Exhibit 10.2

 

 

 

SECURITY AGREEMENT

dated as of

September 26, 2019,

among

INSTALLED BUILDING PRODUCTS, INC.,

THE OTHER GRANTORS PARTY HERETO,

and

BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

     1  

SECTION 1.01

  Defined Terms      1  

SECTION 1.02

  Other Defined Terms      1  

ARTICLE II PLEDGE OF SECURITIES

     6  

SECTION 2.01

  Pledge      6  

SECTION 2.02

  Delivery of the Pledged Collateral      6  

SECTION 2.03

  Representations, Warranties and Covenants      7  

SECTION 2.04

  Registration in Nominee Name; Denominations      8  

SECTION 2.05

  Voting Rights; Dividends and Interest      8  

SECTION 2.06

  Article 8 Opt-In      10  

ARTICLE III SECURITY INTERESTS IN PERSONAL PROPERTY

     11  

SECTION 3.01

  Security Interest      11  

SECTION 3.02

  Representations and Warranties      12  

SECTION 3.03

  Covenants      15  

SECTION 3.04

  Other Actions      17  

SECTION 3.05

  Covenants Regarding Patent, Trademark and Copyright Collateral      17  

ARTICLE IV REMEDIES

     18  

SECTION 4.01

  Remedies upon Default      18  

SECTION 4.02

  Application of Proceeds      20  

SECTION 4.03

  Securities Act      20  

SECTION 4.04

  Grant of License to Use Intellectual Property      21  

ARTICLE V MISCELLANEOUS

     22  

SECTION 5.01

  Notices      22  

SECTION 5.02

  Waivers; Amendment      22  

SECTION 5.03

  Administrative Agent’s Fees and Expenses; Indemnification      22  

SECTION 5.04

  Successors and Assigns      22  

SECTION 5.05

  Survival of Agreement      23  

SECTION 5.06

  Counterparts; Effectiveness; Several Agreement      23  

SECTION 5.07

  Severability      23  

 

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TABLE OF CONTENTS

(continued)

 

SECTION 5.08

  Right of Set-off      23  

SECTION 5.09

  Governing Law; Jurisdiction; Consent to Service of Process; Appointment of
Service of Process Agent      24  

SECTION 5.10

  WAIVER OF JURY TRIAL      25  

SECTION 5.11

  Headings      25  

SECTION 5.12

  Security Interest Absolute      25  

SECTION 5.13

  [Reserved]      25  

SECTION 5.14

  Additional Subsidiaries      25  

SECTION 5.15

  Administrative Agent Appointed Attorney-in-Fact      26  

SECTION 5.16

  Intercreditor Agreement Governs      26  

SECTION 5.17

  Delivery of Term Loan First Lien Collateral      27  

SECTION 5.18

  No Liability      27  

SECTION 5.19

  Compromises and Collection of Collateral      27  

 

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Schedules

  

Schedule I

  

Grantors

Schedule II

  

Pledged Equity Interests; Pledged Debt Securities

Schedule III

  

Intellectual Property

Schedule IV

  

Commercial Tort Claims

Exhibits

  

Exhibit I

  

Form of ABL Copyright Security Agreement

Exhibit II

  

Form of ABL Patent Security Agreement

Exhibit III

  

Form of ABL Trademark Security Agreement

 

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SECURITY AGREEMENT dated as of September 26, 2019 (as amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”) among
INSTALLED BUILDING PRODUCTS, INC., a Delaware corporation (the “Borrower”), the
other GRANTORS from time to time party hereto and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”).

PRELIMINARY STATEMENTS

WHEREAS, the Borrower, the Persons party thereto from time to time as
Guarantors, the financial institutions party thereto from time to time as
Lenders, and Bank of America, N.A., as Administrative Agent are entering into
the Credit Agreement dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”); and

WHEREAS, the Lenders have agreed to extend credit to the Borrower subject to the
terms and conditions set forth in the Credit Agreement. The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. The Subsidiary Guarantors are
affiliates of the Borrower, will derive substantial benefits from the extension
of credit to the Borrower pursuant to the Credit Agreement and are willing to
execute and deliver this Agreement in order to induce the Lenders to extend such
credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. (a) Each capitalized term used but not defined
herein shall have the meaning assigned thereto in the Credit Agreement; provided
that each term defined in the New York UCC (as defined herein) and not defined
in this Agreement or the Credit Agreement shall have the meaning specified in
the New York UCC. The term “instrument” shall have the meaning specified in
Article 9 of the New York UCC.

(b) The rules of construction specified in Section 1.4 of the Credit Agreement
also apply to this Agreement, mutatis mutandis.

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

“Account Debtor” means any Person that is or may become obligated to any Grantor
under, with respect to or on account of an Account, Chattel Paper or General
Intangible.

“Administrative Agent” has the meaning assigned to such term in the preamble to
this Agreement.

“After-acquired Debt” has the meaning set forth in the definition of Pledged
Collateral.

“After-acquired Shares” has the meaning set forth in the definition of Pledged
Collateral.

“Agreement” has the meaning assigned to such term in the preamble to this
Agreement.

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“Article 9 Collateral” has the meaning assigned to such term in Section 3.01.

“Borrower” has the meaning assigned to such term in the preamble to this
Agreement.

“Collateral” means Article 9 Collateral and Pledged Collateral.

“Copyright Security Agreement” means the Copyright Security Agreement
substantially in the form of Exhibit I hereto.

“Copyrights” shall mean, with respect to any Grantor, all of such Grantor’s
right, title, and interest in and to the following: (a) all copyrights, rights
and interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing;
(d) the right to sue for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.

“Credit Agreement” has the meaning assigned to such term in the preliminary
statements to this Agreement.

“Discharge of Senior Secured Debt Obligations” has the meaning assigned to such
term in the ABL/Term Intercreditor Agreement.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.

“Excluded Accounts” shall have the meaning assigned to such term in the Credit
Agreement.

“Excluded Assets” shall mean (i) any governmental licenses or state or local
franchises, charters or authorizations, to the extent a security interest in any
such licenses, franchise, charter or authorization would be prohibited or
restricted thereby (including any legally effective prohibition or restriction),
(ii) pledges and security interests prohibited by applicable law, rule or
regulation (including any legally effective requirement to obtain the consent of
any governmental authority) or any agreement containing anti-assignment
provisions not overridden by the UCC, (iii) margin stock and, to the extent
prohibited by the terms of any applicable organizational documents, joint
venture agreement or shareholders’ agreement, equity interests in any person
other than Wholly Owned Restricted Subsidiaries of a Grantor, (iv) any
intent-to-use trademark application prior to the filing of a “Statement of Use”
or “Amendment to Allege Use” with respect thereto, (v) any lease, license or
other agreement or any property subject to a purchase money security interest or
similar arrangement to the extent that a grant of a security interest therein
would violate or invalidate such lease, license or agreement or purchase money
or similar arrangement or create a right of termination in favor of any other
party thereto (other than the Borrower or its Subsidiaries) after giving effect
to the applicable anti-assignment provisions of the UCC or other similar
applicable law (including Section 9-406, 9-408 or 9-409 of the UCC), other than
proceeds and receivables thereof, the assignment of which is expressly deemed
effective under the UCC or other

 

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similar applicable law notwithstanding such prohibition, (vi) any Excluded Real
Property, (vii) any rolling stock, (viii) Excluded Accounts, (ix) Vehicles and
other assets subject to certificates of title, (x) Excluded Equity Interests and
(xi) any assets as to which the Administrative Agent and the Borrower agree in
writing that the difficulty or consequence of obtaining such a security interest
or perfection thereof (taking into account any adverse tax consequences to the
Borrower and its Affiliates (including the imposition of withholding or other
material taxes)) outweighs the benefits to be obtained by the Secured Creditors
therefrom.

“Excluded Equity Interests” shall mean (a) any of the outstanding voting Equity
Interests or other voting ownership interests of any CFC in excess of 65% of all
the Equity Interests or other voting ownership interests (as determined under
Treasury Regulation Section 1.956-2) of such CFC, (b) any equity or other voting
ownership interests in any Subsidiary that is not a first tier Subsidiary of the
Borrower or a Guarantor, (c) any Equity Interests to the extent the pledge
thereof would be prohibited or limited by any applicable law, rule or regulation
existing on the date hereof or on the date such Equity Interests are acquired by
the Borrower or a Guarantor or on the date the issuer of such Equity Interests
is created, (d) the Equity Interests of a Subsidiary (other than a Wholly Owned
Subsidiary) the pledge of which would violate a contractual obligation to the
owners of the other Equity Interests of such Subsidiary (other than any such
owners that are the Borrower or Affiliates of the Borrower) that is binding on
or relating to such Equity Interests and (e) the Equity Interests of any
Unrestricted Subsidiaries.

“Federal Securities Laws” has the meaning assigned to such term in Section 4.03.

“Grantors” means (a) the Borrower, (b) each other Subsidiary identified on
Schedule I hereto and (c) each Subsidiary that becomes a party to this Agreement
as a Grantor on or after the date hereof.

“Intellectual Property” shall mean, with respect to any Grantor, all
intellectual and similar property of every kind and nature now owned or
hereafter acquired by such Grantor, including Patents, Copyrights, Trademarks
and all related documentation and registrations and all additions, improvements
or accessions to any of the foregoing.

“Intercompany Note” means a promissory note substantially in the form of
Exhibit I to the Credit Agreement.

“Inventory” shall have the meaning set forth in Article 9 of the UCC and shall
include, without limitation, (a) all goods intended for sale or lease or for
display or demonstration, (b) all work in process, and (c) all raw materials and
other materials and supplies of every nature and description used or which might
be used in connection with the manufacture, packing, shipping, advertising,
selling, leasing or furnishing of goods or services or otherwise used or
consumed in the conduct of business.

“Joinder Supplement” shall have the meaning assigned to such term in the Credit
Agreement.

“Licenses” shall mean, with respect to any Grantor, all of such Grantor’s right,
title, and interest in and to (a) any and all written licensing agreements or
similar arrangements in and to its owned (1) Patents, (2) Copyrights, or
(3) Trademarks, (b) all income, royalties, damages, claims,

 

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and payments now or hereafter due or payable under and with respect thereto,
including, without limitation, damages and payments for past and future breaches
thereof, and (c) all rights to sue for past, present, and future breaches
thereof.

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

“Patents” shall mean, with respect to any Grantor, all of such Grantor’s right,
title, and interest in and to: (a) any and all patents and patent applications;
(b) all inventions and improvements described and claimed therein; (c) all
reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof; (d) all income, royalties, damages, claims, and
payments now or hereafter due or payable under and with respect thereto,
including, without limitation, damages and payments for past and future
infringements thereof; (e) all rights to sue for past, present, and future
infringements thereof; and (1) all rights corresponding to any of the foregoing
throughout the world.

“Patent Security Agreement” means the Patent Security Agreement substantially in
the form of Exhibit II hereto.

“Pledged Collateral” shall mean collectively, (a) all of the Equity Interests of
Restricted Subsidiaries that are Material Subsidiaries (other than any Excluded
Equity Interests) held by the Grantors, including such Equity Interests
described in Schedule 8 in the Information and Collateral Disclosure Certificate
issued by the entities named therein and all other Equity Interests required to
be pledged by any Grantor under Section 6.12 of the Credit Agreement (the
“After-acquired Shares”) (the “Pledged Equity Interests”) and (b) each
promissory note (including the Intercompany Note), Tangible Chattel Paper and
Instrument evidencing Indebtedness in excess of $1,000,000 (individually) owed
to any Grantor (other than such promissory notes, Tangible Chattel Paper and
Instruments that are Excluded Assets) described in Schedule 8 in the Information
and Collateral Certificate and issued by the entities named therein and all
other Indebtedness owed to any Grantor hereafter and required to be pledged by
any Grantor pursuant to Section 6.13 of the Credit Agreement (the
“After-acquired Debt”), in each case as such Section may be amended pursuant to
Section 10.12 of the Credit Agreement (the “Pledged Debt Securities”).

“Pledged Debt Securities” has the meaning assigned to such term in clause (b) of
the definition of Pledged Collateral.

“Pledged Equity Interests” has the meaning assigned to such term in clause
(a) of the definition of Pledged Collateral.

“Pledged Securities” means any promissory notes, stock certificates, unit
certificates, limited or unlimited liability membership certificates or other
securities (to the extent certificated) now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.

“Receivables” shall mean the Accounts, Chattel Paper, Documents, Investment
Property, Instruments and any other rights or claims to receive money that are
General Intangibles or that are otherwise included as Collateral.

 

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“Secured Creditors” means (a) each Lender (for itself and on behalf of any its
Affiliates party to a Bank Products Document), (b) the Administrative Agent (for
itself and on behalf of any of its Affiliates party to a Bank Products
Document), (c) the Issuing Bank, (d) the Swing Bank, (e) each member of the
Lender Group, (f) the beneficiaries of each indemnification obligation
undertaken by any Credit Party under any Loan Document and (g) the permitted
successors and assigns of each of the foregoing.

“Security Interest” has the meaning assigned to such term in Section 3.01(a).

“Stock Rights” shall mean all dividends, instruments or other distributions and
any other right or property which any Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest constituting Collateral and any right to receive
earnings, in which such Grantor now has or hereafter acquires any right, issued
by an issuer of such Equity Interest.

“Term Credit Agreement” means the Term Loan Credit Agreement dated as of
April 13, 2017, by and among the Borrower, each lender party thereto and Royal
Bank of Canada, as Term Administrative Agent.

“Term Loan Documents” means “Loan Documents” as defined in the Term Credit
Agreement.

“Term Representative” means initially, Royal Bank of Canada, in its capacity as
Term Administrative Agent under the Term Credit Agreement and the other Term
Loan Documents and any other administrative agent, collateral agent or
representative of the holders of Secured Obligations (as defined in the Term
Credit Agreement) appointed as a representative for purposes related to the
administration of the security documents pursuant to the Term Credit Agreement,
in such capacity as provided in the Term Credit Agreement.

“Trademark Security Agreement” means the ABL Trademark Security Agreement
substantially in the form of Exhibit III hereto.

“Trademarks” shall mean, with respect to any Grantor, all of such Grantor’s
right, title, and interest in and to the following: (a) all trademarks
(including service marks), trade names, trade dress, and trade styles and the
registrations and applications for registration thereof and the goodwill of the
business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all
income, royalties, damages, and payments now or hereafter due or payable with
respect thereto, including, without limitation, damages, claims, and payments
for past and future infringements thereof; (d) all rights to sue for past,
present, and future infringements of the foregoing, including the right to
settle suits involving claims and demands for royalties owing; and (e) all
rights corresponding to any of the foregoing throughout the world.

