Exhibit 10.2

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

dated as of July 17, 2008

between

EACH OF THE GRANTORS PARTY HERETO

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Collateral Agent

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TABLE OF CONTENTS

 

          PAGE SECTION 1.     DEFINITIONS; GRANT OF SECURITY    1     1.1   
General Definitions    1     1.2    Definitions; Interpretation    7 SECTION 2.
    GRANT OF SECURITY    8     2.1    Grant of Security    8     2.2    Certain
Limited Exclusions    8 SECTION 3.     SECURITY FOR OBLIGATIONS; GRANTORS REMAIN
LIABLE    9     3.1    Security for Obligations    9     3.2    Continuing
Liability Under Collateral    10 SECTION 4.     CERTAIN PERFECTION REQUIREMENTS
   10     4.1    Delivery Requirements    10     4.2    Control Requirements   
10     4.3    Intellectual Property Recording Requirements    11     4.4   
Other Actions    13     4.5    Timing and Notice    13 SECTION 5.
    REPRESENTATIONS AND WARRANTIES    14     5.1    Grantor Information & Status
   14     5.2    Collateral Identification, Special Collateral    14     5.3   
Ownership of Collateral and Absence of Other Liens    15     5.4    Status of
Security Interest    16     5.5    Goods & Receivables    16     5.6    Pledged
Equity Interests, Investment Related Property    17     5.7    Intellectual
Property    17     5.8    Miscellaneous    19 SECTION 6.     COVENANTS AND
AGREEMENTS    19     6.1    Grantor Information & Status    19     6.2   
Collateral Identification; Special Collateral    19     6.3    Ownership of
Collateral and Absence of Other Liens    20     6.4    Status of Security
Interest    20     6.5    Goods & Receivables    20     6.6    Pledged Equity
Interests, Investment Related Property    22     6.7    Intellectual Property   
24     6.8    Miscellaneous    26 SECTION 7.     ACCESS; RIGHT OF INSPECTION AND
FURTHER ASSURANCES; ADDITIONAL GRANTORS    26     7.1    Access; Right of
Inspection    26     7.2    Further Assurances    26     7.3    Additional
Grantors    27 SECTION 8.     COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT    28
    8.1    Power of Attorney    28

 

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    8.2    No Duty on the Part of Collateral Agent or Secured Parties    29
SECTION 9.     REMEDIES    29     9.1    Generally    29     9.2    Application
of Proceeds    30     9.3    Sales on Credit    31     9.4    Investment Related
Property    31     9.5    Grant of Intellectual Property License    31     9.6
   Intellectual Property    32     9.7    Cash Proceeds; Deposit Accounts    33
SECTION 10.     COLLATERAL AGENT    34 SECTION 11.     CONTINUING SECURITY
INTEREST; TRANSFER OF LOANS    34 SECTION 12.     STANDARD OF CARE; COLLATERAL
AGENT MAY PERFORM    35 SECTION 13.     MISCELLANEOUS    35 SECTION 14.
    AMENDMENT AND RESTATEMENT    36 SECTION 15.     REAFFIRMATION AND GRANT OF
SECURITY INTERESTS    36 SCHEDULE 5.1 — GENERAL INFORMATION    SCHEDULE 5.2 —
COLLATERAL IDENTIFICATION    SCHEDULE 5.4 — FINANCING STATEMENTS    SCHEDULE 5.5
— LOCATION OF EQUIPMENT AND INVENTORY    SCHEDULE 5.6 — PLEDGED EQUITY INTERESTS
   SCHEDULE 5.7 — INTELLECTUAL PROPERTY    EXHIBIT A — PLEDGE SUPPLEMENT   
EXHIBIT B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT    EXHIBIT C —
SECURITIES ACCOUNT CONTROL AGREEMENT    EXHIBIT D — DEPOSIT ACCOUNT CONTROL
AGREEMENT    EXHIBIT E — TRADEMARK SECURITY AGREEMENT    EXHIBIT F — COPYRIGHT
SECURITY AGREEMENT    EXHIBIT G — PATENT SECURITY AGREEMENT   

 

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This AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT dated as of July 17,
2008 between Hologic, Inc. (the “Borrower”) and certain domestic subsidiaries of
the Borrower party hereto from time to time, whether as an original signatory
hereto or as an Additional Grantor (as herein defined) (other than the
Collateral Agent, each, a “Grantor”), and Goldman Sachs Credit Partners L.P.
(“GSCP”), as collateral agent for the Secured Parties (as herein defined) (in
such capacity as collateral agent, together with its successors and permitted
assigns, the “Collateral Agent”).

RECITALS:

WHEREAS, the Borrower and certain of the other Grantors entered into a Pledge
and Security Agreement dated as of October 22, 2007 (as amended, restated,
amended and restated, supplemented or otherwise modified prior to the date
hereof, the “Existing Security Agreement”) with the Collateral Agent;

WHEREAS, subject to the terms and conditions of that certain Amended and
Restated Credit and Guaranty Agreement dated as of the date hereof (as it may be
refinanced, amended, restated, amended and restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”) by and among the Borrower,
the other Grantors party thereto, as Guarantors, the Collateral Agent, the other
Agents party thereto and the Lenders party thereto from time to time;

WHEREAS, subject to the terms and conditions of the Credit Agreement, certain
Grantors may enter into one or more Hedge Agreements with one or more Lender
Counterparties;

WHEREAS, in consideration of the extensions of credit and other accommodations
of the Lenders and the Lender Counterparties as set forth in the Credit
Agreement and the Hedge Agreements, respectively, each Grantor has agreed to
secure such Grantor’s obligations under the Credit Documents and the Hedge
Agreements as set forth herein; and

WHEREAS, pursuant to Section 3.2(j)(i) of the Credit Agreement, the Grantors are
required to execute and deliver certain agreements and documents in order to
perfect or continue the perfection of the Collateral Agent’s security interest
in the Collateral on the terms set forth herein and accordingly are hereby
amending and restating the Existing Security Agreement in its entirety as set
forth herein in order to assure such perfection and/or continued perfection, as
the case may be;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, each Grantor and the Collateral Agent agree as
follows:

SECTION 1. DEFINITIONS; GRANT OF SECURITY.

1.1 General Definitions. In this Agreement, the following terms shall have the
following meanings:

“Additional Grantors” shall have the meaning assigned in Section 7.3.

“Agreement” shall mean this Amended and Restated Pledge and Security Agreement
dated as of July 17, 2008, as it may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time, in accordance with the
terms of the Credit Agreement.

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“Borrower” shall have the meaning set forth in the preamble.

“Cash Proceeds” shall have the meaning assigned in Section 9.7.

“Collateral” shall have the meaning assigned in Section 2.1.

“Collateral Account” shall mean any account established by the Collateral Agent.

“Collateral Agent” shall have the meaning set forth in the preamble.

“Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, supplier lists, blueprints, technical
specifications, manuals, computer software and related documentation, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.

“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

“Control” shall mean: (1) with respect to any Deposit Accounts, control within
the meaning of Section 9-104 of the UCC, (2) with respect to any Securities
Accounts, Security Entitlements, Commodity Contract or Commodity Account,
control within the meaning of Section 9-106 of the UCC, (3) with respect to any
Uncertificated Securities, control within the meaning of Section 8-106(c) of the
UCC, (4) with respect to any Certificated Security, control within the meaning
of Section 8-106(a) or (b) of the UCC, (5) with respect to any Electronic
Chattel Paper, control within the meaning of Section 9-105 of the UCC, (6) with
respect to Letter-of-Credit Rights, control within the meaning of Section 9-107
of the UCC and (7) with respect to any “transferable record”(as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or in Section 16 of the Uniform Electronic Transactions
Act as in effect in any relevant jurisdiction), control within the meaning of
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or in Section 16 of the Uniform Electronic Transactions Act as in effect in
the jurisdiction relevant to such transferable record.

“Copyright Licenses” shall mean any and all agreements, licenses and covenants
(whether or not in writing) providing for the granting of any right in or to any
Copyright or otherwise providing for a covenant not to sue (whether such Grantor
is licensee or licensor thereunder) including, without limitation, each
agreement required to be listed in Schedule 5.2(II) under the heading “Copyright
Licenses” (as such schedule may be amended or supplemented from time to time).

“Copyright Security Agreement” means a Copyright Security Agreement
substantially in the form of Exhibit F.

“Copyrights” shall mean all United States, and foreign copyrights (including
Community designs), including but not limited to copyrights in software and all
rights in and to databases, and all Mask Works (as defined under 17 U.S.C. 901
of the U.S. Copyright Act), whether registered or unregistered and whether or
not the underlying works of authorship have

 

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been published, moral rights, reversionary interests, termination rights, and,
with respect to any and all of the foregoing: (i) all registrations and
applications therefor including, without limitation, the registrations and
applications required to be listed in Schedule 5.2(II) under the heading
“Copyrights” (as such schedule may be amended or supplemented from time to
time), (ii) all extensions and renewals thereof, (iii) the right to sue or
otherwise recover for past, present and future infringements thereof, and
(iv) all Proceeds of the foregoing, including, without limitation, licenses,
fees, royalties, income, payments, claims, damages and proceeds of suit now or
hereafter due and/or payable with respect thereto, and (v) all other rights of
any kind accruing thereunder or pertaining thereto throughout the world.

“Credit Agreement” shall have the meaning set forth in the recitals.

“Excluded Asset” shall mean any asset of any Grantor excluded from the security
interest hereunder by virtue of Section 2.2 hereof but only to the extent, and
for so long as, so excluded thereunder.

“Excluded Foreign Equity Interests” shall mean (i) the capital stock of and/or
any other equity interests in any Foreign Subsidiary that is not a First-Tier
Foreign Subsidiary and (ii) the capital stock of any First-Tier Foreign
Subsidiary not required to be pledged pursuant to the terms of Section 5.10(b)
of the Credit Agreement.

“Existing Security Agreement” shall have the meaning set forth in the recitals.

“Foreign Intellectual Property” shall mean any Collateral (whether now owned or
existing or hereafter acquired, created, developed or arising) consisting of
foreign, international, or multi-national issued/registered Patents, registered
Trademarks, registered Copyrights, or any applications for the foregoing.

“Grantors” shall have the meaning set forth in the preamble.

“GSCP” shall have the meaning set forth in the preamble.

“Indemnitee” shall mean the Collateral Agent, and its and its Affiliates’
officers, partners, directors, trustees, employees, agents.

“Insurance” shall mean (i) all insurance policies covering any or all of the
Collateral (regardless of whether the Collateral Agent is the loss payee
thereof) and (ii) any key man life insurance policies.

“Intellectual Property” shall mean, the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under the laws of the United States (or of any state or political subdivision
thereof) or of any Foreign Jurisdiction or otherwise, including without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and the
Trade Secret Licenses, and the right to sue or otherwise recover for past,
present and future infringement or other impairment thereof, including the right
to receive all Proceeds therefrom, including without limitation license fees,
royalties, income, payments, claims, damages and proceeds of suit, now or
hereafter due and/or payable with respect thereto.

“Intellectual Property Licenses” shall mean, collectively, the Copyright
Licenses, Patent Licenses, Trademark Licenses and Trade Secret Licenses.

 

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“Investment Accounts” shall mean the Collateral Account, Securities Accounts,
Commodities Accounts and Deposit Accounts.

“Investment Related Property” shall mean: (i) all “investment property” (as such
term is defined in Article 9 of the UCC) and (ii) all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Equity Interests, Pledged Debt, the Investment Accounts and certificates
of deposit.

“Majority Holder” shall have the meaning set forth in Section 10.

“Material Intellectual Property” shall mean any item of Intellectual Property
included in the Collateral which is material to the business of the Grantors,
taken as a whole, or is otherwise of material value to the Grantors, taken as a
whole.

“Non-Assignable Contract” shall mean any agreement, contract or license to which
any Grantor is a party that by its terms purports to restrict or prevent the
assignment or granting of a security interest therein (either by its terms or by
any federal or state statutory prohibition or otherwise irrespective of whether
such prohibition or restriction is enforceable under Section 9-406 through 409
of the UCC).

“Patent Licenses” shall mean all agreements, licenses and covenants (whether or
not in writing) providing for the granting of any right in or to any Patent or
otherwise providing for a covenant not to sue (whether such Grantor is licensee
or licensor thereunder), including, without limitation, each agreement required
to be listed in Schedule 5.2(II) under the heading “Patent Licenses” (as such
schedule may be amended or supplemented from time to time).

“Patent Security Agreement” means a Patent Security Agreement substantially in
the form of Exhibit G.

