EXHIBIT G-1
FORM OF PLEDGE AND SECURITY AGREEMENT

SENIOR SECURED DEBTOR-IN-POSSESSION PLEDGE AND SECURITY AGREEMENT
BETWEEN
GEOKINETICS HOLDINGS USA, INC., as Company and as a Grantor
GEOKINETICS INC., as Parent and as a Grantor,
THE OTHER GRANTORS PARTY HERETO
AND
CANTOR FITZGERALD SECURITIES, as Collateral Agent

Dated as of March [__], 2013

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TABLE OF CONTENTS
 
 
Page
 
 
 
ARTICLE I DEFINITIONS AND INTERPRETATION
1

1.1

Terms Defined in Credit Agreement
1

1.2

Terms Defined in UCC
1

1.3

Definitions of Certain Terms Used Herein
1

1.4

Interpretation
8

1.5

Resolution of Drafting Ambiguities
9

1.6

ORDERS
9

 
 
 
ARTICLE II GRANT OF SECURITY INTEREST
9

 
 
 
ARTICLE III REPRESENTATIONS AND WARRANTIES
11

 
 
 
3.1

Title, Perfection and Priority
11

3.2

Type and Jurisdiction of Organization, Organizational and Identification Numbers
11

3.3

Principal Location
11

3.4

Collateral Locations
11

3.5

Deposit Accounts and Securities Accounts
11

3.6

Exact Names
11

3.7

Letter-of-Credit Rights and Chattel Paper
12

3.8

Accounts and Chattel Paper
12

3.9

Inventory and Equipment
12

3.10

Intellectual Property
13

3.11

Collateral Information
14

3.12

Commercial Tort Claims
14

3.13

No Financing Statements, Security Agreements
14

3.14

Pledged Collateral
14

3.15

Perfection Certificates
15

3.16

Payment of Taxes
15

3.17

Encumbered Property
15

 
 
 
ARTICLE IV COVENANTS
17

 
 
 
4.1

General
17

4.2

Receivables
18

4.3

Equipment
19

4.4

Encumbered Property
19

4.5

Intentionally Omitted
19

4.6

Pledged Collateral
19

4.7

Intellectual Property
21

4.8

Commercial Tort Claims
22

4.9

Letter-of-Credit Rights
22

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4.10

Federal, State or Municipal Claims
22

4.11

Intentionally Omitted
22

4.12

Insurance
22

4.13

Intentionally Omitted
22

4.14

Intentionally Omitted
22

4.15

Change of Name or Location; Change of Fiscal Year
22

4.16

Assigned Contracts
23

 
 
 
ARTICLE V REMEDIES
23

 
 
 
5.1

Remedies
23

5.2

Grantor's Obligations Upon an Event of Default
25

5.3

Grant of Intellectual Property License
26

5.4

Waiver of Notice and Claims
26

5.5

Certain Sales of Collateral
26

5.6

No Waiver; Cumulative Remedies
27

 
 
 
ARTICLE VI ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
27

 
 
 
6.1

Account Verification
27

6.2

Authorization for Secured Party to Take Certain Action
27

6.3

Proxy
28

6.4

Nature of Appointment; Limitation of Duty
28

 
 
 
ARTICLE VII APPLICATION OF PROCEEDS
29

 
 
 
ARTICLE VIII GENERAL PROVISIONS
29

 
 
 
8.1

Waivers
29

8.2

Limitation on Collateral Agent's and Secured Parties' Duty with Respect to the
Collateral
303

8.3

Compromises and Collection of Collateral
30

8.4

Secured Party Performance of Debtor Obligations
31

8.5

Specific Performance of Certain Covenants
31

8.6

Dispositions Not Authorized
31

8.7

No Waiver; Amendments; Cumulative Remedies
31

8.8

Limitation by Law; Severability of Provisions
31

8.9

Indemnification; Expenses
31

8.10

Reinstatement
32

8.11

Benefit of Agreement
32

8.12

Survival of Representations
32

8.13

Taxes and Grantor Expenses
32

8.14

Headings
33

8.15

Termination; Release
33

8.16

Continuing Security Interest Assignment
33

8.17

Entire Agreement
33

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8.18

Governing Law; Consent to Jurisdiction; Waiver of Jury Trial
33

8.19

No Credit for Payment of Taxes or Imposition
33

8.20

No Release
33

8.21

Obligations Absolute
34

8.22

Counterparts
34

 
 
 
ARTICLE IX NOTICES
34

SCHEDULES
 
 
Schedule A
Exact Names, Jurisdictions, Locations, Etc.
 
Schedule B
Deposit Accounts
 
Schedule C
Letter of Credit Rights and Chattel Paper
 
Schedule D
Intellectual Property
 
Schedule E
Property
 
Schedule F
Location of Fixtures
 
Schedule G
Pledged Collateral
 
Schedule H
Commercial Tort Claims
 
Schedule I
Options, Warrants, Calls or Commitments on Pledged Collateral
 
Schedule J
Contracts
 
Schedule K
Permitted Encumbrances
 
Schedule L
Leases

    

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SENIOR SECURED DEBTOR-IN-POSSESSION
PLEDGE AND SECURITY AGREEMENT
THIS SENIOR SECURED DEBTOR-IN-POSSESSION PLEDGE AND SECURITY AGREEMENT (as it
may be amended, restated, supplemented, modified and/or replaced from time to
time, the “Security Agreement”) is entered into as of March [__], 2013 by and
among Geokinetics Holdings USA, Inc., a Delaware corporation (the “Company” or
“Borrower”), Geokinetics Inc., a Delaware corporation (“Parent”), the other
Guarantors listed on the signature pages hereof (collectively with the Company
and Parent, the “Grantors” and each individually, a “Grantor”), and Cantor
Fitzgerald Securities, in its capacity as collateral agent (together with any
successor collateral agent, the “Collateral Agent”) on behalf of the Secured
Parties (as defined in the Credit Agreement as hereinafter defined).
PRELIMINARY STATEMENT
A.    The Borrower has requested that the Lenders provide it with a senior
secured debtor in possession term loan facility (the “DIP Facility”) and the
Lenders are willing to provide such DIP Facility to the Borrower on the terms
and subject to the conditions set forth in that certain Senior Secured
Debtor-In-Possession Credit Agreement, dated as of even date hereof by and
between the Administrative Agent, Collateral Agent, the Borrower, the Parent and
each Lender from time to time party thereto (as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, the “Credit
Agreement”).
B.    As a condition to the Lenders providing such DIP Facility, the Lenders
required (x) each Grantor (other than the Borrower) to unconditionally guarantee
all of the Obligations (as hereinafter defined) pursuant to a guarantee, dated
the date hereof from the Grantors to the Collateral Agent (such guarantee, the
“Guarantee” and such guaranteed obligations, the "Guaranteed Obligations") and
(y) each of the Grantors to execute and deliver this Security Agreement to
secure the Obligations and Guaranteed Obligations.
C.    It is a condition precedent to the making of Loans under the Credit
Agreement that the Grantors shall have executed and delivered this Security
Agreement to secure the Obligations.
ACCORDINGLY, in consideration of the foregoing premises and to induce the
Lenders to enter into the Credit Agreement and to make extensions of credit to
the Borrower thereunder, each Grantor and the Collateral Agent, on behalf of the
Secured Parties, hereby agree as follows:

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ARCTICLE I
DEFINITIONS AND INTERPRETATION

1.1    Terms Defined in Credit Agreement. All capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
1.2    Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Security Agreement or the Credit Agreement are used herein as
defined in the UCC.
1.3    Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:
“Accounts” shall have the meaning set forth in Article 9 of the UCC.
“Article” means a numbered article of this Security Agreement, unless another
document is specifically referenced.
“Assigned Contracts” means, collectively, all of the Grantors' rights and
remedies under, and all moneys and claims for money due or to become due to any
Grantor under those contracts set forth on Schedule J hereto and any other
material contracts, and any and all amendments, supplements, extensions, and
renewals thereof including all rights and claims of the Grantors now or
hereafter existing: (a) under any insurance, indemnities, warranties, and
guarantees provided for or arising out of or in connection with any of the
foregoing agreements; (b) for any damages arising out of or for breach or
default under or in connection with any of the foregoing contracts; (c) to all
other amounts from time to time paid or payable under or in connection with any
of the foregoing agreements; or (d) to exercise or enforce any and all
covenants, remedies, powers and privileges thereunder.
“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.
“Claims” shall mean any and all property and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or
assessed against, and landlords’, carriers’, mechanics’, workmen’s, repairmen’s,
laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims
arising by operation of law against, all or any portion of the Collateral.
“Collateral” shall have the meaning set forth in Article II.
“Commercial Tort Claims” means “commercial tort claims” as set forth in Article
9 of the UCC and shall include, without limitation, the existing commercial tort
claims of each Grantor set forth in Schedule H attached hereto.
“Control” shall have the meaning set forth in Article 8 or, if applicable, in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
“Copyrights” means, with respect to any Person, all of such Person's right,
title, and interest in and to the following: (a) all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof; whether registered or
unregistered and whether published or unpublished), rights and interests in
copyrights, works protectable by copyright, copyright registrations, and
copyright applications, including those listed on Schedule D, in each case,
whether now owned or hereafter created or acquired by or assigned to such
Person; (b) all renewals. reissues, continuations and extensions of any of the
foregoing; (c) rights and privileges arising under applicable law

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with respect to such Person’s use of such copyrights; (d) all income, royalties,
fees, damages, and payments now or hereafter due and/or payable under any of the
foregoing, including, without limitation, damages or payments for past or future
infringements for any of the foregoing; (e) the right to sue for past, present,
and future infringements of any of the foregoing; and (f) all rights
corresponding to any of the foregoing throughout the world.
“Default” means any event or condition which upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default.
“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.
“Documents” shall have the meaning set forth in Article 9 of the UCC.
“Encumbered Property” means, collectively:
(a)    all of the Grantors’ right, title and interest in and to the parcels of
land owned by such Grantors (collectively, the “Land”), together with any
after-acquired estate of the Grantors in the Land, and together with all rights
appurtenant thereto, including without limitation, all strips and gores within
or adjoining the Land, all estate, right, title, interest, claim or demand of
the Grantors in the streets, roads, sidewalks, alleys and ways adjacent thereto
(whether or not vacated and whether public or private and whether open or
proposed), all easements over adjoining land granted by any easement agreements,
covenants or restrictive agreements, all of the tenements, hereditaments,
easements, reciprocal easement agreements, rights pursuant to any trackage
agreement, rights to the use of common drive entries, rights-of-way and other
rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto, all reversions, remainders, dower and right of dower,
curtesy and right of curtesy, all of the air space and right to use air space
above such property, all transferable development rights arising therefrom or
transferred thereto, all water and water rights and water rights applications
(whether riparian, littoral, appropriative or otherwise, and whether or not
appurtenant), all pumps, pumping plants, pipes, flumes and ditches thereunto
appertaining, all rights and ditches for irrigation, all utility rights, sewer
rights, and shares of stock evidencing the same, all oil, gas and other minerals
and mineral substances (which term shall include all gypsum, anhydrite, coal,
lignite, hydrocarbon or other fossil materials or substances, fissionable
materials or substances and all other minerals of any kind or character, whether
gaseous, liquid or hard minerals, whether similar or dissimilar to those named,
whether now or hereafter found to exist and whether associated with the surface
or mineral estate) in, on or under the Land or produced, saved or severed from
the Land, all mineral, mining, gravel, oil, gas, hydrocarbon rights and other
rights to produce or share in the production of anything related to such
property, all drainage, crop, timber, agricultural, and horticultural rights
with respect to such property, and all other appurtenances appurtenant to such
property, including without limitation, any now or hereafter belonging or in any
way appertaining thereto, and all claims or demands of the Grantors, either at
law or in equity, in possession or expectancy, now or hereafter acquired, of, in
or to the same (the Land and all of the foregoing being sometimes referred to
herein collectively as the “Real Estate”);
(b)    all of the Grantors’ right, title and interest in and to all buildings,
improvements, fixtures and other structures or improvements of any kind now or
hereafter erected or located upon the Land, including, but not limited to, all
building materials, water, sanitary and storm sewers, drainage, electricity,
steam, gas, telephone and other utility facilities, parking areas, roads,
driveways, walks and other site improvements, together in each case with and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof, owned or to be owned by the Grantors or in which the
Grantors have or shall acquire an interest, to the extent of the Grantors’
interest therein, now or hereafter erected or located upon the Land
(collectively, the “Improvements” and, together with the Real Estate the
“Premises”);