“UCC” shall mean the New York UCC; provided, however, that, at any time, if by
reason of mandatory provisions of law, any or all of the perfection or priority
of the Administrative Agent’s and the Secured Creditors’ security interest in
any item or portion of the Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as in effect, at such time,

 

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in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or priority and for purposes of definitions relating to such
provisions.

“Vehicles” shall mean all vehicles covered by a certificate to title law of any
state and all tires and other appurtenances to any of the foregoing.

ARTICLE II

PLEDGE OF SECURITIES

SECTION 2.01 Pledge. As security for the payment or performance, as the case may
be, in full of the Obligations, each Grantor hereby pledges, assigns and grants
to the Administrative Agent, on behalf of and for the benefit of the Secured
Creditors, a security interest in all of its right, title and interest in, to
and under all of the Pledged Collateral.

Notwithstanding the foregoing or anything herein to the contrary, in no event
shall the “Pledged Collateral” include or the security interest attach to any
Excluded Assets or Excluded Equity Interests.

SECTION 2.02 Delivery of the Pledged Collateral.

(a) Subject to the ABL/Term Intercreditor Agreement, each Grantor will promptly
deliver to the Administrative Agent (or its non-fiduciary agent or designee)
upon execution of this Agreement all certificates, now or hereafter acquired, if
any, representing or evidencing the Pledged Collateral to the extent such
certificates constitute certificated securities (other than checks received in
the ordinary course of business), together with duly executed instruments of
transfer or assignments in blank.

(b) Except as otherwise addressed in Section 3.03(b) herein, if any amount
payable with respect to any Indebtedness owed to any Grantor shall be or become
evidenced by any promissory note (which may be a global note), such note or
instrument shall be promptly delivered (but in any event within 45 days of
receipt (other than any promissory note in an aggregate principal amount of less
than $1,000,000 owed to the applicable Grantor by any Person) by such Grantor or
such longer period as the Administrative Agent may agree in its reasonable
discretion) to the Administrative Agent, for the benefit of the Secured
Creditors, together with an undated instrument of transfer duly executed in
blank and in a manner reasonably satisfactory to the Administrative Agent.

(c) Upon delivery to the Administrative Agent, (i) any certificate or promissory
note representing Pledged Securities shall be accompanied by undated stock or
note powers, as applicable, duly executed in blank or other undated instruments
of transfer duly executed in blank and reasonably satisfactory to the
Administrative Agent and by such other instruments and documents as the
Administrative Agent may reasonably request and (ii) all other property
comprising part of the Pledged Collateral shall be accompanied by undated proper
instruments of assignment duly executed in blank by the applicable Grantor and
such other instruments and documents as the Administrative Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing such Pledged Securities, which schedule shall be deemed attached to,
and shall supplement, Schedule II hereto and be made a part hereof; provided,
that failure to provide any such schedule hereto shall not affect the validity
of such

 

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pledge of such Pledged Securities. Each schedule so delivered shall supplement
any prior schedules so delivered.

SECTION 2.03 Representations, Warranties and Covenants. The Grantors jointly and
severally represent, warrant and covenant to and with the Administrative Agent,
for the benefit of the Secured Creditors, that:

(a) as of the date hereof, Schedule II hereto sets forth a true and complete
list, with respect to each Grantor, of all the Pledged Equity Interests owned by
such Grantor in any Subsidiary and the percentage of the issued and outstanding
units of each class of the Equity Interests of the issuer thereof represented by
the Pledged Equity Interests owned by such Grantor and all the Pledged Debt
Securities owned by such Grantor;

(b) the Pledged Equity Interests and the Pledged Debt Securities have been duly
and validly authorized and issued by the issuers thereof and (i) in the case of
Pledged Equity Interests, are fully paid and, in the case of corporate
interests, nonassessable and (ii) in the case of such Pledged Debt Securities,
are legal, valid and binding obligations of the issuers thereof, except to the
extent that enforceability of such obligations may be limited by applicable
bankruptcy, insolvency, and other similar laws affecting creditor’s rights
generally; provided that the foregoing representations, insofar as they relate
to the Pledged Collateral issued by a Person other than the Borrower or any
Subsidiary, are made to the knowledge of the Grantors;

(c) except for the security interests granted hereunder and under any other Loan
Documents, each of the Grantors (i) is and, subject to any transfers made in
compliance with the Credit Agreement, will continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on Schedule II
hereto as owned by such Grantor, (ii) holds the same free and clear of all
Liens, other than Liens permitted pursuant to Section 7.2 of the Credit
Agreement and transfers made in compliance with the Credit Agreement, (iii) will
make no further 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 Liens permitted pursuant to Section 7.2 of the Credit
Agreement and transfers made in compliance with the Credit Agreement, and
(iv) will use commercially reasonable efforts to defend its title or interest
thereto or therein against any and all Liens (other than the Liens created by
this Agreement and the other Loan Documents and Liens permitted pursuant to
Section 7.2 of the Credit Agreement), however arising, of all Persons
whomsoever;

(d) except for restrictions and limitations imposed by or otherwise permitted by
the Loan Documents (including pursuant to the Term Loan Documents and any Liens
permitted pursuant to Section 7.2 of the Credit Agreement) or securities laws
generally, the Pledged Equity Interests and, to the extent issued by the
Borrower or any Subsidiary, the Pledged Debt Securities are and will continue to
be freely transferable and assignable, and none of the Pledged Equity Interests
and, to the extent issued by the Borrower or any Subsidiary, none of the Pledged
Debt Securities are or will be subject to any option, right of first refusal,
shareholders agreement or Organizational Document provisions or contractual
restriction of any nature that might prohibit, impair, delay or otherwise affect
in any manner adverse to the Secured Creditors in any material respect the
pledge of such Pledged Collateral hereunder, the sale or disposition thereof
pursuant hereto or the exercise by the Administrative Agent of rights and
remedies hereunder;

 

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

(f) by virtue of the execution and delivery by the Grantors of this Agreement,
when any Pledged Securities constituting certificated securities are delivered
to the Administrative Agent in accordance with this Agreement, the
Administrative Agent will obtain a legal, valid and perfected lien upon and
security interest in such Pledged Securities, free of any adverse claims, under
the New York UCC to the extent such lien and security interest may be created
and perfected under the New York UCC, as security for the payment and
performance of the Obligations; and

(g) subject to the terms of this Agreement and to the extent permitted by
applicable law, each Grantor hereby agrees that upon the occurrence and during
the continuance of an Event of Default, it will comply with the instructions of
the Administrative Agent with respect to the Equity Interests in such Grantor
that constitute Pledged Equity Interests hereunder that are not certificated
without further consent by the applicable owner or holder of such Equity
Interests.

SECTION 2.04 Registration in Nominee Name; Denominations. If an Event of Default
shall have occurred and is continuing and the Administrative Agent shall have
notified the Grantors in writing of its intent to exercise such rights, the
Administrative Agent, on behalf of the Secured Creditors, shall have the right
(in its sole and absolute discretion) to hold the Pledged Securities in the name
of the applicable Grantor, endorsed or assigned in blank or in favor of the
Administrative Agent or in its own name as pledgee or in the name of its nominee
(as pledgee or as sub-agent), and each Grantor will promptly give to the
Administrative Agent copies of any notices or other communications received by
it with respect to Pledged Securities registered in the name of such Grantor.
Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any reasonable purpose consistent with this Agreement.

SECTION 2.05 Voting Rights; Dividends and Interest. (a) Unless and until an
Event of Default shall have occurred and is continuing and the Administrative
Agent shall have notified the Grantors in writing that their rights under this
Section 2.05 are being suspended:

(i) each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any
part thereof;

(ii) the Administrative Agent shall promptly execute and deliver to each
Grantor, or cause to be promptly executed and delivered to such Grantor, all
such proxies, powers of attorney and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise the
voting and/or consensual rights and powers it is entitled to exercise pursuant
to paragraph (a)(i) of this Section; and

(iii) each Grantor 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 Securities to the extent and only to the extent that such
dividends, interest,

 

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principal and other distributions are permitted by, and are otherwise paid or
distributed in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable laws; provided that any
noncash dividends, interest, principal or other distributions that would
constitute Pledged Equity Interests or Pledged Debt Securities, whether
resulting from a subdivision, combination or reclassification of the outstanding
Equity Interests in the issuer of any Pledged Securities or received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall be and become part of the
Pledged Collateral and, if received by any Grantor, shall be forthwith delivered
to the Administrative Agent in the same form as so received (with any necessary
endorsements, stock or note powers and other instruments of transfer reasonably
requested by the Administrative Agent), in each case, to the extent required
pursuant to Section 2.02 or Section 2.06. So long as no Event of Default has
occurred and is continuing, the Administrative Agent shall promptly deliver to
each Grantor any Pledged Securities in its possession if requested to be
delivered to the issuer thereof in connection with any exchange or redemption of
such Pledged Securities permitted by the Credit Agreement in accordance with
this Section 2.05(a)(iii), subject to receipt by the Administrative Agent of a
certificate of a Responsible Officer of the Borrower with respect thereto and
other documents reasonably requested by the Administrative Agent.

(b) Upon the occurrence and during the continuance of an Event of Default, after
the Administrative Agent shall have notified the Grantors, as applicable, of the
suspension of their rights under paragraph (a)(iii) of this Section 2.05, all
rights of any Grantor to dividends, interest, principal or other distributions
that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of
this Section 2.05 shall cease, and all such rights shall thereupon become vested
in the Administrative Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions; provided that, to the extent directed by the Required Lenders,
the Administrative Agent shall have the right from time to time following the
occurrence and during the continuance of an Event of Default to permit the
Grantors to exercise such rights. All dividends, interest, principal or other
distributions received by any Grantor contrary to the provisions of this
Section 2.05 shall be held for the benefit of the Administrative Agent and the
other Secured Creditors and shall be forthwith delivered to the Administrative
Agent upon demand in the same form as so received (with any necessary
endorsements, stock or note powers and other instruments of transfer reasonably
requested by the Administrative Agent). Any and all money and other property
paid over to or received by the Administrative Agent pursuant to the provisions
of this paragraph (b) shall be retained by the Administrative Agent in an
account to be established by the Administrative Agent upon receipt of such money
or other property and, to the extent so received, shall, subject to any
applicable Intercreditor Agreement, be applied in accordance with the provisions
of Section 4.02. After all Events of Default have been cured or waived and the
Borrower has delivered to the Administrative Agent a certificate of a
Responsible Officer of the Borrower to that effect, the Administrative Agent
shall promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.05 and
that remain in such account.

 

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(c) Upon the occurrence and during the continuance of an Event of Default, after
the Administrative Agent shall have notified the Grantors of the suspension of
their rights under paragraph (a)(i) of this Section 2.05, all rights of any
Grantor to exercise the voting and consensual rights and powers it is entitled
to exercise pursuant to paragraph (a)(i) of this Section 2.05, and the
obligations of the Administrative Agent under paragraph (a)(ii) of this
Section 2.05, shall cease, and all such rights shall thereupon become vested in
the Administrative Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, prior to the Administrative Agent exercising such voting and consensual
rights and powers, the Administrative Agent shall notify the Grantors in writing
of its intention to exercise any such right on behalf of the Secured Creditors;
provided further that, unless otherwise directed by the Required Lenders, the
Administrative Agent shall have the right from time to time following and during
the continuance of an Event of Default to permit the Grantors to exercise such
rights. After all Events of Default have been cured or waived and the Borrower
has delivered to the Administrative Agent a certificate of a Responsible Officer
of the Borrower to that effect, all rights vested in the Administrative Agent
pursuant to this paragraph (c) shall cease, and the Grantors shall have the
exclusive right to exercise the voting and consensual rights and powers they
would otherwise be entitled to exercise pursuant to paragraph (a)(i) of this
Section 2.05.

(d) Any notice given by the Administrative Agent to the Grantors, suspending
their rights under paragraph (a) of this Section 2.05 (i) may be given by
telephone if promptly confirmed in writing, (ii) may be given with respect to
one or more of the Grantors at the same or different times and (iii) may suspend
the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part
without suspending all such rights (as specified by the Administrative Agent in
its sole and absolute discretion) and without waiving or otherwise affecting the
Administrative Agent’s rights to give additional notices from time to time
suspending other rights; provided that the Administrative Agent shall only
provide any such notice if an Event of Default has occurred and is continuing.

SECTION 2.06 Article 8 Opt-In. No Grantor shall take any action to cause any
membership interest, partnership interest, or other equity interest of any
limited liability company or limited partnership owned or controlled by any
Grantor comprising Collateral to be or become a “security” within the meaning
of, or to be governed by Article 8 of the UCC as in effect under the laws of any
state having jurisdiction and shall not cause or permit any such limited
liability company or limited partnership to “opt in” or to take any other action
seeking to establish any membership interest, partnership interest or other
equity interest of such limited liability company or limited partnership
comprising the Collateral as a “security” or to become a certificated security,
in each case, without delivering all certificates evidencing such interest to
the Administrative Agent in accordance with and as required by Section 2.02 or,
in the case of any uncertificated security, without taking such steps, to the
extent requested by the Administrative Agent (following notice to the
Administrative Agent of any such change, which shall be promptly provided by
such Grantor), to provide the Administrative Agent with control (as defined in
Article 8-106 of the UCC) of any such security.

 

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ARTICLE III

SECURITY INTERESTS IN PERSONAL PROPERTY

SECTION 3.01 Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby pledges,
assigns and grants to the Administrative Agent, on behalf of and for the benefit
of the Secured Creditors, a security interest (the “Security Interest”) in all
of its right, title and interest in, to and under all of the following property
and other assets, whether now owned by or owing to, or hereafter acquired by or
arising in favor of such Grantor, and regardless of where located (all of which
are collectively referred to as the “Article 9 Collateral”):

(i) all Accounts;

(ii) all Chattel Paper (including Electronic Chattel Paper and Tangible Chattel
Paper);

(iii) all Intellectual Property;

(iv) all Documents;

(v) all Equipment;

(vi) all Fixtures;

(vii) all General Intangibles;

(viii) all Goods;

(ix) all Instruments;

(x) all Inventory;

(xi) all Investment Property;

(xii) all Letter-of-Credit Rights and Supporting Obligations;

(xiii) all Deposit Accounts;

(xiv) [Reserved];

(xv) all Commercial Tort Claims including as specified from time to time in
Schedule IV hereto (as the same may be updated from time to time in accordance
with the terms hereof);

(xvi) all cash or other property deposited with the Administrative Agent or any
Secured Creditor or any Affiliate of the Administrative Agent or any Secured
Creditor or which the Administrative Agent, for its benefit and for the benefit
of the other Secured Creditors, or any Secured Creditor or such Affiliate is
entitled to retain or

 

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otherwise possess as collateral pursuant to the provisions of this Agreement or
the Credit Agreement;

(xvii) all books, records, files, correspondence, computer programs, tapes,
disks and related data processing software which contain information identifying
or pertaining to any of the foregoing or any Account Debtor or showing the
amounts thereof or payments thereon or otherwise necessary or helpful in the
realization thereon or the collection thereof;

(xviii) As-Extracted Collateral; and

(xix) any and all accessions to, substitutions for and replacements, products
and all proceeds (including Stock Rights) of the foregoing (including any claims
to any items referred to in this definition and any claims against third parties
for loss of, damage to or destruction of any or all of the Collateral or for
proceeds payable under or unearned premiums with respect to policies of
insurance) in whatever form, including cash, negotiable instruments and other
instruments for the payment of money, Chattel Paper, collateral agreements and
other documents.

