Exhibit 10.3

FIRST LIEN SECURITY AGREEMENT

dated as of

June 30, 2014

among

THE GRANTORS IDENTIFIED HEREIN

and

DEUTSCHE BANK AG NEW YORK BRANCH,

as Administrative Agent

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TABLE OF CONTENTS

 

 

 

          PAGE     

Article 1

Definitions

  

Section 1.01.

  

Credit Agreement

     1   

Section 1.02.

  

Other Defined Terms

     1       Article 2       Pledge of Securities   

Section 2.01.

  

Pledge

     4   

Section 2.02.

  

Delivery of the Pledged Securities

     6   

Section 2.03.

  

Representations, Warranties and Covenants

     6   

Section 2.04.

  

Certification of Limited Liability Company and Limited Partnership Interests

     8   

Section 2.05.

  

Registration in Nominee Name; Denominations

     9   

Section 2.06.

  

Voting Rights; Dividends and Interest

     9       Article 3       Security Interests in Personal Property   

Section 3.01.

  

Security Interest

     11   

Section 3.02.

  

Representations and Warranties

     14   

Section 3.03.

  

Covenants

     15       Article 4       Remedies   

Section 4.01.

  

Remedies Upon Default

     18   

Section 4.02.

  

Application of Proceeds

     20   

Section 4.03.

  

Grant of License to Use Intellectual Property

     20   

Section 4.04.

  

Effect of Securities Laws

     21   

Section 4.05.

  

Deficiency

     21       Article 5       Subordination   

Section 5.01.

  

Subordination

     22       Article 6       Miscellaneous   

Section 6.01.

  

Notices

     22   

Section 6.02.

  

Waivers; Amendment

     22   

Section 6.03.

  

Administrative Agent’s Fees and Expenses; Indemnification

     23   

Section 6.04.

  

Successors and Assigns

     23   

 

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Section 6.05.

  

Survival of Agreement

     23   

Section 6.06.

  

Counterparts; Effectiveness; Several Agreement

     24   

Section 6.07.

  

Severability

     24   

Section 6.08.

  

Governing Law; Jurisdiction; Venue; Waiver of Jury Trial; Consent to Service of
Process

     24   

Section 6.09.

  

Headings

     24   

Section 6.10.

  

Security Interest Absolute

     25   

Section 6.11.

  

Termination, Release or Subordination

     25   

Section 6.12.

  

Additional Grantors

     26   

Section 6.13.

  

Administrative Agent Appointed Attorney-in-Fact

     26   

Section 6.14.

  

General Authority of the Administrative Agent

     27   

Section 6.15.

  

Reasonable Care

     28   

Section 6.16.

  

Delegation; Limitation

     28   

Section 6.17.

  

Reinstatement

     28   

Section 6.18.

  

Intercreditor Agreements

     28   

Schedules

 

Schedule I    Subsidiary Parties Schedule II    Pledged Equity and Pledged Debt
Schedule III    [Reserved]. Schedule IV    Locations of Equipment and Inventory

Exhibits

 

Exhibit I    Form of Security Agreement Supplement Exhibit II    Form of
Perfection Certificate Exhibit III    Form of Patent Security Agreement Exhibit
IV    Form of Trademark Security Agreement Exhibit V    Form of Copyright
Security Agreement

 

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FIRST LIEN SECURITY AGREEMENT dated as of June 30, 2014 (as amended, restated,
amended and restated, supplemented and otherwise modified from time to time, the
“Agreement”), by and among the Grantors (as defined below) and Deutsche Bank AG
New York Branch, as Administrative Agent for the Secured Parties (in such
capacity and together with its successors and permitted assigns in such
capacity, the “Administrative Agent”).

Reference is made to the First Lien Credit Agreement dated as of June 30, 2014
(as amended, restated, amended and restated, supplemented or otherwise modified
in writing from time to time, the “Credit Agreement”), among, inter alios, Jason
Incorporated, a Wisconsin corporation (the “Company” and the “Borrower”), Jason
Partners Holdings Inc., a Delaware corporation (“Holdings”), Jason Holdings,
Inc. I, a Delaware corporation (“Intermediate Holdings”), the other guarantors
from time to time party thereto, Deutsche Bank AG New York Branch, as
Administrative Agent, Swing Line Lender and L/C Issuer and each lender from time
to time party thereto (collectively, the “Lenders” and, individually, a
“Lender”). The Lenders have agreed to extend credit to the Borrower subject to
the terms and conditions set forth in the Credit Agreement. The obligations of
the Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. Holdings, Intermediate Holdings and
the Subsidiary Parties (as defined below) are affiliates of the Company, will
derive substantial benefits from the extension of credit by the Lenders pursuant
to the Credit Agreement, and are willing to execute and deliver this Agreement
in order to induce the Lenders to extend such credit. It is acknowledged and
agreed by all parties hereto that this Agreement is executed and effective on
and from the Closing Date. Accordingly, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Credit Agreement.

(a) Capitalized terms used in this Agreement and not otherwise defined herein
have the meanings specified in the Credit Agreement. All terms defined in the
UCC (as defined herein) and not defined in this Agreement have the meanings
specified therein; the term “instrument” shall have the meaning specified in
Article 9 of the UCC.

(b) The rules of construction specified in Article I (including Sections 1.01
through 1.11) of the Credit Agreement also apply to this Agreement.

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

“Account Debtor” means any Person who is or who may become obligated to any
Grantor under, with respect to or on account of an Account.

“Accounts” has the meaning specified in Article 9 of the UCC.

 

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

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

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

“Collateral” means the Article 9 Collateral and the Pledged Collateral.

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any Copyright now or hereafter owned
by any Grantor or that such Grantor otherwise has the right to license, or
granting any right to any Grantor under any Copyright now or hereafter owned by
any third party, and all rights of such Grantor under any such agreement.

“Copyrights” means all of the following now owned or hereafter acquired by any
Grantor: (a) all copyright rights in any work subject to the copyright Laws of
the United States, whether as author, assignee, transferee or otherwise, and
(b) all registrations and applications for registration of any such copyright in
the United States, including registrations, recordings, supplemental
registrations and pending applications for registration in the USCO.

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

“General Intangibles” has the meaning specified in Article 9 of the UCC.

“Grantor” means the Borrower, each Guarantor that is a party hereto, and each
Guarantor that is a Domestic Subsidiary that becomes a party to this Agreement
after the Closing Date.

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

“Intellectual Property” means all (a) intellectual property of every kind and
nature now owned or hereafter acquired by any Grantor, including inventions,
designs, Patents, Copyrights, Trademarks, trade secrets, the intellectual
property rights in software and databases and related documentation and all
additions and improvements to the foregoing, (b) renewals, extensions,
supplements and continuations thereof, (c) income, fees, royalties, damages,
claims and payments now and hereafter due and/or payable thereunder or with
respect thereto including damages and payments for past, present or future
infringements or violations thereof, and (d) rights to sue for past, present or
future infringements or violations thereof, in each case whether such
intellectual property is owned or licensed.

“Intellectual Property Security Agreements” means the short-form Patent Security
Agreement, short-form Trademark Security Agreement, and short-form Copyright
Security Agreement, each substantially in the form attached hereto as Exhibits
III, IV and V, respectively.

 

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

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

“License” means any Patent License, Trademark License, Copyright License or
other Intellectual Property license or sublicense agreement to which any Grantor
is a party; provided, that Licenses shall not include any Excluded Assets.

“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a Patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.

“Patents” means all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States in or to which any Grantor
now or hereafter has any right, title or interest therein, all registrations and
recordings thereof, and all applications for letters patent of the United
States, including registrations, recordings and pending applications in the
USPTO; and (b) all reissues, continuations, divisionals, continuations-in-part,
improvements or extensions thereof, and the inventions disclosed or claimed
therein, including the right to make, use and/or sell the inventions disclosed
or claimed therein.

