or
other state securities laws and (b) may approach and negotiate with a single
potential purchaser to effect such sale. Each Pledgor acknowledges and agrees
that any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Collateral at a price that
the Collateral Agent, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 5.03 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.

ARTICLE VI

[RESERVED]

ARTICLE VII

MISCELLANEOUS

Section 7.01. Notices. All communications and notices hereunder shall (except as
otherwise permitted herein) be in writing and given as provided in Section 13.02
of the Indenture. All communications and notices hereunder to any Subsidiary
Party shall be given to it in care of the Issuers, with such notice to be given
as provided in Section 13.02 of the Indenture.

Section 7.02. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest in the Article 9 Collateral, the security
interest in the Pledged Collateral and all obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Indenture, any other Indenture Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Indenture, any
other Indenture Document or any other agreement or instrument, (c) any exchange,
release or non-perfection of any Lien on other collateral, or any release or
amendment or waiver of or consent under or departure from any guarantee,
securing or guaranteeing all or any of the Obligations or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Pledgor in respect of the Obligations or this Agreement (other
than a defense of payment or performance).

Section 7.03. Limitation By Law. All rights, remedies and powers provided in
this Agreement may be exercised only to the extent that the exercise thereof

 

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does not violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that
they shall not render this Agreement invalid, unenforceable, in whole or in
part, or not entitled to be recorded, registered or filed under the provisions
of any applicable law.

Section 7.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any party to this Agreement when a counterpart hereof executed
on behalf of such party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such party and the Collateral Agent and
their respective permitted successors and assigns, and shall inure to the
benefit of such party, the Collateral Agent and the other Secured Parties and
their respective permitted successors and assigns, except that no party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated by this Agreement or the Indenture.
This Agreement shall be construed as a separate agreement with respect to each
party and may be amended, modified, supplemented, waived or released with
respect to any party without the approval of any other party and without
affecting the obligations of any other party hereunder.

Section 7.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Pledgor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective permitted successors and assigns; provided that no Pledgor may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent, except as
permitted by the Indenture. The Collateral Agent hereunder shall at all times be
the same person that is the Collateral Agent under the Indenture. Written notice
of resignation by the Collateral Agent as trustee pursuant to the Indenture
shall also constitute notice of resignation as the Collateral Agent under this
Agreement. Upon the acceptance of any appointment as the trustee under the
Indenture by a successor Collateral Agent, that successor trustee shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent pursuant hereto.

Section 7.06. Collateral Agent’s Fees and Expenses; Indemnification.

(a) In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, each Pledgor jointly and severally agrees to pay upon
demand to the Collateral Agent the amount of any and all reasonable expenses,
including the reasonable fees, disbursements and other charges of its counsel
and of any experts or agents, which the Collateral Agent may incur in connection
with (i) the administration of this Agreement, (ii) the custody or preservation
of, or the sale of, collection from or other realization upon any of the
Collateral, (iii) the exercise, enforcement or protection of any rights of the
Collateral Agent hereunder or (iv) the failure of any Pledgor to perform or
observe any of the provisions hereof applicable to it.

 

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(b) Without limitation of its indemnification obligations under the other
Indenture Documents, each Pledgor jointly and severally agrees to indemnify the
Collateral Agent, the Trustee, the Holders and each Affiliate of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of, (i) the execution, delivery or performance of this
Agreement or any other Indenture Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto and
thereto of their respective obligations thereunder or the consummation of the
transactions contemplated hereby, (ii) the use of proceeds of the Notes or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, or to the Collateral, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Indenture Document,
the consummation of the transactions contemplated hereby, the repayment of any
of the Obligations, the invalidity or unenforceability of any term or provision
of this Agreement or any other Indenture Document, or any investigation made by
or on behalf of the Collateral Agent or any other Secured Party. All amounts due
under this Section 7.06 shall be payable on written demand therefor.

Section 7.07. Collateral Agent Appointed Attorney-in-Fact. In accordance with,
and to the extent consistent with, the terms of the Intercreditor Agreement,
each Pledgor hereby appoints the Collateral Agent the attorney-in-fact of such
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that the Collateral Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. The Collateral Agent shall have the
right, upon the occurrence and during the continuance of an Event of Default,
with full power of substitution either in the Collateral Agent’s name or in the
name of such Pledgor, (a) to receive, endorse, assign or deliver any and all
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof, (b) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of
the Collateral; (c) to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral; (d) to sign the name of any Pledgor on any invoice or bill of
lading relating to any of the Collateral; (e) to send verifications of Accounts
to any Account Debtor; (f) to commence and

 

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prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (g) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (h) to notify, or to require any
Pledgor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, that nothing herein contained shall
be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Collateral Agent, or to present or file any claim or notice, or
to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby.
The Collateral Agent and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the powers granted to
them herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Pledgor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.

Section 7.08. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

Section 7.09. Waivers; Amendment.

(a) No failure or delay by the Collateral Agent or any Secured Party in
exercising any right, power or remedy hereunder or under any other Indenture
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy, or any abandonment or
discontinuance of steps to enforce such a right, power or remedy, preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The rights, powers and remedies of the Collateral Agent and the Secured
Parties hereunder and under the other Indenture Documents are cumulative and are
not exclusive of any rights, powers or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by any
Indenture Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section 7.09, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on any Indenture Party in any case shall
entitle any Indenture Party to any other or further notice or demand in similar
or other circumstances.

