Exhibit 10.3

SECURITY AGREEMENT

This SECURITY AGREEMENT dated as of August 20, 2010 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof and the Indenture (as defined below), this “Security
Agreement”), among First Data Corporation, a Delaware corporation (the
“Issuer”), each of the Subsidiaries (as defined below) of the Issuer listed on
Annex A hereto or that becomes a party hereto pursuant to Section 8.14 hereof
(each such Subsidiary being a “Subsidiary Grantor” and, collectively, the
“Subsidiary Grantors”; the Subsidiary Grantors and the Issuer are referred to
collectively as the “Grantors”), and Wells Fargo Bank, National Association, in
its capacity as collateral agent (in such capacity and together with any
successors in such capacity, the “Collateral Agent”), pursuant to an indenture,
dated as of August 20, 2010 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Indenture”) among the Issuer, each
Guarantor (as defined in the Indenture) and Wells Fargo Bank, National
Association, in its capacity as trustee (the “Trustee”) on behalf of the holders
of the Notes (as defined below) (the “Holders”).

W I T N E S S E T H :

WHEREAS, pursuant to the Indenture, the Issuer has issued, or will issue
$510,000,000 aggregate principal amount of 8.875% senior secured notes due 2020
(together with any Additional Notes issued pursuant to the Indenture, the
“Notes”) upon the terms and subject to the conditions set forth therein;

WHEREAS, each Guarantor has, pursuant to the guarantee provisions under the
Indenture, unconditionally guaranteed the Obligations (as defined below);

WHEREAS, each Grantor will receive substantial benefits from the proceeds of the
Notes and each is, therefore, willing to enter into this Security Agreement;

WHEREAS, this Security Agreement is given by each Grantor in favor of the
Collateral Agent for the benefit of the Secured Parties (as defined below) to
secure the payment and performance of all of the Obligations;

WHEREAS, in order to secure the obligations under the Senior Credit Facility,
the Grantors have also granted to the administrative agent for the benefit of
the holders of the obligations under the Senior Credit Facility, a first
priority security interest in the Collateral (as defined below) (subject to
certain priorities upon realization of any value from the Collateral as set
forth in the Intercreditor Agreement); and

WHEREAS, from time to time after the date hereof, the Issuer may, subject to the
terms and conditions of the Indenture and the Security Documents, incur
Additional First Lien Obligations (including Additional Notes issued under the
Indenture), that the Issuer desires to secure by the Collateral on a pari passu
basis with the Notes;

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NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Grantor and the Collateral Agent hereby agree as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, terms defined in the Indenture and used
herein shall have the meanings given to them in the Indenture.

(b) Terms used herein without definition that are defined in the UCC have the
meanings given to them in the UCC, including the following terms (which are
capitalized herein): Account, Chattel Paper, Commodity Contract, Documents,
Instruments, Inventory, Letter-of-Credit Right, Security Entitlement, Supporting
Obligation and Tangible Chattel Paper.

(c) The following terms shall have the following meanings:

“Additional First Lien Agreement” shall mean any indenture, credit agreement or
other agreement, if any, pursuant to which any Grantor has or will incur
Additional First Lien Obligations; provided that, in each case, the Indebtedness
thereunder has been designated as Additional First Lien Obligations pursuant to
and in accordance with Section 8.16.

“Additional First Lien Obligations” shall mean any principal, interest
(including any interest accruing subsequent to the filing of a petition in
bankruptcy, reorganization or similar proceeding with respect to any Grantor,
whether or not such interest is an allowed claim under applicable state, federal
or foreign law), premium, penalties, fees, indemnifications, reimbursements,
damages and other liabilities, and guarantees of payment of such principal,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under any Additional First Lien Agreement, in each case,
that have been designated as Additional First Lien Obligations pursuant to and
in accordance with Section 8.16.

“Additional First Lien Secured Parties” shall mean the holders from time to time
of Additional First Lien Obligations.

“Additional First Lien Secured Party Consent” shall mean a consent in the form
of Annex C to this Security Agreement executed by the Authorized Representative
of any holders of Additional First Lien Obligations pursuant to Section 8.16.

“Agreement” shall have the meaning assigned to such term in the Preamble hereof.

“Applicable First Lien Representative” shall have the meaning assigned to the
term “Applicable Authorized Representative” in the First Lien Intercreditor
Agreement.

“Authorized Representative” means (i) in the case of the Obligations securing
the Notes or the Holders, the Trustee and (ii) in the case of any Series of
Additional First Lien Obligations or Additional First Lien Secured Parties that
become subject to the Intercreditor Agreement, the Authorized Representative
named for such Series in the applicable joinder agreement.

“Change in Law” shall mean (a) the adoption of any law, treaty, order, policy,
rule or regulation after the date of the Security Agreement, (b) any change in
any law, treaty, order, policy, rule or regulation or in the interpretation or
application thereof by any Governmental

 

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Authority after the date of the Security Agreement or (c) compliance by any
Secured Party with any guideline, request, directive or order issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law).

“Collateral” shall have the meaning provided in Section 2.

“Collateral Account” shall mean any collateral account established by the
Collateral Agent as provided in Section 5.1 or Section 5.3.

“Collateral Agent” shall have the meaning provided in the preamble to this
Security Agreement.

“Contractual Requirement” shall mean (a) any applicable provision of any
material law, statute, rule, regulation, order, writ, injunction or decree of
any court or governmental instrumentality or (b) any of the terms, covenants,
conditions or provisions of any material indenture, loan agreement, lease
agreement, mortgage, deed of trust, agreement or other material instrument to
which such Grantor or any of the Restricted Subsidiaries is a party or by which
it or any of its property or assets is bound.

“Control” shall mean “control,” as such term is defined in Section 9-104 or
9-106, as applicable, of the UCC.

“Copyright License” shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor (including all Copyrights) or that any Grantor
otherwise has the right to license, or granting any right to any Grantor under
any copyright now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement, including those listed on Schedule 1.

“copyrights” shall mean, with respect to any Person, all of the following now
owned or hereafter acquired by such Person: (i) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, and (ii) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office.

“Copyrights” shall mean all copyrights now owned or hereafter acquired by any
Grantor, including those listed on Schedule 2.

“Credit Agreement Collateral Agent” shall mean Credit Suisse AG, Cayman Islands
Branch (formerly known as Credit Suisse, Cayman Islands Branch), as collateral
agent for the “Secured Parties” as defined in the Senior Credit Facility.

“Credit Agreement Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement.

“Credit Agreement Obligations” shall have the meaning assigned to such term in
the Intercreditor Agreement.

 

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“Discharge” shall have the meaning assigned to such term in the Intercreditor
Agreement.

“Domestic Subsidiary” shall mean each Subsidiary of the Issuer that is organized
under the laws of the United States, any state thereof, or the District of
Columbia.

“equipment” shall mean all “equipment,” as such term is defined in Article 9 of
the UCC, now or hereafter owned by any Grantor or to which any Grantor has
rights and, in any event, shall include all machinery, equipment, furnishings,
movable trade fixtures and vehicles now or hereafter owned by any Grantor or to
which any Grantor has rights and any and all Proceeds, additions, substitutions
and replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto; but excluding equipment to the extent it is subject to a Lien,
in each case permitted by Section 4.12 of the Indenture and the terms of the
Indebtedness secured by such Lien prohibit assignment of, or granting of a
security interest in, such Grantor’s rights and interests therein (other than to
the extent that any such prohibition would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law), provided,
that immediately upon the repayment of all Indebtedness secured by such Lien,
such Grantor shall be deemed to have granted a Security Interest in all the
rights and interests with respect to such equipment.

“Event of Default” shall have the meaning assigned to such term in the
Indenture.

“Excluded Property” shall mean all Settlement Assets.

“Excluded Stock and Stock Equivalents” shall mean (i) any Stock or Stock
Equivalents with respect to which, in the reasonable judgment of the Issuer
(confirmed in writing by notice to the Collateral Agent), the cost or other
consequences (including any adverse tax consequences) of pledging such Stock or
Stock Equivalents in favor of the Secured Parties shall be excessive in view of
the benefits to be obtained by the Secured Parties therefrom, (ii) solely in the
case of any pledge of Stock and Stock Equivalents of any Foreign Subsidiary or
any Domestic Subsidiary substantially all of the assets of which consist of
Stock or Stock Equivalents of Foreign Subsidiaries to secure the Obligations,
any Stock or Stock Equivalents of any class of such Foreign Subsidiary or such
Domestic Subsidiary in excess of 65% of the outstanding Stock or Stock
Equivalents of such class (such percentage to be adjusted upon any Change in Law
as may be required to avoid adverse U.S. federal income tax consequences to the
Issuer or any Subsidiary), (iii) any Stock or Stock Equivalents to the extent
the pledge thereof would violate any applicable Requirement of Law, (iv) in the
case of (A) any Stock or Stock Equivalents of any Subsidiary to the extent such
Stock or Stock Equivalents are subject to a Lien permitted by the Indenture or
(B) any Stock or Stock Equivalents of any Subsidiary that is not wholly owned by
the Issuer and its Subsidiaries at the time such Subsidiary becomes a
Subsidiary, any Stock or Stock Equivalents of each such Subsidiary described in
clause (A) or (B) to the extent that (1) a pledge thereof to secure the
Obligations is prohibited by any applicable Contractual Requirement (other than
customary non-assignment provisions which are ineffective under the Uniform
Commercial Code or other applicable law), (2) any Contractual Requirement
prohibits such a pledge without the consent of any other party; provided that
this clause (2) shall not apply if (x) such other party is a Grantor or wholly
owned Subsidiary or (y) consent has been obtained to

 

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consummate such pledge (it being understood that the foregoing shall not be
deemed to obligate the Issuer or any Subsidiary to obtain any such consent) and
for so long as such Contractual Requirement or replacement or renewal thereof is
in effect, or (3) a pledge thereof to secure the Obligations would give any
other party (other than a Grantor or wholly owned Subsidiary) to any contract,
agreement, instrument or indenture governing such Stock or Stock Equivalents the
right to terminate its obligations thereunder (other than customary
non-assignment provisions which are ineffective under the Uniform Commercial
Code or other applicable law) and (v) any Stock or Stock Equivalents of any
Subsidiary to the extent that (A) the pledge of such Stock or Stock Equivalents
would result in adverse tax consequences to the Issuer or any Subsidiary as
reasonably determined by the Issuer and (B) such Stock or Stock Equivalents have
been identified in writing to the Collateral Agent by an Officer of the Issuer.