“Perfection Certificate” means a certificate substantially in the form of
Exhibit II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Responsible Officer of each
Grantor.

“Pledged Collateral” has the meaning assigned to such term in Section 2.01.

“Pledged Debt” has the meaning assigned to such term in Section 2.01.

“Pledged Equity” has the meaning assigned to such term in Section 2.01.

“Pledged Securities” means the Pledged Equity and Pledged Debt.

“Proceeds” shall mean all “proceeds” as such term is defined in the UCC.

“Registered Intellectual Property Collateral” means the Collateral consisting of
United States registered Patents, United States registered Trademarks and United
States registered Copyrights and, in each case, applications therefor.

 

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“Security Agreement Supplement” means an instrument substantially in the form of
Exhibit I hereto.

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

“Subsidiary Parties” means (a) the Restricted Subsidiaries identified on
Schedule I and (b) each other Restricted Subsidiary that becomes a party to this
Agreement as a Subsidiary Party after the Closing Date.

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter
owned by any Grantor or that any Grantor otherwise has the right to license, or
granting to any Grantor any right to use any Trademark now or hereafter owned by
any third party, and all rights of any Grantor under any such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (a) all trademarks, service marks, trade names, corporate names, trade
dress, logos, designs, fictitious business names, and other source or business
identifiers, now existing or hereafter adopted or acquired and whether
registered or unregistered, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the USPTO or any similar offices
in any State of the United States or any political subdivision thereof, and all
extensions or renewals thereof, as well as any unregistered trademarks and
service marks used by a Grantor; and (b) all goodwill connected with the use of
and symbolized thereby; provided, that “Trademarks” shall not include any
Excluded Assets.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
State of New York; provided that, if perfection or the effect of perfection or
non-perfection or the priority of the security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, “UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.

“USCO” means the United States Copyright Office.

“USPTO” means the United States Patent and Trademark Office.

ARTICLE 2

PLEDGE OF SECURITIES

Section 2.01. Pledge. As security for the payment or performance in full of the
Secured Obligations, including the Guaranteed Obligations, each of the Grantors
hereby pledges to the Administrative Agent, its successors and permitted
assigns, for the benefit of the Secured Parties, and hereby grants to the
Administrative Agent, its successors and permitted assigns, for the benefit of
the Secured Parties, a security interest in all of such

 

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Grantor’s right, title and interest in, to and under any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire right, title or interest:

(i) all Equity Interests held by it, including, without limitation, the Equity
Interests which are listed on Schedule II, and any other Equity Interests
obtained in the future by such Grantor and the certificates (if any)
representing all such Equity Interests (the “Pledged Equity”); provided that the
Pledged Equity shall not include (A) Excluded Assets or (B) for the avoidance of
doubt, Equity Interests in excess of 65% of the issued and outstanding Equity
Interests of (1) any Restricted Subsidiary that is a CFC Holding Company and
(2) any Restricted Subsidiary that is a wholly owned Foreign Subsidiary that is
directly owned by the Borrower or by any Subsidiary Guarantor;

(ii) (A) all debt securities owned by it, including without limitation, the debt
securities which are listed opposite the name of such Grantor on Schedule II,
(B) any debt securities obtained in the future by such Grantor and (C) the
promissory notes and any other instruments evidencing such debt securities (the
“Pledged Debt”);

(iii) all other property that may be delivered to and held by the Administrative
Agent pursuant to the terms of this Agreement;

(iv) subject to Section 2.06, all payments of principal or interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (i) and (ii) above;

(v) subject to Section 2.06, all rights and privileges of such Grantor with
respect to the securities and other property referred to in clauses (i), (ii),
(iii) and (iv) above; and

(vi) all Proceeds of any of the foregoing

(the items referred to in clauses (i) through (vi) above being collectively
referred to as the “Pledged Collateral”). For the avoidance of doubt, neither
“Pledged Collateral” nor any defined term used therein shall include any
Excluded Assets.

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

 

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Section 2.02. Delivery of the Pledged Securities.

(a) As of the Closing Date, each Grantor has delivered or caused to be delivered
to the Administrative Agent, for the benefit of the Secured Parties, any and all
Pledged Equity evidenced by a certificate and, to the extent required to be
delivered pursuant to Section 2.02(b) below, any and all Pledged Debt. Each
Grantor agrees promptly (but in any event within 10 Business Days after receipt
by such Grantor or such longer period as the Administrative Agent may agree in
its reasonable discretion) to deliver or cause to be delivered to the
Administrative Agent, for the benefit of the Secured Parties, any and all
Pledged Equity acquired after the Closing Date that is evidenced by a
certificate and, to the extent required to be delivered pursuant to
Section 2.02(b), any and all Pledged Debt acquired after the Closing Date.

(b) Each Grantor will cause any Indebtedness for borrowed money having an
aggregate principal amount in excess of $5,000,000 owed to such Grantor by any
Person that is evidenced by a duly executed promissory note constituting a
negotiable instrument to be pledged and delivered to the Administrative Agent,
for the benefit of the Secured Parties, pursuant to the terms hereof.

(c) Upon delivery to the Administrative Agent, any Pledged Securities shall be
accompanied by stock or security powers, endorsements or allonges duly executed
in blank or other instruments of transfer reasonably satisfactory to the
Administrative Agent (other than instruments or documents requiring actions in
any non-U.S. jurisdiction related to Equity Interests of Foreign Subsidiaries).
Each delivery of Pledged Securities shall be accompanied by a schedule
describing the Pledged Securities, which schedule shall be deemed to supplement
Schedule II and made a part hereof; provided that failure to supplement Schedule
II shall not affect the validity of such pledge of such Pledged Securities. Each
schedule so delivered shall supplement any prior schedules so delivered.

Section 2.03. Representations, Warranties and Covenants. Each Grantor
represents, warrants and covenants to and with the Administrative Agent, for the
benefit of the Secured Parties, that:

(a) As of the date hereof, Schedule II includes all Equity Interests, debt
securities and promissory notes required to be pledged by such Grantor hereunder
in order to satisfy the Collateral and Guarantee Requirement;

(b) the Pledged Equity issued by the Borrower or a wholly-owned Restricted
Subsidiary have been duly and validly authorized and issued by the issuers
thereof and are fully paid and non-assessable (if applicable);

(c) except for the security interests granted hereunder, such Grantor (i) is,
subject to any transfers made in compliance with the Credit Agreement, the
direct owner, beneficially and of record, of the Pledged Securities indicated on
Schedule II to be owned by such Grantor, (ii) holds the same free and clear of
all Liens, other than (A) Liens created by the Collateral Documents and
(B) Liens permitted pursuant to Section 7.01 of the Credit Agreement, and
(iii) if reasonably requested by the Administrative Agent, will use commercially
reasonable efforts to defend its title or interest thereto or therein against
any and all Liens (other than the Liens permitted pursuant to this
Section 2.03(c), however arising, of all Persons whomsoever;

 

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(d) as of the Closing Date, except for restrictions and limitations (i) imposed
or permitted by the Loan Documents, (subject to the terms of the Closing Date
Intercreditor Agreement) the Second Lien Loan Documents, Contractual Obligations
permitted pursuant to Section 7.09 of the Credit Agreement, or securities laws
generally and (ii) in the case of Pledged Equity of Persons that are not
Subsidiaries, transfer restrictions that exist at the time of acquisition of
Equity Interests in such Persons (but not entered into in contemplation
thereof), the Pledged Collateral is freely transferable and assignable, and none
of the Pledged Collateral is subject to any option, right of first refusal,
shareholders agreement, charter or bylaw provisions or contractual restriction
of any nature that could reasonably be expected to prohibit, impair, delay or
otherwise affect, in each case, in any manner material and adverse to the
Secured Parties the pledge of such Pledged Collateral hereunder, the sale or
disposition thereof pursuant hereto or the exercise by the Administrative Agent
of rights and remedies hereunder;