“Patents” shall mean all United States and foreign patents and certificates of
invention, inventions or similar industrial property rights, and applications
for any of the foregoing, including, but not limited to: (i) each patent and
patent application required to be listed in Schedule 5.2(II) under the heading
“Patents” (as such schedule may be amended or supplemented from time to time),
(ii) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals, and reexaminations thereof, (iii) all improvements thereto, (iv) the
right to sue or otherwise recover for past, present and future infringements
thereof, (v) all Proceeds of the foregoing, including, without limitation,
license fees, royalties, income, payments, claims, damages, and proceeds of suit
now or hereafter due and/or payable with respect thereto, and (vi) all other
rights of any kind accruing thereunder or pertaining thereto throughout the
world.

“Pledged Debt” shall mean all indebtedness for borrowed money owed to such
Grantor, whether or not evidenced by any Instrument, including, without
limitation, all indebtedness described on Schedule 5.2(I) under the heading
“Pledged Debt” (as such schedule may be amended or supplemented from time to
time), issued by the obligors named therein, the instruments, if any, evidencing
such any of the foregoing, and all interest, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the foregoing.

“Pledged Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and any other participation or interests in any
equity or profits of any business entity including, without limitation, any
trust.

 

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“Pledged LLC Interests” shall mean, other than any Excluded Asset, all interests
in any limited liability company and each series thereof owned by any Grantor,
including, without limitation, all limited liability company interests listed on
Schedule 5.2(I) under the heading “Pledged LLC Interests” (as such schedule may
be amended or supplemented from time to time) and the certificates, if any,
representing such limited liability company interests and any interest of such
Grantor on the books and records of such limited liability company or on the
books and records of any securities intermediary pertaining to such interest and
all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
limited liability company interests that constitutes “Collateral” hereunder.

“Pledged Partnership Interests” shall mean, other than any Excluded Asset, all
interests in any general partnership, limited partnership, limited liability
partnership or other partnership owned by any Grantor, including, without
limitation, all partnership interests listed on Schedule 5.2(I) under the
heading “Pledged Partnership Interests” (as such schedule may be amended or
supplemented from time to time) and the certificates, if any, representing such
partnership interests and any interest of such Grantor on the books and records
of such partnership or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such partnership interests that constitutes
“Collateral” hereunder.

“Pledged Stock” shall mean, other than any Excluded Asset, all shares of capital
stock owned by any Grantor, including, without limitation, all shares of capital
stock described on Schedule 5.2(I) under the heading “Pledged Stock” (as such
schedule may be amended or supplemented from time to time), and the
certificates, if any, representing such shares and any interest of such Grantor
in the entries on the books of the issuer of such shares or on the books of any
securities intermediary pertaining to such shares, and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares that
constitutes “Collateral” hereunder.

“Pledge Supplement” shall mean an agreement substantially in the form of Exhibit
A hereto.

“Receivables” shall mean all rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, including,
without limitation all such rights constituting or evidenced by any Account,
Chattel Paper, Instrument, General Intangible or Investment Related Property,
together with all of Grantor’s rights, if any, in any goods or other property
giving rise to such right to payment and all Collateral Support and Supporting
Obligations related thereto and all Receivables Records.

“Receivables Records” shall mean (i) all original copies of all documents,
instruments or other writings or electronic records or other Records evidencing
the Receivables, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and other papers relating to Receivables,
including, without limitation, all tapes, cards, computer tapes, computer discs,
computer runs, record keeping systems and other papers and documents relating to
the Receivables, whether in the possession or under the control of Grantor or
any computer bureau or agent from time to time acting for Grantor or otherwise,
(iii) all evidences of

 

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the filing of financing statements and the registration of other instruments in
connection therewith, and amendments, supplements or other modifications
thereto, notices to other creditors, secured parties or agents thereof, and
certificates, acknowledgments, or other writings, including, without limitation,
lien search reports, from filing or other registration officers, (iv) all credit
information, reports and memoranda relating thereto and (v) all other written or
non-written forms of information related in any way to the foregoing or any
Receivable.

“Secured Obligations” shall have the meaning assigned in Section 3.1.

“Secured Parties” shall mean the Agents, Lenders, the Issuing Bank, the Lender
Counterparties and the Cash Management Providers and shall include, without
limitation, all former Agents, Lenders and Lender Counterparties to the extent
that any Obligations owing to such Persons were incurred while such Persons were
Agents, Lenders or Lender Counterparties and such Obligations have not been paid
or satisfied in full.

“Securities” shall mean any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

“Specified German Patents” shall mean the patents issued/registered in the
Republic of Germany, each of which is identified in Schedule 5.2(II) as a
“Specified German Patent.”

“Trademark Licenses” shall mean any and all agreements, licenses and covenants
(whether or not in writing) providing for the granting of any right in or to any
Trademark or otherwise providing for a covenant not to sue or permitting
co-existence (whether such Grantor is licensee or licensor thereunder),
including, without limitation, each agreement required to be listed in Schedule
5.2(II) under the heading “Trademark Licenses” (as such schedule may be amended
or supplemented from time to time).

“Trademark Security Agreement” means a Trademark Security Agreement
substantially in the form of Exhibit E.

“Trademarks” shall mean all United States, and foreign trademarks, trade names,
trade dress, corporate names, company names, business names, fictitious business
names, Internet domain names, service marks, certification marks, collective
marks, logos, other source or business identifiers, designs and general
intangibles of a like nature, whether or not registered, and with respect to any
and all of the foregoing: (i) all registrations and applications therefor
including, without limitation, the registrations and applications required to be
listed in Schedule 5.2(II) under the heading “Trademarks” (as such schedule may
be amended or supplemented from time to time), (ii) all extensions or renewals
of any of the foregoing, (iii) all of the goodwill of the business connected
with the use of and symbolized by the foregoing, (iv) the right to sue for past,
present and future infringement or dilution of any of the foregoing or for any
injury to the related goodwill, (v) all Proceeds of the foregoing, including,
without limitation, license fees, royalties, income, payments, claims, damages,
and proceeds of suit now or hereafter due and/or payable with respect thereto,
and (vi) all other rights of any kind accruing thereunder or pertaining thereto
throughout the world.

 

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“Trade Secret Licenses” shall mean any and all agreements (whether or not in
writing) providing for the granting of any right in or to Trade Secrets (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each agreement required to be listed in Schedule 5.2(II) under the heading
“Trade Secret Licenses” (as such schedule may be amended or supplemented from
time to time).

“Trade Secrets” shall mean all trade secrets and all other confidential or
proprietary information and know-how whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating, or referring in any way to such Trade Secret,
including but not limited to: (i) the right to sue or otherwise recover for
past, present and future misappropriation or other violation thereof, (ii) all
Proceeds of the foregoing, including, without limitation, license fees,
royalties, income, payments, claims, damages, and proceeds of suit now or
hereafter due and/or payable with respect thereto; and (iii) all other rights of
any kind accruing thereunder or pertaining thereto throughout the world.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the perfection or priority of, or
remedies with respect to, any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of New
York, the term “UCC” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions hereof
relating to such perfection, priority or remedies.

“United States” shall mean the United States of America.

1.2 Definitions; Interpretation

(a) In this Agreement, the following capitalized terms shall have the meaning
given to them in the UCC (and, if defined in more than one Article of the UCC,
shall have the meaning given in Article 9 thereof): Account, Account Debtor,
As-Extracted Collateral, Bank, Certificated Security, Chattel Paper, Consignee,
Consignment, Consignor, Commercial Tort Claims, Commodity Account, Commodity
Contract, Deposit Account, Document, Entitlement Order, Equipment, Electronic
Chattel Paper, Farm Products, Fixtures, General Intangibles, Goods,
Health-Care-Insurance Receivable, Instrument, Inventory, Letter-of-Credit Right,
Manufactured Home, Money, Payment Intangible, Proceeds, Record, Securities
Account, Securities Intermediary, Security Certificate, Security Entitlement,
Supporting Obligations, Tangible Chattel Paper and Uncertificated Security.

(b) All other capitalized terms used herein (including the preamble and recitals
hereto) and not otherwise defined herein shall have the meanings ascribed
thereto in the Credit Agreement. The incorporation by reference of terms defined
in the Credit Agreement shall survive any termination of the Credit Agreement
until this agreement is terminated as provided in Section 11 hereof. Any of the
terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference. References herein to any
Section, Appendix, Schedule or Exhibit shall be to a Section, an Appendix, a
Schedule or an Exhibit, as the case may be, hereof unless otherwise specifically
provided. The use herein of the word “include” or “including”, when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not non-limiting
language (such as “without limitation” or “but not limited to” or words of
similar import) is used

 

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with reference thereto, but rather shall be deemed to refer to all other items
or matters that fall within the broadest possible scope of such general
statement, term or matter. The terms lease and license shall include sub-lease
and sub-license, as applicable. If any conflict or inconsistency exists between
this Agreement and the Credit Agreement, the Credit Agreement shall govern. All
references herein to provisions of the UCC shall include all successor
provisions under any subsequent version or amendment to any Article of the UCC.

SECTION 2. GRANT OF SECURITY.

2.1 Grant of Security. Each Grantor hereby grants to the Collateral Agent a
security interest in and continuing lien on all of such Grantor’s right, title
and interest in, to and under all personal property of such Grantor including,
but not limited to the following, in each case whether now owned or existing or
hereafter acquired, created, developed or arising and wherever located (all of
which being hereinafter collectively referred to as the “Collateral”):

(a) Accounts;

(b) Chattel Paper;

(c) Documents;

(d) General Intangibles;

(e) Goods (including, without limitation, Inventory and Equipment);

(f) Instruments;

(g) Insurance;

(h) Intellectual Property;

(i) Investment Related Property (including, without limitation, Deposit
Accounts);

(j) Letter-of-Credit Rights;

(k) Money;

(l) Receivables and Receivable Records;

(m) Commercial Tort Claims now or hereafter described on Schedule 5.2;

(n) to the extent not otherwise included above, all other personal property of
any kind and all Collateral Records, Collateral Support and Supporting
Obligations relating to any of the foregoing; and

(o) to the extent not otherwise included above, all Proceeds, products,
accessions, rents and profits of or in respect of any of the foregoing.

2.2 Certain Limited Exclusions. Notwithstanding anything herein to the contrary,
in no event shall the Collateral include or the security interest granted under
Section 2.1 hereof attach to (a) any lease, license, contract or agreement to
which any Grantor is a party, or any of its

 

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rights or interests thereunder, if and to the extent that a security interest is
prohibited by or would be in violation of (i) any law, rule or regulation
applicable to such Grantor, or (ii) a term, provision or condition of any such
lease, license, contract, property right or agreement (unless such law, rule,
regulation, term, provision or condition would be rendered ineffective with
respect to the creation of the security interest hereunder pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity); provided, however, that the
Collateral shall include (and such security interest shall attach) immediately
at such time as the contractual or legal prohibition shall no longer be
applicable and to the extent severable, shall attach immediately to any portion
of such lease, license, contract or agreement not subject to the prohibitions
specified in subclause (i) or (ii) of clause (a) of this Section 2.2; provided
further that the exclusions referred to in clause (a) of this Section 2.2 shall
not include any Proceeds of any such lease, license, contract or agreement;
(b) any of the outstanding capital stock of or other equity interest in a
First-Tier Foreign Subsidiary (to the extent such capital stock or other equity
interest is not excluded from the Collateral pursuant to clause (ii) of the
definition of Excluded Foreign Equity Interests) in excess of 65% of the voting
power of all classes of capital stock of such First-Tier Foreign Subsidiary
entitled to vote; provided that immediately upon the amendment of the Internal
Revenue Code to allow the pledge of a greater percentage of the voting power of
capital stock in a First-Tier Foreign Subsidiary without adverse tax
consequences, the Collateral shall include, and the security interest granted by
each Grantor shall attach to, such greater percentage of capital stock of each
First-Tier Foreign Subsidiary; (c) any Excluded Foreign Equity Interests;
provided, however, that, subject to the 65% limit specified in clause (b) of
this Section 2.2, the Collateral shall include (and such security interest shall
attach) to the capital stock of First-Tier Foreign Subsidiaries to the extent so
required by the terms of Section 5.10(b) of the Credit Agreement; (d) any
“intent-to-use” application for trademark or service mark registration filed
pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. §1051, prior to the filing
under Section 1(c) or Section 1(d) of the Lanham Act of a “Statement of Use” or
an “Amendment to Allege Use” with respect thereto, solely to the extent, if any,
that, and solely during the period, if any, in which, the grant of a security
interest therein prior to such filing would impair the validity or
enforceability of any registration that issues from such intent-to-use trademark
or service mark application under applicable federal law; (e) any property
and/or assets of Grantors (other than, for purposes of the $20,000,000 limit
below, (i) Intellectual Property, (ii) Investment proceeds or
(iii) inter-company loan proceeds) located outside of the United States,
provided that the aggregate value of such property and assets does not exceed
$20,000,000; or (f) any Third Wave Shares prior to satisfaction of the Third
Wave Condition; provided, however, that the Collateral shall include and such
security interest shall immediately and automatically attach to all Third Wave
Shares immediately upon the satisfaction of the Third Wave Condition without any
further action by any Person.