“General Intangibles” shall mean all “general intangibles” as such term is
defined in Article 9 of the UCC and, in any event, including with respect to any
Grantor, all contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such Grantor
has any right, title or interest or to which such Grantor or any property of
such Grantor is subject, as the same may from time to time be amended,
supplemented or otherwise modified, including (a) all rights of such Grantor to
receive moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of such Grantor to receive proceeds of any insurance,
indemnity, warranty or guarantee with respect thereto, (c) all claims of such
Grantor for damages arising out of any breach of or default thereunder and
(d) all rights of such Grantor to terminate, amend, supplement, modify or
exercise rights or options thereunder, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder, in each case to the
extent the grant by such Grantor of a Security Interest pursuant to this
Security Agreement in its right, title and interest in any such contract,
agreement, instrument or indenture (i) is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other party
thereto (other than a Grantor), (ii) would not give any other party (other than
a Grantor) to any such contract, agreement, instrument or indenture the right to
terminate its obligations thereunder or (iii) is permitted with consent if all
necessary consents to such grant of a Security Interest have been obtained from
the other parties thereto (other than to the extent that any such prohibition
referred to in clauses (i), (ii) and (iii) would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code
(or any successor provision or provisions) of any relevant jurisdiction or any
other applicable law) (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents), provided that the
foregoing limitation shall not affect, limit, restrict or impair the grant by
such Grantor of a Security Interest pursuant to this Security Agreement in any
Account or any money or other amounts due or to become due under any such
contract, agreement, instrument or indenture.

“Governmental Authority” shall mean any nation, sovereign or government, any
state, province, territory or other political subdivision thereof, and any
entity or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including a central
bank or stock exchange.

“Grantor” shall have the meaning assigned to such term in the preamble hereof.

 

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“Indenture” shall have the meaning assigned to such term in the recitals hereto.

“Indenture Party” means the Issuer and the Guarantors.

“Intellectual Property” shall mean all of the following now owned or hereafter
acquired by any Grantor: (A) all Copyrights, Trademarks and Patents, and (B) all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise now
owned or hereafter acquired, including (a) all information used or useful
arising from the business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production, ideas, confidential
business information, techniques, processes, formulas and all other proprietary
information, and (b) rights, priorities and privileges relating to the
Copyrights, the Patents, the Trademarks and the Licenses and all rights to sue
at law or in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom, in each case to the
extent the grant by such Grantor of a Security Interest pursuant to this
Security Agreement in any such rights, priorities and privileges relating to
intellectual property (i) is not prohibited by any contract, agreement or other
instrument governing such rights, priorities and privileges without the consent
of any other party thereto (other than a Grantor), (ii) would not give any other
party (other than a Grantor) to any such contract, agreement or other instrument
the right to terminate its obligations thereunder or (iii) is permitted with
consent if all necessary consents to such grant of a Security Interest have been
obtained from the relevant parties (other than to the extent that any such
prohibition referred to in clauses (i), (ii) and (iii) would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law) (it being understood that the foregoing shall not be deemed to
obligate such Grantor to obtain such consents).

“Intercreditor Agreement” shall have the meaning assigned to the term “First
Lien Intercreditor Agreement” in the Indenture.

“Investment Property” shall mean all Securities (whether certificated or
uncertificated), Security Entitlements and Commodity Contracts of any Grantor
(other than (i) as pledged pursuant to the Pledge Agreement and (ii) solely with
respect to the Obligations, any Stock or Stock Equivalents of any Foreign
Subsidiary in excess of 65% of the outstanding voting class of such Stock or
Stock Equivalents), whether now or hereafter acquired by any Grantor, except, in
each case, to the extent the grant by a Grantor of a Security Interest therein
pursuant to this Security Agreement in its right, title and interest in any such
Investment Property (i) is prohibited by any contract, agreement, instrument or
indenture governing such Investment Property without the consent of any other
party thereto (other than a Grantor) unless such consent has been expressly
obtained, or (ii) would give any other party (other than a Grantor) to any such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder (other than to the extent that any such prohibition
referred to in clauses (i) and (ii) would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law) (it being
understood that the foregoing shall not be deemed to obligate any Grantor to
obtain any such consents referred to in clauses (i) or (ii) above).

“Issuer” shall have the meaning assigned to such term in the preamble hereof.

 

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“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense to which any Grantor is a party.

“Material Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of the Issuer
and its Subsidiaries, taken as a whole, that would, individually or in the
aggregate, materially adversely affect (a) the ability of the Issuer and the
other Grantors, taken as a whole, to perform their payment obligations under
this Agreement or any of the other Notes Documents or (b) the rights and
remedies of the Secured Parties under this Agreement or any of the other Notes
Documents.

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

“Obligations” shall mean (i) any principal, interest (including any interest
accruing subsequent to the filing of a petition in bankruptcy, reorganization or
similar proceeding with respect to any Grantor, whether or not such interest is
an allowed claim under applicable state, federal or foreign law), premium,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities, and guarantees of payment of such principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable to
any Secured Party under the Notes, the Indenture and any other Notes Documents
and all other obligations, covenants and duties of any Indenture Party arising
under any Notes Document or otherwise with respect to any Notes Document and
(ii) any Additional First Lien Obligations owing to any holder of Additional
First Lien Obligations (that has been designated as Additional First Lien
Obligations pursuant to Section 8.16) under any Additional First Lien Agreement.

“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor (including all Patents) or
that any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a
patent, now or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement, including those listed on
Schedule 3.

“patents” shall mean, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (a) all letters patent of the United
States or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of the United States
or the equivalent thereof in any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.

“Patents” shall mean all patents now owned or hereafter acquired by any Grantor,
including those listed on Schedule 4.

 

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“Pledge Agreement” means that certain pledge agreement dated August 20, 2010 (as
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with the provisions thereof and the Indenture), among the
Grantors and the Collateral Agent.

“Proceeds” shall mean all “proceeds” as such term is defined in Article 9 of the
UCC and, in any event, shall include with respect to any Grantor, any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that constitutes Collateral, any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Collateral Agent, (b) any claim of any Grantor against any third party for (and
the right to sue and recover for and the rights to damages or profits due or
accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by any
Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.

“Requirement of Law” shall mean, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or assets or to which such
Person or any of its property or assets is subject.

“Secured Parties” shall mean, collectively, (a) the Collateral Agent, (b) each
Holder (including the Holders of any Additional Notes issued under and in
compliance with the terms of the Indenture), (c) the beneficiaries of each
indemnification obligation undertaken by any Indenture Party under any Notes
Document, (d) the Trustee, (e) Additional First Lien Secured Parties and their
Authorized Representatives; provided that such Additional First Lien Secured
Parties and their Authorized Representatives comply with Section 8.16 hereof and
execute an Additional First Lien Secured Party Consent and (f) the successors
and permitted assigns of each of the foregoing.

“Security Agreement” shall have the meaning assigned to such term in the
preamble hereof.

“Security Interest” shall have the meaning provided in Section 2.

“Senior Credit Facility” means that certain Amended and Restated Credit
Agreement, dated as of September 28, 2007, among the Company, the lenders from
time to time party thereto, Credit Suisse AG, Cayman Islands Branch (formerly
known as Credit Suisse, Cayman Islands Branch), as administrative agent and the
other parties thereto, as amended, restated, amended and restated, extended,
supplemented or otherwise modified from time to time.

 

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“Stock” shall mean shares of capital stock or shares in the capital, as the case
may be (whether denominated as common stock or preferred stock or ordinary
shares or preferred shares, as the case may be), beneficial, partnership or
membership interests, participations or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity, whether voting or non-voting.

“Stock Equivalents” shall mean all securities convertible into or exchangeable
for Stock and all warrants, options or other rights to purchase or subscribe for
any Stock, whether or not presently convertible, exchangeable or exercisable.

“Subsidiary” shall have the meaning assigned to such term in the Indenture.