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(c)    all of the Grantors’ right, title and interest in and to the following
(collectively, the “Personal Property”):
(i)    all personal property and fixtures of every kind and nature whatsoever
which are now or hereafter located on, attached to, incorporated in (regardless
of where located) or affixed to the Premises or the Improvements or used or
useful in connection with the ownership, construction, maintenance, repair,
reconstruction, alteration, addition, improvement, operation, mining, use or
occupancy of the Premises or the Improvements, including, without limitation,
all goods, inventory, construction materials, equipment, mining equipment,
tools, tooling, furniture, furnishings, fittings, fixtures, supplies, computers
and computer programs, carpeting, draperies, blinds, window treatments, racking
and shelving systems, heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, incinerating and/or compacting plants, systems and
equipment, elevators, escalators, appliances, stoves, ranges, refrigerators,
vacuum, window washing and other cleaning and building service systems, call
systems, sprinkler systems and other fire prevention and extinguishing apparatus
and materials, cables, antennae, pipes, ducts, conduits, machinery, apparatus,
motors, dynamos, engines, compressors, generators, boilers, stokers, furnaces,
pumps, tanks, appliances, garbage systems and pest control systems and all of
Grantors’ present and future “goods”, “equipment” and “fixtures” (as such terms
are defined in the UCC) and other personal property, including without
limitation any such personal property and fixtures which are leased, but
expressly excluding any such leased personal property and fixtures whose further
encumbrance is prohibited under the terms of its underlying lease, and all
repairs, attachments, betterments, renewals, replacements, substitutions and
accessions thereof and thereto; and
(ii)    all general intangibles now owned or hereafter acquired by the Grantors
and relating to the design, development, operation, management and use of the
Premises or the Improvements, including, but not limited to, all contract
rights, trademarks, trade names, logos, symbols, books, records, chattel paper,
claims, deposits, accounts, escrows and other rights relating to the name and
style under which the Premises and the Improvements are operated;
(d)    all approvals, authorizations, building permits, certificates of
occupancy, zoning variances, use permits, certifications, entitlements,
exemptions, franchises, licenses, orders, variances, plat plan approvals,
environmental approvals, air pollution permits and other authorizations to
construct and to operate, sewer and waste discharge permits, national pollutant
discharge elimination system permits, water permits, zoning and land use
entitlements and all other permits, whether now existing or hereafter issued to
or obtained by or on behalf of the Grantors, that relate to or concern in any
way the Premises or the Improvements and are given or issued by any governmental
or quasi-governmental authority, whether now existing or hereafter created (as
the same may be amended, modified, renewed or extended from time to time, and
including all substitutions and replacements therefor), all rights under and
pursuant to all construction, service, engineering, consulting, management,
access, supply, leasing, architectural and other similar contracts relating in
any way to the design, construction, management, operation, occupancy and/or use
of the Premises and Improvements, all rights under all purchase agreements,
sales agreements, option contracts, land contracts and contracts for the sale of
oil, gas and other minerals or any of them, that relate to or concern in any way
the Premises or the Improvements, all abstracts of title, architectural,
engineering or construction drawings, plans, specifications, operating manuals,
computer programs, computer data, maps, surveys, soil tests, feasibility
studies, appraisals, environmental studies, engineering reports and similar
materials relating to any portion of or all of the Premises and Improvements,
and all payment and performance bonds or warranties or guarantees relating to
the Premises or the Improvements, all to the extent assignable (collectively,
the “Permits, Plans and Contracts”);

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(e)    the Grantors’ interest in and rights under all leases, occupancy
agreements or licenses (under which the Grantors are landlord or licensor) and
subleases (under which the Grantors are sublandlord), concession, franchise,
management, mineral or other agreements relating to the use or occupancy of the
Premises or the Improvements or any part thereof for any purpose, or the
extraction or taking of any gas, oil, water or other minerals from the Premises,
whether now or hereafter existing or entered into (including any use or
occupancy arrangements created pursuant to Section 365(d) of the Bankruptcy Code
or otherwise in connection with the commencement or continuance of any
bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership
or similar proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or occupant of any portion of the Premises or the
Improvements), and all guaranties thereof and all amendments, modifications,
supplements, extensions or renewals thereof (collectively, the “Leases”), and
all rents, issues, profits, revenues, charges, fees, receipts, royalties,
proceeds from the sale of oil, gas and/or other minerals (whether gaseous,
liquid or hard minerals, whether similar or dissimilar to those named and
whether associated with the surface or mineral estate), accounts receivable,
cash or security deposits and other deposits (subject to the prior right of the
tenants making such deposits) and income, and other benefits now or hereafter
derived from any portion of the Premises or the Improvements or the use or
occupancy thereof (including any payments received pursuant to Section 502(b) of
the Bankruptcy Code or otherwise in connection with the commencement or
continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings, or any assignment for the
benefit of creditors, in respect of any tenant or other occupants of any portion
of the Premises or the Improvements and all claims as a creditor in connection
with any of the foregoing) and all payments of a similar nature, now or
hereafter, including during any period of redemption, derived from the Premises
or the Improvements or any other portion of the Encumbered Property and all
proceeds from the cancellation, surrender, sale or other disposition of the
Leases (collectively, the “Rents”);
(f)    all of the Grantors’ right, title and interest in and to all refunds or
rebates of real and personal property taxes or charges in lieu of taxes,
heretofore or now or hereafter assessed or levied against all or any of the
Premises, the Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, including interest thereon, and the right to
receive the same, whether such refunds or rebates relate to fiscal periods
before or during the term of this Security Agreement;
(g)    all of the Grantors’ right, title and interest in and to all insurance
policies and the proceeds thereof, now or hereafter in effect with respect to
all or any of the Premises, the Improvements, the Personal Property, the Leases,
the Rents and the Permits, Plans and Contracts, including, without limitation,
any and all title insurance proceeds, and all unearned premiums and premium
refunds, accrued, accruing or to accrue under such insurance policies, and all
awards made for any taking of or damage to all or any of the Premises, the
Improvements, the Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts by eminent domain, or by any purchase in lieu thereof, and
all awards resulting from a change of grade of streets or for severance damages,
and all other proceeds of the conversion, voluntary or involuntary, of all or
any of the Premises, Improvements, the Personal Property, the Leases, the Rents
and the Permits, Plans and Contracts, into cash or other liquidated claims, and
all judgments, damages, awards, settlements and compensation (including interest
thereon) heretofore or hereafter made to the present and all subsequent owners
of the Premises, Improvements, the Personal Property, the Leases, the Rents and
the Permits, Plans and Contracts, or any part thereof for any injury to or
decrease in the value thereof for any reason;
(h)    all of the Grantors’ right, title and interest in and to the following to
the extent contemplated by the Credit Agreement and subject to any conditions
set forth therein:

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(i)    all right, in the name and on behalf of the Grantors, to appear in and
defend any action or proceeding brought with respect to all or any of the
Premises, Improvements, the Personal Property, the Leases, the Rents and the
Permits, Plans and Contracts, and to commence any action or proceeding to
protect the interest of the Grantors in all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts;
(ii)    all right and power to encumber further all or any of the Premises,
Improvements, the Personal Property, the Leases, the Rents and the Permits,
Plans and Contracts, or any part thereof;
(iii)    all rights, titles, interests, estates or other claims, both in law and
in equity, which the Grantors now have or may hereafter acquire in any of the
Premises, the Improvements, the Personal Property, the Leases, the Rents or the
Permits, Plans and Contracts, or in and to any greater estate in all or any of
the Premises, the Improvements, the Personal Property, the Leases, the Rents and
the Permits, Plans and Contracts; and
(iv)    all property hereafter acquired or constructed by the Grantors of the
type described above, in each case, if and to the extent the same is located on,
used in connection with or otherwise directly relates to the Premises, which
shall forthwith, upon acquisition or construction thereof by the Grantors and
without any act or deed by any party, become subject to the lien and security
interest of this Security Agreement as if such property were now owned by the
Grantors and were specifically described in this Security Agreement and were
specifically conveyed or encumbered hereby; and
(i)    all accessions, additions or attachments to, and proceeds or products of,
any of the foregoing.
“Equipment” shall have the meaning set forth in Article 9 of the UCC.
“Event of Default” shall have the meaning set forth in the Credit Agreement.
“Excluded Property” shall have the meaning set forth in Article II.
“Fixtures” shall have the meaning set forth in Article 9 of the UCC.
“General Intangibles” shall mean, collectively, with respect to each Grantor,
all “general intangibles,” as such term is defined in Article 9 of the UCC, of
such Grantor and, in any event, shall include (i) all of such Grantor’s rights,
title and interest in, to and under all insurance policies and Contracts, (ii)
all know-how and warranties relating to any of the Collateral, (iii) any and all
other rights, claims, choses-in-action and causes of action of such Grantor
against any other person and the benefits of any and all collateral or other
security given by any other person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Collateral, (v) all
lists, books, records, correspondence, ledgers, printouts, files (whether in
printed form or stored electronically), tapes and other papers or materials
containing information relating to any of the Collateral, including all customer
or tenant lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge, surveys,
studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and
automatic machinery software and programs and the like, field repair data,
accounting information pertaining to such Grantor’s operations or any of the
Collateral and all media in which or on which any of the information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge,

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records or data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, of any
Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Grantor pertaining to
operations now or hereafter conducted by such Grantor or any of the Collateral
and (vii) all rights to reserves, deferred payments, deposits, refunds,
indemnification of claims to the extent the foregoing relate to any Collateral
and claims for tax or other refunds against any Governmental Authority relating
to any Collateral.
“Goods” shall have the meaning set forth in Article 9 of the UCC.
“Improvements” shall have the meaning set forth in definition of Encumbered
Property.
“Instruments” shall have the meaning set forth in Article 9 of the UCC.
“Intellectual Property” means any and all Patents, Copyrights, Trademarks
(including the goodwill associated with such Trademarks), trade secrets,
know-how, inventions (whether or not patentable), algorithms, software programs
(including source code and object code), processes, product designs, industrial
designs, blueprints, drawings, data, customer lists, URLs and domain names,
specifications, documentations, reports, catalogs, and any other forms of
technology or proprietary information of any kind, including all rights therein
and all applications for registration or registrations thereof.
“Intellectual Property Licenses” means (i) any licenses in Intellectual Property
owned or controlled by any Grantor provided to any third party, including the
license agreements listed on Schedule D, and (ii) any licenses in Intellectual
Property owned by any third party provided to any Grantor, including the license
agreements listed on Schedule D, in each case, together with any and all (A)
renewals, extensions, supplements and continuations thereof, (B) income, fees,
royalties, damages, claims and payments now and hereafter due and/or payable
thereunder and with respect thereto including damages and payments for past,
present or future infringements or violations thereof, (C) rights to sue for
past, present and future infringements or violations thereof and (D) other
rights to use, exploit or practice any or all of the Patents, Trademarks or
Copyrights.
“Inventory” shall have the meaning set forth in Article 9 of the UCC.
“Investment Property” shall have the meaning set forth in Article 9 of the UCC.
“Land” shall have the meaning set forth in definition of Encumbered Property.
“Leases” shall have the meaning set forth in definition of Encumbered Property.
“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the
UCC.
“Obligations” shall have the meaning set forth in the Credit Agreement and, for
the avoidance of doubt, shall include, without limitation, the Guaranteed
Obligations.
“Patents” means, with respect to any Person, all of such Person's right, title,
and interest in and to: (a) any and all patents issued, owned, acquired, pending
or assigned to and all patent applications and registrations made by such Person
(whether established or registered or recorded in the United States, any state
of the United States or any other country), including those listed on Schedule
D; (b) all inventions and improvements described and claimed therein; (c) rights
and privileges arising under applicable law with respect to such Person’s use of
any patents; (d) all reissues, divisions, continuations, renewals, extensions,
and continuations-in-part thereof; (e) all income, fees, royalties, damages,
claims, and payments now or

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hereafter due or payable under and with respect thereto, including, without
limitation, damages and payments for past and future infringements thereof; (f)
all rights to sue for past, present, and future infringements thereof; and (g)
all rights corresponding to any of the foregoing throughout the world.
“Pledged Collateral” means all Instruments, Securities and other Investment
Property of the Grantors, whether or not physically delivered to the Collateral
Agent pursuant to this Security Agreement.
“Permitted Encumbrances” shall have the meaning set forth in Section 3.1.
“Personal Property” shall have the meaning set forth in definition of Encumbered
Property.
“Premises” shall have the meaning set forth in definition of Encumbered
Property.
“Real Estate” shall have the meaning set forth in definition of Encumbered
Property.
“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments and any other rights or claims to receive money which are General
Intangibles or which are otherwise included as Collateral.
“Schedule” refers to a specific schedule to this Security Agreement, unless
another document is specifically referenced.
“Section” means a numbered section of this Security Agreement, unless another
document is specifically referenced.
“Securities Account” has the meaning set forth in Article 8 of the UCC.
“Security” has the meaning set forth in Article 8 of the UCC.
“Stock Rights” means all dividends, instruments or other distributions and any
other right or property which the Grantors shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantors now have or hereafter acquire any right, issued by an issuer of such
Equity Interest.
“Supporting Obligations” shall have the meaning set forth in Article 9 of the
UCC.
“Trademarks” means, with respect to any Person, all of such Person's right,
title, and interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress, and trade styles, slogans, logos,
certification marks, uniform resource locations (URL’s), domain names, corporate
names, whether registered or unregistered, owned by or assigned to such Grantor
and all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States, any state
of the United States or any other country), including those listed on Schedule
D, and the goodwill of the business symbolized by the foregoing; (b) all
licenses of the foregoing, whether as licensee or licensor; (c) rights and
privileges arising under applicable law with respect to such Person’s use of any
trademarks; (d) all renewals, reissues, continuations and extensions of the
foregoing; (e) all income, fees, royalties, damages, and payments now or
hereafter due or payable with respect thereto, including, without limitation,
damages, claims, and payments for past and future infringements thereof; (f) all
rights to sue for past, present, and future infringements of the foregoing,
including the right to settle suits involving claims