(e) the execution and performance by the Grantors of this Agreement are within
each Grantor’s corporate or limited liability company powers and have been duly
authorized by all necessary corporate action or other organizational action;

(f) no approval, consent, exemption, authorization or other action, filing,
notice or registration is necessary to ensure the validity of the pledge
effected hereby, except for (i) approvals, consents, exemptions, authorizations,
or other actions by, or notices to, or filings and registrations necessary to
perfect the Liens on the Collateral granted by the Loan Parties in favor of the
Secured Parties (or release existing Liens) under applicable U.S. law, (ii) 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 (except to the extent not required to be obtained, taken, given or made
or in full force and effect pursuant to the Collateral and Guarantee
Requirement) and (iii) those approvals, consents, exemptions, authorizations or
other actions, notices or filings, the failure of which to obtain or make could
not reasonably be expected to have a Material Adverse Effect;

(g) by virtue of the execution and delivery by each Grantor of this Agreement,
and delivery of the Pledged Equity to and continued possession by the
Administrative Agent in the State of New York, the Administrative Agent (for the
benefit of the Secured Parties) has a legal, valid and perfected first-priority
lien upon and security interest in such Pledged Equity as security for the
payment and performance of the Secured Obligations to the extent such perfection
is governed by the UCC, subject only to Liens permitted by Section 7.01 of the
Credit Agreement and the Enforcement Qualifications;

(h) by virtue of (i) the filing of UCC financing statements or other appropriate
filings, recordings or registrations prepared by the Administrative Agent based
upon the information provided to the Administrative Agent in the Perfection
Certificate for filing in the applicable filing office, in each case, as
required by the Collateral and Guarantee Requirement and Section 6.11 and 6.20
of the Credit Agreement and (ii) delivery of the

 

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Pledged Debt to and continued possession of the Pledged Debt by the
Administrative Agent in the State of New York, the Administrative Agent (for the
benefit of the Secured Parties) has a legal, valid and perfected security
interest in respect of all Collateral in which the Security Interest in the
Pledged Debt may be perfected by filing or recording in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the UCC or by possession of the Pledged Debt (subject, in each case, to the
Enforcement Qualifications); and

(i) the pledge effected hereby is effective to vest in the Administrative Agent,
for the benefit of the Secured Parties, the rights set forth herein of the
Administrative Agent in the Pledged Collateral.

Subject to the terms of this Agreement, each Grantor hereby agrees that upon the
occurrence and during the continuance of an Event of Default, it will comply
with instructions of the Administrative Agent with respect to the Equity
Interests in such Grantor that constitute Pledged Equity hereunder without
further consent by the applicable owner or holder of such Equity Interests.

Notwithstanding anything to the contrary in this Agreement, to the extent any
provision of this Agreement or the Credit Agreement excludes any assets from the
scope of the Pledged Collateral, or from any requirement to take any action to
perfect any security interest in favor of the Administrative Agent in the
Pledged Collateral, the representations, warranties and covenants made by any
relevant Grantor in this Agreement with respect to the creation, perfection or
priority (as applicable) of the security interest granted in favor of the
Administrative Agent (including, without limitation, this Section 2.03) shall be
deemed not to apply to such excluded assets.

Section 2.04. Certification of Limited Liability Company and Limited Partnership
Interests. No interest in any limited liability company or limited partnership
controlled by any Grantor that constitutes Pledged Equity is, or shall be,
represented by a certificate unless the limited liability company agreement or
partnership agreement expressly provides that such interests shall be a
“security” within the meaning of Article 8 of the UCC; provided that, regardless
of whether such Pledged Equity is a “security” within the meaning of Article 8
of the UCC, any and all certificates evidencing such Pledged Equity shall be
delivered to the Administrative Agent in accordance with Section 2.02. If any
limited liability company or limited partnership controlled by any Grantor, the
interest of which is pledged under Section 2.01, includes in its limited
liability company agreement or partnership agreement that any interests in such
limited liability company or such limited partnership be a “security” as defined
under Article 8 of the UCC, the applicable Grantor shall promptly certificate
any Equity Interests in any such limited liability company or such limited
partnership. To the extent an interest in any limited liability company or
limited partnership controlled by any Grantor and pledged under Section 2.01 is
certificated or becomes certificated, (i) each such certificate shall be
delivered to the Administrative Agent, pursuant to Section 2.02(a) and (ii) such
Grantor shall fulfill all other requirements under Section 2.02 applicable in
respect thereof. To the extent an interest in any limited liability company or
limited partnership controlled by any Grantor and pledged under Section 2.01 is
an “uncertificated security” as defined

 

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under Article 8 of the UCC, each Grantor shall not permit any issuer of such
uncertificated securities (other than (x) an uncertificated security credited on
the books of a Clearing Corporation or Securities Intermediary and (y) an
uncertificated security issued by a Person that is not a Restricted Subsidiary
of the Borrower) to (i) enter into any agreement with any Person, other than the
Administrative Agent, whereby such issuer effectively delivers “control” of such
uncertificated securities under the UCC to such Person, or (ii) allow such
uncertificated securities to become “certificated securities”, as defined under
Article 8 of the UCC, unless such Grantor complies with the procedures set forth
in this Section 2.04.

Section 2.05. Registration in Nominee Name; Denominations. If an Event of
Default shall have occurred and be continuing and the Administrative Agent shall
have given the Borrower two (2) Business Days prior written notice of its intent
to exercise such rights, (a) the Administrative Agent, on behalf of the Secured
Parties, shall have the right to hold the Pledged Equity in its own name as
pledgee, the name of its nominee (as pledgee or as subagent) or the name of the
applicable Grantor, endorsed or assigned in blank or in favor of the
Administrative Agent and each Grantor will promptly give to the Administrative
Agent copies of any written notices or other written communications received by
it with respect to Pledged Equity registered in the name of such Grantor and
(b) to the extent permitted by the documentation governing such Pledged Equity,
the Administrative Agent shall have the right to exchange the certificates
representing Pledged Equity for certificates of smaller or larger denominations
for any purpose consistent with this Agreement.

Section 2.06. Voting Rights; Dividends and Interest.

(a) Unless and until an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have provided two (2) Business Days prior
written notice to the Borrower that the rights of the Grantor under this
Section 2.06 are being suspended:

(i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any
part thereof and each Grantor agrees that it shall not exercise such rights in
violation of this Agreement, the Credit Agreement and the other Loan Documents.

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

(iii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Securities to the extent and only to the extent that such

 

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dividends, interest, principal and other distributions are permitted by, and
otherwise paid or distributed in accordance with, the terms and conditions of
the Credit Agreement, the other Loan Documents and applicable Laws; provided
that any noncash dividends, interest, principal or other distributions that
would constitute Pledged Equity or Pledged Debt, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity Interests
of the issuer of any Pledged Securities or received in exchange for Pledged
Securities or any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, if received by any Grantor, shall be held for the benefit of
the Administrative Agent and the Secured Parties and shall be promptly (and in
any event within 10 Business Days or such longer period as the Administrative
Agent may agree in its reasonable discretion) delivered to the Administrative
Agent in the same form as so received (with any endorsement reasonably requested
by the Administrative Agent). So long as no Event of Default has occurred and is
continuing, the Administrative Agent shall promptly deliver to each Grantor any
Pledged Securities in its possession if requested to be delivered to the issuer
thereof in connection with any exchange or redemption of such Pledged Securities
permitted by the Credit Agreement in accordance with this Section 2.06(a)(iii).