Notwithstanding the foregoing or anything herein to the contrary, in no event
shall the “Article 9 Collateral” include or the Security Interest attach to any
Excluded Assets.

(b) Each Grantor hereby irrevocably authorizes the Administrative Agent for the
benefit of the Secured Creditors at any time and from time to time to file in
any relevant U.S. jurisdiction any financing statements, with respect to the
Collateral or any part thereof and amendments thereto that (i) describe the
collateral covered thereby in any manner that the Administrative Agent
reasonably determines is necessary or advisable to ensure the perfection of the
security interest in the Collateral granted under this Agreement, including
indicating the Collateral as “all assets” of such Grantor or words of similar
effect, and (ii) contain the information required by Article 9 of the UCC for
the filing of any financing statement or amendment, including whether such
Grantor is an organization, the type of organization and, if required, any
organizational identification number issued to such Grantor. Each Grantor agrees
to provide such information to the Administrative Agent promptly upon request.

The Administrative 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 in Article 9 Collateral consisting of Patents, Trademarks or
Copyrights granted by each Grantor and naming any Grantor or the Grantors as
debtors and the Administrative Agent as secured creditor.

(c) The Security Interest and the security interest granted pursuant to
Article II are granted as security only and shall not subject the Administrative
Agent or any other Secured Creditor to, or in any way alter or modify, any
obligation or liability of any Grantor with respect to or arising out of the
Collateral.

SECTION 3.02 Representations and Warranties. The Grantors jointly and severally
represent and warrant to the Administrative Agent, for the benefit of the
Secured Creditors, that:

 

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(a) each Grantor has good title or valid leasehold interests in the Article 9
Collateral material to its business with respect to which it has purported to
grant a Security Interest hereunder, free and clear of any Liens, (i) except for
Liens expressly permitted pursuant to Section 7.2 of the Credit Agreement and
(ii) except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or as proposed to be conducted or to
utilize such properties for their intended purposes, in each case to the extent
the failure to have such good title or valid leasehold interest could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and has full power and authority to grant to the Administrative
Agent, for the benefit of the Secured Creditors, 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 except to the extent that failure to obtain or make such consent or
approval, as the case may be, individually or in aggregate, could not reasonably
be expected to have a Material Adverse Effect;

(b) the Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name and
jurisdiction of organization of each Grantor, is correct and complete in all
material respects as of the date hereof. The Uniform Commercial Code financing
statements or other appropriate filings, recordings or registrations prepared by
the Administrative Agent based upon the information provided to the
Administrative Agent in the Information and Collateral Disclosure Certificate
for filing in the Secretary of State or equivalent office of the jurisdiction
specified in Schedule 2(a) to Perfection Certificate (or specified by notice
from the Borrower to the Administrative Agent after the date hereof in the case
of filings, recordings or registrations required by Section 6.12 of the Credit
Agreement), are all the filings, recordings and registrations that are necessary
to establish a legal, valid and perfected security interest in favor of the
Administrative Agent, for the benefit of the Secured Creditors, in respect of
all Article 9 Collateral in which the Security Interest may be perfected by such
filing, recording or registration in the United States, and as of the date
hereof, no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration (other than filings, if any, which shall be made
in the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, to record the Security Interest in Article 9 Collateral
consisting of filed, registered or applied-for United States Patents, Trademarks
and Copyrights) is necessary, except as provided under applicable law with
respect to the filing of continuation statements (other than such actions as are
necessary to perfect the Security Interest with respect to any Article 9
Collateral consisting of filed, registered or applied for Patents, Trademarks
and Copyrights filed, acquired or developed by a Grantor after the date hereof).
The Grantors represent and warrant that, if applicable, a fully executed Patent
Security Agreement, Trademark Security Agreement and Copyright Security
Agreement, in each case containing a list of the Article 9 Collateral consisting
of United States registered Patents, United States registered Trademarks and
United States registered Copyrights (and applications for any of the foregoing),
as applicable, and executed by each Grantor owning any such Article 9
Collateral, have been delivered to the Administrative Agent for recording with
the United States Patent and Trademark Office or the United States Copyright
Office as applicable to establish a legal, valid and perfected security interest
in favor of the Administrative Agent, for the benefit of the Secured Creditors,
in respect of all Article 9 Collateral consisting of registered and applied for
Patents, Trademarks and Copyrights in which a security interest may be perfected
by filing, recording or registering in the United States Patent and Trademark
Office or the United States Copyright Office, as applicable.

 

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No further or subsequent filing, refiling, recording, rerecording, registration
or reregistration is necessary (other than filing, recording or registering
financing statements or analogous documents in the applicable jurisdictions in
the United States pursuant to the Uniform Commercial Code and such other actions
as are necessary to perfect the Security Interest with respect to any Article 9
Collateral consisting of registered and applied for Patents, Trademarks and
Copyrights acquired or developed by a Grantor 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 paragraph (b) of this
Section 3.02 (including payment of applicable fees in connection therewith), 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 applicable jurisdiction in the United
States pursuant to the Uniform Commercial Code and (iii) subject to the filings
described in paragraph (b) of this Section 3.02, a perfected security interest
in all Article 9 Collateral in which a security interest may be perfected upon
the receipt and recording of a Patent Security Agreement, a Trademark Security
Agreement and a Copyright 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 prior to any other Lien on any of the Article
9 Collateral, other than Liens permitted pursuant to Section 7.2 of the Credit
Agreement;

(d) as of the date hereof, Schedule III hereto sets forth a true and complete
list, with respect to each Grantor, of (i) all of such Grantor’s Patents and
Trademarks applied for or issued or registered with the United States Patent and
Trademark Office, including the name of the registered owner or applicant and
the registration, application, or publication number, as applicable, of each
such Patent or Trademark and (ii) all of such Grantor’s Copyrights applied for
or registered with the United States Copyright Office, including the name of the
registered owner and the registration number of each such Copyright; and

(e) none of the Grantors has filed or consented to (i) the filing of any
financing statement or analogous document, in each case with respect to a Lien,
under the Uniform Commercial Code or any other applicable laws covering any
Article 9 Collateral, or (ii) any assignment in which any Grantor 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, except, in each case, for Liens expressly
permitted pursuant to Section 7.2 of the Credit Agreement.

(f) The names of the obligors, amounts owing, due dates and other information
with respect to each Grantor’s Accounts and Chattel Paper that are Collateral
have been correctly stated in all material respects, at the time furnished, in
the records of such Grantor relating thereto and in all invoices and each
Borrowing Base Certificate, to the extent contained therein, with respect
thereto furnished to the Administrative Agent by such Grantor from time to time.

(g) With respect to Accounts of the Grantors identified as Eligible Accounts on
the most recent Borrowing Base Certificate, except as specifically disclosed on
the most recent Borrowing Base Certificate, (i) all such Accounts represent bona
fide sales of Inventory or rendering of services to Account Debtors in the
ordinary course of the applicable Grantor’s

 

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business and are not evidenced by a judgment (except as would not have a
Material Adverse Effect), Instrument or Chattel Paper; (ii) there are no
setoffs, claims or disputes existing or asserted in writing with respect thereto
and no Grantor has made any agreement with any Account Debtor for any extension
of time for the payment thereof, any compromise or settlement for less than the
full amount thereof, any release of any Account Debtor from liability therefor,
or any deduction therefrom except a discount or allowance allowed by a Grantor
in the ordinary course of its business for prompt payment and disclosed to the
Administrative Agent; (iii) there are no facts, events or occurrences that in
any way impair the validity or enforceability thereof or could reasonably be
expected to reduce the amount payable thereunder as shown on such Grantor’s
books and records and any invoices, statements and the most recent Borrowing
Base Certificate with respect thereto; (iv) no Grantor has received any notice
of proceedings or actions that are threatened or pending against any Account
Debtor that might result in any material adverse change in such Account Debtor’s
financial condition; and (v) no Grantor has knowledge that any Account Debtor is
unable generally to pay its debts as they become due.

(h) In addition, with respect to all Accounts of the Grantors, except as
specifically disclosed on the most recent Borrowing Base Certificate, (i) the
amounts shown on all invoices, statements are actually and absolutely owing to a
Grantor as indicated thereon and are not in any way contingent except as would
not reasonably be expected to have a Material Adverse Effect and (ii) the
amounts shown on the most recent Borrowing Base Certificate are actually and
absolutely owing to a Grantor as indicated thereon and are not in any way
contingent.

(i) With respect to any Inventory of the Grantors and that is scheduled or
listed as Eligible Inventory on the most recent Borrowing Base Certificate,
except as specifically disclosed on the most recent Borrowing Base Certificate,
(i) such Inventory (other than Inventory in transit, out for repair or in the
possession of employees and Inventory in an aggregate amount not exceeding
$1,000,000) is located at one of the Grantors’ locations set forth in Schedule 2
of the Information and Collateral Disclosure Certificate, (ii) such Inventory is
not subject to any licensing, patent, royalty, trademark, trade name or
copyright agreement with any third party that, to such Grantor’s knowledge,
would, upon sale or other disposition of such Inventory by the Administrative
Agent in accordance with the terms hereof, infringe the rights of such
third-party, violate any contract with such third-party, or cause the
Administrative Agent to incur any liability with respect to payment of royalties
other than royalties incurred pursuant to sale of such Inventory under the
current licensing agreement related thereto, (iii) to such Grantor’s knowledge,
such Inventory has been produced in accordance with the Federal Fair Labor
Standards Act of 1938, as amended, and all rules, regulations and orders
thereunder except as would not reasonably be expected to have a Material Adverse
Effect and (iv) to such Grantor’s knowledge, the completion of manufacture, sale
or other disposition of such Inventory by the Administrative Agent following an
Event of Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which any
Grantor is a party or to which such Inventory is subject.

SECTION 3.03 Covenants. (a) Each Grantor shall, at its own expense, take any and
all commercially reasonable actions necessary to (i) defend title to the Article
9 Collateral (other than Intellectual Property, which is governed by
Section 3.05) against all Persons, except with respect to Article 9 Collateral
that such Grantor determines in its reasonable business judgment is no longer
necessary or beneficial to the conduct of such Grantor’s business, and
(ii) defend the

 

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Security Interest of the Administrative Agent in the Article 9 Collateral and
the priority thereof against any Lien, in each case subject to (x) Liens
permitted pursuant to Section 7.2 of the Credit Agreement, (y) transfers made in
compliance with the Credit Agreement, and (z) the rights of such Grantor under
Section 9.11(a) of the Credit Agreement and the corresponding provisions of the
Security Documents to obtain a release of the Liens created under the Security
Documents.

(b) Each Grantor 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 as the Administrative Agent may from time to time reasonably
request to obtain, preserve, protect and perfect the Security Interest and the
rights and remedies created hereby, including the payment of any reasonable and
documented or invoiced out-of-pocket fees and Taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements or other documents in
connection herewith or therewith. If any amount payable to any Grantor under or
in connection with any of the Article 9 Collateral shall be or become evidenced
by any promissory note (which may be a global note) or other instrument (other
than any promissory note or other instrument in an aggregate principal amount of
less than $1,000,000 owed to the applicable Grantor by any Person), such note or
instrument shall be promptly delivered (but in any event within 45 days of
receipt by such Grantor or such longer period as the Administrative Agent may
agree in its reasonable discretion) to the Administrative Agent, for the benefit
of the Secured Creditors, together with an undated instrument of transfer duly
executed in blank and in a manner reasonably satisfactory to the Administrative
Agent.

(c) At its option, the Administrative Agent may, with three (3) Business Day’s
prior written notice to the Borrower, discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the tangible Article 9 Collateral and not permitted pursuant
to Section 7.2 of the Credit Agreement, and may pay for the maintenance and
preservation of the tangible Article 9 Collateral to the extent any Grantor
fails to do so as required by the Credit Agreement, this Agreement or any other
Loan Document and within a reasonable period of time after the Administrative
Agent has reasonably requested that it do so; provided that nothing in this
paragraph shall be interpreted as excusing any Grantor from the performance of,
or imposing any obligation on the Administrative Agent or any Secured Creditor
to cure or perform, any covenants or other promises of any Grantor with respect
to taxes, assessments, charges, fees, Liens, security interests or other
encumbrances and maintenance as set forth herein or in the other Loan Documents.

(d) The exercise by the Administrative Agent of any of its rights hereunder
shall not release any Grantor from any of its duties or obligations under each
contract, agreement or instrument relating to the Article 9 Collateral unless
the Administrative Agent has expressly in writing assumed such duties and
obligations and each Grantor jointly and severally agrees to indemnify and hold
harmless the Administrative Agent and the other Secured Creditors from and
against any and all liability for such performance.

(e) Notwithstanding anything herein to the contrary, it is understood that no
Grantor shall be required by this Agreement to better assure, preserve, protect
or perfect the Security Interest created hereunder by any means other than
(i) filings of financing statements pursuant to the Uniform Commercial Code,
(ii) filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office), in respect of

 

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registered or applied for Intellectual Property, (iii) in the case of Collateral
that constitutes Pledged Securities, Instruments, Tangible Chattel Paper or
Negotiable Documents (other than those Negotiable Documents held in the ordinary
course of business), delivery thereof to the Administrative Agent in accordance
with the terms hereof (together with, where applicable, undated stock or note
powers or other undated proper instruments of assignment) and (iv) other actions
to the extent required by Section 3.04 and 6.20 of the Credit Agreement
hereunder. No Grantor shall be required to (i) complete any filings or other
action with respect to the better assurance, preservation, protection or
perfection of the security interests created hereby in any jurisdiction outside
of the United States or to reimburse the Administrative Agent for any costs
incurred in connection with the same or (ii) except as required by Section 6.20
of the Credit Agreement, deliver control agreements with respect to, or confer
perfection by “control” over, any Deposit Accounts, Securities Accounts or
Commodity Accounts.

