Exhibit 10.1

EXECUTION VERSION

 

 

COLLATERAL AGREEMENT (SECOND LIEN)

dated and effective as of

January 28, 2020

among

PRIME SECURITY SERVICES BORROWER, LLC,

as Issuer,

PRIME FINANCE INC.,

as Co-Issuer,

each Subsidiary Guarantor

party hereto

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Collateral Agent

AS SET FORTH MORE FULLY IN SECTION 5.18 HEREOF, THIS COLLATERAL

AGREEMENT (SECOND LIEN) IS SUBJECT TO THE

PROVISIONS OF (I) THE EXISTING FIRST LIEN/SECOND LIEN ICA AND (II)

ANY OTHER “INTERCREDITOR AGREEMENT” AS DEFINED HEREIN

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TABLE OF CONTENTS

 

          Page   ARTICLE I    Definitions   

SECTION 1.01.

   Notes Indenture      2  

SECTION 1.02.

   Other Defined Terms      2   ARTICLE II    Pledge of Securities   

SECTION 2.01.

   Pledge      10  

SECTION 2.02.

   Delivery of the Pledged Collateral      11  

SECTION 2.03.

   Representations, Warranties and Covenants      12  

SECTION 2.04.

   Certification of Limited Liability Company and Limited Partnership Interests
     14  

SECTION 2.05.

   Registration in Nominee Name; Denominations      15  

SECTION 2.06.

   Voting Rights; Dividends and Interest, Etc.      15   ARTICLE III    Security
Interests in Other Personal Property   

SECTION 3.01.

   Security Interest      18  

SECTION 3.02.

   Representations and Warranties      20  

SECTION 3.03.

   Covenants      23  

SECTION 3.04.

   Other Actions      25  

SECTION 3.05.

   Covenants Regarding Patent, Trademark and Copyright Collateral      26  
ARTICLE IV    Remedies   

SECTION 4.01.

   Remedies Upon Default      27  

SECTION 4.02.

   Application of Proceeds      29  

SECTION 4.03.

   Securities Act, Etc.      31   ARTICLE V    Miscellaneous   

SECTION 5.01.

   Notices      31  

SECTION 5.02.

   Security Interest Absolute      32  

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SECTION 5.03.

   Limitation By Law      32  

SECTION 5.04.

   Binding Effect; Several Agreements      32  

SECTION 5.05.

   Successors and Assigns      32  

SECTION 5.06.

   Collateral Agent’s Fees and Expenses; Indemnification      33  

SECTION 5.07.

   Collateral Agent Appointed Attorney-in-Fact      33  

SECTION 5.08.

   Governing Law      34  

SECTION 5.09.

   Waivers; Amendment      34  

SECTION 5.10.

   WAIVER OF JURY TRIAL      35  

SECTION 5.11.

   Severability      35  

SECTION 5.12.

   Counterparts      35  

SECTION 5.13.

   Headings      36  

SECTION 5.14.

   Jurisdiction; Consent to Service of Process      36  

SECTION 5.15.

   Termination or Release      37  

SECTION 5.16.

   Additional Subsidiaries      38  

SECTION 5.17.

   General Authority of the Collateral Agent      38  

SECTION 5.18.

   Subject to Intercreditor Agreements; Conflicts      39  

SECTION 5.19.

   Other Second Lien Obligations      39  

SECTION 5.20.

   Person Serving as Collateral Agent      40  

SECTION 5.21.

   Rights and Privileges of Collateral Agent      41  

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Schedules

 

Schedule I    Subsidiary Guarantors Schedule II    Pledged Stock; Pledged Debt
Schedule III    Intellectual Property Schedule IV    Commercial Tort Claims
Schedule V    Post-Closing Collateral-Related Matters

Exhibits

 

Exhibit I    Form of Supplement to the Collateral Agreement (Second Lien)
Exhibit II    Form of Notice of Grant of Security Interest (Second Lien) in
Intellectual Property Exhibit III    Form of Other Second Lien Secured Party
Consent

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COLLATERAL AGREEMENT (SECOND LIEN), dated and effective as of January 28, 2020
(this “Agreement”), is among PRIME SECURITY SERVICES BORROWER, LLC (the
“Issuer”), PRIME FINANCE INC. (the “Co-Issuer), each Subsidiary Guarantor and
WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral agent for the Secured
Parties referred to herein (together with its successors and assigns in such
capacity, the “Collateral Agent”).