(b) Upon the occurrence and during the continuance of an Event of Default, after
the Administrative Agent shall have notified the Borrower of the suspension of
the Grantors’ rights under paragraph (a)(iii) of this Section 2.06, then all
rights of any Grantor to dividends, interest, principal or other distributions
that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of
this Section 2.06 shall cease, and all such rights shall thereupon become vested
in the Administrative Agent, which shall have the sole and exclusive right and
authority to receive and retain such dividends, interest, principal or other
distributions. All dividends, interest, principal or other distributions
received by any Grantor contrary to the provisions of this Section 2.06 shall be
held for the benefit of the Administrative Agent and the Secured Parties and
shall be promptly (and in any event within 10 Business Days or such longer
period as the Administrative Agent may agree in its reasonable discretion)
delivered to the Administrative Agent upon demand in the same form as so
received (with any endorsement reasonably requested by the Administrative
Agent). Any and all money and other property paid over to or received by the
Administrative Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Administrative Agent in an account to be established by the
Administrative Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 4.02. After all Events of
Default have been cured or waived, the Administrative Agent shall promptly repay
to each Grantor (without interest) all dividends, interest, principal or other
distributions that such Grantor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(ii) of this Section 2.06 and that remain in such
account.

(c) Upon the occurrence and during the continuance of an Event of Default, after
the Administrative Agent shall have provided the Borrower with notice of the

 

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suspension of its rights under paragraph (a)(i) of this Section 2.06, then all
rights of any Grantor to exercise the voting and consensual rights and powers it
is entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06, and
the obligations of the Administrative Agent under paragraph (a)(ii) of this
Section 2.06, shall cease, and all such rights shall thereupon become vested in
the Administrative Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Required Lenders, the Administrative
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Grantors to exercise such
rights. After all Events of Default have been cured or waived, each Grantor
shall have the exclusive right to exercise the voting and/or consensual rights
and powers that the Borrower would otherwise be entitled to exercise pursuant to
the terms of paragraph (a)(i) above, and the obligations of the Administrative
Agent under paragraph (a)(ii) of this Section 2.06 shall be reinstated.

(d) In order to permit the Administrative Agent to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant hereto and to
receive all dividends and other distributions which it may be entitled to
receive hereunder, each Grantor shall promptly execute and deliver (or cause to
be executed and delivered) to the Administrative Agent all proxies, dividend
payment orders and other instruments as the Administrative Agent may from time
to time reasonably request, but in any event solely after an Event of Default
has occurred and is continuing, and after having provided required notice to
Borrower of its desire to exercise its rights hereunder, and each Grantor
acknowledges that the Administrative Agent may utilize the power of attorney set
forth in Section 6.13 herein in accordance with the terms thereof.

(e) Any notice given by the Administrative Agent to the Borrower under
Section 2.05 or this Section 2.06 (i) shall be given in writing, (ii) may be
given with respect to one or more Grantors at the same or different times and
(iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph
(a)(iii) of this Section 2.06 in part without suspending all such rights (as
specified by the Administrative Agent in its sole and absolute discretion) and
without waiving or otherwise affecting the Administrative Agent’s rights to give
additional notices from time to time suspending other rights so long as an Event
of Default has occurred and is continuing.

ARTICLE 3

SECURITY INTERESTS IN PERSONAL PROPERTY

Section 3.01. Security Interest.

(a) As security for the payment or performance in full of the Secured
Obligations, including the Guaranteed Obligations, each Grantor hereby pledges
to the Administrative Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, and hereby grants to the Administrative Agent,
its successors and permitted assigns, for the benefit of the Secured Parties, a
security interest (the “Security Interest”) in, all right, title or interest in
or to any and all of the following assets and

 

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properties now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the “Article 9 Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all Documents;

(iv) all Equipment and Fixtures;

(v) all General Intangibles;

(vi) all Goods;

(vii) all Instruments;

(viii) all Inventory;

(ix) all Investment Property;

(x) all Letter-of-Credit Rights to the extent constituting a Supporting
Obligation for other Article 9 Collateral as to which perfection of security
interests in such Article 9 Collateral is accomplished solely by the filing of a
UCC financing statement;

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

(xii) all Intellectual Property and Licenses; and

(xiii) to the extent not otherwise included, all Proceeds, products, accessions,
rents and profits of any and all of the foregoing and all Supporting
Obligations, collateral security and guarantees given by any Person with respect
to any of the foregoing;

provided that, notwithstanding anything to the contrary in this Agreement,
(i) this Agreement shall not constitute a grant of a security interest in any
Excluded Assets and (ii) the Article 9 Collateral (nor any defined term therein)
shall not include any Excluded Assets.

(b) Subject to Section 3.01(e), each Grantor hereby irrevocably authorizes the
Administrative Agent for the benefit of the Secured Parties at any time and from
time to time to file in any relevant jurisdiction any financing statements with
respect to the Collateral or any part thereof and amendments thereto and
continuations thereof that (i) indicate the Collateral as “all assets of the
debtor, whether now existing or hereafter arising” or words of similar effect as
being of an equal or lesser scope or with greater detail and (ii) contain the
information required by Article 9 of the UCC or the analogous

 

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legislation of each applicable jurisdiction for the filing of any financing
statement or amendment, including whether such Grantor is an organization, the
type of organization and, if required, any organizational identification number
issued to such Grantor. Each Grantor agrees to provide such information to the
Administrative Agent promptly upon any reasonable request.

(c) The Security Interest is granted as security only and shall not subject the
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral; provided that the foregoing will not limit or otherwise
affect the obligations and liabilities of the Grantors to the extent set forth
herein and in the other Loan Documents.

(d) Upon three (3) Business Days prior written notice to the applicable Grantor,
the Administrative Agent is authorized to file with the USPTO or the USCO (or
any successor office) any additional documents (including any Intellectual
Property Security Agreements and/or supplements thereto) as may be necessary for
the purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest in United States Intellectual Property of each Grantor in
which a security interest has been granted by each Grantor, and naming any
Grantor as debtor and the Administrative Agent as secured party.

(e) Notwithstanding anything to the contrary in the Loan Documents, none of the
Grantors shall be required, nor is the Administrative Agent authorized, (i) to
perfect the Security Interests granted by this Agreement (including Security
Interests in Investment Property and Fixtures) by any means other than by
(A) filings pursuant to the UCC in the office of the secretary of state (or
similar central filing office) of the relevant State(s), and filings in the
applicable real estate records with respect to any fixtures relating to
Mortgaged Property to the extent required by the Collateral and Guarantee
Requirement, (B) filings in United States government offices with respect to
Intellectual Property of Grantor as expressly required elsewhere herein,
(C) delivery to the Administrative Agent to be held in its possession of all
Collateral consisting of Instruments or certificated Pledged Collateral as
expressly required elsewhere herein or (D) other methods expressly provided
herein, (ii) to enter into any deposit account control agreement, securities
account control agreement or any other control agreement with respect to any
deposit account, securities account or any other Collateral that requires
perfection by “control,” (iii) to take any action (other than the actions listed
in clauses (i)(A) and (C) above) with respect to any assets located outside of
the United States or any other assets, including any Intellectual Property
registered in any non-U.S. jurisdiction (and no security agreements or pledge
agreements governed under the laws of any non-U.S. jurisdiction shall be
required), (iv) to perfect in any assets subject to a certificate of title
statute or (v) to deliver any Equity Interests except as expressly provided in
Section 2.02.

 

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Section 3.02. Representations and Warranties. Each Grantor, jointly and
severally represents and warrants, to the Administrative Agent and the Secured
Parties that:

(a) Each Grantor has good and valid rights in and title (except as otherwise
permitted by the Loan Documents) to the Article 9 Collateral with respect to
which it has purported to grant a Security Interest hereunder and has full
organizational power and authority to grant to the Administrative Agent the
Security Interest in such Article 9 Collateral pursuant hereto and to execute,
deliver and perform its obligations in accordance with the terms of this
Agreement, without the consent or approval of any Governmental Authority other
than (i) any consent or approval that has been obtained or (ii) any consent or
approval the lack thereof could not reasonably be expected to cause a Material
Adverse Effect.