SECTION 3.04 Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, the Security Interest, each Grantor agrees, in each case at such
Grantor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:

(a) Instruments. If any Grantor shall at any time hold or acquire any
Instruments constituting Collateral evidencing Indebtedness in excess of
$1,000,000 (individually), such Grantor shall promptly (but in any event within
45 days of receipt by such Grantor or such longer period as the Administrative
Agent may agree in its reasonable discretion) endorse, assign and deliver the
same to the Administrative Agent, accompanied by such undated instruments of
transfer or assignment duly executed in blank as the Administrative Agent may
from time to time reasonably request.

(b) Investment Property. Except to the extent otherwise provided in Article II,
if any Grantor shall at any time hold or acquire any certificated securities
constituting Collateral, such Grantor shall forthwith endorse, assign and
deliver the same to the Administrative Agent, accompanied by such undated
instruments of transfer or assignment duly executed in blank as the
Administrative Agent may from time to time reasonably request.

(c) [Reserved].

(d) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a
Commercial Tort Claim (in respect of which a complaint or counterclaim has been
filed by or on behalf of such Grantor) seeking damages in an amount reasonably
estimated to exceed $1,000,000, such Grantor shall promptly notify the
Administrative Agent thereof in a writing signed by such Grantor, including a
summary description of such claim, and Schedule IV hereto shall be deemed to be
supplemented to include such description of such Commercial Tort Claim as set
forth in such writing.

SECTION 3.05 Covenants Regarding Patent, Trademark and Copyright Collateral.
(a) Except to the extent a failure to act could not reasonably be expected to
have a Material Adverse Effect, with respect to registration or pending
application of each item of its Intellectual Property for which such Grantor has
standing and ability to do so, each Grantor agrees to take commercially
reasonable efforts to (i) take all steps to maintain the validity and
enforceability of any United

 

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States registered Intellectual Property (or applications therefor) that is
material to the conduct of such Grantor’s business and to maintain such
registrations and applications of Intellectual Property in full force and effect
and (ii) pursue the registration and maintenance of each Patent, Trademark or
Copyright registration or application that is material to the conduct of such
Grantor’s business. Grantor shall take commercially reasonable steps to defend
title to and ownership of its Intellectual Property that is material to the
conduct of such Grantor’s business. Notwithstanding the foregoing, nothing in
this Section 3.05 shall prevent any Grantor from disposing of, discontinuing the
use or maintenance of, abandoning, failing to pursue or enforce or otherwise
allowing to lapse, terminate, be invalidated or put into the public domain any
of its registered or applied for Intellectual Property that is no longer used or
useful, or economically practicable to maintain, or if such Grantor determines
in its reasonable business judgment that such discontinuance is desirable in the
conduct of its business.

(b) Each Grantor agrees that, should it obtain an ownership or other interest in
any Intellectual Property after the Closing Date (i) the provisions of this
Agreement shall automatically apply thereto and (ii) any such Intellectual
Property shall automatically become Intellectual Property subject to the terms
and conditions of this Agreement, except, with respect to each of (i) and (ii)
above, if such Intellectual Property is obtained under a license from a third
party under which a security interest would not be permitted. For the avoidance
of doubt, a security interest shall not be granted in any Intellectual Property
that constitutes an Excluded Asset.

(c) Each Grantor, either itself or through any agent, employee, licensee or ,
shall (i) whenever a certificate is delivered or required to be delivered
pursuant to Section 6.4(b) of the Credit Agreement, deliver to the
Administrative Agent a schedule setting forth all of such Grantor’s registered
and applied for Patents, Trademarks and Copyrights that are not listed on
Schedule III hereto or on a schedule previously provided to the Administrative
Agent pursuant to this Section 3.05(c), and (ii) within a reasonable time
following the request of the Administrative Agent, execute and deliver a Patent
Security Agreement, Trademark Security Agreement or Copyright Security
Agreement, as applicable, in respect of such Patents, Trademarks and Copyrights,
and any and all other agreements, instruments, documents and papers as the
Administrative Agent may reasonably request to evidence and perfect the Security
Interest in such registered or applied for Patents, Trademarks or Copyrights.

ARTICLE IV

REMEDIES

SECTION 4.01 Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver, on demand,
each item of Collateral to the Administrative Agent or any Person designated by
the Administrative Agent, including all books and records relating thereto and
all tangible evidence of its Accounts and contract rights (including, without
limitation, all documents evidencing the Accounts and all Contracts evidencing
such contract rights), and if the Administrative Agent so directs, such Grantor
shall legend, in form and manner reasonably satisfactory to the Administrative
Agent, the Accounts and the Contracts, as well as books, records and documents
(if any) of such Grantor evidencing or pertaining to such Accounts and Contracts
with an appropriate reference to the fact that such Accounts and Contracts have
been assigned to the Administrative Agent and that the Administrative Agent has
a security interest therein, and it is agreed that the Administrative Agent

 

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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 Grantors to the Administrative Agent, for the benefit of the
Secured Creditors, or to license or sublicense, whether on an exclusive or
nonexclusive basis, any such Article 9 Collateral throughout the world on such
terms and conditions and in such manner as the Administrative Agent shall
determine (other than in violation of any of the then existing licensing
arrangements to the extent that waivers cannot be obtained) in connection with
exercise of its remedies hereunder, 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 the Pledged Collateral and occupy any premises
owned or, to the extent lawful and permitted, leased by any of the Grantors
where the Collateral or any part thereof is assembled or located for a
reasonable period in order to effectuate its rights and remedies hereunder or
under the Uniform Commercial Code or other applicable law. Without limiting the
generality of the foregoing, each Grantor agrees that the Administrative Agent
shall have the right, subject to the mandatory requirements of applicable law
and the notice requirements described below, 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 Administrative Agent shall deem appropriate. The Administrative
Agent shall be authorized at any such sale of securities (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Administrative 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 sale of Collateral
shall hold the property sold absolutely free from any claim or right on the part
of any Grantor, and each Grantor hereby waives (to the extent permitted by law)
all rights of redemption, stay and appraisal that such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

The Administrative Agent shall give the applicable Grantors no less than 10
days’ prior written notice (which each Grantor agrees is reasonable notice
within the meaning of Section 9-611 of the New York UCC or its equivalent in
other jurisdictions) of the Administrative 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 Administrative Agent may fix and state in the notice (if any) of such
sale. At any such sale, the Collateral, or portion thereof, to be sold may be
sold in one lot as an entirety or in separate parcels, as the Administrative
Agent may (in its sole and absolute discretion) determine. The Administrative
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 Administrative 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 case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Administrative Agent until the

 

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sale price is paid by the purchaser or purchasers thereof, but the
Administrative Agent and the other Secured Creditors shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public or private sale made pursuant to
this Agreement, any Secured Creditor may bid for or purchase, free (to the
extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Creditor from any Grantor as a credit against
the purchase price, and such Secured Creditor may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof, a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Administrative Agent shall be free to carry out such sale pursuant
to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Administrative 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
Administrative 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 4.01 shall be deemed to conform to
the commercial reasonableness standards as provided in Section 9-610(b) of the
New York UCC or its equivalent in other jurisdictions.

SECTION 4.02 Application of Proceeds. Subject to the terms of any applicable
intercreditor agreement contemplated by the Credit Agreement, the Administrative
Agent shall apply the proceeds of any collection or sale of Collateral,
including any Collateral consisting of cash, as set forth in Section 2.11 of the
Credit Agreement.

The Administrative 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 Administrative Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Administrative 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 Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof. The Administrative Agent shall have no liability to any of the Secured
Creditors for actions taken in reliance on information supplied to it as to the
amounts of unpaid principal and interest and other amounts outstanding with
respect to the Obligations.

SECTION 4.03 Securities Act. In view of the position of the Grantors 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 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 Grantor understands that compliance
with the Federal Securities Laws might very strictly limit the course of conduct
of the Administrative Agent if the

 

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Administrative 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 Administrative 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 Grantor recognizes that in light of
such restrictions and limitations the Administrative Agent may, with respect to
any sale of the Pledged Collateral, limit the purchasers to those who will
agree, among other things, to acquire such Pledged Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that in light of such restrictions
and limitations, the Administrative 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 under the Federal Securities Laws to the extent the Administrative
Agent has determined that such a registration is not required by any
Requirements of Law and (b) may approach and negotiate with a limited number of
potential purchasers (including a single potential purchaser) to effect such
sale. Each Grantor 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
Administrative Agent and the other Secured Creditors shall incur no
responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Administrative 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 limited number of purchasers (or a single purchaser) were
approached. The provisions of this Section 4.03 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 Administrative Agent
sells.

SECTION 4.04 Grant of License to Use Intellectual Property. Upon the occurrence
and during the continuance of an Event of Default, for the purpose of enabling
the Administrative Agent to exercise rights and remedies under this Agreement,
each Grantor hereby grants to the Administrative Agent an irrevocable (until
terminated as provided below), nonexclusive license (exercisable without payment
of royalty or other compensation to the Grantors) to use or sublicense (to its
contractors, agents or representatives, or otherwise exercising its remedies
hereunder) any of the Collateral consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof to the extent that such
non-exclusive license (a) does not violate the express terms of any agreement
between a Grantor and a third party governing such Collateral consisting of
Intellectual Property, or gives such third party any right of acceleration,
modification, termination or cancellation therein and (b) is not prohibited by
any Requirements of Law; provided that such license and sublicenses with respect
to Trademarks shall be subject to the maintenance of quality standards with
respect to the goods and services on which such Trademarks are used sufficient
to preserve the validity of such Trademarks. The use of such license by the
Administrative Agent may be exercised solely during the continuation of an Event
of Default; provided that any license, sublicense or other transaction entered
into by the Administrative Agent in accordance with the provisions of this
Agreement shall be binding upon the Grantors, notwithstanding any subsequent
cure of an Event of Default. For

 

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the avoidance of doubt, at the time of the release of the Liens on any
Collateral as set forth herein, the license granted to the Administrative Agent
pursuant to this Section 4.04 with respect to such Collateral shall
automatically and immediately terminate.

ARTICLE V

MISCELLANEOUS

SECTION 5.01 Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.1 of the Credit Agreement. All communications and notices hereunder
to any Grantor shall be given to it in care of the Borrower as provided in
Section 10.1 of the Credit Agreement.

SECTION 5.02 Waivers; Amendment. (a) No failure or delay by the Administrative
Agent or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Credit Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section 5.02, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default hereunder, regardless of whether the Administrative Agent
or any Lender may have had notice or knowledge of such Default at the time. No
notice or demand on any Credit Party in any case shall entitle any Credit Party
to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Grantor or Grantors with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.12 of the Credit Agreement; provided that
the Administrative Agent may, without the consent of any other Secured Creditor,
consent to a departure by any Grantor from any covenant of such Grantor set
forth herein to the extent such departure is consistent with the authority of
the Administrative Agent set forth in the definition of the term “Collateral and
Guarantee Requirement” in the Credit Agreement.

SECTION 5.03 Administrative Agent’s Fees and Expenses; Indemnification. The
provisions of Section 10.2 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis; provided that each reference therein to the
“Borrower” shall be deemed to be a reference to “each Grantor”.

SECTION 5.04 Successors and Assigns. Subject to Section 5.06, 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

 

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on behalf of any Grantor or the Administrative Agent that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.

SECTION 5.05 Survival of Agreement. All covenants, agreements, representations
and warranties made by the Credit Parties in this Agreement and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the Secured
Creditors and shall survive the execution and delivery of the Loan Documents and
the making of any Loans, in each case, in accordance with and subject to the
limitations set forth in Section 5.24 of the Credit Agreement.

SECTION 5.06 Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original but all of which when
taken together shall constitute a single contract. Delivery of an executed
signature page to this Agreement by facsimile or other electronic transmission
shall be effective as delivery of a manually signed counterpart of this
Agreement. This Agreement shall become effective as to any Grantor when a
counterpart hereof executed on behalf of such Grantor shall have been delivered
to the Administrative Agent and a counterpart hereof shall have been executed on
behalf of the Administrative Agent, and thereafter shall be binding upon such
Grantor and the Administrative Agent and their respective permitted successors
and assigns, and shall inure to the benefit of such Grantor, the Administrative
Agent and the other Secured Creditors and their respective successors and
assigns, except that no Grantor shall have the right to assign or transfer its
rights or obligations hereunder or any interest herein (and any such assignment
or transfer shall be void) except as expressly provided in this Agreement and
the Credit Agreement. This Agreement shall be construed as a separate agreement
with respect to each Grantor and may be amended, modified, supplemented, waived
or released with respect to any Grantor without the approval of any other
Grantor and without affecting the obligations of any other Grantor hereunder.

SECTION 5.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 5.08 Right of Set-off. If an Event of Default under the Credit Agreement
shall have occurred and be continuing, each Lender 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, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender to or for the credit or the
account of any Grantor against any of and all the obligations of such Grantor
then due and owing under this Agreement, the Credit Agreement or another Loan
Document held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement, the Credit Agreement or another Loan
Document and although (i) such obligations may be contingent or unmatured and
(ii) such obligations are owed to a branch or office of such Lender different
from the branch or office holding such deposit or obligated on such
Indebtedness. The applicable Lender shall notify the applicable Grantor and the
Administrative Agent of such setoff and application; provided that any failure
to give or any delay in giving such notice shall not affect the validity of

 

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any such setoff and application under this Section 5.08. The rights of each
Lender under this Section 5.08 are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.

SECTION 5.09 Governing Law; Jurisdiction; Consent to Service of Process;
Appointment of Service of Process Agent. (a) THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, EXCEPT TO THE EXTENT
OTHERWISE PROVIDED IN THE LOAN DOCUMENTS.