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and demands for royalties owing; and (g) all rights corresponding to any of the
foregoing throughout the world.
“UCC” means the Uniform Commercial Code of the State of New York as in effect
from time to time; provided, however, that if by reason of mandatory provisions
of law, any or all of the attachment, perfection or priority of the Collateral
Agent’s and the Secured Parties’ security interest in any item or portion of the
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect on the date hereof in such other
jurisdiction for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions relating to such
provisions.
The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
1.4    Interpretation. The rules of interpretation specified in the Credit
Agreement shall be applicable to this Security Agreement.
1.5    Resolution of Drafting Ambiguities. Each Grantor acknowledges and agrees
that it was represented by counsel in connection with the execution and delivery
hereof, that it and its counsel reviewed and participated in the preparation and
negotiation hereof and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party (i.e., the Collateral
Agent) shall not be employed in the interpretation hereof.
1.6    ORDERS. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECURITY AGREEMENT, THIS SECURITY AGREEMENT, AND THE RIGHTS, DUTIES, PRIVILEGES
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THE PERFECTION AND PRIORITY OF THE
COLLATERAL, SHALL BE SUBJECT TO THE TERMS AND PROVISIONS OF THE ORDERS (AS
DEFINED IN THE CREDIT AGREEMENT), INCLUDING, WITHOUT LIMITATION, THE PRIORITY OF
THE LIENS ON THE COLLATERAL SECURING THE OBLIGATIONS UNDER THE EXISTING CREDIT
DOCUMENTS AND THE LIENS ON THE COLLATERAL SECURING OBLIGATIONS (AS DEFINED IN
THE CREDIT AGREEMENT), AND THE RIGHTS OF THE RELEVANT PARTIES WITH RESPECT
THERETO.
ARTICLE II
GRANT OF SECURITY INTEREST
To secure the prompt and complete payment and performance of the Obligations,
each Grantor hereby pledges, assigns and grants to the Collateral Agent, on
behalf of and for the ratable benefit of the Secured Parties, a security
interest in all of its right, title and interest in, to and under all real and
personal property and other assets, whether now owned by or owing to, or
hereafter acquired by or arising in favor of such Grantor (including under any
trade name or derivations thereof), and whether owned or consigned by or to, or
leased from or to, such Grantor, and regardless of where located (all of which
will be collectively referred to as the “Collateral”), including, without
limitation:
(i)
all Accounts;

(ii)
all Chattel Paper;

(iii)
all Copyrights, Patents and Trademarks;

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(iv)
all Documents;

(v)
all Equipment;

(vi)
all Fixtures;

(vii)
all General Intangibles;

(viii)
all Goods;

(ix)
all Instruments;

(x)
all Inventory;

(xi)
all Investment Property;

(xii)
all cash or cash equivalents;

(xiii)
all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(xiv)
all Deposit Accounts and all Securities Accounts;

(xv)
all Commercial Tort Claims described on Schedule H hereto or notice of which is
given pursuant to Section 4.8;

(xvi)
all Assigned Contracts;

(xvii)
after the entry of the Final Order and solely to the extent provided therein,
all Avoidance Actions;

(xviii)
the Encumbered Property; and

(xix)
to the extent not covered by clauses (i) through (xviii) above, all other real
and personal property of such Grantor, whether tangible or intangible and all
Proceeds and products of each of the foregoing assets referenced in clauses (i)
through (xviii) and all accessions to, substitutions for and replacements for,
and rents, profits and products of, each of the foregoing, any and all proceeds
of Stock Rights, insurance, indemnity, warranty or guaranty payable to such
Grantor from time to time with respect to the any of the foregoing, together
with all books and records, customer lists, credit files, computer files,
programs, printouts and other computer materials and records related thereto and
any General Intangibles at any time evidencing or relating to any of the
foregoing.

Notwithstanding the foregoing, and with respect to the grant of security
interests and liens hereunder only, the term “Collateral” shall not include, and
the Grantors shall not be deemed to have granted a security interest in
(collectively, “Excluded Property”) (i) any “intent to use” Trademark
applications for which a statement of use has not been filed (but only until
such statement is filed) to the extent, but only to the extent, that a grant of
a security interest therein constitutes or results in the abandonment,
invalidation or

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unenforceability of any right, title or interest of the applicable Grantor in
such property and then only to the extent that any law, rule or regulation or
contractual provision giving rise to such abandonment, invalidation or
unenforceability would not 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, including without
limitation, any bankruptcy or insolvency law, or principles of equity, (ii) any
license or permit from any Governmental Authority or any of the Grantors' rights
or interests in any contract or agreement to which any such Grantor is a party,
in each case, to the extent, but only to the extent, that the terms of any such
license, permit, contract or agreement expressly prohibit the granting of a lien
or an assignment by such Grantor with respect to such license, permit, contract
or agreement and then only to the extent that (A) any necessary consent to such
grant or assignment shall have not been obtained and (B) the terms of any such
license, permit, contract or agreement are not 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, any other applicable law, including
without limitation, any bankruptcy or insolvency law, or principles of equity,
or by the Orders and (iii) any of its issued and outstanding Equity Interests
with respect to any Foreign Subsidiary that is a “controlled foreign
corporation” within the meaning of U.S. federal income tax law entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) which are in excess of
66% (or such greater percentage that (A) could not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
United States federal income tax purposes to be treated as a deemed dividend to
such Foreign Subsidiary's United States parent or (B) could not reasonably be
expected to cause any material adverse tax consequences) of the total issued and
outstanding Equity Interests of such Foreign Subsidiary entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2)); provided, however, that (x)
immediately and automatically upon the ineffectiveness, lapse, cessation or
termination of any provision of any contract, agreement, indenture, permit,
license, any law or any condition or circumstance, the existence of which caused
any asset or property to constitute “Excluded Property” hereunder (including,
without limitation, as the result of the commencement of the Cases (as defined
in the Credit Agreement) or the Orders), such asset or property shall no longer
constitute “Excluded Property” hereunder and the Collateral shall include, and
the applicable Grantor shall be deemed to have granted a security interest in
and lien on, all such Grantor's rights and interests in such asset or property
as if such provision, law, condition or circumstance had never been in effect,
(y) “Excluded Property” shall in no event include, and the Grantors shall be
deemed to have granted to the Collateral Agent a security interest in and lien
on, any Account, account receivable, money or other amounts due or to become due
to the Grantors under any license, permit, contract or agreement referred to in
clause (ii) above and (z) “Excluded Property” shall in no event include, and the
Grantors shall be deemed to have granted to the Collateral Agent a security
interest in and lien on, any and all Proceeds from the sale or other disposition
of Excluded Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants to the Secured Parties on the Effective
Date and on each Borrowing Date, that the following statements are true and
correct in all material respects as of such date other than to the extent such
representation or warranty specifically relate to an earlier date (in which case
such representation or warranty shall be true and correct in all material
respects as of such earlier date):
3.1    Title, Perfection and Priority. Such Grantor owns and, as to Collateral
acquired by it from time to time after the date hereof, will own the rights in
each item of Collateral pledged by it hereunder free and clear of any and all
Liens or claims of others other than (x) in the case of the Encumbered Property,
the exceptions and encumbrances set forth on Schedule K hereto (the “Permitted
Encumbrances”) and (y) in the case of all other Collateral, Liens permitted
under Section 7.01 of the Credit Agreement. The security interest

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in the Collateral granted to the Collateral Agent for the benefit of the Secured
Parties hereunder constitutes a valid, enforceable and perfected security
interest having the priority specified in the Orders.
3.2    Type and Jurisdiction of Organization, Organizational and Identification
Numbers. The type of entity of such Grantor, its state of organization, the
organizational number issued to it by its state of organization and its federal
employer identification number are set forth on Schedule A.
3.3    Principal Location. As of the Effective Date, such Grantor's mailing
address and the location of its place of business (if it has only one) or its
chief executive office (if it has more than one place of business), are
disclosed in Schedule A; as of the Effective Date, such Grantor has no other
places of business except those set forth in Schedule A.
3.4    Collateral Locations. All of such Grantor's locations where Collateral is
located as of the Effective Date are listed on Schedule A (other than Inventory
and Equipment in transit or out for repair). All of said locations are owned by
such Grantor except for locations (i) which are leased by the Grantor as lessee
and designated in Schedule A and (ii) at which Inventory is held in a public
warehouse or is otherwise held by a bailee or on consignment as designated in
Schedule A.
3.5    Deposit Accounts and Securities Accounts. All of such Grantor's Deposit
Accounts and Securities Accounts are listed on Schedule B.
3.6    Exact Names. Such Grantor's name in which it has executed this Security
Agreement is the exact name as it appears in such Grantor's organizational
documents, as amended and in effect on the date hereof and on each date on which
the representations and warranties are remade, as filed with such Grantor's
jurisdiction of organization. Except as disclosed in Schedule A, such Grantor
has not, during the past five years, been known by or used any other corporate
or fictitious name, or been a party to any merger or consolidation, or been a
party to any acquisition.
3.7    Letter-of-Credit Rights and Chattel Paper. Schedule C lists all
Letter-of-Credit Rights of such Grantor having a value in excess of $100,000 as
of the Effective Date and all Chattel Paper of such Grantor having a value in
excess of $50,000 as of the Effective Date. As of the Effective Date, the
aggregate value of all Letter-of-Credit Rights of all Grantors does not exceed
$250,000 and the aggregate value of all Chattel Paper of all Grantors does not
exceed $250,000.
3.8    Accounts and Chattel Paper.
(a)    The names of the obligors, amounts owing, due dates and other information
with respect to its Accounts and Chattel Paper are and will be correctly stated
in all material respects in all records of such Grantor relating thereto and in
all invoices and reports with respect thereto furnished to the Collateral Agent
by such Grantor from time to time. As of the time when each Account or each item
of Chattel Paper arises, such Grantor shall be deemed to have represented and
warranted that such Account or Chattel Paper, as the case may be, and all
records relating thereto, are genuine and in all material respects what they
purport to be.
(b)    With respect to its Accounts, (i) all Accounts represent bona fide sales
of Inventory or rendering of services to Account Debtors in the ordinary course
of such Grantor's business and are not evidenced by a judgment, Instrument or
Chattel Paper (other than judgments, Instruments and Chattel Paper which, when
added to all judgments, Instruments and Chattel Paper of all other Grantors, do
not have an aggregate value for all such judgments, Instruments and Chattel
Paper in excess of $250,000); (ii) there are no setoffs, claims or disputes
existing or asserted in writing with respect thereto and such Grantor has not