(b) None of this Agreement, the Intercreditor Agreement, any of the other
Indenture Documents or any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Collateral Agent and the Indenture Party or Indenture Parties with respect to
which such waiver, amendment or modification is to apply, subject to the
limitations in the

 

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Intercreditor Agreement or as otherwise provided in the Intercreditor Agreement.
For the avoidance of doubt, the Collateral Agent shall have no obligation to
execute and deliver any amendment, supplement, modification or waiver to this
Agreement which affects its own rights, duties, immunities or indemnities under
this Agreement or under the other Note Documents. In signing such amendment,
supplement, modification or waiver, the Collateral Agent shall be entitled to
receive indemnity satisfactory to it and in all cases shall be provided with,
and shall be fully protected in relying in good faith upon, (i) a certificate of
an Officer of the Company and (ii) an opinion of counsel to the Company stating
that the execution of such documents is authorized or permitted hereunder.

Section 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INDENTURE DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.10.

Section 7.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Indenture Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

Section 7.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 7.04 hereof. Delivery of an executed counterpart to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed original.

Section 7.13. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

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Section 7.14. Jurisdiction; Consent to Service of Process.

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

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

Section 7.15. Termination or Release.

(a) This Agreement, the pledges made herein, the Security Interest and all other
security interests granted hereby shall terminate when all the Note Obligations
(other than contingent indemnity or expense reimbursement obligations in respect
of which no claim has been made) have been defeased in accordance with its terms
and any other requirements set forth in the Note Documents then effective are
satisfied.

(b) The Liens securing the Note Obligations will be released in whole or in
part, as provided in Section 11.04 of the Indenture.

(c) A Subsidiary Party shall automatically be released from its obligations
hereunder and the security interests in the Collateral of such Subsidiary Party
shall be automatically released if such Subsidiary Party is released from its
guarantee pursuant to Section 11.04 of the Indenture.

(d) Upon any sale or other transfer by any Pledgor of any Collateral that is
permitted under the Note Documents (to the extent the release of such Collateral
following such sale is permitted by the Note Documents), or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to the Note Documents, the security
interest in such Collateral shall be automatically released.

 

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(e) In connection with any termination or release pursuant to paragraph (a),
(b) or (c) of this Section 7.15, the Collateral Agent shall execute and deliver
to any Pledgor, at such Pledgor’s expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release (including, without
limitation, Uniform Commercial Code termination statements) and will duly assign
and transfer to such Pledgor such of the Pledged Collateral that may be in the
possession of the Collateral Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement; provided, that the
Collateral Agent shall not be required to take any action under this
Section 7.15(e) unless such Pledgor shall have delivered to the Collateral Agent
together with such request, which may be incorporated into such request, (i) a
reasonably detailed description of the Collateral, which in any event shall be
sufficient to effect the appropriate termination or release without affecting
any other Collateral, and (ii) a certificate of an Officer of the Company or
such Pledgor certifying that the transaction giving rise to such termination or
release is permitted by the Note Documents and was consummated in compliance
with the Note Documents. Any execution and delivery of documents pursuant to
this Section 7.15 shall be without recourse to or warranty by the Collateral
Agent.

Section 7.16. Additional Subsidiaries. If, pursuant to the Indenture, the
Issuers are required to cause any Subsidiary that is not a Subsidiary Guarantor
to become a Subsidiary Guarantor, upon execution and delivery by the Collateral
Agent and such Subsidiary of an instrument in the form of Exhibit I hereto, such
Subsidiary shall become a Subsidiary Party hereunder with the same force and
effect as if originally named as a Subsidiary Party herein. The execution and
delivery of any such instrument shall not require the consent of any other party
to this Agreement. The rights and obligations of each party to this Agreement
shall remain in full force and effect notwithstanding the addition of any new
party to this Agreement.

Section 7.17. Right of Set-off. If an Event of Default shall have occurred and
be continuing, each Secured Party is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Secured Party to or
for the credit or the account of any party to this Agreement against any of and
all the obligations of such party now or hereafter existing under this Agreement
owed to such Secured Party, irrespective of whether or not Secured Party shall
have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Secured Party under this Section 7.17 are in
addition to other rights and remedies (including other rights of set-off) that
such Secured Party may have.

Section 7.18. Subject to Intercreditor Agreement. Notwithstanding anything
herein to the contrary, (i) the liens and security interests granted to the
Collateral Agent pursuant to this Agreement are expressly subject and
subordinate to the liens and security interests granted to (a) the First-Lien
Administrative Agent and ABL Administrative Agent pursuant to the Collateral
Agreements, (b) the First-Lien Notes Collateral Agent pursuant to the First-Lien
Notes Collateral Agreement, (c) the 1.5 Lien Notes Collateral Agent pursuant to
the 1.5 Lien Notes Collateral Agreement, or (d) any

 

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other Second-Priority Agent (as defined in the Intercreditor Agreement) for any
other Trustee for any other Secured Lender, and (ii) the liens and security
interests granted to the Collateral Agent pursuant to this Agreement rank
equally and ratably in all respects with the liens and security interests
granted to (a) the Trustee (as defined in the Intercreditor Agreement), or
(b) any other Second-Priority Agent (as defined in the Intercreditor Agreement)
for any other Second-Priority Secured Parties and (iii) the exercise of any
right or remedy by the Collateral Agent hereunder is subject to the limitations
and provisions of the Intercreditor Agreement. In the event of any conflict
between the terms of the Intercreditor Agreement and the terms of this
Agreement, the terms of the Intercreditor Agreement shall govern. This Agreement
is a Second-Priority Collateral Agreement as defined in the Intercreditor
Agreement.

