EXHIBIT 10.2

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Security Agreement”), is entered into as of
September 1, 2005, among LIONBRIDGE TECHNOLOGIES, INC., a Delaware corporation
(the “Company”), each of the Domestic Subsidiaries of the Company from time to
time party hereto (individually a “US Guarantor” and collectively the “US
Guarantors”; the US Guarantors, together with the Company, individually an
“Obligor” and collectively the “Obligors”) and WACHOVIA BANK, NATIONAL
ASSOCIATION, in its capacity as Administrative Agent under the Credit Agreement
referred to below (in such capacity, the “Administrative Agent”) for the several
banks and other financial institutions as may from time to time become parties
to such Credit Agreement (individually a “Lender” and collectively the
“Lenders”).

 

RECITALS

 

WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof
(as amended, modified, extended, renewed, restated or replaced from time to
time, the “Credit Agreement”), among the Company, Lionbridge Technologies
Ireland, a company formed under the laws of Ireland, as the Irish Borrower,
Lionbridge Technologies Holdings B.V., a company incorporated under the laws of
The Netherlands with corporate seat in Amsterdam, as a Dutch Borrower, the US
Guarantors, the Foreign Guarantors party thereto, the Lenders party thereto and
the Administrative Agent, the Lenders have agreed to make Loans and to issue
and/or acquire participation interests in Letters of Credit upon the terms and
subject to the conditions set forth therein; and

 

WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue and/or acquire participation interests in Letters of Credit under the
Credit Agreement that the Obligors shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of the
Lenders.

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

1. Definitions.

 

(a) Unless otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to such terms in the Credit Agreement, and the following
terms which are defined in the Uniform Commercial Code from time to time in
effect in the State of New York (the “UCC”) are used herein as so defined:
Accessions, Accounts, As-Extracted Collateral, Chattel Paper, Commercial Tort
Claims, Consumer Goods, Control, Deposit Accounts, Documents, Electronic Chattel
Paper, Equipment, Farm Products, Fixtures, General Intangibles, Goods,
Instruments, Inventory, Investment Property, Letter-of-Credit Rights,
Manufactured Homes, Proceeds, Securities Account,

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Securities Intermediary, Security Entitlement, Software, Supporting Obligations
and Tangible Chattel Paper. For purposes of this Security Agreement, the term
“Lender” shall include any Hedging Agreement Provider.

 

(b) In addition, the following terms shall have the following meaning:

 

“Material Copyright” means a Copyright that is material to the business of any
Credit Party or any of its Subsidiaries.

 

“Material Intellectual Property” means any Intellectual Property that is
material to the business of any Credit Party or any of its Subsidiaries.

 

“Material Patent” means a Patent that is material to the business of any Credit
Party or any of its Subsidiaries.

 

“Material Trademark” means a Trademark that is material to the business of any
Credit Party or any of its Subsidiaries.

 

“Secured Obligations” means: (i) all of the Credit Party Obligations (including
obligations under Secured Hedging Agreements), howsoever evidenced, created,
incurred or acquired, whether primary, secondary, direct, contingent, or joint
and several and (ii) all expenses and charges, legal and otherwise, incurred by
the Administrative Agent, the Lenders and/or the Hedging Agreement Providers in
collecting or enforcing any of the Credit Party Obligations or in realizing on
or protecting any security therefor, including without limitation the security
interest granted hereunder.

 

2. Grant of Security Interest in the Collateral.

 

(a) To secure the prompt payment and performance in full when due, whether by
lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured
Obligations, each Obligor hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders, a continuing security interest in, and a right
to set off against, any and all right, title and interest of such Obligor in and
to the following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the “Collateral”):

 

  (i) all Accounts;

 

 

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  (ii) all cash and Cash Equivalents;

 

  (iii) all Chattel Paper (including Electronic Chattel Paper);

 

  (iv) those certain Commercial Tort Claims of such Obligor set forth on
Schedule 2(a)(iv) attached hereto (as such Schedule may be updated from time to
time by such Obligor);

 

  (v) all Copyright Licenses;

 

  (vi) all Copyrights;

 

  (vii) all Deposit Accounts;

 

  (viii) all Documents;

 

  (ix) all Equipment;

 

  (x) all Fixtures;

 

  (xi) all General Intangibles;

 

  (xii) all Goods;

 

  (xiii) all Instruments;

 

  (xiv) all Inventory;

 

  (xv) all Investment Property;

 

  (xvi) all Letter-of-Credit Rights;

 

  (xvii) all Material Contracts and all such other agreements, contracts,
leases, licenses, tax sharing agreements or hedging arrangements now or
hereafter entered into by an Obligor, as such agreements may be amended or
otherwise modified from time to time (collectively, the “Assigned Agreements”),
including without limitation, (A) all rights of an Obligor to receive moneys due
and to become due under or pursuant to the Assigned Agreements, (B) all rights
of an Obligor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Assigned Agreements, (C) claims of an Obligor for
damages arising out of or for breach of or default under the Assigned Agreements
and (D) the right of an Obligor to terminate the Assigned Agreements, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder;

 

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  (xviii) all Payment Intangibles;

 

  (xix) all Patent Licenses;

 

  (xx) all Patents;

 

  (xxi) all Trademark Licenses;

 

  (xxii) all Trademarks;

 

  (xxiii) all Securities Accounts;

 

  (xxiv) all Software;

 

  (xxv) all Supporting Obligations;

 

  (xxvi) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks, and related data processing software (owned by such
Obligor or in which it has an interest) that at any time evidence or contain
information relating to any Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon;

 

  (xxvii) all other personal property of any kind or type whatsoever owned by
such Obligor; and

 

  (xxviii) to the extent not otherwise included, all Accessions, Proceeds and
products of any and all of the foregoing.