(b) FOR PURPOSES OF ANY LEGAL ACTION OR PROCEEDING BROUGHT BY ANY MEMBER OF THE
LENDER GROUP WITH RESPECT TO THIS AGREEMENT, EACH CREDIT PARTY HEREBY
IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF THE FEDERAL AND STATE COURTS
SITTING IN THE STATE OF NEW YORK AND HEREBY IRREVOCABLY DESIGNATES AND APPOINTS,
AS ITS AUTHORIZED AGENT FOR SERVICE OF PROCESS, THE BORROWER, OR SUCH OTHER
PERSON AS SUCH CREDIT PARTY SHALL DESIGNATE HEREAFTER BY WRITTEN NOTICE GIVEN TO
THE ADMINISTRATIVE AGENT. THE CONSENT TO JURISDICTION HEREIN SHALL NOT BE
EXCLUSIVE. THE LENDER GROUP SHALL FOR ALL PURPOSES AUTOMATICALLY, AND WITHOUT
ANY ACT ON THEIR PART, BE ENTITLED TO TREAT SUCH DESIGNEE OF EACH CREDIT PARTY
AS THE AUTHORIZED AGENT TO RECEIVE FOR AND ON BEHALF OF SUCH CREDIT PARTY
SERVICE OF WRITS, OR SUMMONS OR OTHER LEGAL PROCESS, WHICH SERVICE SHALL BE
DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH CREDIT PARTY SERVED WHEN DELIVERED,
WHETHER OR NOT SUCH AGENT GIVES NOTICE TO SUCH CREDIT PARTY; AND DELIVERY OF
SUCH SERVICE TO ITS AUTHORIZED AGENT SHALL BE DEEMED TO BE MADE WHEN PERSONALLY
DELIVERED OR THREE (3) BUSINESS DAYS AFTER MAILING BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH AUTHORIZED AGENT. EACH CREDIT PARTY FURTHER IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL TO SUCH CREDIT PARTY AT THE
ADDRESS SET FORTH ABOVE, SUCH SERVICE TO BECOME EFFECTIVE THREE (3) BUSINESS
DAYS AFTER SUCH MAILING. IN THE EVENT THAT, FOR ANY REASON, SUCH AGENT OR ITS
SUCCESSORS SHALL NO LONGER SERVE AS AGENT OF EACH CREDIT PARTY TO RECEIVE
SERVICE OF PROCESS, EACH CREDIT PARTY SHALL SERVE AND ADVISE THE ADMINISTRATIVE
AGENT THEREOF SO THAT AT ALL TIMES EACH CREDIT PARTY WILL MAINTAIN AN AGENT TO
RECEIVE SERVICE OF PROCESS ON BEHALF OF SUCH CREDIT PARTY WITH RESPECT TO THIS
AGREEMENT. IN THE EVENT THAT, FOR ANY REASON, SERVICE OF LEGAL PROCESS CANNOT BE
MADE IN THE MANNER DESCRIBED ABOVE, SUCH SERVICE MAY BE MADE IN SUCH MANNER AS
PERMITTED BY LAW.

(c) EACH CREDIT PARTY AND EACH MEMBER OF THE LENDER GROUP HEREBY IRREVOCABLY
WAIVES ANY OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF
ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
BROUGHT IN

 

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THE FEDERAL COURTS OF THE UNITED STATES SITTING IN NEW YORK COUNTY, NEW YORK,
AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

SECTION 5.10 WAIVER OF JURY TRIAL. EACH CREDIT PARTY AND EACH MEMBER OF THE
LENDER GROUP TO THE EXTENT PERMITTED BY APPLICABLE LAW WAIVES, AND OTHERWISE
AGREES NOT TO REQUEST, A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM OF ANY TYPE IN WHICH ANY CREDIT PARTY, ANY MEMBER OF
THE LENDER GROUP OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS
TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT
AND THE RELATIONS AMONG THE PARTIES LISTED IN SECTION 5.9 OR THIS SECTION 5.10.

SECTION 5.11 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 shall not affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 5.12 Security Interest Absolute. All rights of the Administrative Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan 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 Credit
Agreement, any other Loan 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 Grantor in respect of the Obligations or this Agreement.

SECTION 5.13 [Reserved].

SECTION 5.14 Additional Subsidiaries. The Grantors shall cause (i) each
Subsidiary of the Borrower (other than any Excluded Subsidiary) which, from time
to time, on or after the date hereof shall be required to grant Liens on any
assets to the Administrative Agent for the benefit of the Secured Creditors
pursuant to the Credit Agreement and (ii) consistent with the Credit Agreement,
any Domestic Subsidiary, or to the extent reasonably acceptable to the
Administrative Agent, a Foreign Subsidiary that is not a Wholly Owned Subsidiary
(including any consolidated Affiliate in which its Subsidiaries own no Equity
Interests), which the Borrower, at its option, elects to become a Grantor, to
execute and deliver to the Administrative Agent a Joinder Supplement regarding
such Subsidiary (as applicable), in each case, within the time period provided
in Section 6.12 of the Credit Agreement. Upon execution and delivery of such
documents to the Administrative Agent, any such Subsidiary shall become a
Grantor hereunder with the same force and effect as if originally named as such
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instrument shall not require the consent of any other Grantor hereunder. The
rights and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this
Agreement.

SECTION 5.15 Administrative Agent Appointed Attorney-in-Fact. Each Grantor
hereby makes, constitutes and appoints the Administrative Agent (and all
officers, employees or agents designated by the Administrative Agent) the
attorney-in-fact of such Grantor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
hereof at any time after and during the continuance of an Event of Default,
which appointment is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, the Administrative Agent shall have the right,
but only upon the occurrence and during the continuance of an Event of Default
and written notice by the Administrative Agent to the Borrower of its intent to
exercise such rights, with full power of substitution either in the
Administrative Agent’s name or in the name of such Grantor (a) to receive,
indorse, assign and/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 sign the
name of any Grantor on any invoice or bill of lading relating to any of the
Collateral; (d) upon prior written notice to the Borrower, to send verifications
of accounts receivable to any Account Debtor; (e) to commence and 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; (f) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) upon prior written notice to the
Borrower, to notify, or to require any Grantor to notify, Account Debtors to
make payment directly to the Administrative Agent; (h) 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
Administrative Agent were the absolute owner of the Collateral for all purposes,
and (i) to make, settle and adjust claims in respect of Article 9 Collateral
under policies of insurance, indorsing the name of such Grantor 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;
provided that nothing herein contained shall be construed as requiring or
obligating the Administrative Agent to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by the
Administrative 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
Administrative Agent and the other Secured Creditors 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 Grantor for any act or failure to act
hereunder, except for their own gross negligence, bad faith or willful
misconduct or that of any of their controlled Affiliates, directors, officers,
employees, counsel, agents or attorneys-in-fact.

SECTION 5.16 Intercreditor Agreement Governs. Notwithstanding anything herein to
the contrary, (i) the Liens and security interests granted to the Administrative
Agent for the benefit of the Secured Creditors pursuant to this Agreement and
(ii) the exercise of any right or remedy by the Administrative Agent hereunder
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proceeds and condemnation proceeds) of any Collateral, are subject to the
provisions of the ABL/Term Intercreditor Agreement. In the event of any conflict
between the terms of the ABL/Term Intercreditor Agreement and the terms of this
Agreement, the terms of the ABL/Term Intercreditor Agreement shall govern.

SECTION 5.17 Delivery of Term Loan First Lien Collateral. In accordance with the
terms of the ABL/Term Intercreditor Agreement, all Term Loan First Lien
Collateral delivered to the Term Representative shall be held by the Term
Representative as gratuitous bailee for the Secured Creditors solely for the
purpose of perfecting the security interest granted under this Agreement.
Notwithstanding anything herein to the contrary, prior to the Discharge of
Senior Secured Debt Obligations with respect to Term Loan First Lien Collateral,
to the extent any Grantor is required hereunder to deliver Term Loan First Lien
Collateral to the Administrative Agent and is unable to do so as a result of
having previously delivered such Term Loan First Lien Collateral to the Term
Representative in accordance with the terms of the Pari Term Loan Debt Security
Documents, such Grantor’s obligations hereunder with respect to such delivery
shall be deemed satisfied by the delivery to the Term Representative, acting as
gratuitous bailee of the Administrative Agent. Terms used in this Section 5.17
and not otherwise defined herein shall have the meanings given to such terms in
the ABL/Term Intercreditor Agreement.

SECTION 5.18 No Liability. The Administrative Agent shall not be responsible for
or have a duty to ascertain or inquire into any representation or warranty
regarding the existence, value or collectability of the Collateral, the
existence, priority or perfection of the Administrative Agent’s Lien thereon, or
any certificate prepared by any Credit Party in connection therewith, nor shall
the Administrative Agent be responsible or liable to the Lenders for any failure
to monitor or maintain any portion of the Collateral.

SECTION 5.19 Compromises and Collection of Collateral. Each Grantor and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, each Grantor agrees that
the Administrative Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the
Administrative Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Administrative Agent shall be
commercially reasonable so long as the Administrative Agent acts in good faith
based on information known to it at the time it takes any such action.

[Remainder of Page Intentionally Left Blank]

 

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

 

GRANTORS:

INSTALLED BUILDING PRODUCTS, INC.

By:

 

/s/ Michael T. Miller

Name:

 

Michael T. Miller

Title:

 

Executive Vice President and

 

Chief Financial Officer

 

Signature Page to Security Agreement

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

GRANTORS CONTINUED:

 

A+ INSULATION OF KANSAS CITY, LLC, a Delaware limited liability company

ACCURATE INSULATION LLC, a Maryland limited liability company

ACCURATE INSULATION OF COLORADO, LLC, a Delaware limited liability company

ACCURATE INSULATION OF DELAWARE, LLC, a Delaware limited liability company

ACCURATE INSULATION OF UPPER MARLBORO, LLC, a Delaware limited liability company

ADVANCED FIBER, LLC, a Delaware limited liability company

ADVANCED INSULATION, LLC, a Delaware limited liability company

ALL CONSTRUCTION SERVICES, LLC, a Delaware limited liability company

ALL IN ONE & MOORE BUILDING SYSTEMS, LLC, a Delaware limited liability company

ALPINE INSULATION I, LLC, a Delaware limited liability company

AMERICAN INSULATION & ENERGY SERVICES, LLC, an Alabama limited liability company

ANY SEASON INSULATION, LLC, a Delaware limited liability company

APPLE VALLEY INSULATION, A BDI COMPANY, INC., a California corporation

ASTRO INSULATION OF ILLINOIS, LLC, a Delaware limited liability company

BAYTHERM INSULATION, LLC, a Delaware limited liability company

BDI INSULATION OF IDAHO FALLS, INC., an Idaho corporation

BDI INSULATION OF SALT LAKE, L.L.C., a Utah limited liability company

BER ENERGY SERVICES, LLC, a Texas limited liability company

BIG CITY INSULATION, INC., a Utah corporation

BIG CITY INSULATION OF IDAHO, INC., an Idaho corporation

B-ORGANIZED INSULATION, LLC, a Delaware limited liability company

BROKEN DRUM OF BAKERSFIELD, INC., a California corporation

BROKEN DRUM INSULATION VISALIA, INC., a California corporation

BUILDERS INSTALLED PRODUCTS OF MAINE, LLC, a Delaware limited liability company

BUILDERS INSTALLED PRODUCTS OF NEW HAMPSHIRE, LLC, a Delaware limited liability
company

BUILDERS INSTALLED PRODUCTS OF NEW YORK, LLC, a Delaware limited liability
company

 

      

 

By:

 

/s/ Michael T. Miller

      

 

Name:

 

Michael T. Miller

      

 

Title:

 

Executive Vice President and Chief Financial Officer

 

Signature Page to Security Agreement

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

GRANTORS CONTINUED:

 

BUILDERS INSTALLED PRODUCTS OF VERMONT, LLC, a Delaware limited liability
company

BUILDING MATERIALS FINANCE, INC., a Delaware corporation

CLS INSULATION, LLC, a Delaware limited liability company

CORNHUSKER INSULATION, LLC, a Delaware limited liability company

C.Q. INSULATION, INC., a Florida corporation

EAST COAST INSULATORS II, LLC, a Delaware limited liability company

EASTERN CONTRACTOR SERVICES LIMITED LIABILITY COMPANY, a New Jersey limited
liability company

ECOLOGIC ENERGY SOLUTIONS, LLC, a Delaware limited liability company

EDWARDS/MOONEY & MOSES, LLC, a Delaware limited liability company

ELITE SPRAY FOAM OF LAS VEGAS, LLC, a Delaware limited liability company

EMPER HOLDINGS, LLC, a Delaware limited liability company

ENERGY SAVERS OF LOUISVILLE, LLC, a Delaware limited liability company

EXPERT INSULATION OF MINNESOTA, LLC, a Delaware limited liability company

FIBERCLASS INSULATION, LLC, a Delaware limited liability company

FIRST STATE BUILDING PRODUCTS, LLC, a Delaware limited liability company

FORT WAYNE URETHANE, LLC, a Delaware limited liability company

GARAGE DOOR SYSTEMS, LLC, a Delaware limited liability company

GOLD INSULATION, INC., a Delaware corporation

GREEN STAR PLUS INSULATION, LLC, a Delaware limited liability company

G-T-G, LLC, a South Carolina limited liability company

GULF COAST INSULATION, LLC, a Delaware limited liability company

HINKLE INSULATION & DRYWALL COMPANY, INCORPORATED, a Texas corporation

HORIZON ELECTRIC SERVICES, LLC, a Delaware limited liability company

IBHL A HOLDING COMPANY, INC., a Delaware corporation

IBHL B HOLDING COMPANY, INC., a Delaware corporation

IBHL II-A HOLDING COMPANY, INC., a Delaware corporation

IBHL II-B HOLDING COMPANY, INC., a Delaware corporation

IBP ARCTIC EXPRESS, LLC, a Delaware limited liability company

IBP ASSET, LLC, a Delaware limited liability company

IBP ASSET II, LLC, a Delaware limited liability company

IBP CORPORATION HOLDINGS, INC., a Delaware corporation

IBP EXTERIORS, INC., a New Jersey corporation

 

      

 

By:

 

/s/ Michael T. Miller

      

 

Name:

 

Michael T. Miller

      

 

Title:

 

Executive Vice President and Chief Financial Officer

 

Signature Page to Security Agreement

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

GRANTORS CONTINUED:

 

IBP HOLDINGS, LLC, a Delaware limited liability company

IBP HOLDINGS II, LLC, a Delaware limited liability company

IBP OF MANSFIELD, LLC, a Delaware limited liability company

IBP OF OKLAHOMA, LLC, a Delaware limited liability company

IBP OF SAN ANTONIO, LLC, a Delaware limited liability company

IBP OF TOLEDO, LLC, a Delaware limited liability company

IBP TEXAS ASSETS I, LLC, a Delaware limited liability company

IBP TEXAS ASSETS II, LLC, a Delaware limited liability company

IBP TEXAS ASSETS III, LLC, a Delaware limited liability company

INSTALLED BUILDING PRODUCTS, LLC, a Delaware limited liability company

INSTALLED BUILDING PRODUCTS II, LLC, a Delaware limited liability company

INSTALLED BUILDING PRODUCTS OF HOUSTON, LLC, a Delaware limited liability
company

INSTALLED BUILDING PRODUCTS OF MAINE, LLC, a Delaware limited liability company

INSTALLED BUILDING PRODUCTS - PORTLAND, LLC, an Oregon limited liability company

INSTALLED BUILDING SOLUTIONS II, LLC, a Delaware limited liability company

INSULATION NORTHWEST, LLC, a Delaware limited liability company

INSULATION WHOLESALE SUPPLY, LLC, a Nevada limited liability company

INSULVAIL, LLC, a Colorado limited liability company

KEY INSULATION OF AUSTIN, LLC, a Delaware limited liability company

KEY INSULATION OF SAN ANTONIO, LLC, a Delaware limited liability company

LAKESIDE INSULATION, LLC, a Delaware limited liability company

LAYMAN BROTHERS INSULATION, LLC, a Delaware limited liability company

LKS TRANSPORTATION, LLC, a Delaware limited liability company

LOVEDAY INSULATION, LLC, a Delaware limited liability company

M&D INSULATION, LLC, a Delaware limited liability company

MAP INSTALLED BUILDING PRODUCTS OF SAGAMORE, LLC, a Delaware limited liability
company