Section 7.19. Senior Collateral Documents. The Collateral Agent acknowledges and
agrees, on behalf of itself and any Secured Party, that any provision of this
Agreement to the contrary notwithstanding, until the First-Lien Termination
Date, the Indenture Parties shall not be required to act or refrain from acting
pursuant to the Security Documents or with respect to any Collateral on which
the Intercreditor Agent has a Lien superior in priority to the Collateral
Agent’s Lien thereon in any manner that would result in a default under the
terms and provisions of the Senior Collateral Documents.

[Signature Page Follows]

 

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

 

VERSO PAPER HOLDINGS LLC

VERSO PAPER INC.

VERSO PAPER LLC

VERSO ANDROSCOGGIN LLC

VERSO BUCKSPORT LLC

VERSO FIBER FARM LLC

VERSO MAINE ENERGY LLC

VERSO QUINNESEC LLC

VERSO SARTELL LLC

VERSO QUINNESEC REP HOLDING INC.

NEXTIER SOLUTIONS CORPORATION By:  

/s/ Robert P. Mundy

  Name:   Robert P. Mundy   Title:   Senior Vice President and Chief Financial
Officer

 

WILMINGTON TRUST, NATIONAL ASSOCIATION as Collateral Agent By:  

/s/ Jane Schweiger

  Name:   Jane Schweiger   Title:   Vice President

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Schedules to Collateral Agreement

SCHEDULE I

SUBSIDIARY PARTIES

 

Legal Name

 

Type of Entity

 

Jurisdiction of Organization

Verso Paper LLC   Limited Liability Company   Delaware Verso Androscoggin LLC  
Limited Liability Company   Delaware Verso Bucksport LLC   Limited Liability
Company   Delaware Verso Fiber Farm LLC   Limited Liability Company   Delaware
Verso Maine Energy LLC   Limited Liability Company   Delaware Verso Quinnesec
LLC   Limited Liability Company   Delaware Verso Sartell LLC  
Limited Liability Company   Delaware Verso Quinnesec REP Holding Inc.  
Corporation   Delaware nexTier Solutions Corporation   Corporation   California

 

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Schedules to Collateral Agreement

 

SCHEDULE II

EQUITY

 

Issuer

  

Registered Owner

  

Number and Class of

Equity Interest

   Percentage
of Equity
Interests     Certificate
Number

Verso Paper Holdings LLC

   Verso Paper Finance Holdings LLC    LLC interest      100 %    N/A

Verso Paper LLC

   Verso Paper Holdings LLC    LLC interest      100 %    N/A

Verso Paper Inc.

   Verso Paper Holdings LLC    1,000 shares of common stock      100 %    1

Verso Androscoggin LLC

   Verso Paper LLC    LLC interest      100 %    N/A

Verso Bucksport LLC

   Verso Paper LLC    LLC interest      100 %    N/A

Bucksport Leasing LLC

   Verso Paper LLC    LLC interest      100 %    N/A

Verso Maine Energy LLC

   Verso Paper LLC    LLC interest      100 %    N/A

Verso Maine Power Holdings LLC

   Verso Paper LLC    LLC interest      100 %    N/A

Verso Quinnesec REP Holding Inc.

   Verso Paper LLC    1,000 shares of common stock      100 %    1

Verso Quinnesec LLC

   Verso Paper LLC    LLC interest      99.9 %    N/A   
Verso Quinnesec REP Holding Inc.    LLC interest      0.1 %    N/A

Verso Quinnesec REP LLC

   Verso Quinnesec LLC    LLC interest      100 %    N/A

Verso Sartell LLC

   Verso Paper LLC    LLC interest      100 %    N/A

Verso Fiber Farm LLC

   Verso Paper LLC    LLC interest      100 %    N/A

nexTier Solutions Corporation

   Verso Paper LLC    1,000 shares of common stock      100 %    20

DEBT SECURITIES

 

1. Approximately $77 million Demand Note No. 1, dated August 1, 2006, issued by
Verso Androscoggin LLC to Verso Paper Holdings LLC.

 

2. Approximately $108 million Demand Note No. 2, dated August 1, 2006, issued by
Verso Androscoggin LLC to Verso Paper Holdings LLC.

 

3. Approximately $92 million Demand Note No. 3, dated August 1, 2006, issued by
Verso Androscoggin LLC to Verso Paper Holdings LLC.

 

4. Approximately $88 million Demand Note No. 4, dated August 1, 2006, issued by
Verso Androscoggin LLC to Verso Paper Holdings LLC.

 

5. Approximately $53 million Demand Note No. 1, dated August 1, 2006, issued by
Verso Bucksport LLC to Verso Paper Holdings LLC.

 

6. Approximately $74 million Demand Note No. 2, dated August 1, 2006, issued by
Verso Bucksport LLC to Verso Paper Holdings LLC.

 

7. Approximately $63 million Demand Note No. 3, dated August 1, 2006, issued by
Verso Bucksport LLC to Verso Paper Holdings LLC.

 

8. Approximately $60 million Demand Note No. 4, dated August 1, 2006, issued by
Verso Bucksport LLC to Verso Paper Holdings LLC.

 

9. Approximately $77 million Demand Note No. 1, dated August 1, 2006, issued by
Verso Quinnesec LLC to Verso Paper Holdings LLC.

 

41

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Schedules to Collateral Agreement

 

10. Approximately $108 million Demand Note No. 2, dated August 1, 2006, issued
by Verso Quinnesec LLC to Verso Paper Holdings LLC.