“Trademark License” shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor (including any Trademark) or that any Grantor
otherwise has the right to license, or granting to any Grantor any right to use
any trademark now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement, including those listed on Schedule 5.

“trademarks” shall mean, with respect to any Person, all of the following now
owned or hereafter acquired by such Person: (i) all trademarks, service marks,
trade names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof (if any), and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office or any similar offices in any State of the United States or any
other country or any political subdivision thereof, and all extensions or
renewals thereof, (ii) all goodwill associated therewith or symbolized thereby
and (iii) all other assets, rights and interests that uniquely reflect or embody
such goodwill.

“Trademarks” shall mean all trademarks now owned or hereafter acquired by any
Grantor, including those listed on Schedule 6 hereto; provided that any “intent
to use” Trademark applications for which a statement of use has not been filed
(but only until such statement is filed) are excluded from this definition.

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

 

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(d) The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar
import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement, and Section, subsection, clause and Schedule references are to this
Security Agreement unless otherwise specified. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”

(e) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(f) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

2. Grant of Security Interest.

(a) Each Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages,
pledges, hypothecates and transfers to the Collateral Agent, for the benefit of
the Secured Parties, and grants to the Collateral Agent, for the benefit of the
Secured Parties, a lien on and security interest in (the “Security Interest”),
all of its right, title and interest in, to and under all of the following
property now owned or at any time hereafter acquired by such Grantor or in which
such Grantor now has or at any time in the future may acquire any right, title
or interest (collectively, the “Collateral”), as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations:

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all equipment and fixtures;

(v) all General Intangibles;

(vi) all Instruments;

(vii) all Intellectual Property;

(viii) all Inventory;

(ix) all Investment Property;

(x) all Supporting Obligations;

(xi) all Collateral Accounts;

 

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(xii) all books and records pertaining to the Collateral; and

(xiii) the extent not otherwise included, all Proceeds and products of any and
all of the foregoing;

provided, that (x) the Collateral for any Obligations shall not include any
(A) Excluded Stock and Stock Equivalents with respect to such Obligations,
(B) Excluded Property or (C) any assets as to which the Collateral Agent and the
Issuer have determined that the costs or other consequences (including adverse
tax consequences) of providing a security interest is excessive in view of the
benefits to be gained thereby by the Secured Parties and (y) none of the items
included in clauses (i) through (xiii) above shall constitute Collateral to the
extent (and only to the extent) that the grant of the Security Interest therein
would violate any Requirement of Law applicable to such Collateral.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent and its
affiliates, counsel and other representatives, at any time and from time to
time, to file or record financing statements, amendments to financing statements
and, with notice to the Issuer, and other filing or recording documents or
instruments with respect to the Collateral in such form and in such offices as
the Collateral Agent reasonably determines appropriate to perfect the Security
Interests of the Collateral Agent under this Security Agreement, and such
financing statements and amendments may describe the Collateral covered thereby
as “all assets excluding Excluded Stock and Stock Equivalents and Excluded
Property, as defined on Schedule A hereto,” “all personal property excluding
Excluded Stock and Stock Equivalents and Excluded Property, as defined on
Schedule A hereto” or words of similar effect, provided that with respect to
fixtures the Collateral Agent shall only file or record financing statements in
the jurisdiction of organization of a Grantor, except in connection with a
Mortgage. Each Grantor hereby also authorizes the Collateral Agent and its
affiliates, counsel and other representatives, at any time and from time to
time, to file continuation statements with respect to previously filed financing
statements.

Each Grantor hereby agrees to provide to the Collateral Agent, promptly upon
request, any information reasonably necessary to effectuate the filings or
recordings authorized by this Section 2(b).

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted hereunder by each Grantor, without the
signature of any Grantor, and naming any Grantor or the Grantors as debtors and
the Collateral Agent, as the case may be, as secured party.

The Security Interests are granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Collateral.

 

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(c) Notwithstanding anything to the contrary in this Section 2, the term
“Collateral”, as it refers to the Collateral securing the Obligations, shall not
include any Stock and other securities of a Subsidiary to the extent that the
pledge of such Stock and other securities would result in the Issuer being
required to file separate financial statements of such Subsidiary with the SEC,
but only to the extent necessary to not be subject to such requirement and only
for so long as such requirement is in existence and only with respect to the
relevant Notes affected; provided that neither the Issuer nor any Subsidiary
shall take any action in the form of a reorganization, merger or other
restructuring a principal purpose of which is to provide for the release of the
Lien on any Stock pursuant to this clause (c). In addition, in the event that
Rule 3-16 of Regulation S-X under the Securities Act of 1933, as amended (“Rule
3-16”), is amended, modified or interpreted by the SEC to require (or is
replaced with another rule or regulation, or any other law, rule or regulation
is adopted, which would require) the filing with the SEC (or any other
Governmental Authority) of separate financial statements of any Subsidiary of
the Issuer due to the fact that such Subsidiary’s Stock secures the Obligations
affected thereby, then the Stock of such Subsidiary will automatically be deemed
not to be part of the Collateral securing the relevant Obligations affected
thereby but only to the extent necessary to not be subject to such requirement
and only for so long as required to not be subject to such requirement. In such
event, this Security Agreement may be amended or modified, without the consent
of any Secured Party, to the extent necessary to release the Security Interests
in favor of the Collateral Agent on the shares of Stock that are so deemed to no
longer constitute part of the Collateral for the relevant Obligations only. In
the event that Rule 3-16 is amended, modified or interpreted by the SEC to
permit (or is replaced with another rule or regulation, or any other law, rule
or regulation is adopted, which would permit) such Subsidiary’s Stock to secure
the Obligations in excess of the amount then pledged without the filing with the
SEC (or any other Governmental Authority) of separate financial statements of
such Subsidiary, then the Stock of such Subsidiary will automatically be deemed
to be a part of the Collateral for the relevant Obligations. For the avoidance
of doubt and notwithstanding anything to the contrary in this Security
Agreement, nothing in this clause (c) shall limit the pledge of such Stock and
other securities from securing the Credit Agreement Obligations at all times or
from securing any Obligations that are not in respect of securities subject to
regulation by the SEC.

3. Representations and Warranties.

Each Grantor hereby represents and warrants to the Collateral Agent and each
Secured Party on the date hereof that:

3.1 Title; No Other Liens. Except for (a) the Security Interest granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Security Agreement, (b) the Liens permitted by the Indenture and (c) any Liens
securing Indebtedness which is no longer outstanding or any Liens with respect
to commitments to lend which have been terminated, such Grantor owns each item
of the Collateral free and clear of any and all Liens or claims of others. No
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral that evidences a Lien securing any material
Indebtedness is on file or of record in any public office, except such as
(i) have been filed in favor of the Collateral Agent for the benefit of the
Secured Parties pursuant to this Security Agreement or (ii) are permitted by the
Indenture.

 

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3.2 Perfected First Priority Liens.

(a) This Security Agreement is effective to create in favor of the Collateral
Agent, for its benefit and for the benefit of the Secured Parties, legal, valid
and enforceable Security Interests in the Collateral to the extent the
enforceability of such obligation with respect to Stock of Foreign Subsidiaries
is governed by the UCC, subject to the effects of bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and general equitable
principles.

(b) Subject to the limitations set forth in clause (c) of this Section 3.2, the
Security Interests granted pursuant to this Security Agreement (i) will
constitute valid and perfected Security Interests in the Collateral (as to which
perfection may be obtained by the filings or other actions described in clause
(A), (B) or (C) of this paragraph) in favor of the Collateral Agent, for the
benefit of the Secured Parties, as collateral security for the Obligations, upon
(A) the filing in the applicable filing offices of all financing statements, in
each case, naming each Grantor as “debtor” and the Collateral Agent as “secured
party” and describing the Collateral, (B) delivery to the Collateral Agent (or
its bailee) of all Instruments, Chattel Paper, Certificated Securities and
negotiable Documents in each case, properly endorsed for transfer in blank and
(C) completion of the filing, registration and recording of a fully executed
agreement in the form hereof (or a supplement hereto) and containing a
description of all Collateral constituting Intellectual Property in the United
States Patent and Trademark Office (or any successor office) within the three
month period (commencing as of the date hereof) or, in the case of Collateral
constituting Intellectual Property acquired after the date hereof, thereafter
pursuant to 35 USC § 261 and 15 USC § 1060 and the regulations thereunder with
respect to United States Patents and United States registered Trademarks and in
the United States Copyright Office (or any successor office) within the one
month period (commencing as of the applicable date of acquisition or filing) or,
in the case of Collateral constituting Intellectual Property acquired after the
date hereof, thereafter with respect to United States registered Copyrights
pursuant to 17 USC § 205 and the regulations thereunder as soon as reasonably
practicable, and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction to the extent that a security interest may be perfected
by such filings, registrations and recordings, and (ii) are prior or equal to
all other Liens on the Collateral other than Liens permitted pursuant to
Section 4.12 of the Indenture.

(c) Notwithstanding anything to the contrary herein, no Grantor shall be
required to perfect the Security Interests granted by this Security Agreement
(including Security Interests in cash, cash accounts and Investment Property) by
any means other than by (i) filings pursuant to the Uniform Commercial Code of
the relevant State(s), (ii) filings approved by United States government offices
with respect to Intellectual Property and (iii) delivery to the Collateral Agent
(or its bailee) to be held in its possession of all Collateral consisting of
Tangible Chattel Paper, Instruments or Certificated Securities with a fair
market value in excess of $10,000,000 individually.