SECTION 3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE.

3.1 Security for Obligations. This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)),
of all Obligations with respect to every Grantor (the “Secured Obligations”).

 

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3.2 Continuing Liability Under Collateral. Notwithstanding anything herein to
the contrary, (i) each Grantor shall remain liable for all obligations under the
Collateral and nothing contained herein is intended or shall be a delegation of
duties to the Collateral Agent or any Secured Party, (ii) each Grantor shall
remain liable under each of the agreements included in the Collateral,
including, without limitation, any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests, to perform all of the obligations undertaken
by it thereunder all in accordance with and pursuant to the terms and provisions
thereof and neither the Collateral Agent nor any Secured Party shall have any
obligation or liability under any of such agreements by reason of or arising out
of this Agreement or any other document related thereto nor shall the Collateral
Agent nor any Secured Party have any obligation to make any inquiry as to the
nature or sufficiency of any payment received by it or have any obligation to
take any action to collect or enforce any rights under any agreement included in
the Collateral, including, without limitation, any agreements relating to
Pledged Partnership Interests or Pledged LLC Interests, and (iii) the exercise
by the Collateral Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral.

SECTION 4. CERTAIN PERFECTION REQUIREMENTS

4.1 Delivery Requirements.

(a) With respect to any Certificated Securities included in the Collateral, each
Grantor shall deliver to the Collateral Agent the Security Certificates
evidencing such Certificated Securities duly indorsed by an effective
indorsement (within the meaning of Section 8-107 of the UCC), or accompanied by
share transfer powers or other instruments of transfer duly endorsed by such an
effective endorsement, in each case, to the Collateral Agent or in blank. In
addition, each Grantor shall cause any certificates evidencing any Pledged
Equity Interests included in the Collateral, including, without limitation, any
Pledged Partnership Interests included in the Collateral or Pledged LLC
Interests included in the Collateral, to be similarly delivered to the
Collateral Agent regardless of whether such Pledged Equity Interests constitute
Certificated Securities. Notwithstanding the foregoing, the delivery
requirements set forth in this Section 4.1(a) shall not apply to any
certificates evidencing shares valued at less than $50,000 individually or
$250,000 in the aggregate; provided that such exception shall not apply to any
certificates evidencing the equity interests in the Borrower’s Subsidiaries.

(b) With respect to any Instruments or Tangible Chattel Paper included in the
Collateral, each Grantor shall deliver to the Collateral Agent all such
Instruments or Tangible Chattel Paper to the Collateral Agent duly indorsed in
blank; provided, however, that such delivery requirement shall not apply to any
Instruments or Tangible Chattel Paper having a face amount of less than
$1,000,000 individually or $5,000,000 in the aggregate.

4.2 Control Requirements.

(a) With respect to any Deposit Accounts, Securities Accounts, Security
Entitlements, Commodity Accounts and Commodity Contracts included in the
Collateral, each Grantor shall ensure that the Collateral Agent has Control
thereof; provided, however, that such Control requirement shall not apply to any
(i) Deposit Accounts with a value of less than, or having funds or other assets
credited thereto with a value of less than, $250,000 individually or $1,000,000
in the aggregate, Deposit Accounts specifically and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of a Grantor’s employees, and Deposit Accounts specifically and
exclusively used for cash collateral to secure letters of credit permitted under
the Credit Agreement and (ii) Securities Accounts, Security Entitlements,
Commodity Accounts and Commodity Contracts with a value of less than, or having
funds or other assets credited thereto with a value of less than, $250,000
individually or

 

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$1,000,000 in the aggregate. With respect to any Securities Accounts or
Securities Entitlements, such Control shall be accomplished by the Grantor
causing the Securities Intermediary maintaining such Securities Account or
Security Entitlement to enter into an agreement substantially in the form of
Exhibit C hereto (or such other agreement in form and substance reasonably
satisfactory to the Collateral Agent) pursuant to which the Securities
Intermediary shall agree to comply with the Collateral Agent’s Entitlement
Orders without further consent by such Grantor. With respect to any Deposit
Account, each Grantor shall cause the depositary institution maintaining such
account to enter into an agreement substantially in the form of Exhibit D hereto
(or such other agreement in form and substance reasonably satisfactory to the
Collateral Agent), pursuant to which the Bank shall agree to comply with the
Collateral Agent’s instructions with respect to disposition of funds in the
Deposit Account without further consent by such Grantor. With respect to any
Commodity Accounts or Commodity Contracts each Grantor shall cause Control in
favor of the Collateral Agent in a manner reasonably acceptable to the
Collateral Agent.

(b) With respect to any Uncertificated Security included in the Collateral
(other than any Uncertificated Securities constituting Collateral credited to a
Securities Account), each Grantor shall cause the issuer of such Uncertificated
Security to either (i) register the Collateral Agent as the registered owner
thereof on the books and records of the issuer or (ii) execute an agreement
substantially in the form of Exhibit B hereto (or such other agreement in form
and substance reasonably satisfactory to the Collateral Agent), pursuant to
which such issuer agrees to comply with the Collateral Agent’s instructions with
respect to such Uncertificated Security without further consent by such Grantor.

(c) With respect to any Letter-of-Credit Rights included in the Collateral
(other than any Letter-of-Credit Rights constituting a Supporting Obligation for
a Receivable in which the Collateral Agent has a valid and perfected security
interest) with a value in excess of $250,000 individually or $1,000,000 in the
aggregate, the Grantor shall ensure that Collateral Agent has Control thereof by
obtaining the written consent of each issuer of each related letter of credit to
the assignment of the proceeds of such letter of credit to the Collateral Agent.

(d) With respect any Electronic Chattel Paper or “transferable record”(as that
term is defined in Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction) included in the
Collateral, the Grantor shall ensure that the Collateral Agent has Control
thereof; provided, however, that such Control requirement shall not apply to any
Electronic Chattel Paper or transferable record having a face amount of less
than $1,000,000 individually or $5,000,000 in the aggregate.

4.3 Intellectual Property Recording Requirements.

(a) In the case of any Collateral (whether now owned or existing or hereafter
acquired, created, developed or arising) consisting of issued U.S. Patents or
pending U.S. Patent applications, the Grantor shall execute and deliver to the
Collateral Agent a Patent Security Agreement in substantially the form of
Exhibit G hereto (or a supplement thereto) covering all such Patents in
appropriate form for recordation with the United States Patent and Trademark
Office with respect to the security interest of the Collateral Agent.

(b) In the case of any Collateral (whether now owned or existing or hereafter
acquired, created, developed or arising) consisting of registered U.S.
Trademarks or pending U.S. Trademark applications, the Grantor shall execute and
deliver to the Collateral Agent a

 

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Trademark Security Agreement in substantially the form of Exhibit E hereto (or a
supplement thereto) covering all such Trademarks, in appropriate form for
recordation with the United States Patent and Trademark Office with respect to
the security interest of the Collateral Agent.

(c) In the case of any Collateral (whether now owned or existing or hereafter
acquired, created, developed or arising) consisting of registered U.S.
Copyrights or pending U.S. Copyright applications, or consisting of exclusive
Copyright Licenses that constitute Material Intellectual Property in respect of
registered U.S. Copyrights for which any Grantor is the licensee, the Grantor
shall execute and deliver to the Collateral Agent a Copyright Security Agreement
in substantially the form of Exhibit F hereto (or a supplement thereto) covering
all such Copyright and exclusive Copyright Licenses, in appropriate form for
recordation with the United States Copyright Office with respect to the security
interest of the Collateral Agent.

(d) Subject to the timing requirements set forth in the last sentence of this
Section 4.3(d) and the proviso to Section 5.10(a) of the Credit Agreement, in
the case of any Foreign Intellectual Property, each Grantor shall (i) execute,
deliver to the Collateral Agent, and record security agreements (or supplements
thereto), covering all such Foreign Intellectual Property in appropriate form
for recordation with the applicable foreign, international or multi-national
registers, to insure the validity, perfection and priority of the security
interests of the Collateral Agent, and (ii) take such additional actions or make
such additional filings or recordings as may be necessary or advisable, under
the laws of the applicable Foreign Jurisdiction to insure the validity,
perfection and priority of the security interest of the Collateral Agent (all
such actions being referred to herein collectively as “Foreign IP Perfection
Filings”); provided, however, that the foregoing requirements shall not apply
with respect to any single Foreign Jurisdiction in which effective Foreign IP
Perfection Filings have not been made if the consolidated revenues derived from
the operations of the Borrower and its Subsidiaries in such jurisdiction are
less than 5% of the consolidated revenues derived from all of the operations of
the Borrower and its Subsidiaries for the four Fiscal Quarter period (the
“Measurement Period”) ending on the last day of the Fiscal Quarter or Fiscal
Year, as the case may be, for which financial statements are required to be
delivered pursuant to Section 5.1(b) or 5.1(c), respectively, of the Credit
Agreement (the “Due Date”) or if the making of such filings remains subject to
the expiration of any grace period therefor contained in this Section 4.3(d)
and/or Section 4.5 of this Agreement or Section 5.10(a) of the Credit Agreement;
provided further that in no event shall the consolidated revenues for such
Measurement Period derived from the operations of the Borrower and its
Subsidiaries in all Foreign Jurisdictions in which effective Foreign IP
Perfection Filings have not been made exceed 15% of the consolidated revenues of
all operations of the Borrower and its Subsidiaries for such Measurement Period
(the “Overall Cap”) (unless the making of such filing remains subject to the
expiration of any grace period therefor contained in this Section 4.3(d) and/or
Section 4.5 of this Agreement or Section 5.10(a) of the Credit Agreement).
Subject to the timing and notice requirements set forth in Section 4.5 of this
Agreement and the proviso to Section 5.10(a) of the Credit Agreement, the
Borrower shall make, and shall cause each other relevant applicable Grantor to
make, all such Foreign IP Perfection Filings as may be necessary or advisable
under the laws of the respective applicable jurisdictions to insure the
validity, perfection and priority of the security interests of the Collateral
Agent in all Foreign Intellectual Property of the Grantors registered or issued
in (x) the Republic of Germany and the United Kingdom, within 90 days after the
date on which such Foreign Intellectual Property is acquired, created, developed
or arises (such filings in respect of the Specified German Patents to be made on
or prior to the date that is 30 days after the Restatement Date), and (y) such
other Foreign Jurisdiction(s) as may be necessary to cause the Overall Cap not
to be exceeded, within 90 days after the Due Date for the financial statements
in respect of any respective applicable Measurement Period, as the case may be.

 

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4.4 Other Actions.

(a) If any issuer of any Pledged Equity Interest constituting Collateral is
organized under the laws of a Foreign Jurisdiction, the Grantor in respect
thereof shall take such additional actions, including, without limitation,
causing the issuer to register the pledge of such Pledged Equity Interests on
its books and records or making such filings or recordings, in each case as may
be necessary or reasonably advisable, under the laws of such issuer’s
jurisdiction, to insure the validity, perfection and priority of the security
interest of the Collateral Agent in such Pledged Equity Interests.

(b) With respect to any Pledged Partnership Interests and Pledged LLC Interests
included in the Collateral, if the Grantors own less than 100% of the equity
interests in any issuer of such Pledged Partnership Interests or Pledged LLC
Interests constituting Collateral, the Grantors shall use their commercially
reasonable efforts to obtain the consent of each other holder of partnership
interest or limited liability company interests in such issuer to the security
interest of the Collateral Agent hereunder and following an Event of Default,
the transfer of such Pledged Partnership Interests and Pledged LLC Interests
constituting Collateral to the Collateral Agent of its designee, and to the
substitution of the Collateral Agent or its designee as a partner or member with
all the rights and powers related thereto. Each Grantor consents to the grant by
each other Grantor of a Lien in all Investment Related Property constituting
Collateral to the Collateral Agent and without limiting the generality of the
foregoing consents to the transfer of any Pledged Partnership Interest and any
Pledged LLC Interest constituting Collateral to the Collateral Agent or its
designee following an Event of Default for the purposes of enabling the
Collateral Agent to exercise rights and remedies under Section 9 hereof and to
the substitution of the Collateral Agent or its designee as a partner in any
partnership or as a member in any limited liability company with all the rights
and powers related thereto.

(c) With respect to any Goods in excess of $100,000 individually or $1,000,000
in the aggregate, which is covered by a certificate of title under a statute of
any jurisdiction under the law of which indication of a security interest on
such certificate is required as a condition of perfection thereof, upon the
reasonable request of the Collateral Agent, (A) provide information with respect
to any such Goods (B) execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an application or other
document requesting the notation or other indication of the security interest
created hereunder on such certificate of title, and (C) deliver to the
Collateral Agent copies of all such applications or other documents filed during
such calendar quarter and copies of all such certificates of title issued during
such calendar quarter indicating the security interest created hereunder in the
items of Goods covered thereby.