(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein is correct and complete in all material
respects (except the information therein with respect to the exact legal name of
each Grantor shall be correct and complete in all respects) as of the Closing
Date. The UCC financing statements or other appropriate filings, recordings or
registrations prepared by the Administrative Agent based upon the information
provided to the Administrative Agent in the Perfection Certificate for filing in
the applicable filing office (or specified by notice from the Borrower to the
Administrative Agent after the Closing Date in the case of filings, recordings
or registrations (other than filings required to be made in the USPTO and the
USCO in order to perfect the Security Interest in Article 9 Collateral
consisting of United States Patents, Trademarks and Copyrights), in each case,
as required by the Collateral and Guarantee Requirement and Section 6.11 and
6.20 of the Credit Agreement), are all the filings, recordings and registrations
that are necessary to establish a legal, valid and perfected security interest
in favor of the Administrative Agent (for the benefit of the Secured Parties) in
respect of all Collateral in which the Security Interest may be perfected by
filing, recording or registration in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the UCC.

(c) Each Grantor represents and warrants that the Intellectual Property Security
Agreements containing a description of all Article 9 Collateral consisting of
Registered Intellectual Property Collateral (other than, in each case, any
Excluded Assets), have been delivered as of or prior to the date hereof to the
Administrative Agent for recording by the USPTO and the USCO pursuant to 35
U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations
thereunder, as applicable, (for the benefit of the Secured Parties) in respect
of all Article 9 Collateral consisting of Registered Intellectual Property
Collateral to the extent required by this Agreement or the Credit Agreement. To
the extent a security interest may be perfected by filing, recording or
registration in USPTO or USCO under the U.S. Federal intellectual property laws,
then no further or subsequent filing, re-filing, recording, rerecording,
registration or reregistration is necessary (other than (i) such filings and
actions as are necessary to perfect the Security Interest with respect to any
Article 9 Collateral consisting of Registered Intellectual Property Collateral
(or registration or application for registration thereof) acquired, owned, filed
or developed by any Grantor after the date hereof and (ii) the UCC financing and
continuation statements contemplated in Section 3.02(b)).

(d) The Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the Secured

 

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Obligations, (ii) subject to the filings described in Section 3.02(b), a
perfected security interest in all Article 9 Collateral in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) pursuant to the UCC, and (iii) subject to the filings
described in Section 3.02(c), a perfected security interest in all Intellectual
Property included in the Article 9 Collateral in which a security interest may
be perfected by filing, recording or registering a security agreement or
analogous document with the USPTO or the USCO, as applicable. The Security
Interest is and shall be prior to any other Lien on any of the Article 9
Collateral, other than any Liens permitted pursuant to Section 7.01 of the
Credit Agreement.

(e) The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens permitted pursuant to Section 7.01 of the Credit
Agreement. None of the Grantors has filed or consented to the filing of (i) any
assignment in which any Grantor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with the USPTO
or the USCO or (ii) any assignment in which any Grantor assigns any Collateral
or any security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 7.01 of the Credit Agreement and assignments expressly permitted by the
Credit Agreement.

(f) [Reserved].

(g) As of the date hereof, Schedule IV lists the locations at which more than
$2,500,000 (per location) of Inventory and Equipment (other than (x) mobile
goods, (y) Inventory or Equipment in transit or out for repair or refurbishment,
and (z) Inventory and Equipment in the possession of employees or customers of
the Grantors in the ordinary course of business) of the Grantors are kept.

Section 3.03. Covenants.

(a) The Borrower agrees to notify the Administrative Agent in writing
(x) promptly, but in any event within 5 Business Days prior to (or such longer
period as the Administrative Agent may agree in its reasonable discretion), any
change in (i) the legal name of any Grantor, (ii) the identity or type of
organization or corporate structure of any Grantor, or (iii) the jurisdiction of
organization of any Grantor and (y) promptly, but at any event within twenty
(20) Business Days (or such longer period as the Administrative Agent may agree
in its reasonable discretion) after any change in (i) the chief executive office
of any Grantor or (ii) the organizational identification number of such Grantor,
if any.

(b) Subject to Section 3.01(e), each Grantor shall, at its own expense, upon the
reasonable request of the Administrative Agent, take any and all commercially
reasonable actions necessary to defend title to the Collateral against all
Persons and to defend the Security Interest of the Administrative Agent in the
Article 9 Collateral and the priority

 

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thereof against any Lien not permitted pursuant to Section 7.01 of the Credit
Agreement; provided that, nothing in this Agreement shall prevent any Grantor
from discontinuing the operation or maintenance of any of its assets or
properties if such discontinuance is permitted by the Credit Agreement.

(c) Subject to Section 3.01(e), each Grantor agrees, at its own expense, to
promptly execute, acknowledge, deliver and cause to be filed all such further
instruments and documents and take all such actions as the Administrative Agent
may from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes reasonably required in connection
with the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements or other documents in
connection herewith or therewith. Notwithstanding the foregoing, nothing in this
Agreement or in any other Loan Document shall require any Grantor to make any
filings or take any other actions in any jurisdiction outside of the United
States to record or perfect the Administrative Agent’s security interest in any
Intellectual Property of any Grantor.

(d) At its option after the occurrence and during the continuance of an Event of
Default, upon five (5) Business Days’ prior written notice to the Grantors, the
Administrative Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted pursuant to Section 7.01 of the Credit
Agreement, and may pay for the maintenance and preservation of the Collateral to
the extent any Grantor fails to do so as required by the Credit Agreement or any
other Loan Document and within a reasonable period of time after the
Administrative Agent has required that it do so, and each Grantor jointly and
severally agrees to reimburse the Administrative Agent pursuant to the terms of
the Credit Agreement; provided, however, the Grantors shall not be obligated to
reimburse the Administrative Agent with respect to any Intellectual Property
that any Grantor has failed to maintain or pursue, or otherwise allowed to
lapse, terminate or be put into the public domain in accordance with
Section 3.03(f)(iv). Nothing in this paragraph shall be interpreted as excusing
any Grantor from the performance of, or imposing any obligation on the
Administrative Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Loan Documents.

(e) If at any time any Grantor shall take a security interest in any property of
an Account Debtor or any other Person the value of which is in excess of
$2,500,000 to secure payment and performance of an Account, such Grantor shall
promptly grant a security interest to the Administrative Agent for the benefit
of the Secured Parties; provided that, notwithstanding anything to the contrary
in this Agreement, such grant shall not constitute a grant of a security
interest in any Excluded Assets. Such grant need not be filed of public record
unless necessary to continue the perfected status of the security interest
against creditors of and transferees from the Account Debtor or other Person
granting the security interest.

 

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(f) Intellectual Property Covenants.

(i) Other than to the extent not prohibited herein or in the Credit Agreement,
or with respect to registrations and applications no longer used or useful, or
except to the extent failure to act would not, as deemed by the applicable
Grantor in its reasonable business judgment, reasonably be expected to have a
Material Adverse Effect, with respect to each registration or pending
application of each item of its Intellectual Property for which such Grantor has
standing to do so, each Grantor agrees to take, at its expense, all reasonable
steps, including, without limitation, in the USPTO, the USCO and any other
governmental authority located in the United States, to pursue the registration
and maintenance of each Patent, Trademark, or Copyright registration or
application now or hereafter included in the Intellectual Property owned by such
Grantor that are not Excluded Assets.

(ii) Other than to the extent not prohibited herein or in the Credit Agreement,
or with respect to registrations and applications no longer used or useful, or
except as would not, as deemed by the applicable Grantor in its reasonable
business judgment, reasonably be expected to have a Material Adverse Effect, no
Grantor shall do or permit any act or knowingly omit to do any act whereby any
Intellectual Property owned by such Grantor, excluding Excluded Assets, may
lapse, be terminated, become invalid or unenforceable or placed in the public
domain (or in the case of a trade secret, become publicly known).