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made any agreement with any Account Debtor for any extension of time for the
payment thereof, any compromise or settlement for less than the full amount
thereof, any release of any Account Debtor from liability therefor, or any
deduction therefrom, except a discount or allowance allowed by such Grantor in
the ordinary course of its business for prompt payment or other discounts or
allowances which, when added to all such discounts and allowances of all other
Grantors, do not exceed $250,000 in the aggregate during any twelve consecutive
month period; (iii) to such Grantor's Knowledge, there are no facts, events or
occurrences which in any way impair the validity or enforceability thereof or
could reasonably be expected to reduce the amount payable thereunder as shown on
such Grantor's books and records and any invoices, and statements, except for
reductions in an amount, which when added to all such reductions of all other
Grantors, do not exceed $250,000 in the aggregate; (iv) such Grantor has not
received any notice of proceedings or actions which are threatened in writing or
pending against any Person which is the Account Debtor with respect to any
material portion of such Grantor's Accounts which might result in any adverse
change in such Account Debtor's financial condition; and (v) such Grantor has no
knowledge that any Account Debtor is unable generally to pay its debts as they
become due.
(c)    In addition, with respect to all of its Accounts, (i) the amounts shown
on all invoices, statements and reports with respect thereto are actually and
absolutely owing to such Grantor as indicated thereon and to such Grantor's
knowledge are not in any way contingent; and (ii) to such Grantor's knowledge,
all Account Debtors have the capacity to contract.
3.9    Inventory and Equipment. Such Grantor has exclusive possession and
control of the Equipment and Inventory other than Equipment and Inventory out
for repair, in transit, on consignment or in the possession of lessees in the
ordinary course of business, or stored at any leased premises or warehouse or
with any bailee. With respect to any of its Inventory, (a) such Inventory (other
than Inventory in transit) is located at one of such Grantor's locations set
forth on Schedule A, (b) no Inventory (other than Inventory in transit) is now,
or shall at any time or times hereafter be stored at any other location except
as permitted by Section 4.1(g), (c) such Grantor has good and merchantable title
to such Inventory and such Inventory is not subject to any Lien or security
interest or document whatsoever except for Liens permitted under 7.01 of the
Credit Agreement, (d) such Inventory is of good and merchantable quality, for
its intended use, (e) such Inventory is not subject to any licensing, patent,
royalty, trademark, trade name or copyright agreements with any third parties
which would require any consent of any third party upon sale or disposition of
that Inventory or the payment of any monies to any third party upon such sale or
other disposition, (f) such Inventory has been produced in accordance with the
Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations
and orders thereunder and (g) the completion of manufacture, sale or other
disposition of such Inventory by the Collateral Agent following an Event of
Default shall not require the consent of any Person (other than waivers or
consents of landlords and bailees to the extent necessary to provide the
Collateral Agent with access to the premises where such Inventory is located)
and shall not constitute a breach or default under any contract or agreement to
which such Grantor is a party or to which such property is subject.
3.10    Intellectual Property.
(a)    As of the Effective Date, Schedule D hereto provides a complete and
correct list of all (i) registered Copyrights and applications for registration
of Copyrights that are owned by any Grantor in the United States, and to such
Grantor's Knowledge, in all other jurisdictions worldwide; (ii) material
Intellectual Property Licenses entered into by any Grantor (other than licenses
for commercially available off-the-shelf software which have been licensed to a
Grantor pursuant to an end-user license) in which (A) any Grantor has provided
any license or other rights in Intellectual Property owned or controlled by such
Grantor to a third party or (B) any third party has granted to any Grantor any
license or other rights in Intellectual Property owned or controlled by the
third party that is material to the business of such Grantor;

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(iii) Patents and applications for Patents owned by any Grantor in the United
States, and to such Grantor's Knowledge, in all other jurisdictions worldwide;
and (iv) registered Trademarks and applications for registration of Trademarks
that are owned by any Grantor in the United States, and to the Grantor's
Knowledge, in all other jurisdictions worldwide.
(b)    As of the Effective Date:
(i)    Grantors exclusively own all right, title and interest in and to the
Copyrights, Patents, and Trademarks set forth in Schedule D, free and clear of
any Liens, other than Liens permitted under Section 7.01 of the Credit
Agreement;
(ii)    To each Grantor's Knowledge, no third party has infringed or
misappropriated or is currently infringing or misappropriating any Intellectual
Property rights owned by such Grantor that is material to the business of such
Grantor;
(iii)    To each Grantor's Knowledge, no Grantor has infringed or
misappropriated within the six (6) year period immediately preceding the date
hereof or is currently infringing or misappropriating any Intellectual Property
rights of any third party;
(iv)    There are no material pending, or written threatened infringement or
misappropriation claims or proceedings pending against any Grantor, and to the
extent any Grantor received written notice of such claim in the five (5) year
period immediately preceding the date hereof, no such notice (or any claim
referred to therein) remains unresolved as of the date hereof;
(v)    All registered Copyrights, registered Trademarks, and issued Patents set
forth in Schedule D are valid, subsisting and enforceable and in compliance with
all legal requirements, filings, and payments and other actions that are
required to maintain such Intellectual Property in full force and effect;
(vi)    Each Grantor has taken reasonable steps to maintain the confidentiality
of and otherwise protect and enforce its rights in all material trade secrets
owned by such Grantor, and to such Grantor's Knowledge no unauthorized
disclosure of such material trade secrets has occurred;
(vii)    No Grantor has any ownership interest in any Copyright that is material
to the operation of such Grantor's business, except for those Copyrights
identified on Schedule D hereto which have been registered with the United
States Copyright Office or the applicable Governmental Authority (provided that
such disclosure on Schedule D does not reflect a representation by any Grantor
that such Copyright is material to the operation of such Grantor's business).
3.11     Collateral Information.
(a)    The Orders and the Collateral Documents create in favor of the Collateral
Agent for the benefit of the Secured Parties with the priority set forth in the
Orders a valid, enforceable and perfected security interest in the Collateral,
securing the payment of the Obligations.
(b)    Subject to the entry by the Bankruptcy Court of the Orders, no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for (i) the grant by such Grantor of the security interest granted
hereunder or for the execution, delivery or performance of this Security
Agreement by such Grantor, (ii) the perfection

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or maintenance of the security interest created hereunder, or (iii) subject to
the provisions of the Orders, the exercise by the Collateral Agent of its voting
or other rights provided for in this Security Agreement or the remedies in
respect of the Collateral pursuant to this Security Agreement, except (w) for
the approvals, consents, exemptions, authorizations, actions, notices and
filings which have been duly obtained, taken, given or made and are in full
force and effect, (x) for those approvals, consents, exemptions, authorizations
or other actions, notices or filings set forth on Schedule 5.03 to the Credit
Agreement, in each case the failure of which to obtain or make would not
reasonably be expected to have a Material Adverse Effect or to the extent that
such noncompliance is permitted by final order of the Bankruptcy Court, (y) any
approvals, consents, exemptions, authorizations or other actions, notices or
filings necessary or required under the Priority Lien Documents, and (z) as may
be required in connection with the disposition of any portion of the Pledged
Collateral by laws affecting the offering and sale of securities generally.
(c)    None of the Collateral owned by it is of a type for which security
interests or liens may be perfected by filing under any federal or foreign
statute or other law except for (a) the property described in Schedule E and (b)
Patents, Trademarks and Copyrights held by such Grantor and described in
Schedule D. The street address of each property on which any Fixtures owned by
any Grantor are located as of the Effective Date is set forth in Schedule F
together with the name and address of the record owner of each such property.
3.12    Commercial Tort Claims. Each Grantor hereby represents and warrants that
as of the date hereof it holds no Commercial Tort Claims other than those listed
in Schedule H annexed hereto.
3.13    No Financing Statements, Security Agreements. No financing statement or
security agreement describing all or any portion of the Collateral which has not
lapsed or been terminated naming such Grantor as debtor has been filed or is of
record in any jurisdiction except as permitted by Section 4.1(e).
3.14    Pledged Collateral.
(a)    Schedule G sets forth a complete and accurate list of all Pledged
Collateral owned by such Grantor as of the Effective Date. Such Grantor is the
direct, sole beneficial owner and sole holder of record of the Pledged
Collateral listed on Schedule G as being owned by it, free and clear of any
Liens, except for Liens permitted by Section 7.01 of the Credit Agreement. Such
Grantor further represents and warrants that (i) all Pledged Collateral owned by
it constituting an Equity Interest has been (to the extent such concepts are
relevant with respect to such Pledged Collateral) duly authorized, validly
issued, and fully paid and non-assessable and (ii) all Pledged Collateral which
represents Indebtedness owed to such Grantor has been duly authorized,
authenticated or issued and delivered by the issuer of such Indebtedness, is the
legal, valid and binding obligation of such issuer and such issuer is not in
default thereunder.
(b)    In addition, (i) none of the Pledged Collateral owned by it has been
issued or transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject, (ii) except as set forth on Schedule I hereof, there
are existing no options, warrants, calls or commitments of any character
whatsoever relating to such Pledged Collateral or which obligate the issuer of
any Equity Interest included in the Pledged Collateral to issue additional
Equity Interests, and (iii) subject to the entry by the Bankruptcy Court of the
Orders, no consent, approval, authorization, or other action by, and no giving
of notice, or filing with, any governmental authority or any other Person is
required for the pledge by such Grantor of such Pledged Collateral pursuant to
this Security Agreement or for the execution, delivery and performance of this
Security Agreement by such Grantor, except (w) for the approvals, consents,
exemptions, authorizations, actions, notices and filings which have been duly
obtained, taken, given or made and are in full force and effect, (x) for those
approvals,

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consents, exemptions, authorizations or other actions, notices or filings set
forth on Schedule 5.03 to the Credit Agreement, in each case the failure of
which to obtain or make would not reasonably be expected to have a Material
Adverse Effect or to the extent that such noncompliance is permitted by final
order of the Bankruptcy Court, (y) any approvals, consents, exemptions,
authorizations or other actions, notices or filings necessary or required under
the Priority Lien Documents, and (z) as may be required under the Orders and/or
in connection with such disposition by laws affecting the offering and sale of
securities generally.
(c)    Except as set forth in Schedule G, such Grantor owns 100% of the issued
and outstanding Equity Interests which constitute Pledged Collateral owned by it
and none of the Pledged Collateral that represents Indebtedness owed to such
Grantor is subordinated in right of payment to other Indebtedness (other than
the Obligations and the “Obligations” as defined in the Senior Notes and the
Existing Credit Agreement) or subject to the terms of an indenture.
3.15    Intentionally Omitted.
3.16    Payment of Taxes. Each Grantor represents and warrants that all Claims
imposed upon or assessed against the Collateral have been paid and discharged
except to the extent such Claims constitute a Lien which is a Lien permitted
under Section 7.01 of the Credit Agreement.
3.17    Encumbered Property.
(a)    On the Petition Date, no Grantor owns any fee interest in real estate
and, thus, no Grantor owns any asset that constitutes “Premises” or “Encumbered
Property”.
(b)    Upon entry of the Orders, each Grantor has good, marketable, insurable,
indefeasible, fee simple title to the Land and Improvements owned by such
Grantor, subject to Permitted Encumbrances. Each Grantor has good and marketable
title to or valid leasehold interests in all of the other Encumbered Property
held by such Grantor.
(c)    Each Grantor has good and lawful right and full power and authority to
encumber or grant a security interest in the Encumbered Property held by such
Grantor. The possession of the Encumbered Property has been peaceful and
undisturbed and title thereto has not been disputed or questioned to the best of
such Grantor’s knowledge. Each Grantor will forever warrant, defend and preserve
its title to the Encumbered Property, the rights of the Secured Parties therein
under the Collateral Documents and the validity and priority of the Lien of the
Collateral Documents thereon against the claims of all persons and parties
except those having rights under the Permitted Encumbrances to the extent of
those rights.
(d)    The Permitted Encumbrances do not and will not materially and adversely
affect (i) the ability of the relevant Grantor to perform its obligations
hereunder and the other Loan Documents to which it is a party or (ii) the use of
the Encumbered Property for the use currently being made thereof, the operation
of the Encumbered Property as currently being operated or the value of the
Encumbered Property.
(e)    The Encumbered Property has adequate rights of access to public ways and
is served by adequate water, sewer, sanitary sewer and storm drain facilities.
All public utilities necessary to the continued use and enjoyment of the
Encumbered Property as presently used and enjoyed are located in the public
right-of-way abutting the Encumbered Property, and all such utilities are
connected so as to serve the Encumbered Property without passing over other
property. All roads necessary for the full utilization of the Encumbered
Property for its current purpose have been completed and dedicated to public use
and accepted by all governmental authorities or are the subject of access
easements for the benefit of the Encumbered Property.