4.5 Timing and Notice. With respect to any Collateral in existence on the
Restatement Date, each Grantor shall comply with the requirements of Section 4
on the Restatement Date (or in the case of Section 4.3(d) hereof, such other
dates as set forth therein) and with respect to any Collateral hereafter
acquired, created, developed or arising such Grantor shall comply with the
requirements of Section 4 hereof: (a) in the case of any Collateral other than
Foreign Intellectual Property, within 45 days after such Collateral is acquired,
created, developed or otherwise arises; and (b) in the case of any Collateral
that is Foreign Intellectual Property, within 90 days after such Collateral is
acquired, created, developed or otherwise arises (subject to the timing
requirements set forth in the proviso to Section 5.10(a) to the Credit
Agreement); provided, in any such case, that the Collateral Agent may grant an
extension therefor if the applicable Grantor in respect thereof is using
commercially reasonable efforts to comply with such requirements. Each Grantor
shall promptly inform the Collateral Agent of its acquisition, creation or
development of any Collateral for which any action is required by Section 4
hereof.

 

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SECTION 5. REPRESENTATIONS AND WARRANTIES.

Each Grantor hereby represents and warrants, on each Credit Date (other than
Credit Dates for any Loans the proceeds of which are used solely to fund the
Third Wave Consideration and Related Expenditures) that the following statements
are true and correct; provided, however, that no Grantor shall or shall be
deemed to have made any representation or warranty in respect of any Third Wave
Shares prior to satisfaction of the Third Wave Condition:

5.1 Grantor Information & Status.

(a) Schedule 5.1(A) & (B) (as such schedule may be amended or supplemented from
time to time) sets forth under the appropriate headings: (1) the full legal name
of such Grantor, (2) all trade names or other names under which such Grantor
currently conducts business, (3) the type of organization of such Grantor,
(4) the jurisdiction of organization of such Grantor, (5) its organizational
identification number, if any, and (6) the jurisdiction where the chief
executive office or its sole place of business (or the principal residence if
such Grantor is a natural person) is located.

(b) Except as provided on Schedule 5.1(C) (as such schedule may be amended or
supplemented from time to time), it has not changed its name, jurisdiction of
organization, chief executive office or sole place of business (or principal
residence if such Grantor is a natural person) or its corporate structure in any
way (e.g., by merger, consolidation, change in corporate form or otherwise) and
has not done business under any other name, in each case, within the past five
(5) years.

(c) It has not within the last five (5) years become bound (whether as a result
of merger or otherwise) as debtor under a security agreement entered into by
another Person, which has not heretofore been terminated other than the
agreements identified on Schedule 5.1(D) hereof (as such schedule may be amended
or supplemented from time to time).

(d) Such Grantor has been duly organized and is validly existing as an entity of
the type as set forth opposite such Grantor’s name on Schedule 5.1(A) solely
under the laws of the jurisdiction as set forth opposite such Grantor’s name on
Schedule 5.1(A) and remains duly existing as such. Such Grantor has not filed
any certificates of dissolution or liquidation, any certificates of
domestication, transfer or continuance in any other jurisdiction.

(e) No Grantor is a “transmitting utility” (as defined in Section 9-102(a)(80)
of the UCC).

5.2 Collateral Identification, Special Collateral.

(a) On the Restatement Date and within 30 days following the completion of the
most recent Fiscal Quarter prior to a Credit Date, Schedule 5.2 (as such
schedule may be amended or supplemented from time to time) sets forth under the
appropriate headings all of such Grantor’s: (1) Pledged Equity Interests
constituting Collateral, other than any Pledged Equity Interests valued at less
than $50,000 individually or $250,000 in the aggregate, provided that such
exception shall not apply to any Pledged Equity Interests evidencing the equity
interests in the Borrower’s Subsidiaries, (2) Pledged Debt other than any
Pledged Debt having a face amount of

 

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less than $250,000 individually or $1,000,000 in the aggregate, (3) Securities
Accounts, Security Entitlements, Commodity Accounts and Commodity Contracts
other than any Securities Accounts, Security Entitlements, Commodity Accounts
and Commodity Contracts having a value of less than, or having funds or other
assets credited thereto with a value of less than, $250,000 individually or
$1,000,000 in the aggregate, (4) Deposit Accounts other than any Deposit
Accounts holding less than $250,000 individually or $1,000,000 in the aggregate,
(5) United States and foreign registrations of and applications for Patents,
Trademarks, and Copyrights owned by such Grantor constituting Material
Intellectual Property, (6) Patent Licenses, Trademark Licenses, Trade Secret
Licenses and Copyright Licenses constituting Material Intellectual Property
other than employment related agreements or consulting agreements with
individuals to the extent that such agreements can be characterized as Patent
Licenses, Trademark Licenses, Trade Secret Licenses and/or Copyright Licenses,
(7) Commercial Tort Claims other than any Commercial Tort Claims having a value
of less than $500,000 individually and $2,000,000 in the aggregate,
(8) Letter-of-Credit Rights for letters of credit other than any Letters of
Credit Rights worth less than $250,000 individually or $1,000,000 in the
aggregate, (9) other than with salesman, servicemen, customers or such items in
transit, under repair or with assemblers, the name and address of any
warehouseman, bailee or other third party in possession of any Inventory,
Equipment and other tangible personal property other than any Inventory,
Equipment or other tangible person property having a value less than $1,000,000
individually or $5,000,000 in the aggregate, and (10) Material Contracts. Within
30 days following the completion of the most recent Fiscal Quarter prior to a
Credit Date, such Grantor shall supplement such schedules as necessary to ensure
that such schedules are accurate.

(b) None of the Collateral in excess of $500,000 individually or $2,000,000 in
the aggregate constitutes, or is the Proceeds of, (1) Farm Products,
(2) As-Extracted Collateral, (3) Manufactured Homes, (4) Health-Care-Insurance
Receivables; (5) timber to be cut, or (6) aircraft, aircraft engines,
satellites, ships or railroad rolling stock. No material portion of the
Collateral consists of motor vehicles or other goods subject to a certificate of
title statute of any jurisdiction.

(c) All information supplied by any Grantor with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.

(d) No Excluded Asset (other than the Third Wave Shares) is material to the
business of such Grantor.

5.3 Ownership of Collateral and Absence of Other Liens.

(a) It owns the Collateral other than Intellectual Property purported to be
owned by it or otherwise has the rights it purports to have in each item of
Collateral and, as to all Collateral whether now existing or hereafter acquired
(including by way of lease or license), will continue to own or have such rights
in each item of the Collateral other than Intellectual Property (except as
otherwise permitted by the Credit Agreement), in each case free and clear of any
and all Liens, rights or claims of all other Persons, including, without
limitation, liens arising as a result of such Grantor becoming bound (as a
result of merger or otherwise) as debtor under a security agreement entered into
by another Person other than any Permitted Liens.

(b) Other than any financing statements filed in favor of the Collateral Agent,
no effective financing statement, fixture filing or other instrument similar in
effect under any applicable law covering all or any part of the Collateral is on
file in any filing or recording

 

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office except for (x) financing statements for which duly authorized proper
termination statements have been delivered to the Collateral Agent for filing
and (y) financing statements filed in connection with Permitted Liens. Other
than the Collateral Agent and any automatic control in favor of a Bank,
Securities Intermediary or Commodity Intermediary maintaining a Deposit Account,
Securities Account or Commodity Contract, no Person is in Control of any
Collateral.

5.4 Status of Security Interest.

(a) Upon the filing of any financing statement naming such Grantor as “debtor”
and the Collateral Agent as “secured party” and describing the Collateral in the
filing offices set forth opposite such Grantor’s name on Schedule 5.4 hereof (as
such schedule may be amended or supplemented from time to time), the security
interest of the Collateral Agent in all Collateral that can be perfected by the
filing of a financing statement under the Uniform Commercial Code as in effect
in any jurisdiction will constitute valid, perfected, First Priority Liens with
respect to such Collateral. Each agreement purporting to give the Collateral
Agent Control over any Collateral is effective to establish the Collateral
Agent’s Control of the Collateral subject thereto.

(b) To the extent perfection or priority of the security interest therein is not
subject to Article 9 of the UCC, upon recordation in the applicable intellectual
property registries (including but not limited to the United States Patent and
Trademark Office and the United States Copyright Office) of the security
interests granted hereunder in all Collateral consisting of (i) U.S. Patents,
Trademarks, Copyrights and exclusive Copyright Licenses and (ii) Foreign
Intellectual Property that constitute Material Intellectual Property and are
required to be perfected pursuant to Section 4.3(d), the security interests
granted to the Collateral Agent hereunder in such Collateral shall constitute
valid, perfected, First Priority Liens.

(c) Except as set forth in the Credit Agreement, no authorization, consent,
approval or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body or any other Person is required for either (i) the
pledge or grant by any Grantor of the Liens purported to be created in favor of
the Collateral Agent hereunder or (ii) the exercise by the Collateral Agent of
any rights or remedies in respect of any Collateral (whether specifically
granted or created hereunder or created or provided for by applicable law),
except (A) for the filings contemplated by clause (a) above and (B) as may be
required, in connection with the disposition of any Investment Related Property,
by laws generally affecting the offering and sale of Securities.

(d) Such Grantor is in compliance with its obligations under Section 4 hereof.

5.5 Goods & Receivables.

(a) Each Receivable (i) is and will be the legal, valid and binding obligation
of the Account Debtor in respect thereof, representing an unsatisfied obligation
of such Account Debtor, (ii) is and will be enforceable in accordance with its
terms, (iii) is not and will not be subject to any credits, rights of
recoupment, setoffs, defenses, taxes, counterclaims (except with respect to
refunds, returns and allowances in the ordinary course of business with respect
to damaged merchandise) and (iv) is and will be in compliance with all
applicable laws, whether federal, state, local or foreign, unless failure to
comply with clauses (i), (ii), (iii) and/or (iv) of this Section 5.5(a) would
not have a Material Adverse Effect.

 

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(b) Except as otherwise identified on Schedule 5.5 hereto, (i) the aggregate
amount of all Receivables constituting Collateral owed by or due from the
government of the United States, or any agency or instrumentality thereof,
collectively, does not exceed $75,000,000; and (ii) the aggregate amount of all
Receivables constituting Collateral owed by or due from the governments of
states or municipalities of the United States or from any foreign sovereigns,
collectively, does not exceed $25,000,000. Subject to Section 6.8, no Receivable
constituting Collateral in excess of $500,000 individually or $2,000,000 in the
aggregate requires the consent of the Account Debtor in respect thereof in
connection with the security interest hereunder, except any consent that has
been obtained and except as otherwise contemplated by the first sentence of this
Section 5.5(b).

(c) Any Goods now or hereafter produced by any Grantor included in the
Collateral have been and will be produced in compliance with the requirements of
the Fair Labor Standards Act, as amended, and the rules and regulations
promulgated thereunder.

(d) Other than any Inventory or Equipment in transit (or, in the case of
Grantors’ motor vehicles, being used in the ordinary course), being repaired or
in the possession or control of any warehouseman, bailee, other third party,
salesmen or customers, all of the Equipment and Inventory included in the
Collateral is located only at the locations specified in Schedule 5.5 (as such
schedule may be amended or supplemented from time to time).

5.6 Pledged Equity Interests, Investment Related Property.

(a) It is the record and beneficial owner of the Pledged Equity Interests free
of all Liens (other than Permitted Liens), rights or claims of other Persons
and, other than as set forth on Schedule 4.2 of the Credit Agreement or as
otherwise permitted under the Credit Agreement, there are no outstanding
warrants, options or other rights to purchase, or shareholder, voting trust or
similar agreements outstanding with respect to, or property that is convertible
into, or that requires the issuance or sale of, any Pledged Equity Interests.

(b) Except as set forth in Schedule 5.6, no consent of any Person including any
other general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is necessary or
reasonably desirable in connection with the creation, perfection or First
Priority status of the security interest of the Collateral Agent in any Pledged
Equity Interests constituting Collateral or the exercise by the Collateral Agent
of the voting or other rights provided for in this Agreement or the exercise of
remedies in respect thereof except such as have been obtained.

(c) All of the Pledged LLC Interests and Pledged Partnership Interests
constituting Collateral are or represent interests that by their terms provide
that they are securities governed by the uniform commercial code of an
applicable jurisdiction.