PRELIMINARY STATEMENT

Reference is made to the First Lien/Second Lien Intercreditor Agreement, dated
as of July 1, 2015 (as may be amended, restated, supplemented, replaced or
otherwise modified from time to time, including pursuant to the Consent and
Acknowledgment (as defined below), the “Existing First Lien/Second Lien ICA”),
by and between Barclays Bank PLC, as First Lien Facility Agent and the
Applicable First Lien Agent (as each term is defined therein), Wells Fargo Bank,
National Association, as Second Lien Facility Agent and the Applicable Second
Lien Agent (as each term is defined therein). Pursuant to the Existing First
Lien/Second Lien ICA, the Liens upon and security interests in the Collateral
granted by this Agreement are and shall be subordinated in the manner provided
in the Existing First Lien/Second Lien ICA to the Liens upon and security
interests in the Collateral granted to secure the First Lien Obligations.

Reference is further made to (a) that certain Indenture, dated as of the date
hereof (as may be amended, restated, supplemented, refinanced, replaced or
otherwise modified from time to time, the “Notes Indenture”), among the Issuer,
the Co-Issuer and Wells Fargo Bank, National Association, as trustee (in such
capacity, the “Trustee”) and the Collateral Agent, pursuant to which the Issuer
and the Co-Issuer issued $1,300,000,000 of 6.25% Second Priority Senior Secured
Notes due 2028 (together with any Additional Notes, the “Notes”), and (b) that
certain Consent and Acknowledgment, dated as of the date hereof (“Consent and
Acknowledgment”) entered into by the Trustee, in its capacity as the Second Lien
Facility Agent and the Applicable Second Lien Agent (each as defined in the
Existing First Lien/Second Lien ICA), with respect to the Existing First
Lien/Second Lien ICA, pursuant to which the Notes Secured Obligations are
designated as the Second Lien Facility Obligations under (and as defined in) the
Existing First Lien/Second Lien ICA.

Each Pledgor is executing and delivering this Agreement pursuant to the terms of
the Notes Indenture to induce the Trustee to enter into the Notes Indenture and
to induce the noteholders to purchase the Notes. The Subsidiary Guarantors, as
Affiliates of the Issuer, will derive substantial benefits from the purchase of
the Notes from the Issuer pursuant to the Notes Indenture. The Subsidiary
Guarantors are willing to execute and deliver this Agreement in order to induce
the Trustee to enter into the Notes Indenture and to induce the noteholders to
purchase the Notes. Therefore, to induce the Trustee to enter into the Notes
Indenture, to induce the noteholders to purchase the Notes and to induce the
holders of any Other Second Lien Obligations to make extensions of credit under
the applicable Other Second Lien Agreements, as applicable, the parties hereto
agree as follows:

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ARTICLE I

Definitions

SECTION 1.01. Notes Indenture. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the respective meanings assigned thereto in
the Notes Indenture. All terms defined in Article 9 of the New York UCC (as
defined herein) and not defined in this Agreement or the Notes Indenture have
the meanings specified therein. The term “instrument” shall have the meaning
specified in Article 9 of the New York UCC.

(b) The rules of construction specified in Section 1.03 of the Notes Indenture
also apply to this Agreement.

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

“Account Debtor” means any person who is or who may become obligated to any
Pledgor under, with respect to or on account of an Account, Chattel Paper or
General Intangibles.

“Agreement” has the meaning assigned to such term in the introductory paragraph
of this agreement, as amended, restated, supplemented or otherwise modified from
time to time.

“Applicable Collateral Agent” means, as the context may require, (a) prior to
the Discharge of First Lien Obligations , the Applicable First Lien Agent (as
defined in the Existing First Lien/Second Lien ICA (or analogous term in any
other then-applicable First Lien/Second Lien Intercreditor Agreement)), and
(b) following the Discharge of First Lien Obligations, the Collateral Agent (or
other such agent that is designated as the “Applicable Authorized Agent” (or
analogous term) pursuant to any then-applicable Intercreditor Agreement).