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(f)    Each Premises consists of a single tax lot or multiple tax lots, no
portion of said tax lot(s) covers property other than the Premises or a portion
of the Premises and no portion of the Premises lies in any other tax lot. Each
Premises consists of one or more legally subdivided lots.
(g)    There are no pending or, to the knowledge of the Grantors, proposed
special or other assessments for public improvements or otherwise affecting the
Encumbered Property, nor, to the knowledge of the Grantor, are there any
contemplated improvements to the Encumbered Property that may result in such
special or other assessments.
(h)    To the best of the Grantors’ knowledge, except as disclosed on the
current survey of the Premises delivered to the Collateral Agent prior to the
date hereof, none of the Improvements on the Land are located in a flood hazard
area as defined by the Director of the Federal Emergency Management Agency.
(i)    No Premises is subject to any Leases other than the Leases described in
Schedule L. No tenant, person, party, firm, corporation or other entity has an
option to purchase the Encumbered Property, any portion thereof or any interest
therein.
(j)    The Encumbered Property has not been damaged by fire, water, wind or
other cause of loss, or any previous damage to the Encumbered Property has been
fully restored. No part of any property subject to the Collateral Documents has
been taken in condemnation or other like proceeding nor, to the Grantors’
knowledge, is any proceeding pending, threatened or known to be contemplated for
the partial or total condemnation or taking of the Encumbered Property.
ARTICLE IV
COVENANTS
From the date of this Security Agreement, and thereafter until this Security
Agreement is terminated in accordance with the provisions hereof, each Grantor
agrees that:
4.1    General.
(a)    Collateral Records. Such Grantor will maintain complete and accurate
books and records in all material respects with respect to the Collateral owned
by it, and furnish to the Collateral Agent, with sufficient copies for the
Secured Parties (to the extent such copies are requested by the Collateral
Agent), such reports relating to such Collateral as the Collateral Agent shall
from time to time reasonably request.
(b)    Perfection and Priority. Upon entry of the Orders by the Bankruptcy Court
and after giving effect to the Orders, the Collateral Agent for the benefit of
the respective Secured Parties shall have legal, valid and enforceable perfected
Liens having the priority specified in the Orders on, and security interests in,
all of the Loan Parties’ right, title and interest in and to the Collateral and
the proceeds thereof.
(c)    Further Assurances. Each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments and documents, and take all further action that
may be reasonably necessary or reasonably desirable or that the Collateral Agent
may reasonably require from time to time, in order to perfect and maintain the
validity, effectiveness

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and priority of any of the Loan Documents and any of the Liens intended to be
created thereunder and assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Loan Document or under
any other instrument or document executed in connection with any Loan Document
to which any Grantor or any of its Subsidiaries is or is to be a party, and
cause each of its Subsidiaries to do so, including to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, each such
Grantor will, if so reasonably requested by the Collateral Agent, furnish to the
Collateral Agent, as often as the Collateral Agent reasonably requests,
statements and schedules further identifying and describing Collateral owned by
it and such other reports and information in connection with its Collateral as
the Collateral Agent may reasonably request, all in such detail as the
Collateral Agent may reasonably specify. Such Grantor also agrees to take any
and all commercially reasonable actions necessary to defend title to any
material portion of the Collateral against all persons and to defend the Liens
of the Collateral Agent in any material portion of the Collateral and the
priority thereof against any Lien not expressly permitted hereunder.
(d)    Disposition of Collateral. Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it except for dispositions specifically
permitted pursuant to the Credit Agreement.
(e)    Liens. Such Grantor will not create, incur, or suffer to exist any Lien
on the Collateral owned by it except (x) in the case of the Encumbered Property,
the Permitted Encumbrances and (y) in the case of all other Collateral, Liens
permitted by Section 7.01 of the Credit Agreement.
(f)    Other Financing Statements. Such Grantor will not authorize the filing of
any financing statement naming it as debtor covering all or any portion of the
Collateral owned by it, except to perfect the lien securing the obligations
under the Senior Notes and the Existing Credit Agreement.
(g)    Locations. Such Grantor will not (i) move any Collateral owned by it from
any location listed on Schedule A (other than to any other location listed on
Schedule A, Collateral in transit or held for repair or in connection with any
sale or other disposition of such Collateral permitted by the Credit Agreement)
or add to such locations without (x) providing at least thirty days' prior
written notice to Collateral Agent of such change or addition (or such shorter
period of time to which Collateral Agent may agree in writing in advance) and
(y) obtaining a collateral access agreement for each such location to the extent
required under the Credit Agreement, or (iii) change its principal place of
business or chief executive office from the location identified on Schedule A,
other than as permitted by Section 4.15. Other than in the ordinary course of
business, none of the Grantors shall move any Equipment or Inventory to any
location outside the continental United States.
(h)    Compliance with Terms. Such Grantor will perform and comply in all
material respects with all obligations in respect of the Collateral owned by it
and all agreements to which it is a party or by which it is bound relating to
such Collateral.
(i)    Consents, etc. In the event that the Collateral Agent desires to exercise
any remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Security Agreement and determines it necessary to obtain any approvals
or consents of any Governmental Authority or any other person therefor, then,
upon the reasonable request of the Collateral Agent, such Grantor agrees to use
its commercially reasonable efforts to assist and aid the Collateral Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.

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(j)    Collateral. All information set forth herein, including the schedules
annexed hereto, and all information contained in any documents, schedules and
lists heretofore delivered to any Secured Party, in connection with this
Security Agreement, in each case, relating to the Collateral, is accurate and
complete in all material respects. The Collateral described on the schedules
hereto constitutes all of the property of such type of Collateral owned or held
by the Grantors (which is required to be scheduled).
(k)    No Further Actions. Notwithstanding Sections 4.1(c), 4.1(i), 4.2(b), 4.6
and 4.16, and any other provision hereof, except for the Orders, no filing with
any Governmental Authority, delivery of possessory collateral, establishment of
“control” or other action shall be required with respect to perfection of the
Liens under this Security Agreement; provided that the Grantors shall make such
filings and take such other action as the Backstop DIP Lenders may reasonably
request, subject to the cooperation of the Collateral Trustee, if required.
4.2    Receivables.
(a)    Such Grantor will not make or agree to make any discount, credit, rebate
or other reduction in the original amount owing on a Receivable or accept in
satisfaction of a Receivable less than the original amount thereof, except that,
prior to the occurrence of an Event of Default, such Grantor may reduce the
amount of Accounts arising from the sale of Inventory or providing of services
in accordance with its present policies and in the ordinary course of business.
(b)    Each Grantor shall keep and maintain at its own cost and expense complete
records of each Receivable, in a manner consistent with prudent business
practice. Each Grantor shall, at such Grantor’s sole cost and expense, upon the
Collateral Agent’s written demand made at any time after the occurrence and
during the continuance of any Event of Default, deliver all tangible evidence of
Receivables, including all documents evidencing Receivables and any books and
records relating thereto to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Grantor). Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may transfer a full and complete copy of any
Grantor’s books, records, credit information, reports, memoranda and all other
comparable writings relating to the Receivables to and for the use by any Person
that has acquired or is contemplating acquisition of an interest in the
Receivables or Receivables or the Collateral Agent’s security interest therein
without the consent of any Grantor.
(c)    Except as otherwise provided in this Security Agreement, such Grantor
will use commercially reasonable efforts to collect and enforce, as and when due
in the ordinary course of business and consistent with prudent business
practice, at such Grantor's sole expense, all amounts due or hereafter due to
such Grantor under the Receivables owned by it.
(d)    Such Grantor will deliver to the Collateral Agent immediately upon its
request after the occurrence and during the continuation of an Event of Default
duplicate invoices with respect to each Receivable owned by it bearing such
language of assignment as the Collateral Agent shall specify.
4.3    Equipment. Such Grantor shall not permit any material Equipment to become
a fixture with respect to real property or to become an accession with respect
to other personal property with respect to which real or personal property the
Collateral Agent does not have a Lien.
4.4    Encumbered Property.
(a)    Except in the ordinary course of business or as otherwise permitted in
the Credit Agreement, no Improvements will be altered in any material respect or
demolished or removed in whole or

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in part by the Grantors without the prior written consent of the Collateral
Agent. No Personal Property shall be removed by the Grantors, except that the
Grantors shall have the right to remove and dispose of, free of the Lien of the
Collateral Documents, such Personal Property as may, from time to time, become
worn out or obsolete in the normal course of business. The Grantors will
maintain and keep the Encumbered Property in good condition and repair,
reasonable wear and tear and damage by casualty excepted, and will not commit
any waste on the Encumbered Property or make any alteration to, or change in the
use of, the Encumbered Property that will materially diminish the utility
thereof for the operation of the business conducted thereon or increase the risk
of fire or other hazard and in no event shall any such alteration or change be
contrary to the terms of any insurance policy required to be kept pursuant to
the Credit Agreement. Subject to the terms of the Credit Agreement, the Grantors
shall promptly repair, replace or rebuild any part of the Encumbered Property
that becomes damaged or worn.
(b)    To the extent the same exist on the date hereof or are obtained in
connection with future permitted alterations, each Grantor shall maintain a
complete set of final plans, specifications, blueprints and drawings for the
Improvements either at the Encumbered Property or in a particular office at the
headquarters of such Grantor to which the Collateral Agent shall have access
upon reasonable advance notice. The Mortgagor shall promptly notify the
Mortgagee of any proposed zoning reclassification, variance, conditional or
special use permit, subdivision plat or annexation affecting the Land. Each
Grantor shall at all times comply in all material respects with, and is
currently in compliance in all material respects with, all of its obligations
under all recorded restrictions, conditions, easements and covenants
(“Restrictive Covenants”) encumbering the Land and shall duly enforce its rights
under all Restrictive Covenants encumbering other property for the benefit of
the Premises. If any Grantor receives any notice (whether oral or written) that
any Restrictive Covenant has been violated, then such Grantor shall promptly
notify the Collateral Agent and take such steps as the Collateral Agent may
reasonably require to correct such violation.
4.5    Intentionally Omitted.
4.6    Pledged Collateral.
(a)    Changes in Capital Structure of Issuers. Except as permitted by the
Credit Agreement, such Grantor will not (i) permit or suffer any issuer of an
Equity Interest constituting Pledged Collateral owned by it and which is a
Subsidiary of Parent to dissolve, merge, liquidate, retire any of its Equity
Interests or other Instruments or Securities evidencing ownership, reduce its
capital, sell or encumber all or substantially all of its assets or merge or
consolidate with any other entity, or (ii) vote any such Pledged Collateral in
favor of any of the foregoing.
(b)    Issuance of Additional Securities. Except as permitted by the Credit
Agreement, such Grantor will not permit or suffer the issuer of an Equity
Interest constituting Pledged Collateral owned by it and which is a Subsidiary
of Parent to issue additional Equity Interests, any right to receive the same or
any right to receive earnings, except to such Grantor.
(c)    Registration of Pledged Collateral. Upon the occurrence and during the
continuance of an Event of Default, such Grantor will permit any registerable
Pledged Collateral owned by it to be registered in the name of the Collateral
Agent or its nominee at any time at the option of the Collateral Agent or the
Required Lenders.
(d)    Exercise of Rights in Pledged Collateral.
(i)    Without in any way limiting the foregoing and subject to clause (ii)
below, such Grantor shall have the right to exercise all voting rights or other
rights relating to the Pledged Collateral

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owned by it for all purposes not inconsistent with this Security Agreement, the
Credit Agreement or any other Loan Documents; provided however, that no vote or
other right shall be exercised or action taken which would have the effect of
impairing in any material respect the rights of the Collateral Agent in respect
of such Pledged Collateral (or any other Collateral) or which could reasonably
be expected to have a Material Adverse Effect.
(ii)    Such Grantor will permit the Collateral Agent or its nominee at any time
after the occurrence and during the continuance of an Event of Default, with
notice, to exercise all voting rights or other rights relating to the Pledged
Collateral owned by it, including, without limitation, exchange, subscription or
any other rights, privileges, or options pertaining to any Equity Interest or
Investment Property constituting such Pledged Collateral as if it were the
absolute owner thereof.
(iii)    So long as no Event of Default shall have occurred and be continuing,
such Grantor shall be entitled to collect and receive for its own use all cash
dividends and interest paid in respect of the Pledged Collateral owned by it to
the extent not in violation of the Credit Agreement other than any of the
following distributions and payments, except to the extent permitted by the
Credit Agreement (collectively referred to as the “Excluded Payments”): (A)
dividends and interest paid or payable other than in cash in respect of such
Pledged Collateral, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged Collateral;
(B) dividends and other distributions paid or payable in cash in respect of such
Pledged Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in capital of an issuer; and (C) cash paid, payable or otherwise
distributed, in respect of principal of, or in redemption of, or in exchange
for, such Pledged Collateral; provided however, that until actually paid, all
rights to such distributions shall remain subject to the Lien created by this
Security Agreement; and
(iv)    Except to the extent permitted by the Credit Agreement, all Excluded
Payments and all other distributions in respect of any of the Pledged Collateral
owned by such Grantor, whenever paid or made, shall be delivered to the
Collateral Agent to hold as Pledged Collateral and shall, if received by such
Grantor, be received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Grantor, and be forthwith
delivered to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement) in each case, to the extent that the
Collateral Agent requires the Pledged Collateral to be delivered to it
hereunder.
4.7    Intellectual Property.
(a)    Subject to Article II hereof, such Grantor will use its commercially
reasonable efforts to secure all consents and approvals necessary or appropriate
for the assignment to or benefit of the Collateral Agent of any Intellectual
Property Licenses held by such Grantor and to enforce the security interests
granted thereunder.
(b)    Such Grantor shall notify the Collateral Agent immediately if it knows or
has reason to know that any application or registration relating to any Patent,
Trademark or Copyright (now or hereafter existing) material to such Grantor's
business may become abandoned or dedicated, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court) regarding such Grantor's
ownership of any Patent, Trademark or Copyright material to its business, its
right to register the same, or to keep and maintain the same.