5.7 Intellectual Property.

(a) Except as set forth in Schedule 5.2, it is the owner of all Patents,
Trademarks, and Copyrights listed on Schedule 5.2 (as such schedule may be
amended or supplemented from time to time) that constitute Material Intellectual
Property; and it owns or has the valid right to use and, where Grantor does so,
sublicense others to use, all Intellectual Property necessary to conduct its
business, free and clear of all Liens, claims, and licenses, except for
Permitted Liens and the licenses set forth on Schedule 5.2 (as each may be
amended or supplemented from time to time) and except as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(b) Except as set forth in Schedule 5.2, each Patent, Trademark and Copyright
listed on Schedule 5.2 (as such schedule may be amended or supplemented from
time to time) that constitute Material Intellectual Property (other than any
Intellectual Property, the disposition or license of which is otherwise
permitted under the Credit Agreement) is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, nor, in the case of Patents, is
the subject of a reexamination proceeding, and such Grantor has performed in all
material respects all acts and has paid all renewal, maintenance and other fees
and taxes required to maintain each and every registration and application of
Copyrights, Patents and Trademarks that constitute Material Intellectual
Property in full force and effect.

(c) No action or proceeding is pending, or to such Grantors’ knowledge,
threatened, challenging the validity, enforceability, registration, ownership or
use of any of such Grantor’s Patents, Trademarks, or Copyrights listed on
Schedule 5.2 (as such schedule may be amended or supplemented from time to time)
that constitute Material Intellectual Property.

(d) None of the Trademarks, Patents, Copyrights or Trade Secrets that constitute
Material Intellectual Property has been licensed by any Grantor to any Affiliate
or third party, except as disclosed in Schedule 5.2 (as such schedule may be
amended or supplemented from time to time), and all exclusive Copyright Licenses
that constitute Material Intellectual Property have been properly recorded in
the United States Copyright Office.

(e) [Intentionally Omitted].

(f) Such Grantor has been using appropriate statutory notice of registration in
connection with its use of registered Trademarks, proper marking practices in
connection with the use of issued Patents and pending Patent applications, and
appropriate notice of copyright in connection with the publication of
Copyrights, except where failure to use such statutory notice of registration,
proper marking practices and appropriate notice of copyright would not have a
Material Adverse Effect.

(g) Such Grantor has taken commercially reasonable steps to protect the
confidentiality of its Trade Secrets that constitute Material Intellectual
Property in accordance with industry standards;

(h) Such Grantor has maintained its standards of quality in the manufacture,
distribution, and sale of all products sold and in the provision of all services
rendered under or in connection with all Trademarks of such Grantor and has
taken commercially reasonable actions to insure that all licensees of the
Trademarks owned by such Grantor meet such standards of quality, except where
failure to maintain or meet such standards would not have a Material Adverse
Effect.

(i) To the best knowledge of such Grantor, except as set forth on Schedule 5.7
hereof, such Grantor is not infringing, misappropriating, diluting, or otherwise
violating the Intellectual Property rights of any other Person unless such
infringement, misappropriation, dilution or violation would not have a Material
Adverse Effect; there is no pending or, to the best knowledge of such Grantor,
threatened claim or litigation against such Grantor alleging any such
infringement, misappropriation, dilution or other violation, except as set forth
on Schedule 5.7 hereof.

 

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(j) To the best knowledge of such Grantor, except as set forth on Schedule 5.7
hereof, during the past two (2) years (or earlier if presently not resolved), no
Person has infringed, misappropriated, diluted or otherwise violated any
Intellectual Property rights of such Grantor unless such infringement,
misappropriation, dilution or violation would not have a Material Adverse
Effect; and

(k) no settlement or consents, covenants not to sue, co-existence agreements,
non-assertion assurances, or releases have been entered into by such Grantor or
binds such Grantor in a manner that would materially adversely affect such
Grantor’s rights to own, license or use any Material Intellectual Property,
except as disclosed in Schedule 5.7 hereof (as such schedule may be amended or
supplemented from time to time).

5.8 Miscellaneous. No Material Contract prohibits assignment or requires consent
of or notice to any Person in connection with the assignment to the Collateral
Agent hereunder, except such as has been given or made or is currently sought
pursuant to Section 6.8 hereof.

SECTION 6. COVENANTS AND AGREEMENTS.

Each Grantor hereby covenants and agrees that:

6.1 Grantor Information & Status. Without limiting any prohibitions or
restrictions on mergers or other transactions set forth in the Credit Agreement,
and except as it may be permitted to do so under the Credit Agreement, it shall
not change such Grantor’s name, identity, corporate structure (e.g. by merger,
consolidation, change in corporate form or otherwise), sole place of business
(or principal residence if such Grantor is a natural person), chief executive
office, type of organization or jurisdiction of organization or establish any
trade names unless it shall have (a) notified the Collateral Agent in writing
promptly with respect to any such change or establishment, identifying such new
proposed name, identity, corporate structure, sole place of business (or
principal residence if such Grantor is a natural person), chief executive
office, jurisdiction of organization or trade name and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (b) except as provided in the Credit Agreement or herein, taken all
actions necessary to maintain the continuous validity, perfection and the same
or better priority of the Collateral Agent’s security interest in that portion
of the Collateral granted or intended to be granted and agreed to hereby, which
in the case of any merger or other change in corporate structure shall include,
without limitation, executing and delivering to the Collateral Agent a completed
Pledge Supplement, substantially in the form of Annex A attached hereto, upon
completion of such merger or other change in corporate structure confirming the
grant of the security interest hereunder.

6.2 Collateral Identification; Special Collateral.

(a) In the event that it hereafter acquires any Collateral of a type described
in Section 5.2(b) hereof with a fair market value in excess of $250,000
individually or $1,000,000 in the aggregate, it shall promptly notify the
Collateral Agent thereof in writing and take such actions and execute such
documents and make such filings all at such Grantor’s expense as the Collateral
Agent may reasonably request to the extent that such actions, execution of
documents and/or filings are otherwise required under Section 4 hereof in order
to ensure that the Collateral Agent has a valid, perfected, First Priority
security interest in such Collateral.

 

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(b) In the event that it hereafter acquires or has any Commercial Tort Claim
that an Authorized Officer of such Grantor reasonably believes has a value in
excess of $500,000 individually or $2,000,000 in the aggregate it shall deliver
to the Collateral Agent a completed Pledge Supplement, substantially in the form
of Exhibit A attached hereto, together with all Supplements to Schedules
thereto, identifying such new Commercial Tort Claims; provided that the Borrower
shall not be required to compromise in any way its attorney-client privilege.

6.3 Ownership of Collateral and Absence of Other Liens.

(a) Except for the security interest created by this Agreement, it shall not
create or suffer to exist any Lien (other than Permitted Liens) upon or with
respect to any of the Collateral, and such Grantor shall defend the Collateral
against all Persons (other than the holders of Permitted Liens) at any time
claiming any interest therein.

(b) Upon any Authorized Officer of such Grantor obtaining knowledge thereof, it
shall promptly notify the Collateral Agent in writing of any event that may have
a Material Adverse Effect on the value of the Collateral or any material portion
thereof, the ability of such Grantor or the Collateral Agent to dispose of the
Collateral or any material portion thereof, or the rights and remedies of the
Collateral Agent in relation thereto, including, without limitation, the levy of
any legal process against the Collateral or any material portion thereof.

(c) It shall not sell, transfer or assign (by operation of law or otherwise) or
exclusively license to another Person any Collateral except as otherwise
permitted by the Credit Agreement.

6.4 Status of Security Interest.

(a) Subject to the limitations set forth in Section 4 hereof and subsection
(b) of this Section 6.4, such Grantor shall maintain the security interest of
the Collateral Agent hereunder in all Collateral as valid, perfected, First
Priority Liens.

(b) Notwithstanding the foregoing, no Grantor shall be required to take any
action to perfect any Collateral that can only be perfected by (i) Control or
(ii) filings with registrars of motor vehicles or similar governmental
authorities with respect to goods covered by a certificate of title, in each
case except as and to the extent specified in Section 4 hereof.

6.5 Goods & Receivables.

(a) It shall not deliver any Document evidencing any Equipment and Inventory to
any Person other than the issuer of such Document or its agent to claim the
Goods evidenced therefor or the Collateral Agent.

(b) If any Equipment or Inventory in excess of $1,000,000 individually or
$5,000,000 in the aggregate is in possession or control of any warehouseman,
bailee or other third party (other than a Consignee under a Consignment for
which such Grantor is the Consignor or with servicemen, salesmen, customers,
such items in transit, such items under repair or with assemblers), such Grantor
shall join with the Collateral Agent in notifying the third party of the
Collateral Agent’s security interest and obtaining an acknowledgment from the
third party that it is holding the Equipment and Inventory for the benefit of
the Collateral Agent and will permit the Collateral Agent to have access to
Equipment or Inventory for purposes of inspecting such Collateral or, following
an Event of Default, to remove same from such premises if the Collateral Agent
so elects; and with respect to any Goods in excess of $250,000 individually or
$1,000,000 in the aggregate subject to a Consignment for which such Grantor is
the Consignor, such Grantor

 

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shall file appropriate financing statements against the Consignee and take such
other action as may be necessary to ensure that such Grantor has a first
priority perfected security interest in such Goods subject to any nonmaterial
Liens.

(c) It shall keep the Equipment, Inventory and any Documents evidencing any
material Equipment and Inventory in the locations specified on Schedule 5.5 (as
such schedule may be amended or supplemented from time to time) or as otherwise
provided by Section 5.5 unless it shall have (a) notified the Collateral Agent
in writing, by executing and delivering to the Collateral Agent a completed
Pledge Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto, prior to ten (10) days after
any change in locations, identifying such new locations and providing such other
information in connection therewith as the Collateral Agent may reasonably
request.

(d) It shall keep and maintain at its own cost and expense satisfactory and
complete records of the Receivables, including, but not limited to, to the
extent it is commercially reasonable to do so, the originals of all
documentation with respect to all Receivables and records of all payments
received and all credits granted on the Receivables, all merchandise returned
and all other material dealings therewith.

(e) (i) If the aggregate amount of all Receivables constituting Collateral owed
by or due from the government of the United States, or any agency or
instrumentality thereof, collectively, exceeds $75,000,000, the Grantors in
respect thereof shall promptly, and in any event within ninety (90) days after
such Receivable(s) arise(s), (x) execute any instruments and take any other
steps reasonably required by the Collateral Agent in order that all monies due
or to become due on account of any such Receivables shall be subject to a valid,
perfected, First Priority Lien in favor of the Collateral Agent for the benefit
of the Secured Parties (to the extent the Collateral Agent does not already have
a valid and perfected First Priority security interest therein) and (y) direct
the applicable Governmental Authority to deposit all monies due or to become due
on account of any such Receivables into a deposit and/or security account
subject to a control agreement in favor of the Collateral Agent, on terms
reasonably satisfactory to the Collateral Agent; and (ii) if the aggregate
amount of all Receivables constituting Collateral owed by or due from the
governments of states or municipalities of the United States or from any foreign
sovereigns, collectively, exceeds $25,000,000, the Grantors in respect thereof
shall promptly, and in any event within ninety (90) days after such
Receivable(s) arise(s), (x) execute any instruments and take any other steps
reasonably required by the Collateral Agent in order that all monies due or to
become due on account of any such Receivable shall be subject to a valid,
perfected, First Priority Lien in favor of the Collateral Agent for the benefit
of the Secured Parties (to the extent that the Collateral Agent does not already
have a valid First Priority security interest therein) and (y) direct the
applicable Governmental Authority to deposit all monies due or to become due on
account of any such Receivables into a deposit and/or security account subject
to a control agreement in favor of the Collateral Agent, on terms reasonably
satisfactory to the Collateral Agent. Anything to the contrary contained in the
foregoing notwithstanding, following the occurrence of any Event of Default, all
Grantors in respect of Receivables constituting Collateral owed by or due from
the government of the United States, or any agency or instrumentality thereof,
or any government of a state or municipality of the United States or any foreign
sovereign shall take all steps necessary, upon the Collateral Agent’s notice to
the Borrower directing the Borrower or the applicable Grantor to take all such
steps, such that (A) all monies due or to become due on account of any such
Receivables shall be subject to a valid, perfected, First Priority Lien in favor
of the Collateral Agent for the benefit of the Secured Parties and (B) each
applicable Governmental Authority is directed to deposit all monies due or to
become due on account of any such Receivables into a deposit and/or security
account subject to a control agreement in favor of the Collateral Agent, on
terms reasonably satisfactory to the Collateral Agent, irrespective of the
individual or aggregate value of such Receivable.

 

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(f) Other than in the ordinary course of business (i) it shall not amend,
modify, terminate or waive any provision of any Receivable other than such
amendments, modifications, terminations or waivers that would not have a
Material Adverse Effect; and (ii) following and during the continuation of an
Event of Default, such Grantor shall not, upon receipt of notice from the
Collateral Agent directing it not to do so, (w) grant any extension or renewal
of the time of payment of any Receivable, (x) compromise or settle any dispute,
claim or legal proceeding with respect to any Receivable for less than the total
unpaid balance thereof, (y) release, wholly or partially, any Person liable for
the payment thereof, or (z) allow any credit or discount thereon.