 

(b) The Obligors and the Administrative Agent, on behalf of the Lenders, hereby
acknowledge and agree that the security interest created hereby in the
Collateral (i) constitutes continuing collateral security for all of the Secured
Obligations, whether now existing or hereafter arising and (ii) is not to be
construed as a present assignment of any Intellectual Property.

 

(c) The term “Collateral” (i) shall include any Secured Hedging Agreement and
any rights of the Obligors thereunder only for purposes of this Section 2 and
(ii) shall not include any contract or agreement if the grant of a security
interest therein would cause a breach under such contract or agreement or
grounds for the termination thereof, unless such default or termination
provision of such contract or agreement is unenforceable under the UCC or other
applicable law.

 

 

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3. Provisions Relating to Accounts, Contracts and Agreements.

 

(a) Anything herein to the contrary notwithstanding, each of the Obligors shall
remain liable under each of its Accounts, contracts and agreements to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any agreement giving rise to
each such Account or the terms of such contract or agreement. Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Account (or any agreement giving rise thereto), contract or agreement by
reason of or arising out of this Security Agreement or the receipt by the
Administrative Agent or any Lender of any payment relating to such Account,
contract or agreement pursuant hereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of an
Obligor under or pursuant to any Account (or any agreement giving rise thereto),
contract or agreement, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Account (or any agreement giving rise
thereto), contract or agreement, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

 

(b) The Administrative Agent hereby authorizes the Obligors to collect the
Accounts; provided, that the Administrative Agent may curtail or terminate such
authority at any time after the occurrence and during the continuation of an
Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuation of an Event of Default, any payments of
Accounts, when collected by the Obligors (i) shall be forthwith (and in any
event within two (2) Business Days) deposited by the Obligors in a collateral
account maintained under the sole dominion and control of the Administrative
Agent, subject to withdrawal by the Administrative Agent for the account of the
Lenders only as provided in Section 12 hereof, and (ii) until so turned over,
shall be held by the Obligors in trust for the Administrative Agent and the
Lenders, segregated from other funds of the Obligors.

 

(c) Not more frequently than once per fiscal quarter or at any time after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right, but not the obligation, after giving prior notice to
the Company, to make test verifications of the Accounts in any manner and
through any medium that it reasonably considers advisable, and the Obligors
shall furnish all such assistance and information as the Administrative Agent
may require in connection with such test verifications. Upon the Administrative
Agent’s request and at the expense of the Obligors, the Obligors shall cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the Accounts. Upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent in its own name or in the name of others may communicate with account
debtors on the Accounts to verify with them to the Administrative Agent’s
satisfaction the existence, amount and terms of any Accounts.

 

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4. Representations and Warranties. Each Obligor hereby represents and warrants
to the Administrative Agent, for the benefit of the Lenders, that so long as any
of the Secured Obligations (other than contingent indemnity obligations that
survive termination of the Credit Documents pursuant to the stated terms
thereof) remain outstanding, any Credit Document or Secured Hedging Agreement is
in effect, and until all of the Commitments shall have been terminated:

 

(a) Chief Executive Office; Books & Records; Legal Name; State of Formation. As
of the Closing Date, each Obligor’s chief executive office and chief place of
business are (and for the prior four months has been) located at the locations
set forth on Schedule 3.19(c) to the Credit Agreement, and as of the Closing
Date each Obligor keeps its books and records at such locations. As of the
Closing Date, each Obligor’s exact legal name is as shown in this Security
Agreement and its state of incorporation or organization is (and for the prior
four months has been) the location set forth on Schedule 3.3 to the Credit
Agreement. No Obligor has in the four months preceding the Closing Date changed
its name, been party to a merger, consolidation or other change in structure or
used any tradename not disclosed on Schedule 4(a) attached hereto (as updated
from time to time).

 

(b) Location of Tangible Collateral. As of the Closing Date, the location of all
tangible Collateral owned by each Obligor is as shown on Schedule 3.19(b) to the
Credit Agreement.

 

(c) Ownership. Subject to the terms of Section 2(c), each Obligor is the legal
and beneficial owner of its Collateral and has the right to pledge, sell, assign
or transfer the same.

 

(d) Security Interest/Priority. This Security Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the Lenders,
in the Collateral of such Obligor and, when properly perfected by filing,
obtaining possession, the granting of Control to the Administrative Agent or
otherwise, shall constitute a valid first priority, perfected security interest
in such Collateral, to the extent such security interest can be perfected by
filing, obtaining possession, the granting of Control or otherwise under the UCC
or by filing an appropriate notice with the United States Patent and Trademark
Office or the United States Copyright Office, free and clear of all Liens except
for Permitted Liens.

 

(e) Consents. Subject to the terms of Section 2(c), except for (i) the filing or
recording of UCC financing statements, (ii) the filing of appropriate notices
with the United States Patent and Trademark Office and the United States
Copyright Office, (iii) obtaining Control to perfect the Liens created by this
Security Agreement, no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder, member or creditor
of such Obligor) is required, except for consents that have

 

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been obtained, (A) for the grant by such Obligor of the security interest in the
Collateral granted hereby or for the execution, delivery or performance of this
Security Agreement by such Obligor or (B) for the perfection of such security
interest or the exercise by the Administrative Agent of the rights and remedies
provided for in this Security Agreement.

 

(f) Types of Collateral. None of the Collateral consists of, or is the Proceeds
of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes
or standing timber (as such term is used in the UCC).