 

11. Approximately $93 million Demand Note No. 3, dated August 1, 2006, issued by
Verso Quinnesec LLC to Verso Paper Holdings LLC.

 

12. Approximately $88 million Demand Note No. 4, dated August 1, 2006, issued by
Verso Quinnesec LLC to Verso Paper Holdings LLC.

 

13. Approximately $29 million Demand Note No. 1, dated August 1, 2006, issued by
Verso Sartell LLC to Verso Paper Holdings LLC.

 

14. Approximately $41 million Demand Note No. 2, dated August 1, 2006, issued by
Verso Sartell LLC to Verso Paper Holdings LLC.

 

15. Approximately $35 million Demand Note No. 3, dated August 1, 2006, issued by
Verso Sartell LLC to Verso Paper Holdings LLC.

 

16. Approximately $33 million Demand Note No. 4, dated August 1, 2006, issued by
Verso Sartell LLC to Verso Paper Holdings LLC.

 

42

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Schedules to Collateral Agreement

 

SCHEDULE III

INTELLECTUAL PROPERTY

Copyrights

 

  Publication    EZ-Suite Computer Program   Owner    Verso Paper LLC   USA   
Copyright No. TXuI-043-100 issued on June 25, 2002

Patents

 

1.   Patent    Elimination of alum yellowing of aspen thermomechanical pulp
through pulp washing   Owner    Verso Paper LLC   USA    Patent No. 7,018,509
issued on March 28, 2006 2.   Patent    Multi-party, multi-tier system for
managing paper purchase and distribution   Owner    Verso Paper LLC   Brazil   
Application No. PI0313537-3 filed on July 15, 2003   Canada    Application No.
2494414 filed on July 15, 2003   USA    Patent No. 8,260,672 issued on September
4, 2012   USA    Application No. 14/100,520 filed on December 9, 2013   USA   
Patent No. 8,630,910 issued on January 14, 2014 3.   Patent    Process for
producing super high bulk, light weight coated papers   Owner    Verso Paper LLC
  Austria    Patent No. E366338 issued on October 16, 2007   Belgium    Patent
No. 1565614 issued on October 4, 2007   Canada    Patent No. 2503966 filed on
October 18, 2011   Finland    Patent No. 1565614 issued on October 3, 2007  
Germany    Patent No. 1565614 issued on October 2, 2007   Great Britain   
Patent No. 1565614 issued on September 20, 2007   Italy    Patent No.
72236BE/2007 issued on September 28, 2007   Netherlands    Patent No. 1565614
issued on October 4, 2007   Sweden    Patent No. 1565614 issued on October 3,
2007 4.   Patent    Quality control apparatus and method for paper mill   Owner
   Verso Paper LLC   USA    Patent No. 6,024,835 issued on February 15, 2000 5.
  Patent    System and method for print analysis   Owner    Verso Paper LLC  
USA    Patent No. 6,504,625 issued on January 7, 2003 6.   Patent    Using a
metered size press to produce lightweight coated rotogravure paper   Owner   
Verso Paper LLC   Austria    Patent No. E355412 issued on February 28, 2007  
Belgium    Patent No. 1623068 issued on February 28, 2007   Finland    Patent
No. 1623068 issued on February 28, 2007   Germany    Patent No. 602004005024.5
issued on February 28, 2007   Great Britain    Patent No. 1623068 issued on
February 28, 2007   Italy    Patent No. 70020BE/2007 issued on February 28, 2007
  Netherlands    Patent No. 1623068 issued on February 28, 2007   Sweden   
Patent No. 1623068 issued on February 28, 2007

 

43

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Schedules to Collateral Agreement

 

Trademarks

 

1.   Mark    Advocate   Type    Trademark   Use    Rolls of coated and uncoated
paper sold to commercial printers and publishers for use in commercial printing
of magazines, catalogs, books and other publications   Owner    Verso Paper LLC
  USA    Registration No. 2,703,228 issued on April 1, 2003 2.   Mark   
EZ-Control   Type    Service mark   Use    Providing on-line non-downloadable
software for collaboratively managing procurement, production planning and
inventory control in the supply chain for the publication, catalog, print and
related paper industries   Owner    Verso Paper LLC   USA    Registration No.
4,171,353 issued on July 10, 2012 3.   Mark    EZ-Printer   Type    Service mark
  Use    Providing on-line non-downloadable software for collaboratively
managing procurement, production planning and inventory control in the supply
chain for the publication, catalog, print and related paper industries   Owner
   Verso Paper LLC   USA    Registration No. 4,171,354 issued on July 10, 2012
4.   Mark    EZ-Suite   Type    Service mark   Use    On-line web based business
management services, namely, collaboratively managing supply chain interactions
between paper suppliers, publishers and printers for others   Owner    Verso
Paper LLC   USA    Registration No. 3,030,600 issued on December 13, 2005 5.  
Mark    EZ-Supplier   Type    Service mark   Use    Providing on-line
non-downloadable software for collaboratively managing procurement, production
planning and inventory control in the supply chain for the publication, catalog,
print and related paper industries   Owner    Verso Paper LLC   USA   
Registration No. 4,171,355 issued on July 10, 2012 6.   Mark    Influence   Type
   Trademark   Use    Printing and publication paper   Owner    Verso Paper LLC
  USA    Registration No. 1,542,526 issued on June 6, 1989 7.   Mark   
Influence Soft-Gloss   Type    Trademark   Use    Printing, writing,
publication, cover and copy paper   Owner    Verso Paper LLC   USA   
Registration No. 2,331,367 issued on March 21, 2000