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

“Authorized Representative” means (a) the Trustee with respect to the Notes
Secured Obligations and (b) with respect to any Series of Other Second Lien
Obligations, the duly authorized representative of the Other Second Lien Secured
Parties of such Series designated as “Authorized Representative” for such Other
Second Lien Secured Parties in the Other Second Lien Agreement for such Series
(or, in the absence of such designation, the administrative agent or trustee
appointed for such Series under such Other Second Lien Agreement).

“Co-Issuer” has the meaning assigned to such term in the introductory paragraph
of this Agreement.

 

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“Collateral” means Article 9 Collateral and Pledged Collateral. For the
avoidance of doubt, the term Collateral does not include any Excluded Property.

“Collateral Agent” has the meaning assigned to such term in the introductory
paragraph of this Agreement.

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

“Consent and Acknowledgment” has the meaning assigned to such term in the
preliminary statement of this Agreement.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and
“Controlling” and “Controlled” shall have meanings correlative thereto.

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

“Copyrights” means all of the following: (a) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, (b) all registrations and
applications for registration of any such Copyright in the United States or any
other country, including registrations, supplemental registrations and pending
applications for registration in the United States Copyright Office and the
right to obtain all renewals thereof, including those listed on Schedule III,
(c) all claims for, and rights to sue for, past or future infringements of any
of the foregoing, and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including
damages and payments for past or future infringement thereof.

“Discharge” has the meaning assigned to such term in the Existing First
Lien/Second Lien ICA (or analogous term in any other then-applicable First
Lien/Second Lien Intercreditor Agreement).

“Dispose” or “Disposed of” shall mean to convey, sell, lease, sell and
leaseback, assign, farm-out, transfer or otherwise dispose of any property,
business or asset (including the issuance of Equity Interests by a Subsidiary).
The term “Disposition” shall have a correlative meaning to the foregoing.

“Existing First Lien/Second Lien ICA” has the meaning assigned to such term in
the preliminary statement of this Agreement.

 

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“Equity Interests” of any person means any and all shares, interests, rights to
purchase or otherwise acquire, warrants, options, participations or other
equivalents of or interests in (however designated) equity or ownership of such
person, including any preferred stock, any limited or general partnership
interest and any limited liability company membership interest, and any
securities or other rights or interests convertible into or exchangeable for any
of the foregoing.

“Event of Default” means an “Event of Default” under and as defined in the Notes
Indenture or any Other Second Lien Agreement.

“Excluded Property” means, (a) with respect to all Secured Obligations,
“Excluded Property” under and as defined in the Notes Indenture and (b) with
respect to any Series of Other Second Lien Obligations, the term “Excluded
Property” includes any Specified Excluded Collateral with respect to such Series
of Other Second Lien Obligations; provided that the Issuer may in its sole
discretion elect to exclude any property from the definition of Excluded
Property.

“Excluded Swap Obligation” shall mean, with respect to any Pledgor, any Hedging
Obligations if, and to the extent that, all or a portion of the guarantee of
such Pledgor of, or the grant by such Pledgor of a security interest to secure,
such Hedging Obligations (or any guarantee thereof) is or becomes illegal under
the Commodity Exchange Act or any rule, regulation or order of the Commodity
Futures Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Pledgor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the guarantee of such Pledgor or the grant of
such security interest becomes effective with respect to such Hedging
Obligations, unless otherwise agreed between the Collateral Agent and the
Issuer. If a Hedging Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Hedging
Obligation that is attributable to swaps for which such guarantee or security
interest is or becomes illegal.

“Federal Securities Laws” has the meaning assigned to such term in Section 4.03.

“First Lien Obligations” has the meaning assigned to such term in the Existing
First Lien/Second Lien ICA (or analogous term in any other First Lien/Second
Lien Intercreditor Agreement).

“First Lien/Second Lien Intercreditor Agreement” means, as the context may
require, (i) the Existing First Lien/Second Lien ICA or (ii) another
intercreditor agreement that satisfies the requirements of the definition of the
“First Lien/Second Lien Intercreditor Agreement” in the Notes Indenture, with
such changes as are reasonably acceptable to the Collateral Agent and the
Issuer, as such document may be amended, renewed, extended, supplemented,
restated, replaced or otherwise modified from time to time.