 

(g) Accounts. With respect to the Accounts of the Obligors, except to the extent
any of the following could not reasonably be expected to have a Material Adverse
Effect: (i) the goods sold and/or services furnished giving rise to each Account
are not subject to any security interest or Lien except the first priority,
perfected security interest granted to the Administrative Agent herein and
except for Permitted Liens; (ii) each Account and the papers and documents of
the applicable Obligor relating thereto are genuine and in all material respects
what they purport to be; (iii) each Account arises out of a bona fide
transaction for goods sold and delivered (or in the process of being delivered)
by an Obligor or for services actually rendered by an Obligor, which transaction
was conducted in the ordinary course of the Obligor’s business and was completed
in accordance with the terms of any documents pertaining thereto; (iv) the
amount of each Account as shown on the applicable Obligor’s books and records;
(v) to each of the Obligor’s knowledge, the account debtor with respect to each
Account has the capacity to contract; (vi) no surety bond was required or given
in connection with any Account of an Obligor or the contracts or purchase orders
out of which they arose; (vii) no Account is evidenced by a judgment, there are
no set-offs, counterclaims or disputes existing or asserted with respect to any
Account, and no Obligor has made any agreement with any account debtor for any
deduction from any Account except for deductions made in the ordinary course of
its business; (viii) there are no facts, events or occurrences which in any
material respect impair the validity or enforcement of any Account or tend to
materially reduce the amount payable thereunder as shown on the applicable
Obligor’s books and records; and (ix) the right to receive payment under each
Account is assignable except where the account debtor with respect to such
Account is a Governmental Authority, to the extent assignment of any such right
to payment is prohibited or limited by applicable law, regulations,
administrative guidelines or contract.

 

(h) Inventory. No Inventory of an Obligor is held by a third party (other than
an Obligor) pursuant to consignment, sale or return, sale on approval or similar
arrangement.

 

(i) Intellectual Property. As of the Closing Date:

 

(i) all Material Intellectual Property of each Obligor is valid, subsisting,
unexpired, enforceable and has not been abandoned, and each Obligor is legally
entitled to use each of its material tradenames;

 

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(ii) except as set forth in Schedule 3.16 to the Credit Agreement, none of the
registered Intellectual Property of the Obligors is the subject of any licensing
or franchise agreement;

 

(iii) no holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of any Material
Intellectual Property of the Obligors;

 

(iv) no action or proceeding is pending seeking to limit, cancel or question the
validity of any Material Intellectual Property of the Obligors, or which, if
adversely determined, would have a material adverse effect on the value of any
such Material Intellectual Property;

 

(v) all applications pertaining to the Material Intellectual Property of each
Obligor have been duly and properly filed, and all registrations or letters
pertaining to such Material Intellectual Property have been duly and properly
filed and issued, and all of such Material Intellectual Property is valid and
enforceable, unless the failure of an application or registration with respect
to any such Material Intellectual Property to be filed or issued, or the failure
of any such Material Intellectual Property to be valid and enforceable, would
not have a material adverse effect on the value of such Material Intellectual
Property; and

 

(vi) no Obligor has made any assignment or entered into any agreement in
conflict with the security interest of the Administrative Agent in the
Intellectual Property of each Obligor hereunder, except for licenses of
Intellectual Property in the ordinary course of business.

 

(j) Documents, Instruments and Chattel Paper. All material Documents,
Instruments and Chattel Paper describing, evidencing or constituting Collateral
are, to the Obligors’ knowledge, complete, valid, and genuine.

 

(k) Equipment. With respect to each Obligor’s Equipment (other than leased
Equipment and Equipment subject to a Permitted Lien): (i) such Obligor has good
and marketable title thereto; and (ii) all such Equipment is in normal operating
condition and repair, ordinary wear and tear alone excepted (subject to casualty
events), and is suitable for the uses to which it is customarily put in the
conduct of such Obligor’s business.

 

(l) Collateral Requiring Control to Perfect. Set forth on Schedule 4(l) is a
description of all Deposit Accounts, Electronic Chattel Paper, Letter-of-Credit
Rights, Securities Accounts and uncertificated Investment Property of the
Obligors, including the name and address of (i) in the case of a Deposit
Account, the depository institution, (ii) in the case of Electronic Chattel
Paper, the account debtor, (iii) in the case of Letter-of-Credit Rights, the
issuer or nominated person, as applicable, and (iv) in the case of a Securities
Account or other uncertificated Investment Property, the Securities Intermediary
or issuer, as applicable.

 

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5. Covenants. Each Obligor covenants that, so long as any of the Secured
Obligations (other than contingent indemnity obligations that survive
termination of the Credit Documents pursuant to the stated terms thereof) remain
outstanding, any Credit Document or Secured Hedging Agreement is in effect, and
until all of the Commitments shall have been terminated, such Obligor shall:

 

(a) Perfection of Security Interest by Filing, Etc. Execute and deliver to the
Administrative Agent and/or file such agreements, assignments or instruments
(including affidavits, notices, reaffirmations, amendments and restatements of
existing documents and, subject to the terms of the Credit Agreement, any
documents as may be necessary if the law of any jurisdiction other than New York
becomes or is applicable to the Collateral or any portion thereof, in each case
as the Administrative Agent may reasonably request) and do all such other things
as the Administrative Agent may reasonably deem necessary or appropriate (i) to
assure to the Administrative Agent its security interests hereunder are
perfected, including (A) such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other instruments as
the Administrative Agent may from time to time reasonably request in order to
perfect and maintain the security interests granted hereunder in accordance with
the UCC and any other personal property security legislation in the appropriate
state(s) or province(s), (B) with regard to Copyrights and Copyright Licenses, a
Notice of Grant of Security Interest in Copyrights for filing with the United
States Copyright Office in the form of Schedule 5(a)-1 attached hereto, (C) with
regard to Patents and Patent Licenses, a Notice of Grant of Security Interest in
Patents for filing with the United States Patent and Trademark Office in the
form of Schedule 5(a)-2 attached hereto and (D) with regard to Trademarks and
Trademark Licenses, a Notice of Grant of Security Interest in Trademarks for
filing with the United States Patent and Trademark Office in the form of
Schedule 5(a)-3 attached hereto, (ii) to consummate the transactions
contemplated hereby and (iii) to otherwise protect and assure the Administrative
Agent of its rights and interests hereunder. Each Obligor hereby authorizes the
Administrative Agent to prepare and file such financing statements (including
continuation statements) or amendments thereof or supplements thereto or other
instruments as the Administrative Agent may from time to time deem necessary or
appropriate in order to perfect and maintain the security interests granted
hereunder in accordance with the UCC, including, without limitation, any
financing statement that describes the Collateral as “all personal property” or
“all assets” of such Obligor or that describes the Collateral in some other
manner as the Administrative Agent deems necessary or advisable. Each Obligor
agrees to mark its books and records to reflect the security interest of the
Administrative Agent in the Collateral.