 

44

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Schedules to Collateral Agreement

 

8.   Mark    Liberty   Type    Trademark   Use    Rolls of coated paper for
commercial printing sold to catalogers, magazine publishers, distributors and
commercial printers   Owner    Verso Paper LLC   USA    Registration No.
3,051,555 issued on January 24, 2006 9.   Mark    Nextier   Type    Service mark
  Use    Business management services, namely, providing web-based,
business-to-business supply chain management services for others in the areas of
catalog, magazine, publication and related paper products industries   Owner   
Verso Paper LLC   USA    Registration No. 4,212,921 issued on September 25, 2012
10.   Mark    Nextier Solutions   Type    Service mark   Use    Business
management services, namely, providing web-based, business-to-business supply
chain management services for others in the areas of catalog, magazine,
publication and related paper products   Owner    Verso Paper LLC   USA   
Registration No. 4,224,530 issued on October 16, 2012 11.   Mark    NXTR (and
design)   Type    Service mark   Use    Business management services, namely,
providing web-based, business-to-business supply chain management services for
others in the areas of catalog, magazine, publication and related paper products
  Owner    Verso Paper LLC   USA    Registration No. 4,212,936 issued on
September 25, 2012 12.   Mark    Quinnesec   Type    Trademark   Use    Wood
pulp   Owner    Verso Paper LLC   USA    Registration No. 1,232,416 issued on
March 29, 1983 13.   Mark    Velocity   Type    Trademark   Use    Rolls of
coated and/or uncoated paper for use in commercial printing   Owner    Verso
Paper LLC   USA    Registration No. 2,576,468 issued on June 4, 2002 14.   Mark
   Verso   Type    Trademark   Use    Coated paper; supercalendered paper;
specialty paper for use in print media and print marketing, such as catalogs,
magazines, inserts, commercial print, direct mail advertising, advertising
brochures, and annual reports; kraft pulp for manufacturing purposes   Owner   
Verso Paper LLC   USA    Registration No. 3,446,920 issued on June 10, 2008 15.
  Mark    Verso Paper   Type    Trademark   Use    Coated paper; supercalendered
paper; specialty paper for use in print media and print marketing, such as
catalogs, magazines, inserts, commercial print, direct mail advertising,
advertising brochures, and annual reports   Owner    Verso Paper LLC   USA   
Registration No. 3,428,676 issued on May 13, 2008

 

45

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Schedules to Collateral Agreement

 

IP Agreements

 

1. Intellectual Property Agreement between International Paper Company and Verso
Paper LLC, effective as of August 1, 2006.

 

2. Intellectual Property Agreement between International Paper Company and Verso
Fiber Farm LLC, effective as of August 1, 2006.

 

3. Letter agreement between International Paper Company and Martha Stewart
Living Omnimedia, Inc. granting International Paper Company a royalty-free
license to manufacture and sell coated papers under the names “Martha Gloss
Offset” and “Martha Gloss Gravure” dated April 1, 2003.

 

4. Application Service Provider and Software License Agreement For EZ-Printer
Services and Software between Brown Printing Company and Nextier, dated
Sept. 20, 2002.

 

5. Application Service Provider and Software License Agreement For EZ- Printer
Services and Software between Conley Printing and Nextier, dated Dec. 28, 2005.

 

6. Application Service Provider and Software License Agreement For EZ- Printer
Services and Software between JCM Print Services and Nextier, dated May 3, 2004.

 

7. Application Service Provider and Software License Agreement For EZ- Printer
Services and Software between Neston Colour Limited and Nextier, dated May 29,
2003.

 

8. Application Service Provider and Software License Agreement For EZ- Printer
Services and Software between Polestar Chromoworks and Nextier, dated
November 17, 2003.

 

9. Application Service Provider and Software License Agreement For EZ- Printer
Services and Software between Polestar - Purnell and Nextier, dated Dec. 23,
2002.

 

10. Letter Agreement on EZ-Printer Services and Software between Quad/Graphics
and International Paper Company (for Nextier Solutions Corporation), dated
March 25, 2003.

 

11. Application Service Provider and Software License Agreement for EZ-Printer
Services and Software between Nextier Solutions Corporation and Quebecor World
(USA) Inc., dated Dec. 21, 2005.

 

12. Application Service Provider and Software License Agreement for EZ-Printer
Services and Software between Nextier Solutions Corporation and Quebecor World
Inc., dated July 15, 2005.

 

13. Application Service Provider and Software License Agreement for EZ-Printer
Services and Software between Nextier Solutions Corporation and R.R. Donnelley &
Sons Company, dated Nov. 17, 2005.

 

46

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Schedules to Collateral Agreement

 

14. Application Service Provider and Software License Agreement for EZ-Printer
Services and Software between Nextier Solutions Corporation and Three Z Printing
Co., dated April 4, 2005.

 

15. Application Service Provider and Software License Agreement for EZ-Printer
Services and Software between Nextier Solutions Corporation and Transcontinental
Inc., dated Feb. 16, 2005.

 

16. Application Service Provider and Software License Agreement for EZ-Printer
Services and Software between Nextier Solutions Corporation and Ringier Print
Zofingen AG, dated Nov. 11, 2002.

 

17. Application Service Provider and Software License Agreement for EZ-Supplier
Services and Software between Nextier Solutions Corporation and Abitibi
Consolidated, dated June 6, 2005.

 

18. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Fraser Papers
Inc., dated February 11, 2002.