MAP INSTALLED BUILDING PRODUCTS OF SEEKONK, LLC, a Delaware limited liability
company

MARV’S INSULATION, INC., an Idaho corporation

 

      

 

By:

 

/s/ Michael T. Miller

      

 

Name:

 

Michael T. Miller

      

 

Title:

 

Executive Vice President and Chief Financial Officer

 

Signature Page to Security Agreement

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

GRANTORS CONTINUED:

 

METRO HOME INSULATION, LLC, a Delaware limited liability company

MID SOUTH CONSTRUCTION AND BUILDING PRODUCTS, INC., a Georgia corporation

MIG BUILDING SYSTEMS, LLC, a Delaware limited liability company

MIG BUILDING SYSTEMS OF EAST SYRACUSE, LLC, a Delaware limited liability company

MOMPER INSULATION OF CROWN POINT, LLC, a Delaware limited liability company

MOMPER INSULATION OF ELKHART, LLC, a Delaware limited liability company

MOMPER INSULATION OF FORT WAYNE, LLC, a Delaware limited liability company

NORTHWEST INSULATION, LLC, a Delaware limited liability company

OJ INSULATION HOLDINGS, INC., a Delaware corporation

PACIFIC PARTNERS INSULATION NORTH, A BDI COMPANY, LLC, a Washington limited
liability company

PACIFIC PARTNERS INSULATION SOUTH, A BDI COMPANY, LLC, a Washington limited
liability company

PARKER INSULATION AND BUILDING PRODUCTS, LLC, a Texas limited liability company

PEG, LLC, a Texas limited liability company

RAJAN, LLC, an Ohio limited liability company

ROCKET INSULATION, LLC, a Delaware limited liability company

ROCKFORD INSULATION, LLC, a Delaware limited liability company

SIERRA INSULATION CONTRACTORS II, LLC, a Delaware limited liability company

SOUTHERN INSULATORS, LLC, a Delaware limited liability company

SPEC 7 INSULATION CO., LLC, a Colorado limited liability company

SUBURBAN INSULATION, INC., a Pennsylvania corporation

SUPERIOR INSULATION, LLC, a Delaware limited liability company

SUPERIOR INSULATION SERVICES, LLC, a Delaware limited liability company

TCI CONTRACTING, LLC, a Georgia limited liability company

TCI CONTRACTING OF CHARLESTON, LLC, a Delaware limited liability company

TCI CONTRACTING OF HILTON HEAD, LLC, a Delaware limited liability company

TCI CONTRACTING OF KENTUCKY, LLC, a Delaware limited liability company

TCI CONTRACTING OF MEMPHIS, LLC, a Delaware limited liability company

 

      

 

By:

 

/s/ Michael T. Miller

      

 

Name:

 

Michael T. Miller

      

 

Title:

 

Executive Vice President and Chief Financial Officer

 

Signature Page to Security Agreement

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

GRANTORS CONTINUED:

 

TCI CONTRACTING OF NASHVILLE, LLC, a Delaware limited liability company

TCI CONTRACTING OF THE GULF, LLC, a Delaware limited liability company

THERMAL CONTROL INSULATION, LLC, an Ohio limited liability company

THERM-CON OF TENNESSEE, LLC, a Delaware limited liability company

TIDEWATER INSULATORS, LLC, a Delaware limited liability company

TOWN BUILDING SYSTEMS, LLC, a Delaware limited liability company

TRADEMARK ROOFING COMPANY, INC., a North Carolina corporation

TRADEMARK SEAMLESS GUTTER COMPANY, INC., a North Carolina corporation

U.S. INSULATION CORP., a Connecticut corporation

WATER-TITE COMPANY, LLC, a Delaware limited liability company

WILSON INSULATION COMPANY, LLC, a Georgia limited liability company

 

      

 

By:

 

/s/ Michael T. Miller

      

 

Name:

 

Michael T. Miller

 

Title:

 

Executive Vice President and Chief Financial Officer

 

ALPHA INSULATION & WATER PROOFING COMPANY, a Georgia corporation

ALPHA INSULATION & WATER PROOFING, INC., a Texas corporation

DIVISION 7 8 9 SUPPLY, LLC, a Delaware limited liability company

TRILOK INDUSTRIES, INC., a Georgia corporation

 

      

 

By:

 

/s/ Michael T. Miller

      

 

Name:

 

Michael T. Miller

      

 

Title:

 

Executive Vice President

 

GOLD STAR INSULATION, L.P., a Delaware limited partnership

            

 

By:

 

Gold Insulation, Inc., its General Partner

            

 

By:

 

/s/ Michael T. Miller

            

 

Name:

 

Michael T. Miller

 

Title:

 

Executive Vice President and Chief Financial Officer

 

OJ INSULATION, L.P., a Delaware limited partnership

  

            

 

By:

 

OJ Insulation Holdings, Inc., its General Partner

            

 

By:

 

/s/ Michael T. Miller

            

 

Name:

 

Michael T. Miller

 

Title:

 

Executive Vice President and Chief Financial Officer

 

Signature Page to Security Agreement

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

BANK OF AMERICA, N.A., as Administrative Agent

By:

 

/s/ Brian Scawinski

Name:

 

Brian Scawinski

Title:

 

Authorized Signatory

 

Signature Page to Security Agreement

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

Schedule I to the

Security Agreement

GRANTORS

BORROWER:

 

  1.

INSTALLED BUILDING PRODUCTS, INC., a Delaware corporation

GUARANTORS:

 

  2.

A+ INSULATION OF KANSAS CITY, LLC, a Delaware limited liability company

  3.

ACCURATE INSULATION LLC, a Maryland limited liability company

  4.

ACCURATE INSULATION OF COLORADO, LLC, a Delaware limited liability company

  5.

ACCURATE INSULATION OF DELAWARE, LLC, a Delaware limited liability company

  6.

ACCURATE INSULATION OF UPPER MARLBORO, LLC, a Delaware limited liability company

  7.

ADVANCED FIBER, LLC, a Delaware limited liability company

  8.

ADVANCED INSULATION, LLC, a Delaware limited liability company

  9.

ALL CONSTRUCTION SERVICES, LLC, a Delaware limited liability company

  10.

ALL IN ONE & MOORE BUILDING SYSTEMS, LLC, a Delaware limited liability company

  11.

ALPHA INSULATION & WATER PROOFING COMPANY, a Georgia corporation

  12.

ALPHA INSULATION & WATER PROOFING, INC., a Texas corporation

  13.

ALPINE INSULATION I, LLC, a Delaware limited liability company

  14.

AMERICAN INSULATION & ENERGY SERVICES, LLC, an Alabama limited liability company

  15.

ANY SEASON INSULATION, LLC, a Delaware limited liability company

  16.

APPLE VALLEY INSULATION, A BDI COMPANY, INC., a California corporation

  17.

ASTRO INSULATION OF ILLINOIS, LLC, a Delaware limited liability company

  18.

B-ORGANIZED INSULATION, LLC, a Delaware limited liability company

  19.

BAYTHERM INSULATION, LLC, a Delaware limited liability company

  20.

BDI INSULATION OF IDAHO FALLS, INC., an Idaho corporation

  21.

BDI INSULATION OF SALT LAKE, L.L.C., a Utah limited liability company

  22.

BER ENERGY SERVICES, LLC, a Texas limited liability company

  23.

BIG CITY INSULATION, INC., a Utah corporation

  24.

BIG CITY INSULATION OF IDAHO, INC., an Idaho corporation

  25.

BROKEN DRUM OF BAKERSFIELD, INC., a California corporation

  26.

BROKEN DRUM INSULATION VISALIA, INC., a California corporation

  27.

BUILDERS INSTALLED PRODUCTS OF MAINE, LLC, a Delaware limited liability company

  28.

BUILDERS INSTALLED PRODUCTS OF NEW HAMPSHIRE, LLC, a Delaware limited liability
company

 

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

  29.

BUILDERS INSTALLED PRODUCTS OF NEW YORK, LLC, a Delaware limited liability
company

  30.

BUILDERS INSTALLED PRODUCTS OF VERMONT, LLC, a Delaware limited liability
company

  31.

BUILDING MATERIALS FINANCE, INC., a Delaware corporation

  32.

CLS INSULATION, LLC, a Delaware limited liability company

  33.

CORNHUSKER INSULATION, LLC, a Delaware limited liability company

  34.

C.Q. INSULATION, INC., a Florida corporation

  35.

DIVISION 7 8 9 SUPPLY, LLC, a Delaware limited liability company

  36.

EAST COAST INSULATORS II, LLC, a Delaware limited liability company

  37.

EASTERN CONTRACTOR SERVICES LIMITED LIABILITY COMPANY, a New Jersey limited
liability company

  38.

ECOLOGIC ENERGY SOLUTIONS, LLC, a Delaware limited liability company

  39.

EDWARDS/MOONEY & MOSES, LLC, a Delaware limited liability company

  40.

ELITE SPRAY FOAM OF LAS VEGAS, LLC, a Delaware limited liability company

  41.

EMPER HOLDINGS, LLC, a Delaware limited liability company

  42.

ENERGY SAVERS OF LOUISVILLE, LLC, a Delaware limited liability company

  43.

EXPERT INSULATION OF MINNESOTA, LLC, a Delaware limited liability company

  44.

FIBERCLASS INSULATION, LLC, a Delaware limited liability company

  45.

FIRST STATE BUILDING PRODUCTS, LLC, a Delaware limited liability company

  46.

FORT WAYNE URETHANE, LLC, a Delaware limited liability company

  47.

GARAGE DOOR SYSTEMS, LLC, a Delaware limited liability company

  48.

GOLD INSULATION, INC., a Delaware corporation

  49.

GOLD STAR INSULATION, L.P., a Delaware limited partnership

  50.

GREEN STAR PLUS INSULATION, LLC, a Delaware limited liability company

  51.

G-T-G, LLC, a South Carolina limited liability company

  52.

GULF COAST INSULATION, LLC, a Delaware limited liability company

  53.

HORIZON ELECTRIC SERVICES, LLC, a Delaware limited liability company

  54.

HINKLE INSULATION & DRYWALL COMPANY, INCORPORATED, a Texas corporation

  55.

IBHL A HOLDING COMPANY, INC., a Delaware corporation

  56.

IBHL B HOLDING COMPANY, INC., a Delaware corporation

  57.

IBHL II-A HOLDING COMPANY, INC., a Delaware corporation

  58.

IBHL II-B HOLDING COMPANY, INC., a Delaware corporation

  59.

IBP ARCTIC EXPRESS, LLC, a Delaware limited liability company

  60.

IBP ASSET, LLC, a Delaware limited liability company

  61.

IBP ASSET II, LLC, a Delaware limited liability company

  62.

IBP CORPORATION HOLDINGS, INC., a Delaware corporation

  63.

IBP EXTERIORS, INC., a New Jersey corporation

  64.

IBP HOLDINGS, LLC, a Delaware limited liability company

 

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

  65.

IBP HOLDINGS II, LLC, a Delaware limited liability company

  66.

IBP OF MANSFIELD, LLC, a Delaware limited liability company

  67.

IBP OF OKLAHOMA, LLC, a Delaware limited liability company

  68.

IBP OF SAN ANTONIO, LLC, a Delaware limited liability company

  69.

IBP OF TOLEDO, LLC, a Delaware limited liability company

  70.

IBP TEXAS ASSETS I, LLC, a Delaware limited liability company

  71.

IBP TEXAS ASSETS II, LLC, a Delaware limited liability company

  72.

IBP TEXAS ASSETS III, LLC, a Delaware limited liability company

  73.

INSTALLED BUILDING PRODUCTS, LLC, a Delaware limited liability company

  74.

INSTALLED BUILDING PRODUCTS II, LLC, a Delaware limited liability company

  75.

INSTALLED BUILDING PRODUCTS OF HOUSTON, LLC, a Delaware limited liability
company

  76.

INSTALLED BUILDING PRODUCTS OF MAINE, LLC, a Delaware limited liability company

  77.

INSTALLED BUILDING PRODUCTS - PORTLAND, LLC, an Oregon limited liability company

  78.

INSTALLED BUILDING SOLUTIONS II, LLC, a Delaware limited liability company

  79.

INSULATION NORTHWEST, LLC, a Delaware limited liability company

  80.

INSULATION WHOLESALE SUPPLY, LLC, a Nevada limited liability company

  81.

INSULVAIL, LLC, a Colorado limited liability company

  82.

KEY INSULATION OF AUSTIN, LLC, a Delaware limited liability company

  83.

KEY INSULATION OF SAN ANTONIO, LLC, a Delaware limited liability company

  84.

LAKESIDE INSULATION, LLC, a Delaware limited liability company

  85.

LAYMAN BROTHERS INSULATION, LLC, a Delaware limited liability company

  86.

LKS TRANSPORTATION, LLC, a Delaware limited liability company

  87.

LOVEDAY INSULATION, LLC, a Delaware limited liability company

  88.

M&D INSULATION, LLC, a Delaware limited liability company

  89.

MAP INSTALLED BUILDING PRODUCTS OF SAGAMORE, LLC, a Delaware limited liability
company

  90.

MAP INSTALLED BUILDING PRODUCTS OF SEEKONK, LLC, a Delaware limited liability
company

  91.

MARV’S INSULATION, INC., an Idaho corporation

  92.

METRO HOME INSULATION, LLC, a Delaware limited liability company

  93.

MID SOUTH CONSTRUCTION AND BUILDING PRODUCTS, INC., a Georgia corporation

  94.

MIG BUILDING SYSTEMS, LLC, a Delaware limited liability company

  95.

MIG BUILDING SYSTEMS OF EAST SYRACUSE, LLC, a Delaware limited liability company

  96.

MOMPER INSULATION OF CROWN POINT, LLC, a Delaware limited liability company

  97.

MOMPER INSULATION OF ELKHART, LLC, a Delaware limited liability company

  98.

MOMPER INSULATION OF FORT WAYNE, LLC, a Delaware limited liability company

  99.

NORTHWEST INSULATION, LLC, a Delaware limited liability company

 

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

  100.

OJ INSULATION HOLDINGS, INC., a Delaware corporation

  101.

OJ INSULATION, L.P., a Delaware limited partnership

  102.