(iii) Other than as excluded or as not prohibited herein or in the Credit
Agreement, or with respect to Patents, Copyrights or Trademarks which are no
longer used or useful in the applicable Grantor’s business operations, or except
where failure to do so would not, as deemed by the applicable Grantor in its
reasonable business judgment, reasonably be expected to have a Material Adverse
Effect, each Grantor shall take all reasonable steps to preserve and protect
each item of Intellectual Property owned by such Grantor, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks owned by such Grantor,
consistent with the quality of the products and services as of the Closing Date,
and taking reasonable steps necessary to ensure that all licensed users of any
of the Trademarks abide by the applicable license’s terms with respect to
standards of quality.

(iv) Notwithstanding any other provision of this Agreement, nothing in this
Agreement or any other Loan Document prevents or shall be deemed to prevent any
Grantor from disposing of, discontinuing the use or maintenance of, failing to
pursue, or otherwise allowing to lapse, terminate or be put into the public
domain, any of its Intellectual Property to the extent permitted by the Credit
Agreement if such Grantor determines in its reasonable business judgment that
such discontinuance is desirable in the conduct of its business.

 

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(v) Within the same delivery period as required for the delivery of the annual
Compliance Certificate required to be delivered under Section 6.02 of the Credit
Agreement, the Borrower shall provide a list of any Registered Intellectual
Property Collateral owned by all Grantors not listed in any Intellectual
Property Security Agreement previously delivered to the Administrative Agent,
together with supplemental Intellectual Property Security Agreements covering
all such Registered Intellectual Property Collateral duly executed by such
Grantors and in proper form for recording, and shall promptly file and record
such supplemental Intellectual Property Security Agreements with the USPTO or
the USCO, as applicable.

ARTICLE 4

REMEDIES

Section 4.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Administrative Agent
shall have the right to exercise any and all rights afforded to a secured party
with respect to the Secured Obligations, including the Guarantees, under the UCC
or other applicable Law or in equity and also may (i) require each Grantor to,
and each Grantor agrees that it will at its expense and upon request of the
Administrative Agent, promptly assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to the Administrative
Agent at a place and time to be designated by the Administrative Agent that is
reasonably convenient to both parties; (ii) occupy any premises owned or, to the
extent lawful and permitted, leased by any of the Grantors where the Collateral
or any part thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under Law, without obligation to
such Grantor in respect of such occupation; provided that the Administrative
Agent shall provide the applicable Grantor with written notice thereof prior to
such occupancy; (iii) exercise any and all rights and remedies of any of the
Grantors under or in connection with the Collateral, or otherwise in respect of
the Collateral; provided that the Administrative Agent shall provide the
applicable Grantor with written notice thereof prior to such exercise; and
(iv) subject to the mandatory requirements of applicable Law and the notice
requirements described below, sell or otherwise dispose of all or any part of
the Collateral securing the Secured Obligations at a public or private sale or
at any broker’s board or on any securities exchange, for cash, upon credit or
for future delivery as the Administrative Agent shall deem appropriate. The
Administrative Agent shall be authorized at any such sale of securities (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to Persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Administrative Agent
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any sale of
Collateral shall hold the property sold absolutely, free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by Law) all rights of redemption, stay and appraisal which such
Grantor now has or may at any time in the future have under any Law now existing
or hereafter enacted.

 

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The Administrative Agent shall give the applicable Grantors 10 days’ written
notice (which each Grantor agrees is commercially reasonable notice within the
meaning of Section 9-611 of the UCC or its equivalent in other jurisdictions) of
the Administrative Agent’s intention to make any sale of Collateral. Such
notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities exchange,
shall state the board or exchange at which such sale is to be made and the day
on which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Administrative
Agent may fix and state in the notice (if any) of such sale. At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Administrative Agent may (in its sole
and absolute discretion) determine. The Administrative Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Administrative Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice. At any public (or, to the extent permitted by applicable Law,
private) sale made pursuant to this Agreement, any Secured Party may bid for or
purchase, free (to the extent permitted by applicable Law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by
applicable Law), the Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable to such
Secured Party from any Grantor as a credit against the purchase price, and such
Secured Party may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to any Grantor therefor.
For purposes hereof, a written agreement to purchase the Collateral or any
portion thereof shall be treated as a sale thereof; the Administrative Agent
shall be free to carry out such sale pursuant to such agreement and no Grantor
shall be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Administrative Agent shall have
entered into such an agreement all Events of Default shall have been remedied
and the Secured Obligations paid in full. As an alternative to exercising the
power of sale herein conferred upon it, the Administrative Agent may proceed by
a suit or suits at Law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 4.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the UCC or its equivalent in other
jurisdictions.

 

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Section 4.02. Application of Proceeds. The Administrative Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash in accordance with Section 8.03 of the Credit Agreement.

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

The Administrative Agent shall have no liability to any of the Secured Parties
for actions taken in reliance on information supplied to it as to the amounts of
unpaid principal and interest and other amounts outstanding with respect to the
Secured Obligations, provided that nothing in this sentence shall prevent any
Grantor from contesting any amounts claimed by any Secured Party in any
information so supplied. All distributions made by the Administrative Agent
pursuant to this Section 4.02 shall be final (absent manifest error).

Section 4.03. Grant of License to Use Intellectual Property. For the exclusive
purpose of enabling the Administrative Agent to exercise rights and remedies
under this Agreement at and during the continuance of such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies at any time after and during the continuance of an Event of Default,
each Grantor hereby grants to the Administrative Agent a nonexclusive,
royalty-free, limited license (exercisable until the termination or cure of the
Event of Default) to use, license or sublicense any of the Intellectual Property
now owned or hereafter acquired by such Grantor or for which such Grantor has
the ability to grant sublicenses, and wherever the same may be located, and
including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software used for
the compilation or printout thereof; provided, however, that all of the
foregoing rights of the Administrative Agent to use such licenses, sublicenses
and other rights, and (to the extent permitted by the terms of such licenses and
sublicenses) all licenses and sublicenses granted thereunder, shall expire
immediately upon the termination or cure of all Events of Default (together with
the Borrower’s written notice to the Administrative Agent of such termination or
cure) and shall be exercised by the Administrative Agent solely in connection
with the Administrative Agent’s exercise of remedies pursuant to Section 4.01
and, to the extent reasonably practicable, upon prior written notice to the
Borrower, and nothing in this Section 4.03 shall require Grantors to grant any
license that is prohibited by any rule of law, statute or regulation, or is
prohibited by, or constitutes a breach or default under or results in the
termination of any contract, license, agreement, instrument or other document
evidencing, giving rise to or theretofore granted, to the extent permitted by
the Credit Agreement, with respect to such property or otherwise unreasonably
prejudices the value thereof to the relevant Grantor; provided, further, that
any such license and any

 

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such license granted by the Administrative Agent to a third party shall include
reasonable and customary terms and conditions necessary to preserve the
existence, validity and enforceability of the affected Intellectual Property,
including provisions requiring the continuing confidential handling of trade
secrets, requiring the use of appropriate notices and prohibiting the use of
false notices, quality control and inurement provisions with regard to
Trademarks, patent designation provisions with regard to Patents, copyright
notices and restrictions on decompilation and reverse engineering of copyrighted
software (it being understood and agreed that, without limiting any other rights
and remedies of the Administrative Agent under this Agreement, any other Loan
Document or applicable Law, nothing in the foregoing license grant shall be
construed as granting the Administrative Agent rights in and to such
Intellectual Property above and beyond (x) the rights to such Intellectual
Property that each Grantor has reserved for itself and (y) in the case of
Intellectual Property that is licensed to any such Grantor by a third party, the
extent to which such Grantor has the right to grant a sublicense to such
Intellectual Property hereunder). For the avoidance of doubt, the use of such
license by the Administrative Agent may be exercised, at the option of the
Administrative Agent, only during the continuance of an Event of Default. Upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may also exercise the rights afforded under Section 4.01 of
this Agreement with respect to Intellectual Property contained in the Article 9
Collateral.