(d) It is understood and agreed that the Security Interests in cash and
Investment Property created hereunder shall not prevent the Grantors from using
such assets in the ordinary course of their respective businesses.

 

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4. Covenants.

Each Grantor hereby covenants and agrees with the Collateral Agent and the
Secured Parties that, from and after the date of this Security Agreement until
the Obligations are paid in full:

4.1 Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the Security Interest created by this Security
Agreement as a perfected Security Interest having at least the priority
described in Section 3.1 and shall defend such Security Interest against the
claims and demands of all Persons whomsoever, in each case subject to
Section 3.2(c).

(b) Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Collateral Agent may reasonably request.

(c) Such Grantor will furnish to the Collateral Agent at the time of the
delivery of the financial statements provided for in Section 4.03 of the
Indenture, a schedule setting forth any additional Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses that are
registered (or for which an application to register such items has been filed)
with the United States Patent and Trademark Office or the United States
Copyright Office (or any successor to either such office) acquired by any
Grantor following the Closing Date (or following the date of the last supplement
provided to the Collateral Agent pursuant to this Section 4.1(c)), all in
reasonable detail.

(d) Subject to clause (e) below and Section 3.2(c), each Grantor agrees that at
any time and from time to time, at the expense of such Grantor, it will execute
any and all further documents, financing statements, agreements and instruments,
and take all such further actions (including the filing and recording of
financing statements (and any necessary amendments or continuations thereto) and
other documents, including all applicable documents required under
Section 3.2(b)(C)), which may be required under any applicable law, or which the
Collateral Agent or the Applicable First Lien Representative may reasonably
request, in order (i) to grant, preserve, protect and perfect the validity and
priority of the Security Interests created or intended to be created hereby or
(ii) to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral, including the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Security Interests created hereby and
all applicable documents required under Section 3.2(b)(C), all at the expense of
such Grantor.

(e) Notwithstanding anything in this Section 4.1 to the contrary, (i) with
respect to any assets acquired by such Grantor after the date hereof that are
required by the Indenture or any Additional First Lien Agreement to be subject
to the Lien created hereby or (ii) with respect to any Person that, subsequent
to the date hereof, becomes a Subsidiary that is required by the Indenture or
any Additional First Lien Agreement to become a party hereto, the relevant
Grantor after the acquisition or creation thereof shall promptly take all
actions required by the Indenture, any Additional First Lien Agreement or this
Section 4.1.

 

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(f) Each Grantor agrees that, in the event any Grantor takes any action to grant
or perfect a Lien in favor of the Credit Agreement Collateral Agent in any
assets, such Grantor shall also take such action to grant or perfect a Lien in
favor of the Collateral Agent to secure the Obligations, whether or not such
action was requested by the Collateral Agent.

4.2 Damage or Destruction of Collateral. The Grantors agree promptly to notify
the Collateral Agent if any material portion of the Collateral is damaged or
destroyed in any manner which could reasonably be expected to have a Material
Adverse Effect.

4.3 Notices. Each Grantor will advise the Collateral Agent on behalf of the
holders of any Obligations promptly, in reasonable detail, of any Lien of which
it has knowledge (other than the Security Interests created hereby or Liens
permitted under the Indenture) on any of the Collateral which would adversely
affect, in any material respect, the ability of the Collateral Agent to exercise
any of its remedies hereunder.

4.4 Changes in Locations, Name, etc. Each Grantor will furnish to the Collateral
Agent promptly (an in any event within 30 days of such change) a written notice
of any change (i) in its legal name, (ii) in its jurisdiction of organization or
location for purposes of the UCC, (iii) in its identity or type of organization
or corporate structure or (iv) in its Federal Taxpayer Identification Number or
organizational identification number. As a result of any such change, each
Grantor agrees to take all action necessary to maintain the perfection and
priority of the security interest of the Collateral Agent for the benefit of the
Secured Parties in the Collateral. Each Grantor agrees promptly to provide the
Collateral Agent with certified organizational documents reflecting any of the
changes described in the first sentence of this paragraph.

4.5 Insurance.

(a)(i) The Issuer will, and will cause each Subsidiary to, at all times maintain
in full force and effect, pursuant to self-insurance arrangements or with
insurance companies that the Issuer believes (in the good faith judgment of the
management of the Issuer) are financially sound and responsible at the time the
relevant coverage is placed or renewed, insurance in at least such amounts
(after giving effect to any self-insurance which the Issuer believes (in the
good faith judgment of management of the Issuer) is reasonable and prudent in
light of the size and nature of its business) and against at least such risks
(and with such risk retentions) as the Issuer believes (in the good faith
judgment of management of the Issuer) is reasonable and prudent in light of the
size and nature of its business; and will furnish to the Collateral Agent, upon
written request from the Collateral Agent, information presented in reasonable
detail as to the insurance so carried and (ii) with respect to each Mortgaged
Property, Borrower will obtain flood insurance in such total amount as the
Collateral Agent may from time to time reasonably require, if at any time the
area in which any improvements located on any Mortgaged Property is designated a
“flood hazard area” in any Flood Insurance Rate Map published by the Federal
Emergency Management Agency (or any successor agency), and otherwise comply with
the National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973, as amended from time to time.

 

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5. Remedial Provisions.

5.1 Certain Matters Relating to Accounts.

(a) At any time after the occurrence and during the continuance of an Event of
Default, subject to the terms of the Intercreditor Agreement, and after giving
reasonable notice to the Issuer and any other relevant Grantor, the Applicable
First Lien Representative shall have the right, but not the obligation, to
instruct the Collateral Agent to (and upon such instruction, the Collateral
Agent shall) make test verifications of the Accounts in any manner and through
any medium that the Applicable First Lien Representative reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
such Applicable First Lien Representative may require in connection with such
test verifications. The Collateral Agent shall have the absolute right to share
any information it gains from such inspection or verification with any Secured
Party.

(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor’s Accounts and the Collateral Agent may curtail or terminate said
authority at any time after the occurrence and during the continuance of an
Event of Default, subject to the terms of the Intercreditor Agreement. If
required in writing by the Collateral Agent at any time after the occurrence and
during the continuance of an Event of Default, any payments of Accounts, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Collateral Agent if required, in a Collateral
Account maintained under the sole dominion and control of and on terms and
conditions reasonably satisfactory to the Collateral Agent, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties only
as provided in Section 5.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Accounts
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.

(c) At the Collateral Agent’s request at any time after the occurrence and
during the continuance of an Event of Default, subject to the terms of the
Intercreditor Agreement, each Grantor shall deliver to the Collateral Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Accounts, including all original orders,
invoices and shipping receipts.

(d) Upon the occurrence and during the continuance of an Event of Default, a
Grantor shall not grant any extension of the time of payment of any of the
Accounts, compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any Person liable for the payment thereof,
or allow any credit or discount whatsoever thereon if the Collateral Agent shall
have instructed the Grantors not to grant or make any such extension, credit,
discount, compromise or settlement under any circumstances during the
continuance of such Event of Default.

(e) At the direction of the Collateral Agent, upon the occurrence and during the
continuance of an Event of Default, subject to the terms of the Intercreditor
Agreement, each Grantor shall grant to the Collateral Agent to the extent
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fully paid-up, royalty-free, worldwide license to use, assign, license or
sublicense any of the Intellectual Property now owned or hereafter acquired by
such Grantor. Such license shall include access to all media in which any of the
licensed items may be recorded or stored and to all computer programs used for
the compilation or printout thereof.

5.2 Communications with Credit Parties; Grantors Remain Liable.

(a) The Collateral Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default,
subject to the terms of the Intercreditor Agreement, after giving reasonable
notice to the relevant Grantor of its intent to do so, communicate with obligors
under the Accounts to verify with them to the Collateral Agent’s satisfaction
the existence, amount and terms of any Accounts. The Collateral Agent shall have
the absolute right to share any information it gains from such inspection or
verification with any Secured Party.

(b) Upon the written request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, subject to the
terms of the Intercreditor Agreement, each Grantor shall notify obligors on the
Accounts that the Accounts have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that payments in respect thereof shall be
made directly to the Collateral Agent.

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

5.3 Proceeds to be Turned Over To Collateral Agent. In addition to the rights of
the Collateral Agent and the Secured Parties specified in Section 5.1 with
respect to payments of Accounts, if an Event of Default shall occur and be
continuing, subject to the terms of the Intercreditor Agreement, and the
Collateral Agent so requires by notice in writing to the relevant Grantor (it
being understood that the exercise of remedies by the Secured Parties in
connection with an Event of Default under Article 6 of the Indenture or the
equivalent provisions of any Additional First Lien Agreement shall be deemed to
constitute a request by the Collateral Agent for the purposes of this sentence
and in such circumstances, no such written notice shall be required), all
Proceeds received by any Grantor consisting of cash, checks and other near cash
items shall be held by such Grantor in trust for the Collateral Agent and the
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Collateral Agent
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such Grantor to the Collateral Agent, if required). All Proceeds received by the
Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral
Account maintained under its dominion and control and on terms and conditions
reasonably satisfactory to the Collateral Agent. All Proceeds while held by the
Collateral Agent in a Collateral Account (or by such Grantor in trust for the
Collateral Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 5.4.