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(c)    In no event shall any Grantor either directly or through any employee,
licensee or designee, file any application for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency without giving
the Collateral Agent prior written notice thereof.
(d)    Upon request of the Collateral Agent, such Grantor shall execute and
deliver any and all security agreements as the Collateral Agent may reasonably
request to evidence the Collateral Agent's valid and perfected security interest
(with the priority set forth in the Orders) on such Patent, Trademark or
Copyright, and the General Intangibles of such Grantor relating thereto or
represented thereby.
(e)    Such Grantor shall take all actions reasonably necessary or reasonably
requested by the Collateral Agent to maintain and pursue each application, to
obtain the relevant registration and to maintain the registration of each of its
Patents, Trademarks and Copyrights (now or hereafter existing) material to its
business, including the filing of applications for renewal, affidavits of use,
affidavits of noncontestability and opposition and interference and cancellation
proceedings. Each Grantor further agrees not to abandon any Trademark, Patent,
Copyright, or Intellectual Property License that is necessary to the operation
of such Grantor's business.
(f)    Should such Grantor obtain an ownership interest in any Intellectual
Property that is not on the date hereof a part of the Collateral
(“After-Acquired Intellectual Property”) (i) the provisions of this Security
Agreement shall automatically apply thereto, and (ii) any such After-Acquired
Intellectual Property and, in the case of trademarks, the goodwill symbolized
thereby, shall automatically become part of the Collateral subject to the terms
and conditions of this Security Agreement with respect thereto. Each Grantor
shall give prompt written notice to the Collateral Agent identifying the After
Acquired Intellectual Property.
(g)    Such Grantor shall, unless it shall reasonably determine that such
Patent, Trademark or Copyright is not material to the conduct of its business or
operations, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and shall take such other actions as the Collateral Agent shall reasonably deem
appropriate under the circumstances to protect such Patent, Trademark or
Copyright. In the event that such Grantor institutes suit because any of its
Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, such Grantor shall comply with
Section 4.8.
(h)    Each Grantor shall take actions reasonably necessary, as determined in
such Grantor's reasonable business discretion, to protect the confidentiality of
the Intellectual Property that is material to its business, which Intellectual
Property derives its value, either in whole or in part, from being kept
confidential.
4.8    Commercial Tort Claims. If any Grantor shall at any time hold or acquire
a Commercial Tort Claim having a value, together with all other Commercial Tort
Claims of all Grantors in which Collateral Agent does not have a security
interest, in excess of $100,000 in the aggregate, such Grantor shall promptly,
notify the Collateral Agent in writing, of the brief details thereof and, upon
Collateral Agent’s direction, grant to the Collateral Agent in such writing
signed by such Grantor a security interest therein and in the Proceeds thereof,
all upon the terms of this Security Agreement, with such writing to be in form
and substance reasonably satisfactory to the Collateral Agent.
4.9    Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of
a letter of credit having a face amount of $500,000 or more, it shall promptly,
and in any event within two Business Days after becoming a beneficiary, notify
the Collateral Agent thereof.

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4.10    Federal, State or Municipal Claims. Such Grantor will promptly notify
the Collateral Agent of any Collateral which constitutes a claim against the
United States government or any state or local government or any instrumentality
or agency thereof, the assignment of which claim is restricted by federal, state
or municipal law.
4.11    Intentionally Omitted.
4.12    Insurance.
(a)    Each Grantor shall maintain all insurance policies required by Section
6.07 of the Credit Agreement. All premiums on any such insurance shall be paid
when due by such Grantor, and copies of the policies shall be delivered to the
Collateral Agent. If such Grantor fails to obtain any insurance as required by
this Section and the Credit Agreement, the Collateral Agent may obtain such
insurance at the Company's expense.
(b)    Upon the request of the Collateral Agent, the Company and the other
Grantors will furnish to the Collateral Agent full information as to their
property and liability insurance carriers.
4.13    Intentionally Omitted.
4.14    Intentionally Omitted.
4.15    Change of Name or Location; Change of Fiscal Year. Except as permitted
by the Credit Agreement, such Grantor shall not (a) change its name as it
appears in official filings in the state of its incorporation or organization,
(b) change its chief executive office, principal place of business, mailing
address, corporate headquarters or warehouses or locations at which Collateral
is held or stored, or the location of its records concerning the Collateral as
set forth in the Security Agreement, (c) change the type of entity that it is,
(d) change its organization identification number, if any, issued by its state
of incorporation or other organization, or (e) change its state of incorporation
or organization, in each case, unless the Collateral Agent shall have received
at least thirty days prior written notice of such change and any reasonable
action requested by the Collateral Agent in connection therewith has been
completed or taken (including any action to continue the perfection of any Liens
in favor of the Collateral Agent, on behalf of Secured Parties, in any
Collateral), provided that, any new location shall be in the continental United
States. Such Grantor shall not change its fiscal year which currently ends on
December 31.
4.16    Assigned Contracts. Such Grantor will use commercially reasonable
efforts to secure all consents and approvals necessary or appropriate for the
assignment to or for the benefit of the Collateral Agent of any Assigned
Contract held by such Grantor and material to its business and to enforce the
security interests granted hereunder. Such Grantor shall fully perform all of
its obligations under each of its Assigned Contracts material to its business,
and shall enforce all of its rights and remedies thereunder, in each case, as it
deems appropriate in its business judgment; provided however, that such Grantor
shall not take any action or fail to take any action with respect to Assigned
Contracts material to such Grantor's business which would cause the termination
of such Assigned Contract. Such Grantor shall diligently use commercially
reasonable efforts to pursue any right to indemnification under any Assigned
Contract material to its business and, upon the request of the Collateral Agent,
shall report to the Collateral Agent on all material developments with respect
thereto. Upon the occurrence of and during the continuance of an Event of
Default, the Collateral Agent may, and at the direction of the Backstop DIP
Lenders shall, directly enforce such right in its own or such Grantor's name and
may enter into such settlements or other agreements with respect thereto as the
Collateral Agent or the Backstop DIP Lenders, as applicable, shall determine.
Notwithstanding any provision hereof to the contrary, such Grantor shall at all
times remain liable to observe and perform all of its duties

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and obligations under its Assigned Contracts, and the Collateral Agent's or any
Secured Party's exercise of any of their respective rights with respect to the
Collateral shall not release such Grantor from any of such duties and
obligations. Neither the Collateral Agent nor any Secured Party shall be
obligated to perform or fulfill any of such Grantor's duties or obligations
under its Assigned Contracts or to make any payment thereunder, or to make any
inquiry as to the nature or sufficiency of any payment or property received by
it thereunder or the sufficiency of performance by any party thereunder, or to
present or file any claim, or to take any action to collect or enforce any
performance, any payment of any amounts, or any delivery of any property.
ARTICLE V
REMEDIES
5.1    Remedies.
(a)    Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall at the direction of the Backstop DIP Lenders exercise
any or all of the following rights and remedies:
(i)    those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document (with the priority specified in the
Orders); provided that, this Section 5.1 shall not be understood to limit any
rights or remedies otherwise available to the Collateral Agent and the Secured
Parties prior to an Event of Default;
(ii)    those rights and remedies available to a secured party under the UCC
(whether or not the UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise of
a bank's right of setoff or bankers' lien and any real estate statutes
applicable to the Encumbered Property) when a debtor is in default under a
security agreement;
(iii)    those rights and remedies provided in the Orders;
(iv)    without notice (except as specifically provided in Section 8.1 or
elsewhere herein or notice to bailees and landlords to the extent necessary to
obtain access to the premises where such Collateral may be located), demand or
advertisement of any kind to any Grantor or any other Person, enter the premises
of any Grantor where any Collateral is located (through self-help and without
judicial process but in compliance with applicable law) to collect, receive,
assemble, process, appropriate, sell, lease, assign, grant an option or options
to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or
any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without
notice and may take place at any Grantor's premises or elsewhere), for cash, on
credit or for future delivery without assumption of any credit risk, and upon
such other terms as may be commercially reasonable and/or remain present at such
premises to receive copies of all communications and remittances relating to the
Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Grantor;
(v)    demand, sue for, collect or receive any money or property at any time
payable or receivable in respect of the Collateral including instructing the
obligor or obligors on any agreement, instrument or other obligation
constituting part of the Collateral to make any payment required by the terms of
such agreement, instrument or other obligation directly to the Collateral Agent,
and in connection with any of the foregoing, compromise, settle, extend the time
for payment and make other

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modifications with respect thereto; provided, however, that in the event that
any such payments are made directly to any Grantor, prior to receipt by any such
obligor of such instruction, such Grantor shall segregate all amounts received
pursuant thereto in trust for the benefit of the Collateral Agent and shall
promptly (but in no event later than one (1) Business Day after receipt thereof)
pay such amounts to the Collateral Agent;
(vi)    sell, assign, grant a license to use or otherwise liquidate, or direct
any Grantor to sell, assign, grant a license to use or otherwise liquidate, any
and all investments made in whole or in part with the Collateral or any part
thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation; and
(vii)    concurrently with written notice to the applicable Grantor, transfer
and register in its name or in the name of its nominee the whole or any part of
the Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a holder
with respect thereto, to collect and receive all cash dividends, interest,
principal and other distributions made thereon and to otherwise act with respect
to the Pledged Collateral as though the Collateral Agent was the outright owner
thereof.
(b)    The Collateral Agent, on behalf of the Secured Parties, may comply with
any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered to adversely
affect the commercial reasonableness of any sale of the Collateral.
(c)    The Collateral Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Collateral Agent and the Secured Parties, the
whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption the Grantor hereby expressly releases.
(d)    Until the Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, the Collateral Agent shall have the right to hold or
use Collateral, or any part thereof, to the extent that it deems reasonably
appropriate for the purpose of preserving Collateral or its value or for any
other purpose deemed reasonably appropriate by the Collateral Agent. The
Collateral Agent may, if it so elects, seek the appointment of a receiver or
keeper to take possession of Collateral and to enforce any of the Collateral
Agent's remedies (for the benefit of the Collateral Agent and Secured Parties),
with respect to such appointment without prior notice or hearing as to such
appointment.
(e)    Notwithstanding the foregoing, neither the Collateral Agent nor the
Secured Parties shall be required to (i) make any demand upon, or pursue or
exhaust any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Obligations or to pursue or exhaust any of their rights or remedies with respect
to any Collateral therefor or any direct or indirect guarantee thereof, (ii)
marshal the Collateral or any guarantee of the Obligations or to resort to the
Collateral or any such guarantee in any particular order, or (iii) effect a
public sale of any Collateral.
(f)    Each Grantor recognizes that the Collateral Agent may be unable to effect
a public sale of any or all the Equity Interests that constitute Pledged
Collateral and may be compelled to resort to one or more private sales thereof
in accordance with clause (a) above. Each Grantor also acknowledges that any
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a
commercially unreasonable manner solely by virtue of such sale being private.
The Collateral

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Agent shall be under no obligation to delay a sale of any of the Equity
Interests that constitute Pledged Collateral for the period of time necessary to
permit any Grantor or the issuer of such Pledged Collateral to register such
securities for public sale under the Securities Act of 1933, as amended, or
under applicable state securities laws, even if the applicable Grantor and the
issuer would agree to do so.
5.2    Grantor's Obligations Upon an Event of Default. Upon the request of the
Collateral Agent after the occurrence and during the continuance of an Event of
Default, each Grantor will:
(a)    assemble and make available to the Collateral Agent the Collateral and
all books and records relating thereto at any place or places specified by the
Collateral Agent, whether at a Grantor's premises or elsewhere;
(b)    permit the Collateral Agent, by the Collateral Agent's representatives
and agents, to enter, occupy and use any premises (subject to the rights of
bailees and landlords with respect to such premises) where all or any part of
the Collateral, or the books and records relating thereto, or both, are located,
to take possession of all or any part of the Collateral or the books and records
relating thereto, or both, to remove all or any part of the Collateral or the
books and records relating thereto, or both, and to conduct sales of the
Collateral, without any obligation to pay the Grantor for such use and
occupancy;
(c)    to the extent commercially reasonable, prepare and file, or cause an
issuer of any Equity Interests that constitute Pledged Collateral to prepare and
file, with the Securities and Exchange Commission or any other applicable
government agency, registration statements, a prospectus and such other
documentation in connection with such Pledged Collateral as the Collateral Agent
may reasonably request, all in form and substance reasonably satisfactory to the
Collateral Agent, and furnish to the Collateral Agent, or cause an issuer of
Pledged Collateral to furnish to the Collateral Agent, any information regarding
the Pledged Collateral in such detail as the Collateral Agent may reasonably
specify;
(d)    to the extent commercially reasonable, take, or cause an issuer of
Pledged Collateral to take, any and all actions necessary to register or qualify
the Pledged Collateral to enable the Collateral Agent to consummate a public
sale or other disposition of the Pledged Collateral; and
(e)    at its own expense, cause the independent certified public accountants
then engaged by each Grantor to prepare and deliver to the Collateral Agent and
each Secured Party, at any time, and from time to time, promptly upon the
Collateral Agent's request, the following reports with respect to the applicable
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts.
5.3    Grant of Intellectual Property License. For the purpose of enabling the
Collateral Agent to exercise the rights and remedies under this Article V at
such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies and during the continuance of an Event of Default, each
Grantor hereby (a) grants to the Collateral Agent, for the benefit of the
Collateral Agent and the Secured Parties, an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to
use, license or sublicense any Patents, Trademarks, Copyrights or other
intellectual property rights now owned or hereafter acquired by such Grantor,
and wherever the same may be located, and including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout thereof
and (b) irrevocably agrees that the Collateral Agent may sell any of such
Grantor's Inventory directly to any person, including without limitation persons
who have previously purchased the Grantor's Inventory from such Grantor and in
connection with any such sale or other enforcement of the Collateral Agent's
rights under this Security Agreement or the other Loan Documents (including the
Orders), may sell Inventory which bears any