Section 4.04. Effect of Securities Laws. Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all of the
Pledged Collateral by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Collateral for the period of time necessary to permit the
applicable issuer thereof to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such issuer
would agree to do so.

Section 4.05. Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Secured Obligations and, to the extent set forth herein and in the
other Loan Documents, the fees and disbursements of any attorneys employed by
any Secured Party to collect such deficiency.

 

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ARTICLE 5

SUBORDINATION

Section 5.01. Subordination.

(a) Notwithstanding any provision of this Agreement to the contrary, all rights
of the Grantors to indemnity, contribution or subrogation under applicable Law
or otherwise shall be fully subordinated to the payment in full of the
Obligations (other than (i) contingent indemnification obligations as to which
no claim has been asserted, (ii) Cash Management Obligations, (iii) obligations
pursuant to Secured Hedge Agreements and (iv) the Outstanding Amount of the L/C
Obligations related to Letters of Credit that have been Cash Collateralized,
backstopped by a letter of credit reasonably satisfactory to the applicable L/C
Issuer or deemed reissued under another agreement reasonably acceptable to the
applicable L/C Issuer). No failure on the part of the Borrower or any Grantor to
make the payments required under applicable Law or otherwise shall in any
respect limit the obligations and liabilities of any Grantor with respect to its
obligations hereunder, and each Grantor shall remain liable for the full amount
of the Obligations of such Grantor hereunder.

(b) Each Grantor hereby agrees that upon the occurrence and during the
continuance of an Event of Default and after written notice from the
Administrative Agent, all Indebtedness owed to it by any other Grantor shall be
fully subordinated to the payment in full of the Obligations (other than
(i) contingent indemnification obligations as to which no claim has been
asserted, (ii) Cash Management Obligations, (iii) obligations pursuant to
Secured Hedge Agreements and (iv) the Outstanding Amount of the L/C Obligations
related to Letters of Credit that have been Cash Collateralized, back-stopped by
a letter of credit reasonably satisfactory to the applicable L/C Issuer or
deemed reissued under another agreement reasonably acceptable to the applicable
L/C Issuer).

ARTICLE 6

MISCELLANEOUS

Section 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement. All communications and notices hereunder
to the Borrower or any other Grantor shall be given to it in care of the
Borrower as provided in Section 10.02 of the Credit Agreement.

Section 6.02. Waivers; Amendment.

(a) No failure or delay by any Secured Party in exercising any right, remedy,
power or privilege hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges of the Secured Parties herein provided,
and provided under each other Loan Document, are cumulative and are not
exclusive of any rights, remedies, powers and privileges provided by Law. No
waiver of any provision of this Agreement or consent to any departure by any
Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 6.02, and then such waiver or consent
shall

 

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be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan, the
issuance of a Letter of Credit or the provision of services under Treasury
Services Agreements or Secured Hedge Agreements shall not be construed as a
waiver of any Default or Event of Default, regardless of whether any Secured
Party may have had notice or knowledge of such Default or Event of Default at
the time.

(b) Subject to the terms of the Intercreditor Agreement, neither this Agreement
nor any provision hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Administrative Agent
and the Grantor or Grantors with respect to which such waiver, amendment or
modification is to apply, subject to the Collateral and Guarantee Requirement
and any consent required in accordance with Section 10.01 of the Credit
Agreement.

Section 6.03. Administrative Agent’s Fees and Expenses; Indemnification.

(a) The parties hereto agree that the Administrative Agent shall be entitled to
reimbursement of its reasonable and documented out-of-pocket expenses incurred
hereunder and indemnity for its actions in connection herewith as provided in
Sections 10.04 and 10.05 of the Credit Agreement.

(b) Any such amounts payable as provided hereunder shall be additional Secured
Obligations secured hereby and by the other Collateral Documents. The provisions
of this Section 6.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Secured Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent or any other Secured Party. All
amounts due under this Section 6.03 shall be payable within 30 days of written
demand therefor (including documentation reasonably supporting such request).

Section 6.04. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties here to and their
respective successors and assigns.

Section 6.05. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Grantors hereunder and in the other Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon
by the Secured Parties and shall survive the execution and delivery of the Loan
Documents, the making of any Loans and issuance of any Letters of Credit and the
provision of services under Treasury Services Agreements or Secured Hedge
Agreements, regardless of any investigation made by any Secured Party or on its
behalf and notwithstanding that any Secured Party may have had notice or
knowledge of any Default or Event of Default at the time any credit is extended
under the Credit Agreement, and shall continue in full force and effect as long
as this Agreement has not been terminated or released pursuant to Section 6.11
below.

 

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Section 6.06. Counterparts; Effectiveness; Several Agreement. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Delivery by facsimile or other electronic communication of an
executed counterpart of a signature page to this Agreement shall be effective as
delivery of an original executed counterpart of this Agreement. This Agreement
shall become effective as to any Grantor when a counterpart hereof executed on
behalf of such Grantor shall have been delivered to the Administrative Agent and
a counterpart hereof shall have been executed on behalf of the Administrative
Agent, and thereafter shall be binding upon such Grantor and the Administrative
Agent and their respective permitted successors and assigns, and shall inure to
the benefit of such Grantor, the Administrative Agent and the other Secured
Parties and their respective permitted successors and assigns, except that no
Grantor shall have the right to assign or transfer its rights or obligations
hereunder or any interest herein (and any such assignment or transfer shall be
void) without the prior written consent of the Administrative Agent, except to
the extent permitted by the Credit Agreement. This Agreement shall be construed
as a separate agreement with respect to each Grantor and may be amended,
restated, modified, supplemented, waived or released with respect to any Grantor
without the approval of any other Grantor and without affecting the obligations
of any other Grantor hereunder.

Section 6.07. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, the legality, validity and enforceability of
the remaining provisions of this Agreement shall not be affected or impaired
thereby. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

Section 6.08. Governing Law; Jurisdiction; Venue; Waiver of Jury Trial; Consent
to Service of Process.

(a) The terms of Sections 10.15 and 10.16 of the Credit Agreement with respect
to governing law, submission of jurisdiction, venue and waiver of jury trial are
incorporated herein by reference, mutatis mutandis, and the parties hereto agree
to such terms.

(b) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 6.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by Law.

Section 6.09. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

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Section 6.10. Security Interest Absolute. To the extent permitted by Law, all
rights of the Administrative Agent hereunder, the Security Interest, the grant
of a security interest in the Collateral and all obligations of each Grantor
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Secured Obligations or any other agreement
or instrument relating to any of the foregoing, (b) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Secured Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any Lien
on other collateral, or any release or amendment or waiver of or consent under
or departure from any guarantee, securing or guaranteeing all or any of the
Secured Obligations or (d) any other circumstance that might otherwise
constitute a defense (other than defense of payment or performance) available
to, or a discharge of, any Grantor in respect of the Secured Obligations or this
Agreement.

Section 6.11. Termination, Release or Subordination.

(a) This Agreement (other than with respect to provisions hereof that expressly
survive termination), the Security Interest and all other security interests
granted hereby shall terminate with respect to all Secured Obligations and any
Liens arising therefrom shall be automatically released upon termination of the
Aggregate Commitments and payment in full of all Secured Obligations and the
expiration or termination of all Letters of Credit (other than, in each case,
(i) contingent indemnification obligations as to which no claim has been
asserted, (ii) Cash Management Obligations, (iii) obligations pursuant to
Secured Hedge Agreements and (iv) the Outstanding Amount of the L/C Obligations
related to Letters of Credit that have been Cash Collateralized, back-stopped by
a letter of credit reasonably satisfactory to the applicable L/C Issuer or
deemed reissued under another agreement reasonably acceptable to the applicable
L/C Issuer).