 

19. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and International
Paper Company, dated Feb. 22, 2002.

 

20. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Gould Paper,
dated Feb. 25, 2005.

 

21. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Kruger Inc.
dated Oct. 1, 2003.

 

22. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Lindenmeyr
Central, dated Sept. 6, 2005.

 

23. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Mead Corporation
and Westvaco Corporation, dated June 5, 2002.

 

24. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Norske Skog and
Norske Canada, dated Dec. 30, 2003.

 

25. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Norske Skog
Canada Limited, dated June 28, 2005.

 

26. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and SCA Graphic
Laakirchen AG, dated Sept. 1, 2004.

 

47

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Schedules to Collateral Agreement

 

27. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and SCA North
America, dated Nov. 3, 2004.

 

28. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and St. Marys Paper
Ltd., dated April 1, 2004.

 

29. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Tembec, Inc.,
dated January 8, 2003.

 

30. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and UPM-Kymmene,
Inc., dated February 6, 2002.

 

31. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and West Linn Paper
Co., dated May 8, 2002.

 

32. Application Service Provider and Software License Agreement for EZ- Supplier
Services and Software between Nextier Solutions Corporation and Weyerhaeuser
Company Fine Paper, dated Nov. 29, 2001.

 

33. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and American Media,
Inc., dated January 24, 2005.

 

34. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and A.T. Clayton,
dated July 19, 2002.

 

35. Application Service Provider and Software License Agreement For EZ-Supplier
Services and Software between Nextier Solutions Corporation and Graphic
Communications Holdings, Inc., dated Feb. 4, 2002.

 

36. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and Land’s End,
Inc., dated May 16, 2002.

 

37. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and Primedia
Magazines, Inc., dated January 5, 2004.

 

38. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and Sears Canada
Inc., dated Feb. 17, 2004.

 

39. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and Strategic Paper
Group LLC, dated Feb. 11, 2002.

 

48

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Schedules to Collateral Agreement

 

40. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and Xpedx, dated
May 31, 2002.

 

41. Application Service Provider and Software License Agreement For EZ-Control
Services and Software between Nextier Solutions Corporation and Athens Paper
Company, Inc. dated August 1, 2010.

 

42. Application Service Provider and Software License Agreement For EZ-Supplier
Services and Software between Bowater America Inc. (confidential) and Nextier,
dated January 17, 2002.

 

43. Application Service Provider and Software License Agreement for EZ-Supplier
Services and Software between Nextier Solutions Corporation and Stora Enso dated
Oct. 1, 2003.

 

44. Message Delivery Agreement between Liaison Technologies, LLC and Nextier
Solutions Corporation dated June 1, 2007.

 

45. SAVVIS Master Services Agreement between SAVVIS Communications Corporation
and Nextier Solutions Corporation dated Dec. 2, 2005.

 

46. Support and Maintenance Contract for the EPC Messenger between Ponton
Consulting GmbH and Nextier Solutions Corporation dated Sept. 1, 2005.

 

47. Agreement between Prinovi Nurnberg and Nextier, dated March 3, 2006.

 

48. VisionSuite Master Service Agreement between International Paper Company,
Coated and SC Papers Division and Transcentric, Inc. dated September 1, 2005.

 

49. Beta Software Testing Agreement between Nextier Solutions Corporation and
Lands’ End, Inc. dated October 6, 2000.

 

50. Software License Agreement between Nextier Solutions Corporation and Lands’
End, Inc. dated October 6, 2000.

 

51. System Purchase Agreement for Production Management Information System
between Champion International Corporation (Quinnesec, MI) and Majiq Inc.
effective December 20, 1996.

 

52. System Purchase Agreement for Production Management System between Champion
International Corporation (Sartell, MN) and Majiq Inc. effective September 25,
1992.

 

53. System Purchase Agreement for Production Management System between Champion
International Corporation (Bucksport, ME) and Majiq Inc. effective August 1,
1994.

 

54. International Paper Company Services Contract between International Paper
Company and Advanced Service Providers, dated May 1, 2005.

 

55. PROVOX Instrumentation License Agreement between Fisher Controls
International, Inc. and Champion, dated April 5, 1993.

 

56. Master License Agreement between Fisher Controls International, Inc. and
Champion, dated March 25, 1992.

 

49

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Schedules to Collateral Agreement

 

57. End User License Agreement between International Paper Company and Northern
Dynamic, Inc. (undated).

 

58. Software License Agreement between International Paper Company and Cognex
(undated).

 

59. Agreement between International Paper Company and Emerson Process Management
dated July 1, 2005.

 

60. End-User License Agreement between International Paper Company and
Environmental Support Solutions, Inc. (undated).

 

61. Software License Agreement between International Paper Company and TISCOR
(undated).

 

62. Lifetime Support Services Agreement and Software License Agreement between
International Paper Company and Invensys Systems, Inc. (undated).

 

63. Software License Agreement between International Paper Company and Digital
Equipment of Canada (undated).

 

64. Software License Agreement between International Paper Company and Mynah
Technologies dated January 2005.

 

65. iRMX Run-time Operating System Software License Agreement between
International Paper Company and RadiSys Corporation (undated).

 

66. Software License Agreement between International Paper Company and
Intersoft, Inc. (undated).

 

67. Software License Agreement between International Paper Company and Invensys
Software Systems (undated).

 

68. Software License Agreement between International Paper Company and The
Foxboro Company (undated).

 

69. Interact License Agreements between International Paper Company and Computer
Technology Corporation (undated).

 

70. Statement of Work #1 dated March 9, 2006 between Abbottsfield industrial
Training, Inc. and International Paper Company.