“General Intangibles” means all “general intangibles” as defined in the New York
UCC, including all choses in action and causes of action and all other
intangible personal property of any Pledgor of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Pledgor, including corporate or
other business records,

 

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indemnification claims, contract rights (including rights under leases, whether
entered into as lessor or lessee, swap agreements and other agreements),
Intellectual Property, goodwill, registrations, franchises, tax refund claims
and any guarantee, claim, security interest or other security held by or granted
to any Pledgor to secure payment by an Account Debtor of any of the Accounts.

“Governmental Authority” means any federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory or legislative
body.

“Intellectual Property” means all intellectual property of every kind and nature
of any Pledgor, whether now owned or hereafter acquired by any Pledgor,
including, inventions, designs, Patents, Copyrights, Trademarks, Patent
Licenses, Copyright Licenses, Trademark Licenses, trade secrets, domain names,
confidential or proprietary technical and business information, know-how,
show-how or other data or information and all related documentation.

“Intellectual Property Collateral” has the meaning assigned to such term in
Section 3.02(f).

“Intercreditor Agreements” means the First Lien/Second Lien Intercreditor
Agreement and any other intercreditor agreement (upon and during the
effectiveness thereof) entered into in compliance with the Notes Indenture and
each Other Second Lien Agreement (if any).

“IP Agreements” means all material Copyright Licenses, Patent Licenses and
Trademark Licenses, including, without limitation, the agreements set forth on
Schedule III hereto.

“Issuer” has the meaning assigned to such term in the introductory paragraph of
this Agreement.

“Material Adverse Effect” means a material adverse effect on the business,
property, operations or financial condition of the Issuer and its Subsidiaries,
taken as a whole, or the validity or enforceability of any of the Notes
Documents or Other Second Lien Agreements or the rights and remedies of the
Secured Parties thereunder.

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Notes” has the meaning assigned to such term in the preliminary statement of
this Agreement.

“Notes Documents” means (a) the Notes Indenture, the Notes, the Security
Documents and (b) any other related documents or instruments executed and
delivered pursuant to the documents referred to in the foregoing clause (a), in
each case, as such documents or instruments may be amended, restated,
supplemented or otherwise modified from time to time.

 

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“Notes Indenture” has the meaning assigned to such term in the preliminary
statement of this Agreement.

“Notes Secured Obligations” means the “Notes Obligations” as defined in the
Notes Indenture.

“Notes Secured Parties” means, collectively, the Collateral Agent, the Trustee
and each holder of the Notes.

“Notices of Grant of Security Interest in Intellectual Property” means the
notices of grant of security interest substantially in the form attached hereto
as Exhibit II or such other form as shall be reasonably acceptable to the
Collateral Agent.

“Other Second Lien Agreement” means any credit agreement, indenture (other than
the Notes Indenture) or other agreement, document or instrument pursuant to
which any Pledgor has or will incur Other Second Lien Obligations; provided
that, in each case, the indebtedness thereunder has been designated as Other
Second Lien Obligations pursuant to and in accordance with Section 5.19.

“Other Second Lien Obligations” means (a) the due and punctual payment by any
Pledgor of (i) the unpaid principal of and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable as a claim in such
proceeding) on indebtedness under any Other Second Lien Agreement, when and as
due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, and (ii) all other monetary obligations of such Pledgor
to any Secured Party under any Other Second Lien Agreement, including
obligations to pay fees, expense reimbursement obligations and indemnification
obligations, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable as a claim in such proceeding), (b) the due and punctual
performance of all other obligations of such Pledgor under or pursuant to any
Other Second Lien Agreement, and (c) the due and punctual payment and
performance of all the obligations of each other Pledgor under or pursuant to
any Other Second Lien Agreement. Notwithstanding the foregoing, for all purposes
of the Notes Documents and any Other Second Lien Agreements, any guarantee of,
or grant of a Lien to secure, any obligations in respect of a Hedging Agreement
by a Pledgor shall not include any Excluded Swap Obligations.

“Other Second Lien Secured Parties” means, collectively, the holders of Other
Second Lien Obligations and any Authorized Representative with respect thereto.