(g) At any time following the occurrence and during the continuation of an Event
of Default, the Collateral Agent shall have the right at any time to notify, or
require such Grantor to notify, any Account Debtor of the Collateral Agent’s
security interest in the Receivables and any Supporting Obligation and, in
addition, the Collateral Agent may: (1) direct the Account Debtors under any
Receivables to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Collateral Agent; (2) notify, or require such Grantor
to notify, each Person maintaining a lockbox or similar arrangement to which
Account Debtors under any Receivables have been directed to make payment to
remit all amounts representing collections on checks and other payment items
from time to time sent to or deposited in such lockbox or other arrangement
directly to the Collateral Agent; and (3) enforce, at the expense of such
Grantor, collection of any such Receivables and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. If the Collateral Agent notifies such Grantor that it
has elected to collect the Receivables in accordance with the preceding
sentence, any payments of Receivables received by such Grantor shall be
forthwith (and in any event within two (2) Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in the Collateral Account maintained under the
sole dominion and control of the Collateral Agent, and until so turned over, all
amounts and proceeds (including checks and other instruments) received by such
Grantor in respect of the Receivables, any Supporting Obligation or Collateral
Support shall be received in trust for the benefit of the Collateral Agent
hereunder and shall be segregated from other funds of such Grantor and such
Grantor shall not, except as may be permitted by the Collateral Agent, adjust,
settle or compromise the amount or payment of any Receivable, or release wholly
or partly any Account Debtor or obligor thereof, or allow any credit or discount
thereon.

6.6 Pledged Equity Interests, Investment Related Property.

(a) Except as provided in the next sentence, in the event such Grantor receives
any dividends, interest or distributions on account of any Pledged Equity
Interest or other Investment Related Property constituting Collateral, upon the
merger, consolidation, liquidation or dissolution of any issuer of such Pledged
Equity Interest or Investment Related Property, then (a) such dividends,
interest or distributions and securities or other property shall be included in
the definition of Collateral without further action and (b) such Grantor shall
promptly take all steps, if any, necessary or reasonably advisable to ensure the
validity, perfection, priority and, if applicable, control of the Collateral
Agent over such Investment Related Property (including, without limitation,
delivery thereof to the Collateral Agent) and pending any such action such
Grantor shall be deemed to hold such dividends, interest, distributions,
securities or other property in trust for the benefit of the Collateral Agent
and shall segregate such dividends,

 

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distributions, Securities or other property from all other property of such
Grantor. Notwithstanding the foregoing, so long as no Event of Default shall
have occurred and be continuing, the Collateral Agent authorizes such Grantor to
retain all ordinary cash dividends and distributions paid in the normal course
of the business of the issuer and consistent with the past practice of the
issuer and all scheduled payments of interest.

(b) Voting.

(i) So long as no Event of Default shall have occurred and be continuing, except
as otherwise provided under the covenants and agreements relating to Investment
Related Property in this Agreement or elsewhere herein or in the Credit
Agreement, such Grantor shall be entitled to exercise or refrain from exercising
any and all voting and other consensual rights pertaining to the Investment
Related Property included in the Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement or the Credit Agreement;
provided, such Grantor shall not exercise or refrain from exercising any such
right if the Collateral Agent shall have notified such Grantor that, in the
Collateral Agent’s reasonable judgment, such action would have a Material
Adverse Effect; and provided further, such Grantor shall give the Collateral
Agent at least five (5) Business Days prior written notice of the manner in
which it intends to exercise, or the reasons for refraining from exercising, any
such right in a manner that could have a Material Adverse Effect; it being
understood, however, that neither the voting by such Grantor of any Pledged
Stock for, or such Grantor’s consent to, the election of directors (or similar
governing body) at a regularly scheduled annual or other meeting of stockholders
or with respect to incidental matters at any such meeting, nor such Grantor’s
consent to or approval of any action otherwise permitted under this Agreement
and the Credit Agreement, shall be deemed inconsistent with the terms of this
Agreement or the Credit Agreement within the meaning of this
Section 6.6(b)(i)(1) and no notice of any such voting or consent need be given
to the Collateral Agent.

(ii) Upon the occurrence and during the continuation of an Event of Default:

 

  (1) upon receipt of written notice from Collateral Agent terminating such
Grantor’s voting rights, all rights of such Grantor to exercise or refrain from
exercising the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in the Collateral Agent (to the extent permitted by
applicable law) who shall thereupon have the sole right to exercise such voting
and other consensual rights; provided that such rights shall automatically
revert back to such Grantor upon the waiver or cure of all Events of Default
then existing; and

 

  (2) in order to permit the Collateral 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: (1) such Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Collateral Agent all proxies, dividend
payment orders and other instruments as the Collateral Agent may from time to
time reasonably request and (2) such Grantor acknowledges that the Collateral
Agent may utilize the power of attorney set forth in Section 8.1.

 

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(c) Except as expressly permitted by the Credit Agreement, without the prior
written consent of the Collateral Agent, it shall not vote to enable or take any
other action: (i) amend or terminate any partnership agreement, limited
liability company agreement, certificate of incorporation, by-laws or other
organizational documents in any way that materially changes, in an adverse
manner, the rights of such Grantor with respect to any Investment Related
Property constituting Collateral or adversely affects the validity, perfection
or priority of the Collateral Agent’s security interest, (ii) permit any issuer
of any Pledged Equity Interest to issue any additional stock, partnership
interests, limited liability company interest or other equity interests of any
nature or to issue securities convertible into or granting the right of
purchaser or exchange for any such additional stock, partnership interests,
limited liability company interest or other equity interests of any nature of
such issuer unless such additional stock, partnership interests, limited
liability company interest or any other equity interests (or, in each case, any
portion thereof) has been pledged to the Collateral Agent to the extent required
by the terms and conditions of Sections 2.1 and 2.2, (iii) permit any issuer of
any Pledged Equity Interest to dispose of all or a material portion of their
assets, (iv) waive any material default under or material breach of any terms of
organizational document relating to the issuer of any Pledged Equity Interest or
the terms of any Pledged Debt, or (v) cause any issuer of any Pledged
Partnership Interests or Pledged LLC Interests that are not securities (for
purposes of the UCC) on the Restatement Date to elect or otherwise take any
action to cause such Pledged Partnership Interests or Pledged LLC interest to be
treated as securities for purposes of the UCC; provided, however,
notwithstanding the foregoing, if any issuer of any Pledged Partnership
Interests or Pledged LLC Interests takes any such action in violation of the
foregoing in this clause (v), such Grantor shall promptly notify the Collateral
Agent in writing of any such election or action and, in such event, shall take
all steps necessary or advisable to establish the Collateral Agent’s “control”
thereof.

(d) Except as expressly permitted by the Credit Agreement, without the prior
written consent of the Collateral Agent, it shall not permit any issuer of any
Pledged Equity Interest constituting Collateral to merge or consolidate unless
(i) such issuer creates a security interest that is perfected by a filed
financing statement (that is not effective solely under section 9-508 of the
UCC) in collateral in which such new debtor has or acquires rights, (ii) all the
outstanding capital stock or other equity interests of the surviving or
resulting corporation, limited liability company, partnership or other entity
is, upon such merger or consolidation, pledged hereunder (subject to Section 2.2
hereof) and no cash, securities or other property is distributed in respect of
the outstanding equity interests of any other constituent Grantor; provided that
if the surviving or resulting Grantors upon any such merger or consolidation
involving an issuer which is a First-Tier Foreign Subsidiary, then such Grantor
shall only be required to pledge equity interests in accordance with Section 2.2
and (iii) such Grantor promptly complies with the delivery and control
requirements of Section 4 hereof.

6.7 Intellectual Property.

(a) Other than to the extent permitted by the Credit Agreement, it shall not do
any act or omit to do any act whereby any of the Material Intellectual Property
may lapse, or become abandoned, dedicated to the public, forfeited or
unenforceable, or which would adversely affect in any material respect the
validity, grant, or enforceability of the security interest granted therein.

(b) It shall not, with respect to any Trademarks included in the Material
Intellectual Property, cease the use of any of such Trademarks or fail to
maintain the level of the quality of products sold and services rendered under
any of such Trademark at a level at least

 

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substantially consistent with the quality of such products and services as of
the Restatement Date, and such Grantor shall take all steps necessary to insure
that licensees of such Trademarks use such consistent standards of quality,
except where failure to use such Trademarks, to maintain such level of quality
or take such steps would not have a Material Adverse Effect.

(c) [Intentionally Omitted].

(d) It shall promptly notify the Collateral Agent if it knows or has reason to
know that any item of Material Intellectual Property may become (a) abandoned or
dedicated to the public or placed in the public domain, (b) invalid or
unenforceable, (c) subject to any adverse determination or development regarding
such Grantor’s ownership, registration or use or the validity or enforceability
of such item of Intellectual Property (including the institution of , or any
such determination or development in, any action or proceeding in the United
States Patent and Trademark Office, the United States Copyright Office, any
state registry, any foreign counterpart of the foregoing, or any court) or
(d) the subject of any reversion or termination rights.

(e) Other than to the extent permitted by the Credit Agreement, it shall take
all commercially reasonable steps, including in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office, any
state registry or any foreign counterpart of the foregoing, to pursue any
application and maintain any registration of each Trademark, Patent, and
Copyright owned by or exclusively licensed to such Grantor, subject to
Section 6.8 hereof, including, but not limited to, those items on Schedule 5.2
(II) (as each may be amended or supplemented from time to time).

(f) Subject to the exceptions contained in Section 4.3(d), it shall hereafter
use commercially reasonable efforts so as not to permit the inclusion in any
Material Contract to which it hereafter becomes a party of any provision that
would in any way materially impair or prevent the creation of a security
interest in, or the assignment of, such Grantor’s rights and interests in any
property included within the definitions of any Intellectual Property acquired
under such Material Contracts.

(g) in the event that any Material Intellectual Property owned by or exclusively
licensed to such Grantor is infringed, misappropriated, or diluted by a third
party, such Grantor shall promptly take commercially reasonable actions in
response to such infringement, misappropriation, or dilution to protect its
rights in such Material Intellectual Property;

(h) It shall take commercially reasonable steps, consistent with industry
standards, to protect the secrecy of all Trade Secrets that constitute Material
Intellectual Property, including, without limitation, entering into
confidentiality agreements with employees and consultants and labeling and
restricting access to secret information and documents.

(i) It shall use commercially reasonable efforts to use proper statutory notice,
consistent with industry standards, in connection with its use of any of the
Material Intellectual Property.

(j) It shall continue to use commercially reasonable efforts to collect, at its
own expense, all amounts due or to become due to such Grantor in respect of its
Intellectual Property or any portion thereof. In connection with such
collections, such Grantor may take (and, at the Collateral Agent’s reasonable
direction, shall take) such action as such Grantor or, upon the occurrence and
continuation of an Event of Default, the Collateral Agent may deem necessary or

 

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reasonably advisable to enforce collection of such amounts. Notwithstanding the
foregoing, the Collateral Agent shall have the right at any time, to notify, or
require such Grantor to notify, any obligors with respect to any such amounts of
the existence of the security interest created hereby.

6.8 Miscellaneous. Subject to the exceptions contained in Section 4.3(d), such
Grantor shall, within thirty (30) days after the Closing Date (or, with respect
to Third Wave and its Subsidiaries, within thirty (30) days after the
Restatement Date), with respect to any Material Contract that is a
Non-Assignable Contract (other than any Material Contract that constitutes an
Account, Chattel Paper or Payment Intangible of such Grantor) in effect on the
Closing Date and within thirty (30) days after entering into any Material
Contract (entered into after the Closing Date) that is a Non-Assignable
Contract, request in writing the consent of the counterparty or counterparties
to such Non-Assignable Contract pursuant to the terms of such Non-Assignable
Contract or applicable law to the assignment or granting of a security interest
in such Non-Assignable Contract to the Secured Parties and use commercially
reasonable efforts to obtain such consent as soon as practicable thereafter.

SECTION 7. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL
GRANTORS.

7.1 Access; Right of Inspection. The Collateral Agent shall at all times have
free reasonable access during normal business hours to all the books,
correspondence and records of each Grantor, and the Collateral Agent and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and each Grantor agrees to render to the Collateral Agent,
at such Grantor’s cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Collateral Agent and its
representatives shall upon reasonable notice and at such reasonable times during
normal business hours also have the right to enter any premises of each Grantor
and inspect any property of each Grantor where any of the Collateral of such
Grantor granted pursuant to this Agreement is located for the purpose of
inspecting the same, observing its use or otherwise protecting its interests
therein.