5.4 Application of Proceeds. The Collateral Agent shall apply the proceeds of
any collection or sale of the Collateral as well as any Collateral consisting of
cash, at any time after receipt in accordance with the terms of the
Intercreditor Agreement. Upon any sale of the Collateral by the Collateral Agent
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Collateral Agent or of the officer making the
sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral or Mortgaged Property so sold and such purchaser or purchasers shall
not be obligated to see to the application of any part of the purchase money
paid over to the Collateral Agent or such officer or be answerable in any way
for the misapplication thereof.

5.5 Code and Other Remedies. Subject to the terms of the Intercreditor
Agreement, if an Event of Default shall occur and be continuing, the Collateral
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the UCC or any other
applicable law and also may with notice to the relevant Grantor, sell the
Collateral or any part thereof in one or more parcels at public or private sale
or sales, at any exchange, broker’s board or office of the Collateral Agent or
any Secured Party or elsewhere for cash or on credit or for future delivery at
such price or prices and upon such other terms as are commercially reasonable
irrespective of the impact of any such sales on the market price of the
Collateral. The Collateral Agent shall be authorized at any such sale (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
of Collateral 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
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal that it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Collateral Agent and any Secured Party shall
have the right upon any such public sale, and, to the extent permitted by law,
upon any such private sale, to purchase the whole or any part of the Collateral
so sold, and the Collateral Agent or such Secured Party may pay the purchase
price by crediting the amount thereof against the Obligations. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
days’ notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
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so adjourned. To the extent permitted by law, each Grantor hereby waives any
claim against the Collateral Agent arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less than
the price that might have been obtained at a public sale, even if the Collateral
Agent accepts the first offer received and does not offer such Collateral to
more than one offeree. Each Grantor further agrees, at the Collateral Agent’s
request to assemble the Collateral and make it available to the Collateral
Agent, at places which the Collateral Agent shall reasonably select, whether at
such Grantor’s premises or elsewhere. The Collateral Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 5.5 in accordance
with the provisions of Section 5.4.

5.6 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent or any Secured Party to collect such deficiency.

5.7 Amendments, etc. with Respect to the Obligations; Waiver of Rights. Each
Grantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Grantor and without notice to or further
assent by any Grantor, (a) any demand for payment of any of the Obligations made
by the Collateral Agent or any other Secured Party may be rescinded by such
party and any of the Obligations continued, (b) the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Collateral
Agent or any other Secured Party, (c) the Indenture, the other Notes Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Trustee (or the applicable percentage of Holders pursuant to Section 9.02 of the
Indenture, as the case may be) (or in the case of any Additional First Lien
Agreement in accordance with the terms of such Additional First Lien Agreement)
may deem advisable from time to time, and (d) any collateral security, guarantee
or right of offset at any time held by the Collateral Agent or any other Secured
Party for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Collateral Agent nor any other Secured
Party shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Obligations or for this Security
Agreement or any property subject thereto. When making any demand hereunder
against any Grantor, the Collateral Agent or any other Secured Party may, but
shall be under no obligation to, make a similar demand on any Grantor or any
other Person, and any failure by the Collateral Agent or any other Secured Party
to make any such demand or to collect any payments from the Issuer or any
Grantor or any other Person or any release of the Issuer or any Grantor or any
other Person shall not relieve any Grantor in respect of which a demand or
collection is not made or any Grantor not so released of its several obligations
or liabilities hereunder, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Collateral Agent or
any other Secured Party against any Grantor. For the purposes hereof “demand”
shall include the commencement and continuance of any legal proceedings.

 

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5.8 Actions of Collateral Agent. The Applicable First Lien Representative shall
direct the Collateral Agent in exercising any right, power, discretionary duty
or other remedy available to the Collateral Agent under this Security Agreement
or any Security Document and the other Secured Parties shall not have a right to
take any actions with respect to the Collateral. If the Collateral Agent shall
not have received appropriate instruction within 10 days of a request therefor
from the Applicable First Lien Representative (or such shorter period as
reasonably may be specified in such notice or as may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action as it shall deem to be in the best interests of the Secured
Parties and the Collateral Agent shall have no liability to any Person for such
action or inaction.

6. The Collateral Agent.

6.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby appoints, which appointment is irrevocable and coupled
with an interest, effective upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or otherwise, for the purpose of carrying out the terms
of this Security Agreement or any of the Security Documents, to take any and all
appropriate action and to execute any and all documents and instruments that may
be necessary or desirable to accomplish the purposes of this Security Agreement
or any of the Security Documents, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Collateral Agent the power and right,
on behalf of such Grantor, either in the Collateral Agent’s name or in the name
of such Grantor or otherwise, without assent by such Grantor, to do any or all
of the following, in each case after the occurrence and during the continuance
of an Event of Default and after written notice by the Collateral Agent of its
intent to do so:

(i) take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any Account
or with respect to any other Collateral or Mortgaged Property and file any claim
or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any and all such moneys due under any Account or with respect to any
other Collateral or Mortgaged Property whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may request to evidence the Collateral Agent’s and the Secured
Parties’ Security Interest in such Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral or Mortgaged Property;

(iv) execute, in connection with any sale provided for in Section 5.5, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral or Mortgaged Property;

 

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(v) obtain and adjust insurance required to be maintained by such Grantor
pursuant to Section 4.5;

(vi) direct any party liable for any payment under any of the Collateral or
Mortgaged Property to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct;

(vii) ask or demand for, collect and receive payment of and receipt for, any and
all moneys, claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral or Mortgaged Property;

(viii) sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral or Mortgaged Property;

(ix) commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or
Mortgaged Property or any portion thereof and to enforce any other right in
respect of any Collateral or Mortgaged Property;

(x) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral or Mortgaged Property (with such Grantor’s consent to
the extent such action or its resolution could materially affect such Grantor or
any of its affiliates in any manner other than with respect to its continuing
rights in such Collateral or Mortgaged Property);

(xi) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Collateral Agent
may deem appropriate (with such Grantor’s consent to the extent such action or
its resolution could materially affect such Grantor or any of its affiliates in
any manner other than with respect to its continuing rights in such Collateral
or Mortgaged Property);

(xii) assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains), throughout
the world for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and

(xiii) generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral or Mortgaged Property as fully and
completely as though the Collateral Agent were the absolute owner thereof for
all purposes, and do, at the Collateral Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things that the
Collateral Agent deems necessary to protect, preserve or realize upon the
Collateral or Mortgaged Property and the Collateral Agent’s and the Secured
Parties’ Security Interests therein and to effect the intent of this Security
Agreement, all as fully and effectively as such Grantor might do.

 

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Anything in this Section 6.1(a) to the contrary notwithstanding and subject to
the terms of the Intercreditor Agreement, the Collateral Agent agrees that it
will not exercise any rights under the power of attorney provided for in this
Section 6.1(a) unless an Event of Default shall have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Collateral Agent incurred in connection with actions
undertaken as provided in this Section 6.1, together with interest thereon at a
rate per annum equal to the highest rate per annum at which interest would then
be payable on the applicable Notes, from the date of payment by the Collateral
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Collateral Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Security Agreement or any of the Security Documents are
coupled with an interest and are irrevocable until this Security Agreement is
terminated and the Security Interests created hereby or thereby are released.

6.2 Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
its own account. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property. Neither the Collateral
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Collateral Agent and the Secured Parties hereunder are solely to protect the
Collateral Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Collateral Agent or any Secured Party to
exercise any such powers. The Collateral Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

6.3 Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Security Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Collateral Agent and the
Secured Parties, be governed by the Intercreditor Agreement, and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent

 

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and the Grantors, the Collateral Agent shall be conclusively presumed to be
acting as agent for the applicable Secured Parties with full and valid authority
so to act or refrain from acting, and no Grantor shall be under any obligation,
or entitlement, to make any inquiry respecting such authority.

6.4 Security Interest Absolute. All rights of the Collateral Agent hereunder,
the Security Interest and all obligations of the Grantors hereunder shall be
absolute and unconditional.

6.5 Continuing Security Interest; Assignments Under the Indenture; Release.

(a) This Security Agreement and the other Security Documents shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms upon each Grantor and the successors and assigns thereof and shall inure
to the benefit of the Collateral Agent and the other Secured Parties and their
respective successors, indorsees, transferees and assigns until all Obligations
(other than any contingent indemnity obligations not then due) shall have been
satisfied by payment in full.

(b) Subject to the terms of the Intercreditor Agreement, a Subsidiary Grantor
shall automatically be released from its obligations hereunder (x) as it relates
to the Obligations securing the Notes if it ceases to be a Guarantor in
accordance with Section 10.04 of the Indenture and (y) as it relates to the
Obligations securing any Additional First Lien Obligations, if it ceases to be a
guarantor under such Additional First Lien Agreement pursuant to the applicable
provision(s) of such Additional First Lien Agreement.