 

(b) Perfection of Security Interest by Possession. If (i) any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument, Tangible Chattel Paper or Supporting Obligation or (ii) if
any Collateral shall be stored or shipped subject to a Document or (iii) if any
Collateral shall consist of Investment Property in the form of certificated
securities, promptly notify the Administrative Agent of the existence of such
Collateral and, upon the Administrative Agent’s request, deliver such

 

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Instrument, Chattel Paper, Supporting Obligation, Document or Investment
Property to the Administrative Agent, duly endorsed in a manner satisfactory to
the Administrative Agent, to be held as Collateral pursuant to this Security
Agreement.

 

(c) Perfection of Security Interest Through Control.

 

(i) If any Collateral shall consist of Electronic Chattel Paper,
Letter-of-Credit Rights or uncertificated Investment Property (other than
Securities Accounts), promptly notify the Administrative Agent of the existence
of such Collateral and, upon the Administrative Agent’s request, execute and
deliver (and, with respect to any Collateral consisting of uncertificated
Investment Property, cause the issuer with respect to such Investment Property
to execute and deliver) to the Administrative Agent all control agreements,
assignments, instruments or other documents as reasonably requested by the
Administrative Agent for the purposes of obtaining and maintaining Control of
such Collateral.

 

(ii) Upon the occurrence and during the continuance of an Event of Default, if
any Collateral shall consist of Deposit Accounts, Securities Accounts or
uncertificated Securities Entitlements, at the Administrative Agent’s request
execute and deliver (and, with respect to any Collateral consisting of a
Securities Account, cause the Securities Intermediary with respect to such
Securities Account to execute and deliver) to the Administrative Agent all
control agreements or other documents as reasonably requested by the
Administrative Agent for the purposes of obtaining and maintaining Control of
such Collateral.

 

(d) Other Liens. Defend its interests in the Collateral against the claims and
demands of all other parties claiming an interest therein and keep the
Collateral free from all Liens, except for Permitted Liens. Neither the
Administrative Agent nor any Lender authorizes any Obligor to, and no Obligor
shall, sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein, except as permitted under the Credit
Agreement.

 

(e) Preservation of Collateral. Keep the Collateral in good order, condition and
repair in all material respects, ordinary wear and tear excepted; not use the
Collateral in violation of the provisions of this Security Agreement or any
other agreement relating to the Collateral or any policy insuring the
Collateral; not use the Collateral in violation of any applicable Requirement of
Law, except as could not reasonably be expected to have a Material Adverse
Effect; and not permit any Collateral to be or become a fixture to real property
or an accession to other personal property unless the Administrative Agent has a
valid, perfected and first priority security interest for the benefit of the
Lenders in such real or personal property.

 

(f) Changes in Structure or Location. Not, without providing 30 days prior
written notice to the Administrative Agent and without filing (or confirming
that the Administrative Agent has filed) such financing statements and
amendments to any

 

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previously filed financing statements as the Administrative Agent may require,
(i) alter its legal existence or, in one transaction or a series of
transactions, merge into or consolidate with any other entity, or sell all or
substantially all of its assets, (ii) change its state of incorporation or
organization, or (iii) change its registered legal name.

 

(g) Inspection. Allow the Administrative Agent or its representatives to visit
and inspect the Collateral as set forth in Section 5.6 of the Credit Agreement.

 

(h) Collateral Held by Warehouseman, Bailee, etc. If any Collateral is at any
time in the possession or control of a warehouseman, bailee or any agent or
processor of such Obligor, (i) notify the Administrative Agent of such
possession, (ii) notify such Person of the Administrative Agent’s security
interest for the benefit of the Lenders in such Collateral, (iii) instruct such
Person to hold all such Collateral for the Administrative Agent’s account
subject to the Administrative Agent’ s instructions and (iv) obtain an
acknowledgment from such Person that it is holding such Collateral for the
benefit of the Administrative Agent.

 

(i) Treatment of Accounts. (i) Not grant or extend the time for payment of any
Account, or compromise or settle any Account for less than the full amount
thereof, or release any person or property, in whole or in part, from payment
thereof, or allow any credit or discount thereon, unless such actions could not
reasonable be expected to have a Material Adverse Effect, and (ii) maintain at
its principal place of business a record of Accounts consistent with customary
business practices.

 

(j) Covenants Relating to Copyrights.

 

(i) Not do any act or knowingly omit to do any act whereby any Material
Copyright may become invalidated or become injected into the public domain.

 

(ii) Not make any assignment or agreement in conflict with the security interest
in the Copyrights of each Obligor hereunder, except for licenses of Copyrights
in the ordinary course of business.

 

(k) Covenants Relating to Patents and Trademarks.

 

(i) (A) Not adopt or use any mark which is confusingly similar or a colorable
imitation of such Material Trademark unless the Administrative Agent, for the
ratable benefit of the Lenders, shall obtain a perfected security interest in
such mark pursuant to this Security Agreement, and (B) not (and not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Material Trademark may become invalidated.

 

(ii) Not do any act, or omit to do any act, whereby any Material Patent may
become abandoned or dedicated.

 

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(iii) Not make any assignment or agreement in conflict with the security
interest in the Patents or Trademarks of any Obligor hereunder, except for
licenses of Patents and Trademarks in the ordinary course of business.

 

(l) New Intellectual Property. Notify the Administrative Agent of any
application for or registration of any new Intellectual Property in accordance
with the terms of Section 5.13(c) of the Credit Agreement and execute and
deliver such documentation as required by the Administrative Agent with respect
to such new Intellectual Property in accordance with the terms of Section 5(a)
above.