PACIFIC PARTNERS INSULATION NORTH, A BDI COMPANY, LLC, a Washington limited
liability company

  103.

PACIFIC PARTNERS INSULATION SOUTH, A BDI COMPANY, LLC, a Washington limited
liability company

  104.

PARKER INSULATION AND BUILDING PRODUCTS, LLC, a Texas limited liability company

  105.

PEG, LLC, a Texas limited liability company

  106.

RAJAN, LLC, an Ohio limited liability company

  107.

ROCKET INSULATION, LLC, a Delaware limited liability company

  108.

ROCKFORD INSULATION, LLC, a Delaware limited liability company

  109.

SIERRA INSULATION CONTRACTORS II, LLC, a Delaware limited liability company

  110.

SOUTHERN INSULATORS, LLC, a Delaware limited liability company

  111.

SPEC 7 INSULATION CO., LLC, a Colorado limited liability company

  112.

SUBURBAN INSULATION, INC., a Pennsylvania corporation

  113.

SUPERIOR INSULATION, LLC, a Delaware limited liability company

  114.

SUPERIOR INSULATION SERVICES, LLC, a Delaware limited liability company

  115.

TCI CONTRACTING, LLC, a Georgia limited liability company

  116.

TCI CONTRACTING OF CHARLESTON, LLC, a Delaware limited liability company

  117.

TCI CONTRACTING OF HILTON HEAD, LLC, a Delaware limited liability company

  118.

TCI CONTRACTING OF KENTUCKY, LLC, a Delaware limited liability company

  119.

TCI CONTRACTING OF MEMPHIS, LLC, a Delaware limited liability company

  120.

TCI CONTRACTING OF NASHVILLE, LLC, a Delaware limited liability company

  121.

TCI CONTRACTING OF THE GULF, LLC, a Delaware limited liability company

  122.

THERMAL CONTROL INSULATION, LLC, an Ohio limited liability company

  123.

THERM-CON OF TENNESSEE, LLC, a Delaware limited liability company

  124.

TIDEWATER INSULATORS, LLC, a Delaware limited liability company

  125.

TOWN BUILDING SYSTEMS, LLC, a Delaware limited liability company

  126.

TRADEMARK ROOFING COMPANY, INC., a North Carolina corporation

  127.

TRADEMARK SEAMLESS GUTTER COMPANY, INC., a North Carolina corporation

  128.

TRILOK INDUSTRIES, INC., a Georgia corporation

  129.

U.S. INSULATION CORP., a Connecticut corporation

  130.

WATER-TITE COMPANY, LLC, a Delaware limited liability company

  131.

WILSON INSULATION COMPANY, LLC, a Georgia limited liability company

 

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

Schedule II to the

Security Agreement

PLEDGED EQUITY INTERESTS

 

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

1.

   A+ Insulation of Kansas City, LLC    Installed Building Products, LLC    1   
NA      100 %      100 % 

2.

   Accurate Insulation LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

3.

   Accurate Insulation of Colorado, LLC    IBP Asset, LLC    1    NA      100 % 
    100 % 

4.

   Accurate Insulation of Delaware, LLC    Accurate Insulation, LLC    1    NA
     100 %      100 % 

5.

   Accurate Insulation of Upper Marlboro, LLC    Accurate Insulation, LLC    1
   NA      100 %      100 % 

6.

   Advanced Fiber, LLC    Installed Building Products II, LLC    1    NA     
100 %      100 % 

7.

   Advanced Insulation, LLC    TCI Contracting, LLC    1    NA      100 %     
100 % 

8.

   All Construction Services, LLC    Installed Building Products, LLC    1    NA
     100 %      100 % 

9.

   All In One & Moore Building Systems, LLC    Installed Building Products, LLC
   1    NA      100 %      100 % 

10.

   Alpha Insulation & Water Proofing Company    EMPER Holdings, LLC    4    500
     100 %      100 % 

11.

   Alpha Insulation & Water Proofing, Inc.    Trilok Industries, Inc.    1   
6,000      100 %      100 % 

12.

   Alpine Insulation I, LLC    IBP Exteriors, Inc.    1    NA      100 %     
100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

13.

   American Insulation & Energy Services, LLC    Installed Building Products,
LLC    1    NA      100 %      100 % 

14.

   Any Season Insulation, LLC    Installed Building Products, LLC    1    NA   
  100 %      100 % 

15.

   Apple Valley Insulation, a BDI Company, Inc.    IBP Corporation Holdings,
Inc.    4    10,000      100 %      100 % 

16.

   Astro Insulation of Illinois, LLC    Installed Building Products, LLC    1   
NA      100 %      100 % 

17.

   Baytherm Insulation, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

18.

   BDI Insulation of Idaho Falls, Inc.    IBP Corporation Holdings, Inc.    4   
10,000      100 %      100 % 

19.

   BDI Insulation of Salt Lake, L.L.C.    IBP Corporation Holdings, Inc.    1   
NA      100 %      100 % 

20.

   BER Energy Services, LLC    IBP Texas Assets III, LLC    1    NA      100 % 
    100 % 

21.

   Big City Insulation of Idaho, Inc.    IBP Corporation Holdings, Inc.    32   
95      100 %      100 % 

22.

   Big City Insulation, Inc.    IBP Corporation Holdings, Inc.    35    1,000   
  100 %      100 % 

23.

   B-Organized Insulation, LLC    IBP Asset, LLC    1    NA      100 %      100
% 

24.

   Broken Drum Insulation Visalia, Inc.    IBP Corporation Holdings, Inc.    15
   10,000      100 %      100 % 

25.

   Broken Drum of Bakersfield, Inc.    IBP Corporation Holdings, Inc.    22   
300,000      100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

26.

   Builders Installed Products of Maine, LLC    Installed Building Products, LLC
   1    NA      100 %      100 % 

27.

   Builders Installed Products of New Hampshire, LLC    Installed Building
Products, LLC    1    NA      100 %      100 % 

28.

   Builders Installed Products of New York, LLC    Installed Building Products,
LLC    1    NA      100 %      100 % 

29.

   Builders Installed Products of Vermont, LLC    Installed Building Products,
LLC    1    NA      100 %      100 % 

30.

   Building Materials Finance, Inc.    Installed Building Products, LLC    7   
5,800      100 %      100 % 

31.

   C.Q. Insulation, Inc.    IBP Corporation Holdings, Inc.    16    105,000     
100 %      100 % 

32.

   CLS Insulation, LLC    IBP Texas Assets I, LLC    1    NA      100 %      100
% 

33.

   Cornhusker Insulation, LLC    IBP Exteriors, Inc.    1    NA      100 %     
100 % 

34.

   Division 7 8 9 Supply, LLC    EMPER Holdings, LLC    1    NA      100 %     
100 % 

35.

   East Coast Insulators II, LLC    IBP Asset, LLC    1    NA      100 %     
100 % 

36.

   Eastern Contractor Services Limited Liability Company    Installed Building
Products, LLC    3    NA      100 %      100 % 

37.

   Ecologic Energy Solutions, LLC    Installed Building Products, LLC    1    NA
     100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

38.

   Edwards / Mooney & Moses, LLC    Installed Building Products, LLC    1    NA
     100 %      100 % 

39.

   Elite Spray Foam of Las Vegas, LLC    Gold Star Insulation, L.P.    1    NA
     100 %      100 % 

40.

   EMPER Holdings, LLC   

IBHL A Holding Company, Inc.

IBHL B Holding Company, Inc.

   1

2

   NA

NA

    

50

50

% 

% 

   

50

50

% 

% 

41.

   Energy Savers of Louisville, LLC    Installed Building Products, LLC    1   
NA      100 %      100 % 

42.

   Expert Insulation of Minnesota, LLC    Installed Building Products, LLC    1
   NA      100 %      100 % 

43.

   Fiberclass Insulation, LLC    Installed Building Products, LLC    1    NA   
  100 %      100 % 

44.

   First State Building Products, LLC    Installed Building Products, LLC    1
   NA      100 %      100 % 

45.

   Fort Wayne Urethane, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

46.

   Garage Door Systems, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

47.

   Gold Insulation, Inc.    Installed Building Products, LLC    R-2    100     
100 %      100 % 

48.

   Gold Star Insulation, L.P.   

Installed Building Products, LLC

Gold Insulation, Inc.

   2

3

   NA     

99

1

% 

% 

   

99

1

% 

% 

49.

   Green Star Plus Insulation, LLC    Installed Building Products, LLC    1   
NA      100 %      100 % 

50.

   G-T-G, LLC    IBP Exteriors, Inc.    1    NA      100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

51.

   Gulf Coast Insulation, LLC    TCI Contracting, LLC    1    NA      100 %     
100 % 

52.

   Horizon Electric Services, LLC    Installed Building Solutions II, LLC    1
   NA      100 %      100 % 

53.

   Hinkle Insulation & Drywall Company, Incorporated    Installed Building
Products II, LLC    2    1,000      100 %      100 % 

54.

   IBHL A Holding Company, Inc.    Installed Building Products, Inc.    1

2

   100

100

     100 %      100 % 

55.

   IBHL B Holding Company, Inc.    Installed Building Products, Inc.    1

2

   100

100

     100 %      100 % 

56.

   IBHL II-A Holding Company, Inc.    Installed Building Products, Inc.    1   
100      100 %      100 % 

57.

   IBHL II-B Holding Company, Inc.    Installed Building Products, Inc.    1   
100      100 %      100 % 

58.

   IBP Arctic Express, LLC    IBP Texas Assets I, LLC    1    NA      100 %     
100 % 

59.

   IBP Asset, LLC    Installed Building Products, LLC    1    NA      100 %     
100 % 

60.

   IBP Asset II, LLC    Installed Building Products, LLC    1    NA      100 % 
    100 % 

61.

   IBP Corporation Holdings, Inc.   

IBHL A Holding Company, Inc.

IBHL B Holding Company, Inc.

   1

2

   100

100

    

50

50

% 

% 

   

50

50

% 

% 

62.

   IBP Exteriors, Inc.    Installed Building Products, LLC    R-41    10     
100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

63.

   IBP Holdings, LLC   

IBHL A Holding Company, Inc.

 

IBHL B Holding Company, Inc.

   1 Priority

 

2 Priority

   15 Priority
Units

15 Priority
Units

    

 

50

 

50

% 

 

% 

   

 

50

 

50

% 

 

% 

64.

   IBP Holdings II, LLC   

IBHL II-A Holding Company, Inc.

IBHL II-B Holding Company, Inc.

   17 Common

18 Common

   1 Unit

1 Unit

    

50

50

% 

% 

   

50

50

% 

% 

65.

   IBP of Mansfield, LLC    Installed Building Products, LLC    1    NA      100
%      100 % 

66.

   IBP of Oklahoma, LLC    IBP Texas Assets I, LLC    1    NA      100 %     
100 % 

67.

   IBP of San Antonio, LLC    IBP Texas Assets I, LLC    1    NA      100 %     
100 % 

68.

   IBP of Toledo, LLC    Installed Building Products, LLC    1    NA      100 % 
    100 % 

69.

   IBP Texas Assets I, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

70.

   IBP Texas Assets II, LLC    Installed Building Products II, LLC    1    NA   
  100 %      100 % 

71.

   IBP Texas Assets III, LLC    Installed Building Products II, LLC    1    NA
     100 %      100 % 

72.

   Installed Building Products, LLC    IBP Holdings, LLC    1    NA      100 % 
    100 % 

73.

   Installed Building Products II, LLC    IBP Holdings II, LLC    2    NA     
100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

74.

   Installed Building Products of Houston, LLC    IBP Texas Assets II, LLC    1
   NA      100 %      100 % 

75.

   Installed Building Products of Maine, LLC    Installed Building Products, LLC
   1    NA      100 %      100 % 

76.

   Installed Building Products – Portland, LLC    IBP Exteriors, Inc.    1    NA
     100 %      100 % 

77.

   Installed Building Solutions II, LLC    Installed Building Products, LLC    1
   NA      100 %      100 % 

78.

   Insulation Northwest, LLC    Installed Building Products II, LLC    1    NA
     100 %      100 % 

79.

   Insulation Wholesale Supply, LLC    IBP Corporation Holdings, Inc.    5    NA
     100 %      100 % 

80.

   InsulVail, LLC    Installed Building Products, LLC    1    NA      100 %     
100 % 

81.

   Key Insulation of Austin, LLC    IBP Texas Assets I, LLC    1    NA      100
%      100 % 

82.

   Key Insulation of San Antonio, LLC    IBP Texas Assets I, LLC    1    NA     
100 %      100 % 

83.

   Lakeside Insulation, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

84.

   Layman Brothers Insulation, LLC    Installed Building Products II, LLC    1
   NA      100 %      100 % 

85.

   LKS Transportation, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

86.

   Loveday Insulation, LLC    Installed Building Products II, LLC    1    NA   
  100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

87.

   M&D Insulation, LLC    Installed Building Products, LLC    1    NA      100
%      100 % 

88.

   MAP Installed Building Products of Sagamore, LLC    Installed Building
Products, LLC    1    NA      100 %      100 % 

89.

   MAP Installed Building Products of Seekonk, LLC    Installed Building
Products, LLC    1    NA      100 %      100 % 

90.

   Marv’s Insulation, Inc.    Installed Building Products, LLC    1005    5,000
     100 %      100 % 

91.

   Metro Home Insulation, LLC    Installed Building Products, LLC    1    NA   
  100 %      100 % 

92.

   Mid South Construction and Building Products, Inc.    TCI Contracting, LLC   
6

8

   875

125

     100 %      100 % 

93.

   MIG Building Systems, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

94.

   MIG Building Systems of East Syracuse, LLC    Installed Building Products,
LLC    1    NA      100 %      100 % 

95.

   Momper Insulation of Crown Point, LLC    Installed Building Products, LLC   
1    NA      100 %      100 % 

96.

   Momper Insulation of Elkhart, LLC    Installed Building Products, LLC    1   
NA      100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

97.

   Momper Insulation of Fort Wayne, LLC    Installed Building Products, LLC    1
   NA      100 %      100 % 

98.

   Northwest Insulation, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

99.

   OJ Insulation Holdings, Inc.    Installed Building Products, LLC    R-1   
100      100 %      100 % 

100.

   OJ Insulation, L.P.   

OJ Insulation Holdings, Inc.

Installed Building Products, LLC

   1

2

   NA     

1

99

% 

% 

   

1

99

% 

% 

101.

   Pacific Partners Insulation North, a BDI Company, LLC    IBP Corporation
Holdings, Inc.    1    NA      100 %      100 % 

102.

   Pacific Partners Insulation South, a BDI Company, LLC    IBP Corporation
Holdings, Inc.    1    NA      100 %      100 % 

103.

   Parker Insulation and Building Products, LLC    IBP Texas Assets III, LLC   
1    NA      100 %      100 % 

104.