(c) Subject to any applicable terms of the Intercreditor Agreement, (i) the
Liens securing the Obligations with respect to the Notes will be released, in
whole or in part, as provided in Section 10.04 of the Indenture and (ii) the
Liens securing Additional First Lien Obligations of any series will be released,
in whole or in part, as provided in Additional First Lien Agreement governing
such obligations. Any such release in connection with any sale, transfer or
other disposition of such Collateral or Mortgaged Property shall result in such
Collateral or Mortgaged Property being sold, transferred or disposed of, as
applicable, free and clear of the applicable Lien and Security Interest created
hereby.

(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 6.5 shall be without recourse to or warranty by the
Collateral Agent.

6.6 Reinstatement. Each Grantor further agrees that, if any payment made by any
Grantor or any other Person and applied to the Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the proceeds
of Collateral are required to be returned by any Secured Party to such Grantor,
its estate, trustee, receiver or any other party, including any Grantor, under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and

 

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remain in full force and effect, as fully as if such payment had never been made
or, if prior thereto the Lien granted hereby or other Collateral securing such
liability hereunder shall have been released or terminated by virtue of such
cancellation or surrender), such Lien or other Collateral shall be reinstated in
full force and effect, and such prior cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect any Lien or other
Collateral securing the obligations of any Grantor in respect of the amount of
such payment.

7. Collateral Agent As Agent.

(a) Wells Fargo Bank, National Association has been appointed to act as the
Collateral Agent under the Indenture. Pursuant to Section 10.02 of the
Indenture, the Collateral Agent is authorized to appoint one or more
Co-Collateral Agents, for the purposes of this Section 7(a) only references to
the Collateral Agent shall mean the Collateral Agent and any Co-Collateral
Agents appointed in accordance with the Indenture. The Collateral Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action (including the release or substitution of Collateral or
Mortgaged Property), solely in accordance with this Security Agreement, the
Indenture and the Intercreditor Agreement. In furtherance of the foregoing
provisions of this Section 7(a), each Secured Party, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it being understood and agreed by such Secured
Party that all rights and remedies hereunder may be exercised solely by the
Collateral Agent for the ratable benefit of the Secured Parties in accordance
with the terms of this Section 7(a).

(b) So long as the Trustee under the Indenture is the Collateral Agent, written
notice of resignation by the Trustee pursuant to Section 7.08 of the Indenture
shall also constitute notice of resignation as Collateral Agent under this
Security Agreement; removal of the Trustee shall also constitute removal under
this Security Agreement; and appointment of a Trustee pursuant to Section 7.08
of the Indenture shall also constitute appointment of a successor Collateral
Agent under this Security Agreement. Upon the acceptance of any appointment as
Trustee under Section 7.08 of the Indenture and, as applicable, under the
relevant provisions of each Additional First Lien Agreement by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
or removed Collateral Agent under this Security Agreement, and the retiring or
removed Collateral Agent under this Security Agreement shall promptly
(i) transfer to such successor Collateral Agent all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Collateral Agent under this Security Agreement, and
(ii) execute and deliver to such successor Collateral Agent or otherwise
authorize the filing of such amendments to financing statements and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Collateral Agent of the Security Interests created
hereunder, whereupon such retiring or removed Collateral Agent shall be
discharged from its duties and obligations under this Security Agreement. After
any retiring or removed Collateral Agent’s resignation or removal hereunder as
Collateral Agent, the provisions of this Security Agreement shall inure to its
benefit as to any actions taken or omitted to be taken by it under this Security
Agreement while it was Collateral Agent hereunder.

 

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8. Miscellaneous.

8.1 Intercreditor Agreement. Notwithstanding anything herein to the contrary,
the Liens and security interests granted to the Collateral Agent pursuant to
this Security Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder are subject to the terms of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and the terms of this Security Agreement, the terms of the
Intercreditor Agreement shall govern and control. Notwithstanding anything
herein to the contrary, prior to the Discharge of the Credit Agreement
Obligations, all requirements of any Grantor pursuant to this Security Agreement
to endorse, assign, transfer or otherwise deliver or grant control over any
Collateral to the Collateral Agent shall be deemed satisfied by endorsement,
assignment, delivery or control of such Collateral to the Credit Agreement
Collateral Agent pursuant to the Credit Agreement Documents. Any endorsement,
assignment, transfer or delivery to or Control by the Credit Agreement
Collateral Agent shall be deemed an endorsement, assignment, transfer or
delivery to or Control by the Collateral Agent for all purposes hereunder.

THIS SECURITY AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT DATED AS OF AUGUST 20, 2010 (AS AMENDED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME), AMONG THE ISSUER, THE COLLATERAL AGENT AND THE
CREDIT AGREEMENT COLLATERAL AGENT, AND ACKNOWLEDGED BY THE GRANTORS.

8.2 Amendments in Writing. None of the terms or provisions of this Security
Agreement or any of the Notes Documents may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the affected
Grantor and the Collateral Agent in accordance with the terms of the Indenture
and in accordance with each applicable Additional First Lien Agreement and the
Intercreditor Agreement.

8.3 Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.02 of the Indenture. All communications and notices
hereunder to any Subsidiary Grantor shall be given to it in care of the Issuer
at the Issuer’s address set forth in Section 13.02 of the Indenture and all
notices to any Authorized Representative of any Additional First Lien
Obligations, at its address set forth in the Additional First Lien Secured Party
Consent, as such address may be changed by written notice to the Collateral
Agent and the Issuer.

8.4 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral
Agent nor any Secured Party shall by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default or in any breach of any of the terms and conditions hereof.
No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or

 

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remedy that the Collateral Agent or such other Secured Party would otherwise
have on any future occasion. The rights, remedies, powers and privileges herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

8.5 Enforcement Expenses; Indemnification.

(a) Each Grantor agrees to pay any and all reasonable out of pocket expenses
(including all reasonable fees and disbursements of counsel) that may be paid or
incurred by the Collateral Agent in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to the administration of this Agreement, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Grantor under this Security Agreement or
any of the Security Documents.

(b) Each Grantor agrees to pay, and to save the Collateral Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes that
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Security
Agreement or any of the Security Documents.

(c) Each Grantor agrees to pay, and to save the Collateral Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Security Agreement or any of the Security
Documents to the extent the Issuer would be required to do so pursuant to
Section 7.07 of the Indenture; provided that the Grantors shall not be required
to reimburse any expense or indemnify against any loss, liability or expense
incurred by the Collateral Agent through the Collateral Agent’s own willful
misconduct, gross negligence or bad faith.

(d) All expenses of protecting, storing, warehousing, insuring, handling
maintaining and shipping any Collateral, all taxes payable with respect to any
Collateral (including any sale thereof), and all other payments required to be
made by the Collateral Agent to any Person to realize upon any Collateral, shall
be borne and paid by Grantors. The Collateral Agent shall not be liable or
responsible in any way for the safekeeping of any Collateral, for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
the Collateral Agents actual possession), for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency or other Person whatsoever, but the same shall be at Grantors’ sole risk.

(e) The agreements in this Section 8.5 shall survive repayment of the
Obligations and all other amounts payable under the Indenture and the other
Notes Documents and any Additional First Lien Agreement.

8.6 Successors and Assigns. The provisions of this Security Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Security
Agreement without the prior written consent of the Collateral Agent except
pursuant to a transaction permitted by both the Indenture and each Additional
First Lien Agreement.

 

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8.7 Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security Agreement on any number of separate counterparts
(including by facsimile or other electronic transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Security Agreement signed by all the
parties shall be lodged with the Collateral Agent and the Issuer.

8.8 Severability. Any provision of this Security Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. The parties hereto shall endeavor in good faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

8.9 Section Headings. The Section headings used in this Security Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

8.10 Integration. This Security Agreement together with the other Notes
Documents, the Intercreditor Agreement and each Additional First Lien Agreement
represents the agreement of each of the Grantors with respect to the subject
matter hereof and there are no promises, undertakings, representations or
warranties by the Collateral Agent or any other Secured Party relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Notes Documents, the Intercreditor Agreement and each Additional First
Lien Agreement.

8.11 GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12 Submission To Jurisdiction Waivers. Each party hereto hereby irrevocably
and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Security Agreement, the other Notes Documents to which it is a
party and any Additional First Lien Agreement to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

 

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(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address referred to in Section 8.2 or at such other address of which such Person
shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right of any other party hereto
(or any Secured Party) to effect service of process in any other manner
permitted by law or shall limit the right of any party hereto (or any Secured
Party) to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 8.11 any special, exemplary, punitive or consequential damages.

8.13 Acknowledgments. Each party hereto hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Security Agreement and the other Notes Documents to which it is a party;

(b) neither the Collateral Agent nor any other Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Security Agreement or any of the other Note Documents, and the relationship
between the Grantors, on the one hand, and the Collateral Agent and the other
Secured Parties, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Notes Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Grantors and any other Secured Party.

8.14 Additional Grantors. Each Subsidiary of the Issuer that is required to
become a party to this Security Agreement pursuant to the Indenture and/or the
equivalent provision of any Additional First Lien Agreement shall become a
Grantor, with the same force and effect as if originally named as a Grantor
herein, for all purposes of this Security Agreement upon execution and delivery
by such Subsidiary of a written supplement substantially in the form of Annex B
hereto. The execution and delivery of any instrument adding an additional
Grantor as a party to this Security Agreement 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 Security Agreement.