 

(m) Commercial Tort Claims; Notice of Litigation. (i) Promptly forward to the
Administrative Agent written notification of any and all Commercial Tort Claims
of the Obligors, including, but not limited to, any and all Commercial Tort
Claims of such Obligor before any court or other Governmental Authority and (ii)
execute and deliver such statements, documents and notices and do and cause to
be done all such things as may be required by the Administrative Agent, or
required by law, including all things which may from time to time be necessary
under the UCC to fully create, preserve, perfect and protect the priority of the
Administrative Agent’s security interest in any Commercial Tort Claims.

 

(n) Status of Collateral as Personal Property. At all times maintain the
Collateral as personal property and not affix any of the Collateral to any real
property in a manner which would change its nature from personal property to
real property or a Fixture.

 

(o) Insurance. Insure, repair and replace the Collateral of such Obligor as set
forth in the Credit Agreement. All proceeds derived from insurance on the
Collateral shall be subject to the security interest of the Administrative Agent
hereunder.

 

6. License of Intellectual Property. The Obligors hereby assign, transfer and
convey to the Administrative Agent, effective upon the occurrence of any Event
of Default, the nonexclusive right and license to use all Intellectual Property
owned or used by any Obligor that relate to the Collateral and any other
collateral granted by the Obligors as security for the Secured Obligations,
together with any goodwill associated therewith, all to the extent necessary to
enable the Administrative Agent to use, possess and realize on the Collateral
and to enable any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all successors, assigns and
transferees of the Administrative Agent and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary payment
whatsoever be made to the Obligors. Notwithstanding the terms of this Section,
none of the Obligors shall be deemed to have assigned, transferred or conveyed
the nonexclusive right and license to use any Intellectual Property to the
extent such Intellectual Property is subject to a contract or agreement that
contains an enforceable prohibition on such assignment, transfer or conveyance.

 

12

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7. Special Provisions Regarding Inventory. Notwithstanding anything to the
contrary contained in this Security Agreement, each Obligor may, unless and
until an Event of Default occurs and is continuing and the Administrative Agent
instructs such Obligor otherwise, without further consent or approval of the
Administrative Agent, use, consume, sell, lease and exchange its Inventory in
the ordinary course of its business as presently conducted (and as will be
conducted after giving effect to the Acquisition), whereupon, in the case of
such a sale or exchange, the security interest created hereby in the Inventory
so sold or exchanged (but not in any Proceeds arising from such sale or
exchange) shall cease immediately without any further action on the part of the
Administrative Agent.

 

8. Performance of Obligations; Advances by Administrative Agent. On failure of
any Obligor to perform any of the covenants and agreements contained herein, the
Administrative Agent may, at its sole option and in its sole discretion, perform
or cause to be performed the same and in so doing may expend such sums as the
Administrative Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures which the Administrative Agent may make for the protection of the
security interest hereof or may be compelled to make by operation of law. All
such sums and amounts so expended shall be repayable by the Obligors on a joint
and several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Secured Obligations and shall bear interest from the date
said amounts are expended at the default rate for Revolving Loans that are
Alternate Base Rate Loans set forth in Section 2.10 of the Credit Agreement. No
such performance of any covenant or agreement by the Administrative Agent on
behalf of any Obligor, and no such advance or expenditure therefor, shall
relieve the Obligors of any default under the terms of this Security Agreement,
the other Credit Documents or any Secured Hedging Agreement. The Administrative
Agent may make any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by an Obligor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

 

9. Events of Default.

 

The occurrence of an event which under the Credit Agreement would constitute an
Event of Default shall be an event of default hereunder (an “Event of Default”).

 

10. Remedies.

 

(a) General Remedies. Upon the occurrence of an Event of Default and during
continuation thereof, the Administrative Agent and the Lenders shall have, in
addition to the rights and remedies provided herein, in the Credit Documents, in
any Secured Hedging Agreement or by law (including, but not limited to, levy of
attachment,

 

13

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garnishment and the rights and remedies set forth in the Uniform Commercial Code
of the jurisdiction applicable to the affected Collateral), the rights and
remedies of a secured party under the UCC (regardless of whether the UCC is the
law of the jurisdiction where the rights and remedies are asserted and
regardless of whether the UCC applies to the affected Collateral), and further,
the Administrative Agent may, with or without judicial process or the aid and
assistance of others, (i) enter on any premises on which any of the Collateral
may be located and, without resistance or interference by the Obligors, take
possession of the Collateral, (ii) dispose of any Collateral on any such
premises, (iii) require the Obligors to assemble and make available to the
Administrative Agent at the expense of the Obligors any Collateral at any place
and time designated by the Administrative Agent which is reasonably convenient
to both parties, (iv) remove any Collateral from any such premises for the
purpose of effecting sale or other disposition thereof, and/or (v) without
demand and without advertisement, notice, hearing or process of law, all of
which each of the Obligors hereby waives to the fullest extent permitted by law,
at any place and time or times, sell and deliver any or all Collateral held by
or for it at public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon such terms
as the Administrative Agent deems advisable, in its sole discretion (subject to
any and all mandatory legal requirements). Neither the Administrative Agent’s
compliance with any applicable state or federal law in the conduct of such sale,
nor its disclaimer of any warranties relating to the Collateral, shall be
considered to adversely affect the commercial reasonableness of such sale. In
addition to all other sums due the Administrative Agent and the Lenders with
respect to the Secured Obligations, the Obligors shall pay the Administrative
Agent and each of the Lenders all reasonable documented costs and expenses
incurred by the Administrative Agent or any such Lender, including, but not
limited to, reasonable attorneys’ fees and court costs, in obtaining or
liquidating the Collateral, in enforcing payment of the Secured Obligations, or
in the prosecution or defense of any action or proceeding by or against the
Administrative Agent or the Lenders or the Obligors concerning any matter
arising out of or connected with this Security Agreement, any Collateral or the
Secured Obligations, including, without limitation, any of the foregoing arising
in, arising under or related to a case under the Bankruptcy Code. Each Obligor
agrees that any requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Company in accordance
with the notice provisions of Section 9.2 of the Credit Agreement at least 10
days before the time of sale or other event giving rise to the requirement of
such notice. The Administrative Agent and the Lenders shall not be obligated to
make any sale or other disposition of the Collateral regardless of notice having
been given. To the extent permitted by law, any Lender may be a purchaser at any
such sale. To the extent permitted by applicable law, each of the Obligors
hereby waives all of its rights of redemption with respect to any such sale.
Subject to the provisions of applicable law, the Administrative Agent and the
Lenders may postpone or cause the postponement of the sale of all or any portion
of the Collateral by announcement at the time and place of such sale, and such
sale may, without further notice, to the extent permitted by law, be made at the
time and place to which the sale was postponed, or the Administrative Agent and
the Lenders may further postpone such sale by announcement made at such time and
place.