   PEG, LLC    IBP Texas Assets III, LLC    1    NA      100 %      100 % 

105.

   RaJan, LLC    IBP Exteriors, Inc.    1    NA      100 %      100 % 

106.

   Rocket Insulation, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

107.

   Rockford Insulation, LLC    Installed Building Products, LLC    1    NA     
100 %      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

108.

   Sierra Insulation Contractors II, LLC    Installed Building Products, LLC   
1    NA      100 %      100 % 

109.

   Southern Insulators, LLC    IBP Texas Assets I, LLC    1    NA      100 %   
  100 % 

110.

   Spec 7 Insulation Co., LLC    IBP Exteriors, Inc.    1    NA      100 %     
100 % 

111.

   Suburban Insulation, Inc.    Installed Building Products, LLC    5    2     
100 %      100 % 

112.

   Superior Insulation Services, LLC    Installed Building Products, LLC    1   
NA      100 %      100 % 

113.

   Superior Insulation, LLC    IBP Asset, LLC    1    NA      100 %      100 % 

114.

   TCI Contracting of Charleston, LLC    TCI Contracting, LLC    1    NA     
100 %      100 % 

115.

   TCI Contracting of Hilton Head, LLC    TCI Contracting, LLC    1    NA     
100 %      100 % 

116.

   TCI Contracting of Kentucky, LLC    TCI Contracting, LLC    1    NA      100
%      100 % 

117.

   TCI Contracting of Memphis, LLC    TCI Contracting, LLC    1    NA      100
%      100 % 

118.

   TCI Contracting of Nashville, LLC    TCI Contracting, LLC    1    NA      100
%      100 % 

119.

   TCI Contracting of the Gulf, LLC    TCI Contracting, LLC    1    NA      100
%      100 % 

120.

   TCI Contracting, LLC    Installed Building Products, LLC    1    NA      100
%      100 % 

121.

   Thermal Control Insulation, LLC    TCI Contracting, LLC    1    NA      100
%      100 % 

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

    

Issuer

  

Record Owner

   Cert. No.    No. Shares/
Interest    Percent
Owned of
Total
Outstanding     Percent
Pledged of
Total
Outstanding  

122.

   Therm-Con of Tennessee, LLC    Installed Building Products, LLC    1    NA   
  100 %      100 % 

123.

   Tidewater Insulators, LLC    Installed Building Products II, LLC    1    NA
     100 %      100 % 

124.

   Town Building Systems, LLC    Installed Building Products, LLC    1    NA   
  100 %      100 % 

125.

   Trademark Roofing Company, Inc.    IBP Corporation Holdings, Inc.    3    100
     100 %      100 % 

126.

   Trademark Seamless Gutter Company, Inc.    IBP Corporation Holdings, Inc.   
3    200      100 %      100 % 

127.

   Trilok Industries, Inc.    EMPER Holdings, LLC    7    500      100 %     
100 % 

128.

   U.S. Insulation Corp.    Installed Building Products, LLC    21    10,150   
  100 %      100 % 

129.

   Water-Tite Company, LLC    IBP Exteriors, Inc.    1    NA      100 %      100
% 

130.

   Wilson Insulation Company, LLC    IBP Exteriors, Inc.    1    NA      100 % 
    100 % 

PLEDGED DEBT SECURITIES

 

1.

Promissory Note dated April 11, 2016 in the original principal amount of
$16,800,000 issued by IBP Exteriors, Inc. to Installed Building Products, LLC.

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

Schedule III to the

Security Agreement

INTELLECTUAL PROPERTY

United States Trademarks:

 

Trademark Name    Country Name    Application
Number    Filing Date      Registration
Date      Registration
Number      Status    Owner

BUILDERS ENERGY RATER

  

United States of America

   85/666,356      7/1/2012        2/18/2014        4,483,381      Registered   

BER Energy Services, LLC

BUILDERS ENERGY RATER & DESIGN

  

United States of America

   85/666,359      7/1/2012        2/18/2014        4,483,382      Registered   

BER Energy Services, LLC

CE3 & DESIGN

  

United States of America

   85/723,233      9/7/2012        5/7/2013        4,331,706      Registered   

BER Energy Services, LLC

EXPERT INSULATION & DESIGN

  

United States of America

   76/370,745      2/13/2002        12/17/2002        2,662,937      Registered
  

Expert Insulation of Minnesota, LLC

KEY INSULATION

  

United States of America

   85/666,352      7/1/2012        2/12/2013        4,289,046      Registered   

IBP Texas Assets I, LLC

KEY INSULATION & DESIGN

  

United States of America

   85/666,354      7/1/2012        2/26/2013        4,295,442      Registered   

IBP Texas Assets I, LLC

WHAT’S IN YOUR WALLS?

  

United States of America

   86/525,472      2/5/2015        9/8/2015        4,808,295      Registered   

IBP Texas Assets I, LLC

TCI

  

United States of America

   77/560,525      9/2/2008        4/7/2009        3,602,240      Renewed   

TCI Contracting, LLC

TCI TOTAL COMFORT INSTALLATIONS & DESIGN

  

United States of America

   77/560,550      9/2/2008        4/7/2009        3,602,243      Renewed   

TCI Contracting, LLC

TOTAL COMFORT INSTALLATIONS

  

United States of America

   77/560,570      9/2/2008        4/7/2009        3,602,245      Renewed   

TCI Contracting, LLC

United State Patents:

None

United States Copyrights:

 

Copyright Title    Registration
Number      Registration
Date      Owner  

None

        

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

Schedule IV to the

Security Agreement

COMMERCIAL TORT CLAIMS

None

 

Schedule IV

Page 1

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

Exhibit I to the

Security Agreement

ABL COPYRIGHT SECURITY AGREEMENT, dated as of ___________, 20__ (this
“Agreement”), among __________________ (the “Grantor”) and BANK OF AMERICA,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).

Reference is made to (a) the Credit Agreement dated as of September 26, 2019 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among INSTALLED BUILDING PRODUCTS, INC., as Borrower, the
other parties from time to time party hereto and BANK OF AMERICA, N.A., as
Administrative Agent and (b) the Security Agreement dated of September 26, 2019
(as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”) among the Borrower, the other Grantors from time to time
party thereto, and the Administrative Agent. The Lenders have agreed to extend
credit to the Borrower subject to the terms and conditions set forth in the
Credit Agreement. The Grantor is an Affiliate of the Borrower and is willing to
execute and deliver this Agreement in order to induce the Lenders to make
additional Loans and as consideration for Loans previously made. Accordingly,
the parties hereto agree as follows:

SECTION 1. Terms. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in the Security Agreement. The rules
of construction specified in Section 1.01(b) of the Security Agreement also
apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, the Grantor hereby
grants to the Administrative Agent, its successors and assigns, for the benefit
of the Secured Creditors, a security interest in all of such Grantor’s right,
title and interest in, to and under the Copyrights listed on Schedule I attached
hereto (collectively, the “Copyright Collateral”). This Agreement is not to be
construed as an assignment of any copyright or copyright application.

SECTION 3. Security Agreement and ABL/Term Intercreditor Agreement. The Grantor
hereby acknowledges and affirms that the rights and remedies of the
Administrative Agent with respect to the Copyright Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein. In the event of
any conflict between the terms of this Agreement and the Security Agreement, the
terms of the Security Agreement shall govern. Notwithstanding anything herein to
the contrary, (i) the Liens and security interests granted to the Administrative
Agent for the benefit of the Secured Creditors pursuant to the Security
Agreement and (ii) the exercise of any right or remedy by the Administrative
Agent thereunder or the application of proceeds (including insurance proceeds
and condemnation proceeds) of any Collateral, are subject to the provisions of
the ABL/Term Intercreditor Agreement. In the event of any conflict between the
terms of the ABL/Term Intercreditor Agreement and the terms of this Agreement,
the terms of the ABL/Term Intercreditor Agreement shall govern.

SECTION 4. [Reserved].

 

 

Exhibit I

Page 1

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

SECTION 5. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract. Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.

SECTION 6. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York.

[Remainder of Page Intentionally Left Blank]

 

Exhibit I

Page 2

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

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

 

[___________________________]. as Grantor

By:

 

                                                            
                          

Name:

 

   

Title:

 

 

BANK OF AMERICA, N.A., as Administrative Agent

By:

 

                                                                           

Name:

 

 

Title:

 

 

 

By:

 

                                                            
                              

Name:

 

 

Title:

 

 

 

Signature Page to Copyright Security Agreement

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

Schedule I

 

Schedule I

Page 1

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

Exhibit II to the

Security Agreement

ABL PATENT SECURITY AGREEMENT, dated as of                     , 20        
(this “Agreement”), among                                      (the “Grantor”)
and Bank of America, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent”).

Reference is made to (a) the Credit Agreement dated as of September 26, 2019 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among INSTALLED BUILDING PRODUCTS, INC., as Borrower, the
other parties from time to time party hereto and BANK OF AMERICA, N.A., as
Administrative Agent and (b) the Security Agreement dated of September 26, 2019
(as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”) among the Borrower, the other Grantors from time to time
party thereto and the Administrative Agent. The Lenders have agreed to extend
credit to the Borrower subject to the terms and conditions set forth in the
Credit Agreement. The Grantor is an Affiliate of the Borrower and is willing to
execute and deliver this Agreement in order to induce the Lenders to make
additional Loans and as consideration for Loans previously made. Accordingly,
the parties hereto agree as follows:

SECTION 1. Terms. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in the Security Agreement. The rules
of construction specified in Section 1.01(b) of the Security Agreement also
apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, the Grantor hereby
grants to the Administrative Agent, its successors and assigns, for the benefit
of the Secured Creditors, a security interest in all of such Grantor’s right,
title and interest in, to the Patents listed on Schedule I attached hereto (the
“Patent Collateral”). This Agreement is not to be construed as an assignment of
any patent or patent application.

SECTION 3. Security Agreement and ABL/Term Intercreditor Agreement. The Grantor
hereby acknowledges and affirms that the rights and remedies of the
Administrative Agent with respect to the Patent Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein. In the event of
any conflict between the terms of this Agreement and the Security Agreement, the
terms of the Security Agreement shall govern. Notwithstanding anything herein to
the contrary, (i) the Liens and security interests granted to the Administrative
Agent for the benefit of the Secured Creditors pursuant to the Security
Agreement and (ii) the exercise of any right or remedy by the Administrative
Agent thereunder or the application of proceeds (including insurance proceeds
and condemnation proceeds) of any Collateral, are subject to the provisions of
the ABL/Term Intercreditor Agreement. In the event of any conflict between the
terms of the ABL/Term Intercreditor Agreement and the terms of this Agreement,
the terms of the ABL/Term Intercreditor Agreement shall govern.

SECTION 4. [Reserved].

 

Exhibit II

Page 1

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

SECTION 5. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract. Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.

SECTION 6. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York.

[Remainder of Page Intentionally Left Blank]

 

Exhibit II

Page 2

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

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

 

[                                                         ]. as Grantor

By:

 

 

Name:

 

 

Title:

 

 

 

BANK OR AMERICA, N.A., as Administrative Agent

By:

 

 

Name:

 

 

Title:

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Signature Page to Patent Security Agreement

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

Schedule I

 

Schedule I

Page 1

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

Exhibit III to the

Security Agreement

ABL TRADEMARK SECURITY AGREEMENT, dated as of _____________, 20__ (this
“Agreement”), among [__] (the “Grantor”) and Bank of America, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”).

Reference is made to (a) the Credit Agreement dated as of September 26, 2019 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among INSTALLED BUILDING PRODUCTS, INC. as Borrower, the
other parties from time to time party hereto and BANK OF AMERICA, N.A., as
Administrative Agent and (b) the Security Agreement dated of September 26, 2019
(as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”) among the Borrower, the other Grantors from time to time
party thereto and the Administrative Agent. The Lenders have agreed to extend
credit to the Borrower subject to the terms and conditions set forth in the
Credit Agreement. The Grantor is an Affiliate of the Borrower and is willing to
execute and deliver this Agreement in order to induce the Lenders to make
additional Loans and as consideration for Loans previously made. Accordingly,
the parties hereto agree as follows:

SECTION 1. Terms. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in the Security Agreement. The rules
of construction specified in Section 1.01(b) of the Security Agreement also
apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, the Grantor hereby
grants to the Administrative Agent, its successors and assigns, for the benefit
of the Secured Creditors, a security interest (the “Security Interest”) in all
of such Grantor’s right, title and interest in, to and under the Trademarks
listed on Schedule I attached hereto (the “Trademark Collateral”). This
Agreement is not to be construed as an assignment of any trademark or trademark
application. Notwithstanding anything herein to the contrary, the Trademark
Collateral shall not include, and in no event shall the Security Interest attach
to, any intent-to-use trademark applications filed in the United States Patent
and Trademark Office, pursuant to Section 1(b) of the Lanham Act, 15 U.S.C.
Section 1051, prior to the accepted filing of a “Statement of Use” and issuance
of a “Certificate of Registration” pursuant to Section 1(d) of the Lanham Act or
an accepted filing of an “Amendment to Allege Use” whereby such intent-to-use
trademark application is converted to a “use in commerce” application pursuant
to Section 1(c) of the Lanham Act.

SECTION 3. [Reserved].

SECTION 4. Security Agreement and ABL/Term Intercreditor Agreement. The Grantor
hereby acknowledges and affirms that the rights and remedies of the
Administrative Agent with respect to the Trademark Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are hereby
incorporated herein by reference as if fully set forth herein. In the event of
any conflict between the terms of this Agreement and the Security Agreement, the
terms of the Security Agreement shall govern. Notwithstanding anything herein to
the contrary, (i) the Liens and security interests granted to the Administrative
Agent for the benefit of the

 

Exhibit III

Page 1

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

Secured Creditors pursuant to the Security Agreement and (ii) the exercise of
any right or remedy by the Administrative Agent thereunder or the application of
proceeds (including insurance proceeds and condemnation proceeds) of any
Collateral, are subject to the provisions of the ABL/Term Intercreditor
Agreement. In the event of any conflict between the terms of the ABL/Term
Intercreditor Agreement and the terms of this Agreement, the terms of the
ABL/Term Intercreditor Agreement shall govern.

SECTION 5. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract. Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be effective as delivery of a
manually signed counterpart of this Agreement.

SECTION 6. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York.

[Remainder of Page Intentionally Left Blank]

 

Exhibit III

Page 2

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

 

[___________________________]. as Grantor

By:

 

 

Name:

 

                                                                               

Title:

 

 

BANK OF AMERICA, N.A., as Administrative Agent

By:

 

 

Name:

 

 

Title:

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Signature Page to Trademark Security Agreement

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Schedule I