“Other Second Lien Secured Party Consent” means a consent substantially in the
form of Exhibit III to this Agreement (or such other form as shall be reasonably
acceptable to the Collateral Agent) executed by the Authorized Representative of
any holders of Other Second Lien Obligations pursuant to Section 5.19.

 

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“Patent License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to make, use or sell any invention covered by
a Patent, now or hereafter owned by any third party (including any such rights
that such Pledgor has the right to license).

“Patents” means all of the following: (a) all patents of the United States or
the equivalent thereof in any other country or jurisdiction, including those
listed on Schedule III, and all applications for patents of the United States or
the equivalent thereof in any other country or jurisdiction, including those
listed on Schedule III, (b) all provisionals, reissues, extensions,
continuations, divisions, continuations-in-part, reexaminations or revisions
thereof, and the inventions disclosed or claimed therein, including the right to
make, use, import and/or sell the inventions disclosed or claimed therein,
(c) all claims for, and rights to sue for, past or future infringements of any
of the foregoing and (d) all income, royalties, damages and payments now or
hereafter due and payable with respect to any of the foregoing, including
damages and payments for past or future infringement thereof.

“Permitted Liens” means Liens that are not prohibited by the Notes Indenture or
any Other Second Lien Agreement.

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

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

“Pledged Securities” means any promissory notes, stock certificates or other
certificated securities now or hereafter included in the Pledged Collateral,
including all certificates, instruments or other documents representing or
evidencing any Pledged Collateral.

“Pledged Stock” has the meaning assigned to such term in Section 2.01(a).

“Pledgor” means (a) with respect to the Notes Secured Obligations, the Issuer,
the Co-Issuer and each Subsidiary Guarantor; and (b) with respect to any Series
of Other Second Lien Obligations, the Issuer, the Co-Issuer and each Subsidiary
Guarantor, excluding any of the foregoing if such Person or Persons are not
intended to provide collateral with respect to such Series pursuant to the terms
of the Other Second Lien Agreement governing such Series.

“Prior Collateral Agent” has the meaning assigned to such term in Section 5.20.

“Proceeds” means “proceeds” as such term is defined in Article 9 of the New York
UCC and, in any event, also includes all proceeds of, and all other profits,
products, rents or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or other
realization upon, any Collateral, including all claims of the relevant Pledgor
against third parties for loss of, damage to or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of insurance in
respect of, any Collateral, and any condemnation or requisition payments with
respect to any Collateral.

 

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“Regulation S-X Excluded Collateral” has the meaning assigned to such term in
Section 2.01.

“Related Parties” shall mean, with respect to any specified person, such
person’s Controlled or Controlling Affiliates and the respective directors,
trustees, officers, employees, agent and advisors of such person and such
person’s Controlled or Controlling Affiliates.

“Rule 3-10” has the meaning assigned to such term in Section 2.01.

“Rule 3-16” has the meaning assigned to such term in Section 2.01.

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

“Secured Obligations” means, collectively, the Notes Secured Obligations and any
Other Second Lien Obligations, or any of the foregoing. Notwithstanding the
foregoing, for all purposes of the Notes Documents and any Other Second Lien
Agreements, any guarantee of, or grant of a Lien to secure, any obligations in
respect of a Hedging Agreement by a Pledgor shall not include any Excluded Swap
Obligations.

“Secured Parties” means the persons holding any Secured Obligations and in any
event including (i) the Notes Secured Parties and (ii) all Other Second Lien
Secured Parties.

“Security Documents” has the meaning assigned to such term in the Notes
Indenture and any analogous term in any Other Second Lien Agreement (but, with
respect to the Secured Obligations of any Series, the term Security Documents
shall not include any document which by its terms is solely for the benefit of
the holders of one or more other Series of Secured Obligations and not such
Series of Secured Obligations).

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

“Series” means (a) with respect to any Secured Parties, each of (i) the Notes
Secured Parties (in their capacities as such) and (ii) each group of Other
Second Lien Secured Parties that become subject to this Agreement, the First
Lien/Second Lien Intercreditor Agreement, if applicable, or any other applicable
Intercreditor Agreement after the date hereof, which are to be represented
hereunder by a common Authorized Representative (in its capacity as such for
such Other Second Lien Secured Parties), each of which shall constitute a
separate Series of Secured Parties for purposes of this Agreement and (b) with
respect to any Secured Obligations, each of (i) the Notes Secured Obligations
and (ii) each group of Other Second Lien Obligations incurred pursuant to any
Other Second Lien Agreement, which are to be represented hereunder by a common
Authorized Representative (in its capacity as such for such Other Second Lien
Obligations), each of which shall constitute a separate Series of Secured
Obligations for purposes of this Agreement.