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Trademark owned by or licensed to such Grantor and any Inventory that is covered
by any Copyright owned by or licensed to such Grantor, in each case, subject to
such licenses and the Collateral Agent may finish any work in process and affix
any Trademark owned by or licensed to such Grantor and sell such Inventory as
provided herein. Further, if any Event of Default shall have occurred and be
continuing, upon the written demand of the Collateral Agent, each Grantor shall
execute and deliver to the Collateral Agent an assignment or assignments of the
registered Patents, Trademarks and/or Copyrights and Goodwill and such other
documents as are necessary or appropriate to carry out the intent and purposes
hereof.
5.4     Waiver of Notice and Claims. Each Grantor hereby waives, to the fullest
extent permitted by applicable law, notice or judicial hearing in connection
with the Collateral Agent’s taking possession or the Collateral Agent’s
disposition of any of the Collateral, including any and all prior notice and
hearing for any prejudgment remedy or remedies and any such right which such
Grantor would otherwise have under law, and each Grantor hereby further waives,
to the fullest extent permitted by applicable law: (i) all damages occasioned by
such taking of possession, (ii) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement of the
Collateral Agent’s rights hereunder and (iii) all rights of redemption,
appraisal, valuation, stay, extension, homestead exemption or moratorium now or
hereafter in force under any applicable law. The Collateral Agent shall not be
liable for any incorrect or improper payment made pursuant to this Article V in
the absence of gross negligence or willful misconduct. Any sale of, or the grant
of options to purchase, or any other realization upon, any Collateral shall
operate to divest all right, title, interest, claim and demand, either at law or
in equity, of the applicable Grantor therein and thereto, and shall be a
perpetual bar both at law and in equity against such Grantor and against any and
all persons claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under such Grantor.
5.5     Certain Sales of Collateral.
(a)    Each Grantor recognizes that, by reason of certain prohibitions contained
in law, rules, regulations or orders of any Governmental Authority, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Collateral, to limit purchasers to those who meet the requirements of
such Governmental Authority. Each Grantor acknowledges that any such sales may
be at prices and on terms less favorable to the Collateral Agent than those
obtainable through a public sale without such restrictions, and, notwithstanding
such circumstances, agrees that any such restricted sale shall be deemed to have
been made in a commercially reasonable manner and that, except as may be
required by applicable law, the Collateral Agent shall have no obligation to
engage in public sales.
(b)    If the Collateral Agent determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, the applicable Grantor
shall from time to time furnish to the Collateral Agent all such information as
the Collateral Agent may reasonably request in order to determine the number of
securities included in the Pledged Collateral which may be sold by the
Collateral Agent as exempt transactions under the Securities Act and the rules
of the Securities and Exchange Commission thereunder, as the same are from time
to time in effect.
5.6     No Waiver; Cumulative Remedies.
(a)    No failure on the part of the Collateral Agent to exercise, no course of
dealing with respect to, and no delay on the part of the Collateral Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy; nor shall the Collateral Agent be required
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guaranties. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
(b)    In the event that the Collateral Agent shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Collateral Agent, then and in every such case, the Grantors, the
Collateral Agent and each other Secured Party shall be restored to their
respective former positions’ and rights hereunder with respect to the
Collateral, and all rights, remedies and powers of the Collateral Agent and the
other Secured Parties shall continue as if no such proceeding had been
instituted.
ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
6.1    Account Verification. The Collateral Agent may at any time after the
occurrence and during the continuance of an Event of Default, in the Collateral
Agent's own name, in the name of a nominee of the Collateral Agent, or in the
name of any Grantor communicate (by mail, telephone, facsimile or otherwise)
with the Account Debtors of any such Grantor, parties to contracts with any such
Grantor and obligors in respect of Instruments of any such Grantor to verify
with such Persons, to the Collateral Agent's reasonable satisfaction, the
existence, amount, terms of, and any other matter relating to, Accounts,
Instruments, Chattel Paper, payment intangibles and/or other Receivables.
6.2    Authorization for Secured Party to Take Certain Action.
(a)    Each Grantor irrevocably authorizes the Collateral Agent at any time and
from time to time in the sole discretion of the Collateral Agent and appoints
the Collateral Agent as its attorney in fact (i) to execute on behalf of such
Grantor as debtor and to file financing statements necessary or desirable in the
Collateral Agent's sole discretion to perfect and to maintain the perfection and
priority of the Collateral Agent's security interest in the Collateral, (ii) to
endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon,
photographic or other reproduction of this Security Agreement or any financing
statement with respect to the Collateral as a financing statement and to file
any other financing statement or amendment of a financing statement (which does
not add new collateral or add a debtor) in such offices as the Collateral Agent
in its sole discretion deems necessary or desirable to perfect and to maintain
the perfection and priority of the Collateral Agent's security interest in the
Collateral, (iv) to contact and enter into one or more agreements with the
issuers of uncertificated securities which are Pledged Collateral or with
securities intermediaries holding Pledged Collateral as may be necessary or
advisable to give the Collateral Agent Control over such Pledged Collateral, (v)
to apply the proceeds of any Collateral received by the Collateral Agent to the
Obligations as provided in Article VII, (vi) to discharge past due Taxes,
assessments, charges, fees or Liens on the Collateral (except for such Liens as
are specifically permitted hereunder), (vii) to contact Account Debtors for any
reason, (viii) to demand payment or enforce payment of the Receivables in the
name of the Collateral Agent or such Grantor and to endorse any and all checks,
drafts, and other instruments for the payment of money relating to the
Receivables, (ix) to sign such Grantor's name on any invoice or bill of lading
relating to the Receivables, drafts against any Account Debtor of the Grantor,
assignments and verifications of Receivables, (x) to exercise all of such
Grantor's rights and remedies with respect to the collection of the Receivables
and any other Collateral, (xi) to settle, adjust, compromise, extend or renew
the Receivables, (xii) to settle, adjust or compromise any legal proceedings
brought to collect Receivables, (xiii) to prepare, file and sign such Grantor's
name on a proof of claim in bankruptcy or similar document against any Account
Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor's name on
any notice of Lien, assignment or satisfaction of Lien or similar document in
connection with the Receivables, (xv) to

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change the address for delivery of mail addressed to such Grantor to such
address as the Collateral Agent may designate and to receive, open and dispose
of all mail addressed to such Grantor, and (xvi) to do all other acts and things
necessary to carry out this Security Agreement; and such Grantor shall reimburse
the Collateral Agent on demand for any payment made or any expense incurred by
the Collateral Agent in connection with any of the foregoing; provided that,
this authorization shall not relieve such Grantor of any of its obligations
under this Security Agreement or under the Credit Agreement or any other Loan
Document.
(b)    All acts of said attorney or designee are hereby ratified and approved.
The powers conferred on the Collateral Agent, for the benefit of the Collateral
Agent and Secured Parties, under this Section 6.2 are solely to protect the
Collateral Agent's 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 agrees that, except for the powers granted in Sections
6.2(a)(i), (iii) and (iv), it shall not exercise any power or authority granted
to it under this Section 6.2 unless an Event of Default has occurred and is
continuing.
6.3    Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE
COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2
ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH
PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE
RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE COLLATERAL
AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL
OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED
COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS
OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH
MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE
NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED COLLATERAL
ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER
OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR COLLATERAL AGENT THEREOF), UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.
6.4    Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE
COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED
WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY
AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 8.15. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY SECURED PARTY,
NOR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
PARTNERS, ADVISORS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT
OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE
LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT
OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE, WILLFUL MISCONDUCT
OR BAD FAITH AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION;
PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY,
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES.
ARTICLE VII
APPLICATION OF PROCEEDS

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After deducting all costs and expenses of collection, storage, custody, sale or
other disposition and delivery (including reasonable and documented legal costs
and reasonable attorneys' fees) and all other charges against the Collateral,
the residue of the proceeds of any sale, disposition, collection or other
realization of or on any of the Collateral following the occurrence and during
the continuance of an Event of Default shall be applied to the payment of the
Obligations by the Collateral Agent in accordance with the terms of Section 9.03
of the Credit Agreement. In the event the proceeds of any sale, lease,
disposition, collection or other realization of or on any of the Collateral are
insufficient to pay all the Obligations in full, the Grantors will be liable for
the deficiency, together with interest thereon at the maximum rate provided in
the Credit Agreement and the costs and expenses of collection of such
deficiency, including (to the extent permitted by law), without limitation,
Attorney Costs and reasonable fees, expenses and disbursements in accordance
with Section 11.04 of the Credit Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.1    Waivers. Any notice of the time and place of any public sale or the time
after which any private sale or other disposition of all or any part of the
Collateral may be made shall be deemed reasonable if sent to the Grantors,
addressed as set forth in Article IX, at least ten days prior to (i) the date of
any such public sale or (ii) the time after which any such private sale or other
disposition may be made; provided that no notification need be given to any
Grantor if it has signed, after the occurrence of an Event of Default, a
statement renouncing or modifying any right to notification of sale or other
intended disposition. To the maximum extent permitted by applicable law, each
Grantor waives all claims, damages, and demands against the Collateral Agent or
any Secured Party arising out of the repossession, retention or sale of the
Collateral, except such as arise solely out of the bad faith, gross negligence
or willful misconduct of the Collateral Agent or such Secured Party as finally
determined by a court of competent jurisdiction. To the extent it may lawfully
do so, each Grantor absolutely and irrevocably waives and relinquishes the
benefit and advantage of, and covenants not to assert against the Collateral
Agent or any Secured Party, any valuation, stay, appraisal, extension,
moratorium, redemption or similar laws and any and all rights or defenses it may
have as a surety now or hereafter existing which, but for this provision, might
be applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Security Agreement or any other Loan Document (including the Orders), or
otherwise. Except as otherwise specifically provided herein or in the Credit
Agreement or any other Loan Document, each Grantor hereby waives presentment,
demand, protest, notice of intent to accelerate, notice of acceleration, or any
other notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral, other than the
defense of payment or fraud.
8.2    Limitation on Collateral Agent's and Secured Parties' Duty with Respect
to the Collateral. Except as otherwise required by law, the Collateral Agent
shall have no obligation to clean-up or otherwise prepare the Collateral for
sale. The Collateral Agent and each Secured Party shall use reasonable care with
respect to the Collateral in its possession or under its control. Neither the
Collateral Agent nor any Secured Party shall have any other duty as to any
Collateral in its possession or control or in the possession or control of any
agent or nominee of the Collateral Agent or such Secured Party, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto, except for custody, safe keeping and physical
preservation of the Collateral. To the extent that applicable law imposes duties
on the Collateral Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable
for the Collateral Agent (i) to fail to incur expenses deemed significant by the
Collateral Agent to prepare Collateral for disposition or otherwise to transform
raw material or work in process into finished goods or other finished products
for disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected

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or disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or any
adverse claims against Collateral, (iv) to exercise collection remedies against
Account Debtors and other Persons obligated on Collateral directly or through
the use of collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as such Grantor, for
expressions of interest in acquiring all or any portion of such Collateral,
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature, (viii)
to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Collateral Agent
against risks of loss, collection or disposition of Collateral or to provide to
the Collateral Agent a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent,
to obtain the services of other brokers, investment bankers, consultants and
other professionals to assist the Collateral Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that the purpose
of this Section 8.2 is to provide non-exhaustive indications of what actions or
omissions by the Collateral Agent would be commercially reasonable in the
Collateral Agent's exercise of remedies against the Collateral and that other
actions or omissions by the Collateral Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 8.2.
Without limitation upon the foregoing, nothing contained in this Section 8.2
shall be construed to grant any rights to any Grantor or to impose any duties on
the Collateral Agent that would not have been granted or imposed by this
Security Agreement or by applicable law in the absence of this Section 8.2.
8.3    Compromises and Collection of Collateral. The Grantors and the Collateral
Agent recognize that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Receivables, that certain of
the Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Grantor agrees that the
Collateral Agent may at any time and from time to time, if an Event of Default
has occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Collateral Agent in
its sole discretion shall determine or abandon any Receivable, and any such
action by the Collateral Agent shall be commercially reasonable so long as the
Collateral Agent acts in good faith based on information known to it at the time
it takes any such action.
8.4    Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, the Collateral Agent may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Security Agreement and
the other Security Documents and the Grantors shall reimburse the Collateral
Agent for any amounts paid by the Collateral Agent pursuant to this Section 8.4.
The Grantors' obligation to reimburse the Collateral Agent pursuant to the
preceding sentence shall be an Obligation payable on demand.
8.5    Specific Performance of Certain Covenants. Each Grantor acknowledges and
agrees that a breach of any of the covenants contained in Sections 4.1(c),
4.1(d), 4.1(e), 4.1(i), 4.2(b), 4.2(c), 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.15,
4.16 or 8.6 will cause irreparable injury to the Collateral Agent and the
Secured Parties, that the Collateral Agent and Secured Parties have no adequate
remedy at law in respect of such breaches and therefore agrees, without limiting
the right of the Collateral Agent or the Secured Parties to seek and obtain
specific performance of other obligations of the Grantors contained in this
Security

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Agreement, that the covenants of the Grantors contained in the Sections referred
to in this Section 8.5 shall be specifically enforceable against the Grantors.
8.6    Dispositions Not Authorized. No Grantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.1(d) and
notwithstanding any course of dealing between any Grantor and the Collateral
Agent or other conduct of the Collateral Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in Section 4.1(d))
shall be binding upon the Collateral Agent or the Secured Parties unless such
authorization is in writing signed by the Collateral Agent with the consent or
at the direction of the Required Lenders.
8.7    No Waiver; Amendments; Cumulative Remedies. No delay or omission of the
Collateral Agent or any Secured Party to exercise any right or remedy granted
under this Security Agreement shall impair such right or remedy or be construed
to be a waiver of any Default or Event of Default or an acquiescence therein,
and any single or partial exercise of any such right or remedy shall not
preclude any other or further exercise thereof or the exercise of any other
right or remedy. No waiver, amendment or other variation of the terms,
conditions or provisions of this Security Agreement whatsoever shall be valid
unless in writing signed by the Grantors and the Collateral Agent with the
concurrence or at the direction of the Secured Parties required under Section
11.01 of the Credit Agreement and then only to the extent in such writing
specifically set forth. All rights and remedies contained in this Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Collateral Agent and the Secured Parties until the Obligations (other than
contingent indemnification obligations that have not been asserted) have been
paid in full and the Commitments and the Credit Agreement have been terminated.
8.8    Limitation by Law; Severability of Provisions. All rights, remedies and
powers provided in this Security Agreement may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
all the provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or
in part. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Security Agreement are declared to be severable.
8.9    Indemnification; Expenses.
(a)    Without limiting the provisions of Section 11.05 of the Credit Agreement,
each Grantor shall indemnify, defend and save each Secured Party and each of its
Affiliates and their respective officers, directors, employees, agents, partners
and advisors (each, an “Indemnified Party”) from, and hold harmless each
Indemnified Party against, and shall pay on written demand, any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
Attorneys Costs (which, prior to the occurrence and continuation of an Event of
Default, shall be limited to one counsel for the Lenders (collectively) and one
counsel to the Collateral Agent and the other Agents (collectively) (and one
local counsel for the Lenders (collectively) and one local counsel to the
Collateral Agent and the other Agents (collectively) in each applicable
jurisdiction and, in the event of any actual conflict of interest, one
additional counsel to each of the affected parties)) for any Indemnified Party)
incurred by or asserted against any Indemnified Party, in each case arising out
of or in connection with or resulting from this Security Agreement (including,
without limitation, enforcement of this Security Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.

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(b)    Without limiting the provisions of Section 11.04 of the Credit Agreement,
each Grantor will upon demand pay to the Collateral Agent the amount of Attorney
Costs (which, prior to the occurrence and continuation of an Event of Default,
shall be limited to one counsel for the Lenders (collectively) and one counsel
to the Collateral Agent and the other Agents (collectively) (and one local
counsel for the Lenders (collectively) and one local counsel to the Collateral
Agent and the other Agents (collectively) in each applicable jurisdiction and,
in the event of any actual conflict of interest, one additional counsel to each
of the affected parties)) and any and all other reasonable expenses, including,
without limitation, the reasonable fees and expenses of any other experts and
agents, that the Collateral Agent may incur in connection with (i) the
preparation, execution, delivery, administration, modification and amendment of,
or any consent or waiver under this Security Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral of such Grantor, (iii) the enforcement
of this Security Agreement or the exercise, enforcement or protection of the
rights of the Collateral Agent or the other Secured Parties hereunder and (iv)
the Chapter 11 Cases.
8.10    Reinstatement. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
8.11    Benefit of Agreement. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Grantors, the
Collateral Agent and the Secured Parties and their respective successors and
assigns (including all persons who become bound as a debtor to this Security
Agreement), except that no Grantor shall have the right to assign its rights or
delegate its obligations under this Security Agreement or any interest herein,
without the prior written consent of the Secured Parties. No sales of
participations, assignments, transfers, or other dispositions of any agreement
governing the Obligations or any portion thereof or interest therein shall in
any manner impair the Lien granted to the Collateral Agent, for the benefit of
the Collateral Agent and the Secured Parties, hereunder.
8.12    Survival of Representations. All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.
8.13    Taxes and Grantor Expenses. Any Taxes (including income Taxes) payable
or ruled payable by Federal or State authority in respect of this Security
Agreement shall be paid by the Grantors, together with interest and penalties,
if any. Any and all costs and expenses incurred by the Grantors in the
performance of actions required pursuant to the terms hereof shall be borne
solely by the Grantors.
8.14    Headings. The title of and Section headings in this Security Agreement
are for convenience of reference only, and shall not govern the interpretation
of any of the terms and provisions of this Security Agreement.
8.15    Termination; Release.
(a)    When all the Obligations (other than (A) obligations under Secured Hedge
Agreements and Cash Management Obligations not yet due and payable, in each case
which have been cash

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collateralized or backstopped by letters of credit, as the case may be, in a
manner satisfactory to the applicable Secured Parties and (B) contingent
indemnification obligations not yet accrued and payable) have been paid in full
and the Aggregate Commitments shall have expired or been sooner terminated in
accordance with the provisions of the Credit Agreement and the Orders, any Lien
granted or held by the Collateral Agent under any Loan Document for the benefit
of the Secured Parties shall be automatically released and this Security
Agreement shall terminate. Upon termination of this Security Agreement in
accordance with this Section, the Collateral shall be released from the Lien of
this Security Agreement.
(b)    Any Lien on any property granted to or held by the Collateral Agent under
this Security Agreement for the benefit of the Secured Parties shall be
automatically released (i) upon the sale, lease, transfer or other disposition
of such property (including, without limitation, as a result of the sale, in
accordance with the terms of the Loan Documents, of the Grantor that owns such
property) in accordance with the terms of the Loan Documents and the Orders,
(ii) subject to Section 11.01 of the Credit Agreement, if the release of such
Lien is approved, authorized or ratified in writing by the Required Lenders and
the Bankruptcy Court, or (iii) if the property subject to such Lien is owned by
a Guarantor, upon release of such Guarantor from its obligations under its
Guaranty pursuant to Section 10.11(b) of the Credit Agreement.
(c)    Upon such release or any release of Collateral or any part thereof in
accordance with the provisions of the Credit Agreement, the Collateral Agent
shall, upon the reasonable request and at the sole cost and expense of the
Grantors, assign, transfer and deliver to Grantor, against receipt and without
recourse to or warranty by the Collateral Agent except as to the fact that the
Collateral Agent has not encumbered the released assets, such of the Collateral
or any part thereof to be released (in the case of a release) as may be in
possession of the Collateral Agent and as shall not have been sold or otherwise
applied pursuant to the terms hereof, and, with respect to any other Collateral,
proper documents and instruments (including UCC-3 termination financing
statements or releases, if applicable) acknowledging the termination hereof or
the release of such Collateral, as the case may be.
8.16    Continuing Security Interest Assignment. This Security Agreement shall
create a continuing security interest in the Collateral and shall (i) be binding
upon the Grantors, their respective successors and assigns and (ii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent and the other Secured Parties and each of their
respective permitted successors, transferees and assigns. No other persons
(including any other creditor of any Grantor) shall have any interest herein or
any right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (ii), any Secured Party may assign or otherwise transfer any
indebtedness held by it secured by this Security Agreement to any other person,
and such other person shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party, herein or otherwise, subject
however, to the provisions of the Credit Agreement.
8.17    Entire Agreement. This Security Agreement, the Credit Agreement, and the
other Loan Documents embody the entire agreement and understanding between the
Grantors and the Collateral Agent relating to the subject matter hereof and
thereof and supersede all prior agreements and understandings between the
Grantors and the Collateral Agent relating to the subject matter hereof and
thereof.
8.18    GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. SECTIONS
11.14 AND 11.15 OF THE CREDIT AGREEMENT ARE INCORPORATED HEREIN, MUTATIS
MUTANDIS, AS IF A PART HEREOF.
8.19     No Credit for Payment of Taxes or Imposition. Such Grantor shall not be
entitled to any credit against the principal, premium, if any, or interest
payable under the Credit Agreement, and such Grantor

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shall not be entitled to any credit against any other sums which may become
payable under the terms thereof or hereof, by reason of the payment of any Tax
on the Collateral or any part thereof.
8.20     No Release. Nothing set forth in this Security Agreement shall relieve
any Grantor from the performance of any term, covenant, condition or agreement
on such Grantor’s part to be performed or observed under or in respect of any of
the Collateral or from any liability to any person under or in respect of any of
the Collateral or shall impose any obligation on Collateral Agent or any other
Secured Party to perform or observe any such term, covenant, condition or
agreement on such Grantor’s part to be so performed or observed or shall impose
any liability on Collateral Agent or any other Secured Party for any act or
omission on the part of such Grantor relating thereto or for any breach of any
representation or warranty on the part of such Grantor contained in this
Security Agreement, the Credit Agreement or the other Loan Documents, or under
or in respect of the Collateral or made in connection herewith or therewith. The
obligations of each Grantor contained in this Section 8.20 shall survive the
termination hereof and the discharge of such Grantor’s other obligations under
this Security Agreement, the Credit Agreement and the other Loan Documents.
8.21     Obligations Absolute. All obligations of each Grantor hereunder shall
be absolute and unconditional irrespective of
(a)    any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any Grantor;
(b)    any lack of validity or enforceability of the Credit Agreement or any
other Loan Document, or any other agreement or instrument relating thereto;
(c)    any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement or any other Loan
Document or any other agreement or instrument relating thereto;
(d)    any pledge, exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Obligations;
(e)    any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement or any other Loan
Document; or
(f)    any other circumstances which might otherwise constitute a defense
available to, or a discharge of any Grantor.
8.22    Counterparts. This Security Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Security Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page to
this Security Agreement by telecopier (or other electronic transmission) shall
be effective as delivery of an original executed counterpart of this Security
Agreement.
ARTICLE IX
NOTICES
Any notice required or permitted to be given under this Security Agreement shall
be sent in accordance with Section 11.02 of the Credit Agreement.

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[Signature Page Follows]

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this
Security Agreement as of the date first above written.
GRANTORS:
GEOKINETICS HOLDINGS USA, INC.

By: ____________________________________
Name:    
Title:    

GEOKINETICS INC.

By: ____________________________________
Name:    
Title:    

ADVANCED SEISMIC TECHNOLOGY, INC.

By: ____________________________________
Name:    
Title:    

GEOKINETICS ACQUISITION COMPANY

By: ____________________________________
Name:    
Title:    

GEOKINETICS MANAGEMENT, INC.

By: ____________________________________
Name:    
Title:    

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GEOKINETICS PROCESSING, INC.
 
By: ____________________________________
Name:    
Title:    

GEOKINETICS SERVICES CORP.
 
By: ____________________________________
Name:    
Title:    

GEOKINETICS USA, INC.

By: ____________________________________
Name:    
Title:    

GEOKINETICS INTERNATIONAL HOLDINGS, INC.

By: ____________________________________
Name:    
Title:    

GEOKINETICS INTERNATIONAL, INC.

By: ____________________________________
Name:    
Title:    

[Signature Page for Pledge and Security Agreement]

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COLLATERAL AGENT:
CANTOR FITZGERALD SECURITIES,
as Collateral Agent

By: ____________________________________
Name:    
Title:    

[Signature Page for Pledge and Security Agreement]

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