7.2 Further Assurances.

(a) Each Grantor agrees that from time to time, at the expense of such Grantor,
that it shall, subject to the other provisions hereof, promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Collateral Agent may reasonably
request, in order to create and/or maintain the validity, perfection or priority
of and protect any security interest granted or purported to be granted hereby
or to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing and subject to Section 4 and Section 6 hereof, in
each case, each Grantor shall:

(i) file such financing or continuation statements, or amendments thereto,
record security interests in Intellectual Property and execute and deliver such
other agreements, instruments, endorsements, powers of attorney or notices, as
may be necessary or desirable, or as the Collateral Agent may reasonably
request, in order to effect, reflect, perfect and preserve the security
interests granted or purported to be granted hereby;

(ii) take all actions necessary to ensure the recordation of appropriate
evidence of the liens and security interest granted hereunder in the
Intellectual Property with any intellectual property registry in which said
Intellectual

 

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Property is registered or issued or in which an application for registration or
issuance is pending including, without limitation, the United States Patent and
Trademark Office, the United States Copyright Office, the various Secretaries of
State, and the foreign counterparts on any of the foregoing;

(iii) at any reasonable time, upon reasonable request by the Collateral Agent,
assemble the Collateral and allow inspection of the Collateral by the Collateral
Agent, or persons designated by the Collateral Agent;

(iv) at the Collateral Agent’s request, appear in and defend any action or
proceeding that may affect such Grantor’s title to or the Collateral Agent’s
security interest in all or any material part of the Collateral; and

(v) furnish the Collateral Agent with such information regarding the Collateral,
including, without limitation, the location thereof, as the Collateral Agent may
reasonably request from time to time.

(b) Each Grantor hereby authorizes the Collateral Agent to file a Record or
Records, including, without limitation, financing or continuation statements,
intellectual property security agreements and amendments to any of the
foregoing, in any jurisdictions and with any filing offices as the Collateral
Agent may determine, in its sole discretion, are necessary or advisable to
perfect or otherwise protect the security interest granted to the Collateral
Agent herein (subject to Sections 4 and 6 hereof). Such financing statements may
describe the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any
other manner as the Collateral Agent may determine, in its sole discretion, is
necessary, advisable or prudent to ensure the perfection of the security
interest in the Collateral granted to the Collateral Agent herein, including,
without limitation, describing such property as “all assets, whether now owned
or hereafter acquired” or words of similar effect. Each Grantor shall furnish to
the Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.

(c) Each Grantor hereby authorizes the Collateral Agent to modify this Agreement
after obtaining such Grantor’s approval of or signature to such modification by
amending Schedule 5.2 (as such schedule may be amended or supplemented from time
to time) to include reference to any right, title or interest in any existing
Material Intellectual Property or any Material Intellectual Property acquired or
developed by any Grantor after the execution hereof or to delete any reference
to any right, title or interest in any Intellectual Property in which any
Grantor no longer has or claims any right, title or interest or any Intellectual
Property that no longer constitutes Material Intellectual Property.

7.3 Additional Grantors. From time to time subsequent to the Restatement Date,
additional domestic Persons may become parties hereto as additional Grantors
(each, an “Additional Grantor”), by executing a Pledge Supplement. Upon delivery
of any such Pledge Supplement to the Collateral Agent, notice of which is hereby
waived by Grantors, each Additional Grantor shall be a Grantor and shall be as
fully a party hereto as if Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of the Collateral Agent not to cause any
Subsidiary of Borrower to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.

 

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SECTION 8. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

8.1 Power of Attorney. Each Grantor hereby irrevocably appoints the Collateral
Agent (such appointment being coupled with an interest) as such Grantor’s
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, the Collateral Agent or otherwise, from time to
time in the Collateral Agent’s discretion to take any action and to execute any
instrument that the Collateral Agent may deem reasonably necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation, the
following:

(a) upon the occurrence and during the continuance of any Event of Default, to
obtain and adjust insurance required to be maintained by such Grantor or paid to
the Collateral Agent pursuant to and to the extent provided in the Credit
Agreement;

(b) upon the occurrence and during the continuance of any Event of Default, to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

(c) upon the occurrence and during the continuance of any Event of Default, to
receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clause (b) above;

(d) upon the occurrence and during the continuance of any Event of Default, to
file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Collateral Agent with
respect to any of the Collateral;

(e) to prepare and file any UCC financing statements against such Grantor as
debtor;

(f) subject to any exceptions contained in Section 4 hereof, to prepare, sign,
and file for recordation in any intellectual property registry, appropriate
evidence of the lien and security interest granted herein in the Intellectual
Property in the name of such Grantor as debtor;

(g) upon the occurrence and during the continuance of any Event of Default, to
take or cause to be taken all actions necessary to perform or comply or cause
performance or compliance with the terms of this Agreement, including, without
limitation, access to pay or discharge taxes or Liens (other than Permitted
Liens) levied or placed upon or threatened against the Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to be
determined by the Collateral Agent in its sole discretion, any such payments
made by the Collateral Agent to become obligations of such Grantor to the
Collateral Agent, due and payable immediately without demand; and

(h) upon the occurrence and during the continuance of any Event of Default,
generally to sell, transfer, lease, license, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Collateral Agent were the absolute owner thereof for all purposes,
and to do, at the Collateral Agent’s option and such Grantor’s expense, at any
time or from time to time, all acts and things that the Collateral Agent

 

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deems reasonably necessary to protect, preserve or realize upon the Collateral
and the Collateral Agent’s security interest therein in order to effect the
intent of this Agreement, all as fully and effectively as such Grantor might do.

8.2 No Duty on the Part of Collateral Agent or Secured Parties. The powers
conferred on the Collateral Agent hereunder are solely to protect the interests
of the Secured Parties in the Collateral and shall not impose any duty upon the
Collateral Agent or any Secured Party to exercise any such powers. The
Collateral Agent and the Secured Parties shall be accountable only for amounts
that they actually receive as a result of the exercise of such powers, and
neither they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.

SECTION 9. REMEDIES.

9.1 Generally.

(a) If any Event of Default shall have occurred and be continuing, the
Collateral Agent may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it at
law or in equity, all the rights and remedies of the Collateral Agent on default
under the UCC (whether or not the UCC applies to the affected Collateral) to
collect, enforce or satisfy any Secured Obligations then owing, whether by
acceleration or otherwise, and also may pursue any of the following separately,
successively or simultaneously:

(i) require any Grantor to, and each Grantor hereby agrees that it shall at its
expense and promptly upon request of the Collateral Agent forthwith, assemble
all or part of the Collateral as directed by the Collateral Agent and make it
available to the Collateral Agent at a place to be designated by the Collateral
Agent that is reasonably convenient to both parties;

(ii) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process;

(iii) prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent the Collateral Agent deems appropriate; and

(iv) without notice except as specified below or under the UCC, sell, assign,
lease, license (on an exclusive or nonexclusive basis) or otherwise dispose of
the Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit
or for future delivery, at such time or times and at such price or prices and
upon such other terms as the Collateral Agent may deem commercially reasonable.

(b) The Collateral Agent or any Secured Party may be the purchaser of any or all
of the Collateral at any public or private (to the extent to the portion of the
Collateral being privately sold is of a kind that is customarily sold on a
recognized market or the subject of widely distributed standard price
quotations) sale in accordance with the UCC and the Collateral Agent, as
collateral agent for and representative of the Secured Parties, shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the

 

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Collateral sold at any such sale made in accordance with the UCC, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by the Collateral Agent at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Each Grantor agrees
that it would not be commercially unreasonable for the Collateral Agent to
dispose of the Collateral or any portion thereof by using Internet sites that
provide for the auction of assets of the types included in the Collateral or
that have the reasonable capability of doing so, or that match buyers and
sellers of assets. Each Grantor hereby waives any claims against the Collateral
Agent arising by reason of the fact that the price at which any Collateral may
have been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if the Collateral Agent accepts the first
offer received and does not offer such Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay all the Secured Obligations, the Grantors shall be liable for the
deficiency and the fees of any attorneys employed by the Collateral Agent to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the
Collateral Agent, that the Collateral Agent has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities. Nothing in this
Section shall in any way limit the rights of the Collateral Agent hereunder.

(c) The Collateral Agent may sell the Collateral without giving any warranties
as to the Collateral. The Collateral Agent may specifically disclaim or modify
any warranties of title or the like. This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

(d) The Collateral Agent shall have no obligation to marshal any of the
Collateral.

9.2 Application of Proceeds. Except as expressly provided elsewhere in this
Agreement, all proceeds received by the Collateral Agent in respect of any sale,
any collection from, or other realization upon all or any part of the Collateral
shall be applied in full or in part by the Collateral Agent against, the Secured
Obligations in the following order of priority: first, to the payment of all
costs and expenses of such sale, collection or other realization, including
reasonable compensation to the Collateral Agent and its agents and counsel, and
all other expenses, liabilities and advances made or incurred by the Collateral
Agent in connection therewith, and all amounts for which the Collateral Agent is
entitled to indemnification hereunder (in its capacity as the Collateral Agent
and not as a Lender) and all advances made by the Collateral Agent hereunder for
the account of the applicable Grantor, and to the payment of all costs and
expenses paid or incurred by the Collateral Agent in connection with the
exercise of any

 

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right or remedy hereunder or under the Credit Agreement, all in accordance with
the terms hereof or thereof; second, to the extent of any excess of such
proceeds, to the payment of all other Secured Obligations for the ratable
benefit of the Lenders and the Lender Counterparties in accordance with the
Credit Agreement (as applicable); and third, to the extent of any excess of such
proceeds, to the payment to or upon the order of such Grantor or to whosoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.

9.3 Sales on Credit. If Collateral Agent sells any of the Collateral upon
credit, the Grantor will be credited only with payments actually made by
purchaser and received by the Collateral Agent and applied to indebtedness of
the purchaser. In the event the purchaser fails to pay for the Collateral,
Collateral Agent may resell the Collateral and Grantor shall be credited with
proceeds of the sale.

9.4 Investment Related Property. Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Investment Related Property included in the Collateral
conducted without prior registration or qualification of such Investment Related
Property included in the Collateral under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Investment Related Property included in the Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges that any such private sale may be at
prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, each Grantor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that the Collateral Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Investment Related Property included in the Collateral for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it. If the Collateral Agent determines to exercise its right to sell
any or all of the Investment Related Property included in the Collateral, upon
written request, each Grantor shall and shall cause each issuer of any Pledged
Stock to be sold hereunder, each partnership and each limited liability company
from time to time to furnish to the Collateral Agent all such information as the
Collateral Agent may request in order to determine the number and nature of
interest, shares or other instruments included in the Investment Related
Property included in the Collateral which may be sold by the Collateral Agent in
exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.

9.5 Grant of Intellectual Property License. For the purpose of enabling the
Collateral Agent, during the continuance of an Event of Default, to exercise
rights and remedies under Section 9 hereof at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Grantor hereby grants to the Collateral Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to such Grantor), subject, in the case of
Trademarks, to sufficient rights to quality control and inspection in favor of
such Grantor to avoid the risk of invalidation of said Trademarks, to use,
assign, license or sublicense any of the Intellectual Property now owned or
hereafter acquired or created by such Grantor, wherever the same may be located.
Such license shall include access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
compilation or printout hereof.

 

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9.6 Intellectual Property.

(a) Anything contained herein to the contrary notwithstanding, in addition to
the other rights and remedies provided herein, upon the occurrence and during
the continuation of an Event of Default:

(i) the Collateral Agent shall have the right (but not the obligation) to bring
suit or otherwise commence any action or proceeding in the name of any Grantor,
the Collateral Agent or otherwise, in the Collateral Agent’s sole discretion, to
enforce any Intellectual Property rights, in which event such Grantor shall, at
the request of the Collateral Agent, do any and all lawful acts and execute any
and all documents required by the Collateral Agent in aid of such enforcement
and such Grantor shall promptly, upon demand, reimburse and indemnify the
Collateral Agent as provided in Section 12 hereof in connection with the
exercise of its rights under this Section, and, to the extent that the
Collateral Agent shall elect not to bring suit to enforce any Intellectual
Property rights as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement, misappropriation, dilution or other violation of any
of such Grantor’s rights in the Intellectual Property by others and for that
purpose agrees to diligently maintain any action, suit or proceeding against any
Person so infringing, misappropriating, diluting or otherwise violating as shall
be necessary to prevent such infringement, misappropriation, dilution or other
violation;

(ii) upon written demand from the Collateral Agent, for the purpose of enabling
the Collateral Agent, to exercise rights and remedies under Section 9 hereof at
such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies, and for no other purpose, each Grantor shall grant, assign,
convey or otherwise transfer to the Collateral Agent or such Collateral Agent’s
designee all of such Grantor’s right, title and interest in and to the
Intellectual Property and shall execute and deliver to the Collateral Agent such
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement;

(iii) each Grantor agrees that such an assignment and/or recording shall be
applied to reduce the Secured Obligations outstanding only to the extent that
the Collateral Agent (or any Secured Party) receives cash proceeds in respect of
the sale of, or other realization upon, the Intellectual Property;

(iv) within five (5) Business Days after written notice from the Collateral
Agent, each Grantor shall make available to the Collateral Agent, to the extent
within such Grantor’s power and authority, such personnel in such Grantor’s
employ on the date of such Event of Default as the Collateral Agent may
reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks or the Trademark Licenses, such persons to be available to
perform their prior functions on the Collateral Agent’s behalf and to be
compensated by the Collateral Agent at such Grantor’s expense on a per diem,
pro-rata basis consistent with the salary and benefit structure applicable to
each as of the date of such Event of Default; and

 

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(v) the Collateral Agent shall have the right to notify, or require each Grantor
to notify, any obligors with respect to amounts due or to become due to such
Grantor in respect of the Intellectual Property, of the existence of the
security interest created herein, to direct such obligors to make payment of all
such amounts directly to the Collateral Agent, and, upon such notification and
at the expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done:

 

  (1) all amounts and proceeds (including checks and other instruments) received
by Grantor in respect of amounts due to such Grantor in respect of the
Collateral or any portion thereof shall be received in trust for the benefit of
the Collateral Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to the Collateral Agent in
the same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 9.7 hereof; and

 

  (2) upon written notice to the Collateral Agent not to so adjust, settle or
compromise, the Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with respect
thereto or allow any credit or discount thereon.