8.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SECURITY AGREEMENT, ANY OTHER NOTES DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

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8.16 Additional First Lien Obligations. On or after the date hereof and so long
as expressly permitted by the Senior Credit Facility, the Indenture and any
Additional First Lien Agreement then outstanding, the Issuer may from time to
time designate Indebtedness at the time of incurrence to be secured on a pari
passu basis with the Obligations as Additional First Lien Obligations hereunder
by delivering to the Collateral Agent, the Credit Agreement Collateral Agent and
each other Authorized Representative (a) a certificate signed by an Officer of
the Company (i) identifying the obligations so designated and the initial
aggregate principal amount or face amount thereof, (ii) stating that such
obligations are designated as Additional First Lien Obligations for purposes
hereof, (iii) representing that such designation of such obligations as
Additional First Lien Obligations complies with the terms of the Senior Credit
Facility, the Indenture and any Additional First Lien Agreement then outstanding
and (iv) specifying the name and address of the Authorized Representative for
such obligations, (b) a fully executed Additional First Lien Secured Party
Consent (in the form attached as Annex C) and (c) a fully executed joinder to
the Intercreditor Agreement. Each Authorized Representative agrees that upon the
satisfaction of all conditions set forth in the preceding sentence, the
Collateral Agent shall act as agent under and subject to the terms of the
Security Documents for the benefit of all Secured Parties, including, without
limitation, any Secured Parties that hold any such Additional First Lien
Obligations, and each Authorized Representative agrees to the appointment, and
acceptance of the appointment, of the Collateral Agent as agent for the holders
of such Additional First Lien Obligations as set forth in each Additional First
Lien Secured Party Consent and agrees, on behalf of itself and each Secured
Party it represents, to be bound by this Security Agreement and the
Intercreditor Agreement.

8.17 Force Majeure. In no event shall the Collateral Agent be responsible or
liable for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software and hardware) services; it being understood
that the Collateral Agent shall use reasonable efforts that are consistent with
accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.

 

      FIRST DATA CORPORATION, as Grantor By:  

/s/ Michael A. Jacobs

  Name: Michael A. Jacobs   Title: Senior Vice President and Treasurer The
following entities, each as Grantor: BANKCARD INVESTIGATIVE GROUP INC. BUYPASS
INCO CORPORATION CALL INTERACTIVE HOLDINGS LLC CARDSERVICE INTERNATIONAL, LLC
CESI HOLDINGS, INC. CONCORD COMPUTING CORPORATION CONCORD CORPORATE SERVICES,
INC. CONCORD EFS FINANCIAL SERVICES, INC. CONCORD EFS, INC. CONCORD EMERGING
TECHNOLOGIES, INC. CONCORD EQUIPMENT SALES, INC. CONCORD FINANCIAL TECHNOLOGIES,
INC. CONCORD ONE, LLC CONCORD PAYMENT SERVICES, INC. CONCORD PROCESSING, INC.
CONCORD TRANSACTION SERVICES, LLC CTS HOLDINGS, LLC CTS, INC. DW HOLDINGS, INC.
EFS TRANSPORTATION SERVICES, INC. EPSF CORPORATION FDC INTERNATIONAL INC. FDFS
HOLDINGS, LLC FDGS GROUP LLC FDR IRELAND LIMITED FDR MISSOURI INC. FDR SIGNET
INC. FDS HOLDINGS INC. FIRST DATA AVIATION LLC FIRST DATA COMMERCIAL SERVICES
HOLDINGS, INC. FIRST DATA COMMUNICATIONS CORPORATION FIRST DATA EC, LLC FIRST
DATA GOVERNMENT SOLUTIONS, INC.

[Security Agreement]

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

FIRST DATA GOVERNMENT SOLUTIONS, LP FIRST DATA LATIN AMERICA INC. FIRST DATA
MERCHANT SERVICES CORPORATION FIRST DATA MERCHANT SERVICES NORTHEAST, LLC FIRST
DATA MERCHANT SERVICES SOUTHEAST, L.L.C. FIRST DATA MOBILE HOLDINGS, INC. FIRST
DATA PAYMENT SERVICES, LLC FIRST DATA REAL ESTATE HOLDINGS L.L.C. FIRST DATA
RESOURCES, LLC FIRST DATA RETAIL ATM SERVICES L.P. FIRST DATA SECURE LLC FIRST
DATA SOLUTIONS INC. FIRST DATA TECHNOLOGIES, INC. FIRST DATA VOICE SERVICES FSM
SERVICES INC. FUNDSXPRESS, INC. FUNDSXPRESS FINANCIAL NETWORK, INC. FX
SECURITIES, INC. GIFT CARD SERVICES, INC. H & F SERVICES, INC. IDLOGIX, INC.
INSTANT CASH SERVICES, LLC LINKPOINT INTERNATIONAL, INC. LOYALTYCO LLC MAS INCO
CORPORATION MAS OHIO CORPORATION MONEY NETWORK FINANCIAL, LLC NATIONAL PAYMENT
SYSTEMS INC. NEW PAYMENT SERVICES, INC. NPSF CORPORATION PAYPOINT ELECTRONIC
PAYMENT SYSTEMS, LLC PAYSYS INTERNATIONAL, INC. REMITCO LLC SAGEBRUSH HOLDINGS
LLC SIZE TECHNOLOGIES, INC. STAR NETWORKS, INC. STAR PROCESSING, INC. STAR
SYSTEMS ASSETS, INC. STAR SYSTEMS, INC. STAR SYSTEMS, LLC STRATEGIC INVESTMENT
ALTERNATIVES LLC TASQ LLC TASQ TECHNOLOGY, INC. TELECHECK INTERNATIONAL, INC.
TELECHECK PITTSBURGH/WEST VIRGINIA, INC.

[Security Agreement]

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TRANSACTION SOLUTIONS, LLC UNIFIED MERCHANT SERVICES VALUELINK, LLC By:  

/s/ Stanley J. Andersen

  Name: Stanley J. Andersen   Title: Vice President and Assistant Secretary The
following entities, each as Grantor: FIRST DATA CAPITAL, INC. FIRST DATA CARD
SOLUTIONS, INC. GRATITUDE HOLDINGS LLC By:  

/s/ Stanley J. Andersen

  Name: Stanley J. Andersen   Title: President FDR LIMITED, as Grantor By:  

/s/ Rosalind Rayman

  Name: Rosalind Rayman   Title: Secretary TELECHECK SERVICES, INC., as Grantor
By:  

/s/ Mark Wallin

  Name: Mark Wallin   Title: President WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Collateral Agent By:  

/s/ Raymond Delli Colli

  Name: Raymond Delli Colli   Title: Vice President

[Security Agreement]

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ANNEX A TO THE

SECURITY AGREEMENT

SUBSIDIARY GRANTORS

Bankcard Investigative Group Inc.

BUYPASS Inco Corporation

Call Interactive Holdings LLC

Cardservice International, LLC

CESI HOLDINGS, INC.

Concord Computing Corporation

Concord Corporate Services, Inc.

Concord EFS Financial Services, Inc.

Concord EFS, Inc.

Concord Emerging Technologies, Inc.

CONCORD EQUIPMENT SALES, INC.

Concord Financial Technologies, Inc.

CONCORD ONE, LLC

Concord Payment Services, Inc.

Concord Processing, Inc.

Concord Transaction Services, LLC

CTS Holdings, LLC CTS, Inc.

DW Holdings, Inc.

EFS Transportation Services, Inc.

EPSF Corporation

FDC International Inc.

FDFS Holdings, LLC

FDGS Group, LLC

FDR Ireland Limited

FDR Limited

FDR Missouri Inc.

FDR Signet Inc.

FDS Holdings, Inc.

First Data Aviation LLC

First Data Capital, Inc.

First Data Card Solutions, Inc.

First Data Commercial Services Holdings, Inc.

First Data Communications Corporation

First Data EC, LLC

First Data Government Solutions, Inc.

First Data Government Solutions, LP

 

A-1

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First Data Latin America Inc.

First Data Merchant Services Corporation

First Data Merchant Services Northeast, LLC

First Data Merchant Services Southeast, L.L.C.

First Data Mobile Holdings, Inc.

First Data Payment Services, LLC

First Data Real Estate Holdings L.L.C.

First Data Resources, LLC

First Data Retail ATM Services L.P.

First Data Secure LLC

First Data Solutions Inc.

First Data Technologies, Inc.

First Data Voice Services

FSM Services Inc.

FundsXpress, Inc.

FundsXpress Financial Network, Inc.

FX Securities, Inc.

Gift Card Services, Inc.

Gratitude Holdings LLC

H & F Services, Inc.

IDLogix, Inc.

Instant Cash Services, LLC

Linkpoint International, Inc.

LoyaltyCo LLC

MAS Inco Corporation

MAS Ohio Corporation

Money Network Financial, LLC

National Payment Systems Inc.

New Payment Services, Inc.

NPSF Corporation

PayPoint Electronic Payment Systems, LLC

PaySys International, Inc.

REMITCO LLC

Sagebrush Holdings LLC

Size Technologies, Inc.

Star Networks, Inc.

Star Processing, Inc.

STAR SYSTEMS ASSETS, INC.

Star Systems, Inc.

STAR SYSTEMS, LLC

Strategic Investment Alternatives LLC

TASQ LLC

TASQ Technology, Inc.