(b) A Subsidiary Party shall automatically be released from its obligations
hereunder and the Security Interest and any Liens granted herein to the
Administrative Agent in the Collateral of such Subsidiary Party shall be
automatically released upon the consummation of any transaction permitted by and
in accordance with the terms of the Credit Agreement as a result of which such
Subsidiary Party ceases to be a Restricted Subsidiary of the Borrower or
otherwise becomes a Transferred Guarantor that is released from its obligations
hereunder pursuant to, and in accordance with the requirements of, Section 11.09
of the Credit Agreement.

(c) Upon any Disposition by any Grantor of any Collateral that is permitted
under and in accordance with the terms of the Credit Agreement (other than a
sale or transfer to another Loan Party), or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 10.01 of the Credit Agreement, the security
interest in such Collateral shall be automatically released.

 

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(d) The security interest granted hereby in any Collateral shall be subordinated
to another Lien permitted by Section 7.01 of the Credit Agreement which is to be
senior to the Liens securing the Secured Obligations, in accordance with the
terms of Section 9.10(c) of the Credit Agreement, either (i) upon an election by
the Administrative Agent to subordinate such security interest or (ii) in
respect of Liens permitted by Sections 7.01(b), (u), (w) (with respect to
assumed Indebtedness), (aa) (with respect to Sections 7.01(b), (u) and (w) (as
to assumed Indebtedness) of the Credit Agreement) and (bb) of the Credit
Agreement, upon the Borrower’s reasonable request (with Administrative Agent’s
consent, not to be unreasonably withheld, delayed or conditioned).

(e) In connection with any termination or release pursuant to paragraph (a),
(b), (c) or (d) of this Section 6.11, the Administrative Agent shall execute and
deliver to any Grantor, at such Grantor’s expense, all documents that such
Grantor shall reasonably request to evidence such termination or release and
shall perform such other actions reasonably requested by such Grantor to effect
such release, including delivery of certificates, securities and instruments.
Any execution and delivery of documents pursuant to this Section 6.11 shall be
without recourse to or warranty by the Administrative Agent.

Section 6.12. Additional Grantors. Pursuant to Section 6.11 of the Credit
Agreement, certain additional Restricted Subsidiaries of the Grantors may be
required to enter in this Agreement as Grantors. Upon execution and delivery by
the Administrative Agent and a Restricted Subsidiary of a Security Agreement
Supplement, such Restricted Subsidiary shall become a Grantor hereunder with the
same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Grantor hereunder, except to the extent obtained on or prior to such date and in
full force and effect on such date. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Grantor as a party to this Agreement.

Section 6.13. Administrative Agent Appointed Attorney-in-Fact. Each Grantor
hereby appoints the Administrative Agent the attorney-in-fact of such Grantor
for the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Administrative Agent may deem
necessary or advisable to accomplish the purposes hereof, in each case, at any
time after the occurrence and during the continuance of an Event of Default,
which appointment is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, the Administrative Agent shall have the right,
after the occurrence and during the continuance of an Event of Default and, to
the extent reasonably practicable, notice by the Administrative Agent to the
applicable Grantor of the Administrative Agent’s intent to exercise such rights,
with full power of substitution either in the Administrative Agent’s name or in
the name of such Grantor (a) to receive, endorse, assign and/or deliver any and
all notes, acceptances, checks, drafts, money orders or other evidences of
payment relating to the Collateral or any part thereof; (b) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or
any of the Collateral; (c) to sign the name of any Grantor on any invoice or
bill of lading relating to any of the Collateral; (d) upon prior written notice
to the Borrower, to send verifications

 

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of accounts receivable to any Account Debtor; (e) to commence and prosecute any
and all suits, actions or proceedings at Law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (f) to settle,
compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) upon prior written notice to the
Borrower, to notify, or to require the Borrower or any Grantor to notify,
Account Debtors to make payment directly to the Administrative Agent; (h) upon
prior written notice to the Borrower, to otherwise communicate with any Account
Debtor; (i) to make, settle and adjust claims in respect of Collateral under
policies of insurance, endorse the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance; (j) to make all determinations and decisions with respect to policies
of insurance; (k) to obtain or maintain the policies of insurance required by
Section 6.07 of the Credit Agreement or to pay any premium in whole or in part
relating thereto; and (l) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Administrative Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein
contained shall be construed as requiring or obligating the Administrative Agent
to make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Administrative Agent, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Administrative Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence, bad
faith, willful misconduct, or material breach of this Agreement or that of any
of their Affiliates, directors, officers, employees, partners, advisors,
counsel, agents, attorneys-in-fact or other representatives, in each case, as
determined by a final non-appealable judgment of a court of competent
jurisdiction. All sums disbursed by the Administrative Agent in connection with
this paragraph shall be payable pursuant to the terms of Section 10.04 of the
Credit Agreement.

Section 6.14. General Authority of the Administrative Agent. By acceptance of
the benefits of this Agreement and any other Collateral Documents, each Secured
Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to
consent to the appointment of the Administrative Agent as its agent hereunder
and under such other Collateral Documents, (b) to confirm that the
Administrative Agent shall have the authority to act as the exclusive agent of
such Secured Party for the enforcement of any provisions of this Agreement and
such other Collateral Documents against any Grantor, the exercise of remedies
hereunder or thereunder and the giving or withholding of any consent or approval
hereunder or thereunder relating to any Collateral or any Grantor’s obligations
with respect thereto, (c) to agree that it shall not take any action to enforce
any provisions of this Agreement or any other Collateral Document against any
Grantor, to exercise any remedy hereunder or thereunder or to give any consents
or approvals hereunder or thereunder except as expressly provided in this
Agreement or any other Collateral Document and (d) to agree to be bound by the
terms of this Agreement and any other Collateral Documents.

 

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Section 6.15. Reasonable Care. The Administrative Agent is required to use
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, that the Administrative Agent shall be deemed to have used
reasonable care in the custody and preservation of any of the Collateral, if
such Collateral is accorded treatment substantially similar to that which the
Administrative Agent accords its own property.

Section 6.16. Delegation; Limitation. The Administrative Agent may execute any
of the powers granted under this Agreement and perform any duty hereunder either
directly or by or through agents or attorneys-in-fact, and shall not be
responsible for the gross negligence or willful misconduct of any agents or
attorneys-in-fact selected by it with reasonable care and without gross
negligence or willful misconduct.

Section 6.17. Reinstatement. The obligations of the Grantors under this
Agreement shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower or other Loan Party in
respect of the Secured Obligations is rescinded or must be otherwise restored by
any holder of any of the Secured Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.

Section 6.18. Intercreditor Agreements. Notwithstanding anything herein to the
contrary, the Liens and the Security Interest granted to the Administrative
Agent pursuant to this Agreement and the exercise of any right or remedy by the
Administrative Agent hereunder, are subject in all respects to the provisions of
the Intercreditor Agreements. In the event of any conflict between the terms of
any Intercreditor Agreement and this Agreement, the terms of such Intercreditor
Agreement shall govern and control.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

JASON INCORPORATED

JASON PARTNERS HOLDINGS INC.

JASON HOLDINGS, INC. I

By:  

/s/ William P. Schultz

Name:   William Schultz Title:   Assistant Secretary ADVANCE WIRE PRODUCTS, INC.
ASSEMBLED PRODUCTS, INC. JASON INTERNATIONAL HOLDINGS, INC. JASON NEVADA, INC.

JASON OHIO CORPORATION

METALEX CORPORATION

MORTON MANUFACTURING COMPANY

By:  

/s/ William P. Schultz

Name:   William Schultz Title:   Vice President and Secretary

[Signature Page to First Lien Security Agreement]

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DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent and Collateral Agent
By:  

/s/ Michael Winters

  Name:   Michael Winters   Title:   Vice President By:  

/s/ Lisa Wong

  Name:   Lisa Wong   Title:   Vice President

[Signature Page to First Lien Security Agreement]