 

14

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(b) Remedies Relating to Accounts. Upon the occurrence of an Event of Default
and during the continuation thereof, whether or not the Administrative Agent has
exercised any or all of its rights and remedies hereunder, the Administrative
Agent shall have the right to enforce any Obligor’s rights against any account
debtors and obligors on such Obligor’s Accounts. Each Obligor acknowledges and
agrees that the Proceeds of its Accounts remitted to or on behalf of the
Administrative Agent in accordance with the provisions of this Section shall
constitute Proceeds of Collateral and shall be applied to the Credit Party
Obligations in accordance with the terms of the Credit Agreement and that such
Obligor shall not have any right, title or interest in such Proceeds except as
provided in the Credit Agreement. To the extent required by the Administrative
Agent, each Obligor agrees, upon the occurrence and during the continuance of an
Event of Default, to execute any document or instrument, and to take any action,
necessary under applicable law (including the Federal Assignment of Claims Act)
in order for the Administrative Agent to exercise its rights and remedies (or be
able to exercise its rights and remedies at some future date) with respect to
any Accounts of such Obligor where the account debtor is a Governmental
Authority. The Administrative Agent and the Lenders shall have no liability or
responsibility to any Obligor for acceptance of a check, draft or other order
for payment of money bearing the legend “payment in full” or words of similar
import or any other restrictive legend or endorsement or be responsible for
determining the correctness of any remittance. Each Obligor hereby agrees to
indemnify the Administrative Agent and the Lenders and their respective
officers, directors, employees, partners, members, counsel, agents,
representatives, advisors and affiliates from and against all liabilities,
damages, losses, actions, claims, judgments, costs, expenses, charges and
reasonable attorneys’ fees suffered or incurred by the Administrative Agent or
the Lenders (each, an “Indemnified Party”) because of the maintenance of the
foregoing arrangements except as relating to or arising out of the gross
negligence or willful misconduct of an Indemnified Party or its officers,
employees or agents. In the case of any investigation, litigation or other
proceeding, the foregoing indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by an Obligor, its directors,
shareholders or creditors or an Indemnified Party or any other Person or any
other Indemnified Party is otherwise a party thereto.

 

(c) Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuation thereof, the
Administrative Agent shall have the right to enter and remain upon the various
premises of the Obligors without cost or charge to the Administrative Agent, and
use the same, together with materials, supplies, books and records of the
Obligors for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, the Administrative Agent may
remove Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral. If the Administrative Agent exercises its right to take possession
of the Collateral, each Obligor shall also at its expense perform any and all
other steps reasonably requested by the Administrative Agent to preserve and
protect the security interest hereby granted in the

 

15

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Collateral, such as placing and maintaining signs indicating the security
interest of the Administrative Agent, appointing overseers for the Collateral
and maintaining inventory records.

 

(d) Nonexclusive Nature of Remedies. Failure by the Administrative Agent or the
Lenders to exercise any right, remedy or option under this Security Agreement,
any other Credit Document, any Secured Hedging Agreement or as provided by law,
or any delay by the Administrative Agent or the Lenders in exercising the same,
shall not operate as a waiver of any such right, remedy or option. No waiver
hereunder shall be effective unless it is in writing, signed by the party
against whom such waiver is sought to be enforced and then only to the extent
specifically stated, which in the case of the Administrative Agent or the
Lenders shall only be granted as provided herein. To the extent permitted by
law, neither the Administrative Agent, the Lenders, nor any party acting as
attorney for the Administrative Agent or the Lenders, shall be liable hereunder
for any acts or omissions or for any error of judgment or mistake of fact or law
other than their gross negligence or willful misconduct hereunder. The rights
and remedies of the Administrative Agent and the Lenders under this Security
Agreement shall be cumulative and not exclusive of any other right or remedy
which the Administrative Agent or the Lenders may have.

 

(e) Retention of Collateral. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuation thereof,
the Administrative Agent may, after providing the notices required by Sections
9-620 and 9-621 of the UCC (or any successor sections of the UCC) or otherwise
complying with the notice requirements of applicable law of the relevant
jurisdiction, accept or retain all or any portion of the Collateral in
satisfaction of the Secured Obligations. Unless and until the Administrative
Agent shall have provided such notices, however, the Administrative Agent shall
not be deemed to have retained any Collateral in satisfaction of any Secured
Obligations for any reason.

 

(f) Deficiency. In the event that the proceeds of any sale, collection or
realization are insufficient to pay all amounts to which the Administrative
Agent or the Lenders are legally entitled, the Obligors shall be jointly and
severally liable for the deficiency, together with interest thereon at the
default rate for Revolving Loans that are Alternate Base Rate Loans set forth in
Section 2.10 of the Credit Agreement, together with the costs of collection and
the reasonable fees of any attorneys employed by the Administrative Agent to
collect such deficiency. Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the Obligors or to
whomsoever a court of competent jurisdiction shall determine to be entitled
thereto.