(b) If (i) an Event of Default shall have occurred and, by reason of cure,
waiver, modification, amendment or otherwise, no longer be continuing, (ii) no
other Event of Default shall have occurred and be continuing, (iii) an
assignment or other transfer to the Collateral Agent of any rights, title and
interests in and to the Intellectual Property shall have been previously made
and shall have become absolute and effective, and (iv) the Secured Obligations
shall not have become immediately due and payable, upon the written request of
any Grantor, the Collateral Agent shall promptly execute and deliver to such
Grantor, at such Grantor’s sole cost and expense, such assignments or other
transfer as may be necessary to reassign to such Grantor any such rights, title
and interests as may have been assigned to the Collateral Agent as aforesaid,
subject to any disposition thereof that may have been made by the Collateral
Agent; provided, after giving effect to such reassignment, the Collateral
Agent’s security interest granted pursuant hereto, as well as all other rights
and remedies of the Collateral Agent granted hereunder, shall continue to be in
full force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of any other Liens granted by or on behalf of
the Collateral Agent and the Secured Parties.

9.7 Cash Proceeds; Deposit Accounts.

(a) If any Event of Default shall have occurred and be continuing, in addition
to the rights of the Collateral Agent specified in Section 6.5 with respect to
payments of Receivables, all proceeds of any Collateral received by any Grantor
consisting of cash, checks and other near-cash items (collectively, “Cash
Proceeds”), upon the written consent of the Collateral Agent, shall be held by
such Grantor in trust for the Collateral Agent, segregated from other funds of
such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over
to the Collateral Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Collateral Agent, if required) and held by the
Collateral Agent in the Collateral Account. Any Cash Proceeds received by the
Collateral Agent (whether from a Grantor or otherwise) may, in the sole
discretion of the Collateral Agent, (A) be held by the Collateral Agent for the
ratable benefit of the Secured Parties, as collateral security for the Secured
Obligations (whether matured or unmatured) only for so long as it reasonably
appears there may be additional Secured Obligations that arise and/or (B) then
or at any time thereafter may be applied by the Collateral Agent against the
Secured Obligations then due and owing.

 

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(b) If any Event of Default shall have occurred and be continuing, the
Collateral Agent may apply the balance from any Deposit Account or instruct the
bank at which any Deposit Account is maintained to pay the balance of any
Deposit Account to or for the benefit of the Collateral Agent.

SECTION 10. COLLATERAL AGENT.

The Collateral Agent has been appointed to act as Collateral Agent hereunder by
Lenders and, by their acceptance of the benefits hereof, the other Secured
Parties. The Collateral Agent shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided, the
Collateral Agent shall, after payment in full of all Obligations under the
Credit Agreement and the other Credit Documents, exercise, or refrain from
exercising, any remedies provided for herein in accordance with the instructions
of the holders (the “Majority Holders”) of a majority of the aggregate
“settlement amount” as defined in the Hedge Agreements (or, with respect to any
Hedge Agreement that has been terminated in accordance with its terms, the
amount then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Hedge Agreement)
under all Hedge Agreements. For purposes of the foregoing sentence, settlement
amount for any Hedge that has not been terminated shall be the settlement amount
as of the last Business Day of the month preceding any date of determination and
shall be calculated by the appropriate swap counterparties and reported to the
Collateral Agent upon request; provided any Hedge Agreement with a settlement
amount that is a negative number shall be disregarded for purposes of
determining the Majority Holders. In furtherance of the foregoing provisions of
this Section, each Secured Party, by its acceptance of the benefits hereof,
agrees that it shall have no right individually to realize upon any of the
Collateral hereunder, it being understood and agreed by such Secured Party that
all rights and remedies hereunder may be exercised solely by the Collateral
Agent for the benefit of Secured Parties in accordance with the terms of this
Section. The provisions of the Credit Agreement relating to the Collateral Agent
including, without limitation, the provisions relating to resignation or removal
of the Collateral Agent and the powers and duties and immunities of the
Collateral Agent are incorporated herein by this reference and shall survive any
termination of the Credit Agreement.

SECTION 11. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation, expiration, posting of backstop letters of credit or cash
collateralization of all outstanding Letters of Credit satisfactory to the
issuer(s) of such Letters of Credit, be binding upon each Grantor, its
successors and assigns, and inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and its
successors, transferees and assigns. Without limiting the generality of the
foregoing, but subject to the terms of the Credit Agreement, any Lender may
assign or otherwise transfer any Loans held by it to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation, expiration, posting of backstop letters of credit or cash

 

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collateralization of all outstanding Letters of Credit satisfactory to the
issuer(s) of such Letters of Credit, the security interest granted hereby shall
automatically terminate hereunder and of record and all rights to the Collateral
shall revert to Grantors. Upon any such termination the Collateral Agent shall,
at Grantors’ expense, execute and deliver to Grantors or otherwise authorize the
filing of such documents as Grantors shall reasonably request, including
financing statement amendments to evidence such termination. Upon any
disposition of property permitted by the Credit Agreement, the Liens granted
herein shall be deemed to be automatically released and such property shall
automatically revert to the applicable Grantor with no further action on the
part of any Person. The Collateral Agent shall, at Grantor’s expense, execute
and deliver or otherwise authorize the filing of such documents as Grantors
shall reasonably request, in form and substance reasonably satisfactory to the
Collateral Agent, including financing statement amendments to evidence such
release.

SECTION 12. STANDARD OF CARE; COLLATERAL AGENT MAY PERFORM.

The powers conferred on the Collateral Agent hereunder are solely to protect its
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Collateral Agent shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property.
Neither the Collateral Agent nor any of its directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or otherwise. If any Grantor fails to timely perform any agreement
contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by each Grantor under Section 10.2 of the
Credit Agreement.

SECTION 13. MISCELLANEOUS.

Any notice required or permitted to be given under this Agreement shall be given
in accordance with Section 10.1 of the Credit Agreement. No failure or delay on
the part of the Collateral Agent in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement and
the other Credit Documents are cumulative to, and not exclusive of, any rights
or remedies otherwise available. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists. This Agreement shall be binding upon and
inure to the benefit of the Collateral Agent and Grantors and their respective
successors and assigns to the extent permitted by the Credit Agreement. No
Grantor shall, without the prior written consent of the Collateral Agent

 

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given in accordance with the Credit Agreement, assign any right, duty or
obligation hereunder. This Agreement and the other Credit Documents embody the
entire agreement and understanding between Grantors and the Collateral Agent and
supersede all prior agreements and understandings between such parties relating
to the subject matter hereof and thereof. Accordingly, the Credit Documents may
not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties. This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ALL
CLAIMS AND CONTROVERSIES ARISING OUT OF THE SUBJECT MATTER HEREOF WHETHER
SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS THAT WOULD RESULT IN THE
APPLICATION OF ANY OTHER LAW (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC
RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OF THE
SECURITY INTEREST).

THE PROVISIONS OF THE CREDIT AGREEMENT UNDER THE HEADINGS “CONSENT TO
JURISDICTION” AND “WAIVER OF JURY TRIAL” ARE INCORPORATED HEREIN BY THIS
REFERENCE AND SUCH INCORPORATION SHALL SURVIVE ANY TERMINATION OF THE CREDIT
AGREEMENT.

SECTION 14. AMENDMENT AND RESTATEMENT.

It is the intention of each of the parties hereto that the Existing Security
Agreement be amended and restated so as to preserve the perfection and priority
of all security interests securing all Obligations of the Grantors under, and as
defined in, the Existing Credit Agreement and all other Credit Documents entered
into in connection therewith (collectively, the “Existing Credit Documents”),
that all Obligations of the Grantors under the Credit Agreement and the other
Credit Documents entered into in connection therewith be secured by the Liens
created by this Agreement and the other Collateral Documents and that this
Agreement not constitute a novation of the obligations and liabilities existing
under the Existing Credit Documents. The parties hereto further acknowledge and
agree that this Agreement constitutes an amendment of the Existing Security
Agreement made under and in accordance with the terms of Section 10.5 of the
Existing Credit Agreement. In addition, unless specifically amended hereby or in
connection herewith, each of the Credit Documents shall continue in full force
and effect and that, from and after the Restatement Date, all references to the
“Pledge and Security Agreement” contained therein shall be deemed to refer to
this Agreement.

SECTION 15. REAFFIRMATION AND GRANT OF SECURITY INTERESTS.

Each Grantor has created Liens in favor of the Collateral Agent for the benefit
of the Secured Parties on certain Collateral to secure its obligations hereunder
and under each other Credit Document. Each Grantor hereby acknowledges that it
has reviewed the terms and provisions of this Agreement and consents to the
amendment and restatement of the Existing Security

 

36

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Agreement effected pursuant to this Agreement. Each Grantor hereby (i) confirms
that each Credit Document to which it is a party or is otherwise bound and all
Collateral encumbered thereby will continue to secure to the fullest extent
possible in accordance with such Credit Document the payment and performance of
the Obligations, including, without limitation, the payment and performance of
all such Obligations that are joint and several obligations of any Grantor now
or hereafter existing, and (ii) grants to the Collateral Agent for the benefit
of the Secured Parties a continuing Lien on and security interest in and to such
Grantor’s right, title and interest in, to and under all Collateral as
collateral security for the prompt payment and performance in full when due of
the applicable Obligations (whether at stated maturity, by acceleration or
otherwise).

Each Grantor acknowledges and agrees that the Credit Documents to which it is a
party or otherwise bound shall continue in full force and effect and that all of
its obligations thereunder shall be valid and enforceable and shall not be
impaired or limited by the execution or effectiveness of the amendment and
restatement of the Existing Security Agreement.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, each Grantor and the Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

 

HOLOGIC, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Finance and Administration, Chief Financial Officer and Treasurer and Assistant
Secretary

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AEG PHOTOCONDUCTOR CORPORATION,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

BIOLUCENT, LLC,

as Grantor

 

By: Hologic, Inc.,

Its Sole Member and Manager

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Finance and Administration, Chief Financial Officer and Treasurer and Assistant
Secretary

 

CRUISER, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC CORPORATION,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC DEVELOPMENT COMPANY LLC,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC INTERIM, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

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CYTYC INTERNATIONAL, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC LIMITED LIABILITY COMPANY,

as Grantor

 

By: Cytyc Corporation,

Its Sole Member

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC PRENATAL PRODUCTS CORP.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC SURGICAL PRODUCTS II, LIMITED PARTNERSHIP,

as Grantor

 

By: Cytyc Corporation,

Its General Partner

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

CYTYC SURGICAL PRODUCTS III, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

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CYTYC SURGICAL PRODUCTS, LIMITED PARTNERSHIP,

as Grantor

 

By: Cytyc Corporation,

Its General Partner

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

DIRECT RADIOGRAPHY CORP.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

HOLOGIC LIMITED PARTNERSHIP,

as Grantor

 

By: Cytyc Corporation,

Its General Partner

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

R2 TECHNOLOGY, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

SST MERGER CORP.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

 

SUROS SURGICAL SYSTEMS, INC.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Executive Vice President,
Treasurer and Secretary

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THUNDER TECH CORP.,

as Grantor

By:   /s/ Glenn P. Muir Name:   Glenn P. Muir Title:   Treasurer and Secretary

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GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Collateral Agent

By:   /s/ Bruce Mendelsohn  

Authorized Signatory

Bruce Mendelsohn