 

71. Software License Agreement, and related Schedule of Products Number 1,
Schedule of Products Number 2, Schedule of Products Number 3, and Schedule of
Products Number 4, effective on August 1, 2006, between Cincom Systems, Inc. and
Verso Paper LLC.

 

72. Software License Agreement between Apex Analytical, Inc. and Verso Paper
LLC, dated June 6, 2007.

 

73. Software License Agreement between Captaris, Inc. and Verso Paper LLC, dated
March 7, 2008.

 

74. Outsourcing Service Provider Agreement between CASS Service Agreement and
Verso Paper LLC, dated September 14, 2006.

 

50

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Schedules to Collateral Agreement

 

75. Software License Agreement between Cincom Systems, Inc., and Verso Paper
LLC, dated August 1, 2006.

 

76. Cognos General Software License, Support & Services Terms between Cognos
Corporation and Verso Paper LLC, dated April 30, 2007.

 

77. Ektron, Inc. Software License Agreement between Ektron, Inc. and Verso Paper
LLC, dated June 22, 2007.

 

78. Participation Agreement, incorporating FileNet Software License and Support
Agreement, between FileNet Corporation and Verso Paper LLC, dated April 30,
2007.

 

79. Software License Agreement between GE Intelligent Platforms, Inc. and Verso
Paper Corp, dated November 25, 2012.

 

80. Software License Agreement between Greycon Inc., and Verso Paper LLC, dated
June 18, 2007.

 

81. U.S. Relicense Application for VAX and Alpha Software Hewlett–Packard
Company and Verso Paper LLC, dated May 7, 2007.

 

82. Software License Agreement between IBM (Lotus Notes) and Verso Paper LLC,
dated August 1, 2006.

 

83. End-User License Agreement between Loftware, Inc. and Verso Paper LLC, dated
July 16, 2007.

 

84. System Purchase Agreement between TietoEnator Majiq, Inc. and Verso
Androscoggin LLC dated November 20, 2006.

 

85. Business and Services Agreement between Microsoft Licensing, GP and Verso
Paper LLC, dated August 1, 2006.

 

86. Enterprise License and Services Agreement between OSIsoft, Inc., and Verso
Paper Corp., dated October 3, 2012.

 

87. Support and Maintenance Contract for the EPC Messenger between Ponton
Consulting GmbH and Verso Paper LLC dated October 1, 2007.

 

88. Subscription License Agreement between Sabrix, Inc., and Verso Paper LLC,
dated April 10, 2007.

 

89. Software End-User License Agreement between SAP America, Inc. and Verso
Paper Holdings LLC, dated December 28, 2006.

 

90. Software License Agreement between SAP America, Inc. and Verso Paper
Holdings LLC (Appendix 2) dated September 28, 2007.

 

91. Software Contract between Solid Works and Verso Paper LLC, as assignee from
International Paper Company, dated August 1, 2006.

 

92. Software Contract between Symantec and Verso Paper LLC, as assignee from
International Paper Company, dated August 1, 2006.

 

93. Software License Agreement between VTN Technologies, Inc. and Verso Paper
LLC, dated September 5, 2007.

 

51

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Schedules to Collateral Agreement

 

94. Outsourcing Services Agreement between Dell Marketing LLP and Verso Paper
Corp., dated March 1, 2012.

 

95. Software License Agreement between SAP America, Inc. and Verso Paper
Holdings LLC (Appendix 3) dated June 2, 2009.

 

96. Software License Agreement between SAP America, Inc. and Verso Paper
Holdings LLC (Appendix 4) dated December 23, 2009.

 

97. Software License Agreement between SAP America, Inc. and Verso Paper
Holdings LLC (Appendix 5) dated December 15, 2010.

 

98. Software License Agreement between SAP America, Inc. and Verso Paper
Holdings LLC (Appendix 1) dated December 28, 2006.

 

99. Software License and Services Agreement between Oracle USA, Inc. and Verso
Paper LLC. dated May 11, 2013.

 

100. Business Systems Agreement and Subscription Services Agreement between
Honeywell International Inc. and Verso Paper Corp. dated September 11, 2012.

 

101. Software License Agreement between Enterprise Performance Solutions, Inc.
and Verso Paper Corp. dated May 11, 2013.

 

102. Software License Agreement between VMware, Inc. and Verso Paper Corp. dated
September 23, 2009.

 

103. Software License Agreement between SAP America, Inc. and Verso Paper
Holdings LLC (Appendix 6) dated June 28, 2012.

 

52

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Schedules to Collateral Agreement

 

SCHEDULE IV

FILING JURISDICTIONS

 

Pledgor

  

Filing Jurisdiction

Verso Paper Holdings LLC    Delaware Secretary of State Verso Paper Inc.   
Delaware Secretary of State Verso Paper LLC    Delaware Secretary of State Verso
Androscoggin LLC    Delaware Secretary of State Verso Bucksport LLC    Delaware
Secretary of State Verso Fiber Farm LLC    Delaware Secretary of State Verso
Maine Energy LLC    Delaware Secretary of State Verso Quinnesec LLC    Delaware
Secretary of State Verso Sartell LLC    Delaware Secretary of State Verso
Quinnesec REP Holding Inc.    Delaware Secretary of State nexTier Solutions
Corporation    California Secretary of State

 

53

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Schedules to Collateral Agreement

 

SCHEDULE V

COMMERCIAL TORT CLAIMS

None.