 

(g) Other Security. To the extent that any of the Secured Obligations are now or
hereafter secured by property other than the Collateral (including, without
limitation, real and other personal property and securities owned by an
Obligor), or by a guarantee, endorsement or property of any other Person, then
the Administrative Agent shall have the right to proceed against such other
property, guarantee or endorsement upon the

 

16

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occurrence and during the continuation of any Event of Default, and the
Administrative Agent shall have the right, in its sole discretion, to determine
which rights, security, Liens, security interests or remedies the Administrative
Agent shall at any time pursue, relinquish, subordinate, modify or take with
respect thereto, without in any way modifying or affecting any of them or any of
the Administrative Agent’s and the Lenders’ rights or the Secured Obligations
under this Security Agreement, under any other of the Credit Documents or under
any Secured Hedging Agreement.

 

11. Rights of the Administrative Agent.

 

(a) Power of Attorney. Each Obligor hereby designates and appoints the
Administrative Agent, on behalf of the Lenders, and each of its designees or
agents, as attorney-in-fact of such Obligor, irrevocably and with power of
substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default:

 

(i) to demand, collect, settle, compromise, adjust and give discharges and
releases concerning the Collateral of such Obligor, all as the Administrative
Agent may reasonably determine in respect of such Collateral;

 

(ii) to commence and prosecute any actions at any court for the purposes of
collecting any Collateral and enforcing any other right in respect thereof;

 

(iii) to defend, settle, adjust or compromise any action, suit or proceeding
brought with respect to the Collateral and, in connection therewith, give such
discharge or release as the Administrative Agent may deem reasonably
appropriate;

 

(iv) to receive, open and dispose of mail addressed to an Obligor and endorse
checks, notes, drafts, acceptances, money orders, bills of lading, warehouse
receipts or other instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such Obligor, or securing
or relating to such Collateral, on behalf of and in the name of such Obligor;

 

(v) to sell, assign, transfer, make any agreement in respect of, or otherwise
deal with or exercise rights in respect of, any Collateral or the goods or
services which have given rise thereto, as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes;

 

(vi) to adjust and settle claims under any insurance policy relating to the
Collateral;

 

17

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(vii) to execute and deliver and/or file all assignments, conveyances,
statements, financing statements, continuation financing statements, security
agreements, affidavits, notices and other agreements, instruments and documents
that the Administrative Agent may determine necessary in order to perfect and
maintain the security interests and Liens granted in this Security Agreement and
in order to fully consummate all of the transactions contemplated herein;

 

(viii) to institute any foreclosure proceedings that the Administrative Agent
may deem appropriate;

 

(ix) to execute any document or instrument, and to take any action, necessary
under applicable law (including the Federal Assignment of Claims Act) in order
for the Administrative Agent to exercise its rights and remedies (or to be able
to exercise its rights and remedies at some future date) with respect to any
Account of an Obligor where the account debtor is a Governmental Authority; and

 

(x) to do and perform all such other acts and things as the Administrative Agent
may reasonably deem to be necessary, proper or convenient in connection with the
Collateral.

 

This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations (other than contingent
indemnity obligations that survive termination of the Credit Documents pursuant
to the stated terms thereof) remain outstanding, any Credit Document or Secured
Hedging Agreement is in effect, and until all of the Commitments shall have been
terminated. The Administrative Agent shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Administrative Agent in this Security
Agreement, and shall not be liable for any failure to do so or any delay in
doing so. The Administrative Agent shall not be liable for any act or omission
or for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct. This power of attorney is
conferred on the Administrative Agent solely to perfect, protect, preserve and
realize upon its security interest in the Collateral.

 

(b) Assignment by the Administrative Agent. The Administrative Agent may from
time to time assign the Secured Obligations or any portion thereof and/or the
Collateral or any portion thereof to a successor Administrative Agent, and the
assignee shall be entitled to all of the rights and remedies of the
Administrative Agent under this Security Agreement in relation thereto.

 

(c) The Administrative Agent’s Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by
the Administrative Agent hereunder, the Administrative Agent shall have no duty
or liability

 

18

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to preserve rights pertaining thereto, it being understood and agreed that the
Obligors shall be responsible for preservation of all rights in the Collateral,
and the Administrative Agent shall be relieved of all responsibility for the
Collateral upon surrendering it or tendering the surrender of it to the
Obligors. The Administrative Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Administrative Agent accords its own property, which shall be no less than the
treatment employed by a reasonable and prudent agent in the industry, it being
understood that the Administrative Agent shall not have responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any of the Collateral. In the event of a public or private sale of Collateral
pursuant to Section 10 hereof, the Administrative Agent shall have no obligation
to clean-up, repair or otherwise prepare the Collateral for sale.

 

12. Application of Proceeds. After the exercise of remedies by the
Administrative Agent or the Lenders pursuant to Section 7.2 of the Credit
Agreement (or after the Commitments shall automatically terminate and the Loans
(with accrued interest thereon) and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall automatically become due and payable in
accordance with the terms of such Section), any proceeds of the Collateral, when
received by the Administrative Agent, any of the Lenders or any Hedging
Agreement Provider in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth in Section 2.13(b) of the Credit
Agreement, and each Obligor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Administrative Agent shall have the continuing and exclusive right to apply and
reapply any and all such proceeds in the Administrative Agent’ s sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.

 

13. Costs of Counsel. If at any time hereafter, whether upon the occurrence of
an Event of Default or not, the Administrative Agent employs counsel to prepare
or consider amendments, waivers or consents with respect to this Security
Agreement, or to take action or make a response in or with respect to any legal
or arbitral proceeding relating to this Security Agreement or relating to the
Collateral, or to protect the Collateral or exercise any rights or remedies
under this Security Agreement or with respect to the Collateral, then the
Obligors agree to promptly pay upon demand any and all such reasonable
documented costs and expenses of the Administrative Agent in accordance with the
terms of Section 9.5 of the Credit Agreement, all of which costs and expenses
shall constitute Secured Obligations hereunder.