 

A-2

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TeleCheck International, Inc.

TELECHECK PITTSBURGH/WEST VIRGINIA, INC.

TeleCheck Services, Inc.

Transaction Solutions, LLC

Unified Merchant Services

ValueLink, LLC

 

A-3

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ANNEX B TO THE

SECURITY AGREEMENT

SUPPLEMENT NO. [    ] dated as of [                    ], to the Security
Agreement dated as of August 20, 2010 (the “Security Agreement”) among First
Data Corporation, a Delaware corporation (the “Issuer”), each Subsidiary of the
Issuer listed on Annex A thereto (each such Subsidiary individually a
“Subsidiary Grantor” and, collectively, the “Subsidiary Grantors”; the
Subsidiary Grantors and the Issuer are referred to collectively herein as the
“Grantors”), Wells Fargo Bank, National Association, as collateral agent (in
such capacity, the “Collateral Agent”) under the indenture referred to below.

A. Reference is made to the indenture dated as of August 20, 2010 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Indenture”) among the Issuer, the Grantors, the Collateral Agent and Wells
Fargo Bank, National Association, in its capacity as trustee.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Security Agreement.

C. The Grantors have entered into the Security Agreement in order to induce the
Holders to purchase the Notes.

D. Section 8.14 of the Security Agreement provides that each Subsidiary of the
Issuer that is required to become a party to the Security Agreement pursuant to
the Indenture shall become a Grantor, with the same force and effect as if
originally named as a Grantor therein, for all purposes of the Security
Agreement upon execution and delivery by such Subsidiary of an instrument in the
form of this Supplement. Each undersigned Subsidiary (each a “New Grantor”) is
executing this Supplement in accordance with the requirements of the Security
Agreement to become a Subsidiary Grantor under the Security Agreement as
consideration for the purchase of the Notes by the Holders.

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

SECTION 1. In accordance with Section 8.14 of the Security Agreement, each New
Grantor by its signature below becomes a Grantor under the Security Agreement
with the same force and effect as if originally named therein as a Grantor and
each New Grantor hereby (a) agrees to all the terms and provisions of the
Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof. In furtherance of
the foregoing, each New Grantor, as security for the payment and performance in
full of the Obligations, does hereby bargain, sell, convey, assign, set over,
mortgage, pledge, hypothecate and transfer to the Collateral Agent for the
benefit of the Secured Parties, and hereby grants to the Collateral Agent for
the benefit of the Secured Parties, a Security Interest in all of the Collateral
of such New Grantor, in each case whether now or hereafter existing or in which
it now has or hereafter acquires an interest. Each reference to a “Grantor” in
the Security Agreement shall be deemed to include each New Grantor. The Security
Agreement is hereby incorporated herein by reference.

 

B-1

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SECTION 2. Each New Grantor represents and warrants to the Collateral Agent and
the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to the
effects of bankruptcy, insolvency or similar laws affecting creditors’ rights
generally and general equitable principles.

SECTION 3. This Supplement may be executed by one or more of the parties to this
Supplement on any number of separate counterparts (including by facsimile or
other electronic transmission), and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. A set of the copies
of this Supplement signed by all the parties shall be lodged with the Collateral
Agent and the Issuer. This Supplement shall become effective as to each New
Grantor when the Collateral Agent shall have received counterparts of this
Supplement that, when taken together, bear the signatures of such New Grantor
and the Collateral Agent.

SECTION 4. Such New Grantor hereby represents and warrants that (a) set forth on
Schedule I hereto is (i) the legal name of such New Grantor, (ii) the
jurisdiction of incorporation or organization of such New Grantor, (iii) the
identity or type of organization or corporate structure of such New Grantor
(iv) the Federal Taxpayer Identification Number and organizational number of
such New Grantor and (v) the true and correct location of the chief executive
office and principal place of business and any office in which it maintains
books of records relating to Collateral owned by it and (b) as of the date
hereof (i) Schedule II hereto lists all of each New Grantor’s Copyright
Licenses, (ii) Schedule III hereto lists in all material respects all of each
New Grantor’s registered Copyrights (and all applications therefor),
(iii) Schedule IV hereto lists all of each New Grantor’s Patent Licenses,
(iv) Schedule V hereto lists in all material respects all of each New Grantor’s
Patents (and all applications therefor), (v) Schedule VI hereto lists all of
each New Grantor’s Trademark Licenses and (vi) Schedule VII hereto lists in all
material respects all of each New Grantor’s registered Trademarks (and all
applications therefor).

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

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

SECTION 7. Any provision of this Supplement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof and in the Security Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties hereto shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

B-2

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SECTION 8. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.02 of the Indenture. All communications and notices
hereunder to each New Grantor shall be given to it in care of the Issuer at the
Issuer’s address set forth in Section 13.02 of the Indenture.

 

B-3

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

 

[NAME OF NEW GRANTOR] By:  

 

  Name:   Title: [                    ], as Collateral Agent By:  

 

  Name:   Title:

 

B-4

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SCHEDULE I

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

COLLATERAL

 

Legal Name

  

Jurisdiction of

Incorporation or

Organization

  

Type of

Organization or

Corporate

Structure

  

Federal Taxpayer

Identification

Number and

Organizational

Identification

Number

                                            

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

SCHEDULE II

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

COPYRIGHT LICENSES

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

SCHEDULE III

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

COPYRIGHTS

 

Registered

Owner/Grantor

  

Title

  

Registration

Number

                       

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

SCHEDULE IV

TO SUPPLEMENT NO.     TO THE

SECURITY AGREEMENT

PATENT LICENSES

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

SCHEDULE V

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

PATENTS

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

SCHEDULE VI

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

TRADEMARK LICENSES

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

SCHEDULE VII

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

TRADEMARKS

Domestic Trademarks

 

Registered

Owner/Grantor

  

Trademark

  

Registration No.

  

Application No.

                                            

Foreign Trademarks

 

Registered

Owner/Grantor

  

Trademark

  

Registration

No.

  

Application

No.

  

Country

                                                           

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

ANNEX C TO THE

SECURITY AGREEMENT

[Form of]

ADDITIONAL FIRST LIEN SECURED PARTY CONSENT

[Name of Additional First Lien Secured Party]

[Address of Additional First Lien Secured Party]

[Date]

 

 

 

 

 

 

 

 

 

The undersigned is the Authorized Representative for Persons wishing to become
Secured Parties (the “New Secured Parties”) under (i) the Security Agreement
dated as of August 20, 2010 (as heretofore amended and/or supplemented, the
“Security Agreement” (terms used without definition herein have the meanings
assigned to such term by the Security Agreement)) and (ii) the Pledge Agreement
dated as of August 20, 2010 (as heretofore amended and/or supplemented, the
“Pledge Agreement”) among First Data Corporation, the Subsidiary Grantors party
thereto and Wells Fargo Bank, National Association, as Collateral Agent (the
“Collateral Agent”).

In consideration of the foregoing, the undersigned hereby:

(i) represents that the Authorized Representative has been duly authorized by
the New Secured Parties to become a party to the Security Agreement and the
Pledge Agreement on behalf of the New Secured Parties under that [DESCRIBE
OPERATIVE AGREEMENT] (the “New Secured Obligation”) and to act as the Authorized
Representative for the New Secured Parties;

(ii) acknowledges that the New Secured Parties have received copies of the
Security Agreement, the Pledge Agreement and the Intercreditor Agreement;

(iii) appoints and authorizes the Collateral Agent to take such action as agent
on its behalf and on behalf of all other Secured Parties and to exercise such
powers under the Security Agreement, the Pledge Agreement and the Intercreditor
Agreement as are delegated to the Collateral Agent by the terms thereof,
together with all such powers as are reasonably incidental thereto;

 

C-1

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(iv) accepts and acknowledges the terms of the Intercreditor Agreement
applicable to it and the New Secured Parties and agrees to serve as Authorized
Representative for the New Secured Parties with respect to the New Secured
Obligations and agrees on its own behalf and on behalf of the New Secured
Parties to be bound by the terms thereof applicable to holders of Additional
First Lien Obligations, with all the rights and obligations of a Secured Party
thereunder and bound by all the provisions thereof (including, without
limitation, Section [2.02(b)] thereof) as fully as if it had been a Secured
Party on the effective date of the Intercreditor Agreement and agrees that its
address for receiving notices pursuant to the First Lien Security Documents (as
defined in the Intercreditor Agreement) shall be as follows:

[Address]

The Collateral Agent, by acknowledging and agreeing to this Additional First
Lien Secured Party Consent, accepts the appointment set forth in clause
(iii) above.

THIS ADDITIONAL FIRST LIEN SECURED PARTY CONSENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

C-2

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IN WITNESS WHEREOF, the undersigned has caused this Additional First Lien
Secured Party Consent to be duly executed by its authorized officer as of the
     day             , of 20    .

 

[NAME OF AUTHORIZED REPRESENTATIVE] By:  

 

  Name:   Title:

Acknowledged and Agreed

[                                         ],

as Collateral Agent

 

By:  

 

  Name:   Title:

First Data Corporation, a Delaware corporation

The Grantors listed on Schedule I to the

Security Agreement,

each as Grantor

 

By:  

 

  Name:   Title:

 

C-3