 

54

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Schedules to Collateral Agreement

 

SCHEDULE VI

MATTERS RELATING TO ACCOUNTS AND INVENTORY

None.

 

55

--------------------------------------------------------------------------------

Exhibit I

to Collateral Agreement

SUPPLEMENT NO. [—] dated as of (this “Supplement”), to the Collateral Agreement
dated as of August 1, 2014 (the “Collateral Agreement”), among VERSO PAPER
HOLDINGS LLC, a Delaware limited liability company (the “Company”), VERSO PAPER
INC., a Delaware corporation (“Finance Co.” and, together with the Company, the
“Issuers”), each Subsidiary of the Issuers identified on Schedule I or otherwise
identified therein as a party (each, a “Subsidiary Party”) and WILMINGTON TRUST,
NATIONAL ASSOCIATION, as Collateral Agent (in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined therein).

A. Reference is made to the Indenture dated as of August 1, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Indenture”), among the Issuers, the Subsidiary Parties and Wilmington Trust,
National Association, as Trustee (the “Trustee”).

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

C. The Pledgors have entered into the Collateral Agreement in order to induce
the Trustee to enter into the Indenture. Section 7.16 of the Collateral
Agreement provides that additional Subsidiaries may become Subsidiary Parties
under the Collateral Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned Subsidiary (the “New Subsidiary”) is
executing this Supplement in accordance with the requirements of the Indenture
to become a Subsidiary Party under the Collateral Agreement as consideration for
credit previously extended to the Issuers.

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

SECTION 1. In accordance with Section 7.16 of the Collateral Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Party and a Pledgor under
the Collateral Agreement with the same force and effect as if originally named
therein as a Subsidiary Party and a Pledgor, and the New Subsidiary hereby
(a) agrees to all the terms and provisions of the Collateral Agreement
applicable to it as a Subsidiary Party and a Pledgor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Pledgor thereunder are true and correct, in all material respects, on and
as of the date hereof. In furtherance of the foregoing, the New Subsidiary, as
security for the payment and performance in full of the Obligations (as defined
in the Collateral Agreement), does hereby create and grant to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in
and Lien on all the New Subsidiary’s right, title and interest in and to the
Collateral (as defined in the Collateral Agreement) of the New Subsidiary. Each
reference to a “Subsidiary Party” or a “Pledgor” in the Collateral Agreement
shall be deemed to include the New Subsidiary. The Collateral Agreement is
hereby incorporated herein by reference.

 

I-1

--------------------------------------------------------------------------------

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
(i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors’ rights
generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
(iii) implied covenants of good faith and fair dealing.

SECTION 3. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one contract. This Supplement shall become effective when (a) the
Collateral Agent shall have received a counterpart of this Supplement that bears
the signature of the New Subsidiary and (b) the Collateral Agent has executed a
counterpart hereof.

SECTION 4. The New Subsidiary hereby represents and warrants that (a) set forth
on Schedule I attached hereto is a true and correct schedule of all the Pledged
Securities of the New Subsidiary as of the date hereof, (b) set forth on
Schedule II attached hereto is a true and correct schedule of all of the
material Patents, Trademarks and Copyrights of the New Subsidiary as of the date
hereof, (c) set forth on Schedule III attached hereto is a true and correct
schedule of all Commercial Tort Claims of the New Subsidiary individually in
excess of $5.0 million as of the date hereof and (d) set forth under its
signature hereto, is the true and correct legal name of the New Subsidiary, its
jurisdiction of formation and the location of its chief executive office.

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

SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.

SECTION 7. In the event any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 7.01 of the Collateral Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, disbursements and other charges of counsel for the
Collateral Agent.

 

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

 

[Name of New Subsidiary] By:  

 

  Name:   Title: Legal Name: Jurisdiction of Formation: Location of Chief
Executive Office:

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Collateral Agent

By:  

 

  Name:   Title:

 

I-3

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Schedule I

to Supplement No. to

the Collateral Agreement

Pledged Securities of the New Subsidiary

EQUITY INTERESTS

 

Number of Issuer
Certificate

  

Registered Owner

  

Number and Class of

Equity Interest

  

Percentage of Equity
Interests

                          

DEBT SECURITIES

 

Issuer

  

Principal Amount

  

Date of Note

  

Maturity Date

                          

Schedule II

to Supplement No. to

the Collateral Agreement

PATENTS, TRADEMARKS AND COPYRIGHTS

Schedule III

to Supplement No. to

the Collateral Agreement

COMMERCIAL TORT CLAIMS

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Exhibit II

to the Collateral Agreement

ACKNOWLEDGEMENT AND CONSENT

[DATE]

The undersigned hereby acknowledges receipt of a copy of the Collateral
Agreement dated as of August 1, 2014 (the “Agreement”), made by the Pledgors
parties thereto for the benefit of Wilmington Trust, National Association, as
Collateral Agent. The undersigned agrees for the benefit of the Collateral Agent
and the Secured Parties as follows:

The undersigned acknowledges that its Equity Interests (as defined in the
Agreement) have been pledged pursuant to the terms of the Agreement and will
comply with all actions that may be required of it pursuant to Section 3.05 and
4.04(b) of the Agreement.

[Signature on the following page]

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Exhibit II

to the Collateral Agreement

IN WITNESS WHEREOF, the undersigned has duly executed this acknowledgement and
consent as of the date first written above.

 

[NAME OF ISSUER] By:  

 

Name:   Title:   Address for Notices:

 

 

 

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