 

14. Continuing Agreement.

 

(a) This Security Agreement shall be a continuing agreement in every respect and
shall remain in full force and effect so long as any of the Secured Obligations
(other than contingent indemnity obligations that survive termination of the
Credit Documents pursuant to the stated terms thereof) remain outstanding, any
Credit Document or Secured Hedging Agreement is in effect, and until all of the
Commitments shall have been terminated. Upon such payment and termination, this
Security Agreement shall be

 

19

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automatically terminated and the Administrative Agent and the Lenders shall,
upon the request and at the expense of the Obligors, forthwith release all of
the Liens and security interests granted hereunder and shall execute and/or
deliver all UCC termination statements and/or other documents reasonably
requested by the Obligors evidencing such termination. Notwithstanding the
foregoing all releases and indemnities provided hereunder shall survive
termination of this Security Agreement.

 

(b) This Security Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of
any of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, all as
though such payment had not been made; provided that in the event payment of all
or any part of the Secured Obligations is rescinded or must be restored or
returned, all reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Administrative Agent or
any Lender in defending and enforcing such reinstatement shall be deemed to be
included as a part of the Secured Obligations.

 

15. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 9.1 of the Credit Agreement.

 

16. Successors in Interest. This Security Agreement shall create a continuing
security interest in the Collateral and shall be binding upon each Obligor, its
successors and assigns and shall inure, together with the rights and remedies of
the Administrative Agent and the Lenders hereunder, to the benefit of the
Administrative Agent and the Lenders and their successors and permitted assigns;
provided, however, that none of the Obligors may assign its rights or delegate
its duties hereunder without the prior written consent of each Lender or the
Required Lenders, as required by the Credit Agreement. To the fullest extent
permitted by law, each Obligor hereby releases the Administrative Agent, each
Lender and any other Indemnitees, in accordance with the terms of Section 9.5 of
the Credit Agreement, from any liability for any act or omission relating to
this Security Agreement or the Collateral.

 

17. Notices. All notices required or permitted to be given under this Security
Agreement shall be in conformance with Section 9.2 of the Credit Agreement.

 

18. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart. Delivery of executed counterparts of
the Security Agreement by telecopy shall be effective as an original and shall
constitute a representation that an original shall be delivered upon the request
of the Administrative Agent.

 

20

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19. Headings. The headings of the sections and subsections hereof are provided
for convenience only and shall not in any way affect the meaning, construction
or interpretation of any provision of this Security Agreement.

 

20. Governing Law; Submission to Jurisdiction and Service of Process; Waiver of
Jury Trial; Venue. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW). The terms of Sections 9.14 and 9.17 of the Credit
Agreement are incorporated herein by reference, mutatis mutandis, and the
parties hereto agree to such terms.

 

21. Severability. If any provision of this Security Agreement is determined to
be illegal, invalid or unenforceable, such provision shall be fully severable
and the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

 

22. Entirety. This Security Agreement, the other Credit Documents and the
Secured Hedging Agreements represent the entire agreement of the parties hereto
and thereto, and supersede all prior agreements and understandings, oral or
written, if any, including any commitment letters or correspondence relating to
this Security Agreement, the other Credit Documents, the Secured Hedging
Agreements or the transactions contemplated herein and therein.

 

23. Survival. All representations and warranties of the Obligors hereunder shall
survive the execution and delivery of this Security Agreement, the other Credit
Documents and the Secured Hedging Agreements, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit
Agreement.

 

24. Joint and Several Obligations of Obligors.

 

(a) Each of the Obligors is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Lenders
under the Credit Agreement, for the mutual benefit, directly and indirectly, of
each of the Obligors and in consideration of the undertakings of each of the
Obligors to accept joint and several liability for the obligations of each of
them.

 

(b) Each of the Obligors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Obligors with respect to the payment and
performance of all of the Secured Obligations arising under this Security
Agreement, the other Credit Documents and the Secured Hedging Agreements, it
being the intention of the parties hereto that all the Secured Obligations shall
be the joint and several obligations of each of the Obligors without preferences
or distinction among them.

 

21

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(c) Notwithstanding any provision to the contrary contained herein, in any other
of the Credit Documents or in any Secured Hedging Agreement, to the extent the
obligations of an Obligor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of such Obligor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).

 

25. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by the
Required Lenders.

 

22

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Each of the parties hereto has caused a counterpart of this Security Agreement
to be duly executed and delivered as of the date first above written.

 

COMPANY:   LIONBRIDGE TECHNOLOGIES, INC.,    

a Delaware corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

US GUARANTORS:   VERITEST, INC.,    

a Delaware corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

    LIONBRIDGE US, INC.,    

a Delaware corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

    MENTORIX TECHNOLOGIES INC.,    

a California corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

   

LIONBRIDGE GLOBAL SOLUTIONS COMPANIES, INC.

f/k/a BGS COMPANIES, INC.,

   

a Delaware corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

 

1

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

   

LIONBRIDGE GLOBAL SOLUTIONS FEDERAL, INC.

f/k/a BOWNE GLOBAL SOLUTIONS FEDERAL, INC.,

   

a Delaware corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

   

LIONBRIDGE GLOBAL SOLUTIONS II, INC.

f/k/a BOWNE GLOBAL SOLUTIONS II, INC.,

   

a New York corporation

   

By:

 

/s/ Stephen J. Lifshatz

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

   

Name:

 

Stephen J. Lifshatz

   

Title:

 

Vice President

 

 

2

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

Accepted and agreed to as of the date first above written.

 

    WACHOVIA BANK, NATIONAL ASSOCIATION,    

as Administrative Agent

   

By:

 

/s/ Scott C. Reeds

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

   

Name:

 

Scott C. Reeds

   

Title:

 

Vice President

 

3