 

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“Specified Excluded Collateral” means, solely with respect to any Series of
Other Second Lien Obligations, any asset (in addition to those specified in
clause (a) of the definition of “Excluded Property”) that is not intended to be
collateral with respect to such Series pursuant to the terms of the Other Second
Lien Agreement governing such Series (including the Regulation S-X Excluded
Collateral to the extent applicable to such Series in accordance with the last
paragraph of Section 2.01).

“Subsidiary Guarantor” means any Subsidiary of the Issuer set forth on
Schedule I and any Subsidiary of the Issuer that becomes a party hereto pursuant
to Section 5.16 (other than, with respect to any Series of Other Second Lien
Obligations, any Subsidiary of the Issuer excluded pursuant to clause (b) of the
definition of Pledgor with respect to such Series of Other Second Lien
Obligations).

“Successor Collateral Agent” has the meaning assigned to such term in
Section 5.20.

“Termination Date” means the date on which the principal of, and interest on,
the Notes, and all fees and all other expenses or amounts payable under the
Notes Documents have been paid in full (other than in respect of contingent
indemnification and expense reimbursement claims not then due).

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any Pledgor any right to use any Trademark now or hereafter owned by
any third party (including any such rights that such Pledgor has the right to
license).

“Trademarks” means all of the following: (a) all trademarks, service marks,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations thereof (if any), and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States or any other country or
any political subdivision thereof, and all renewals thereof, including those
listed on Schedule III, (b) all goodwill associated with or symbolized by the
foregoing, (c) all claims for, and rights to sue for, past or future
infringements, dilutions or other violations of any of the foregoing and (d) all
income, royalties, damages and payments now or hereafter due and payable with
respect to any of the foregoing, including damages and payments for past or
future infringement, dilutions or other violations thereof.

“Trustee” has the meaning assigned to such term in the preliminary statement of
this Agreement.

 

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ARTICLE II

Pledge of Securities

SECTION 2.01. Pledge. As security for the payment or performance, as the case
may be, in full of the Secured Obligations, each Pledgor hereby assigns and
pledges to the Collateral Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the benefit of the Secured Parties, a
security interest in all of such Pledgor’s right, title and interest in, to and
under:

(a) the Equity Interests directly owned by it (including those listed on
Schedule II) and any other Equity Interests obtained in the future by such
Pledgor and any certificates representing all such Equity Interests
(collectively, the “Pledged Stock”); provided that the Pledged Stock shall not
include any Excluded Property;

(b) (i) the debt obligations listed opposite the name of such Pledgor on
Schedule II, (ii) any debt obligations in the future issued to such Pledgor
having, in the case of each instance of debt obligations, an aggregate principal
amount in excess of $10,000,000, and (iii) the certificates, promissory notes
and any other instruments, if any, evidencing such debt obligations (the
property described in clauses (b)(i), (ii) and (iii) above, the “Pledged Debt”);
provided that the Pledged Debt shall not include any Excluded Property;

(c) subject to Section 2.06, all payments of principal or interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of the Pledged Stock and the Pledged
Debt;

(d) subject to Section 2.06, all rights and privileges of such Pledgor with
respect to the Pledged Stock, Pledged Debt and other property referred to in
clause (c) above; and

(e) all Proceeds of any of the foregoing (the Pledged Stock, Pledged Debt and
other property referred to in this clause (e) and in clauses (c) through
(d) above being collectively referred to as the “Pledged Collateral”); provided
that the Pledged Collateral shall not include any Excluded Property.

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

Notwithstanding anything else contained in this Agreement, to the extent this
paragraph is expressly made applicable with respect to any Series of Other
Second Lien Obligations pursuant to the terms of any Other Second Lien
Agreement, with respect to such Series of Other Second Lien Obligations, in the
event that Rule 3-10 (“Rule 3-10”) or Rule 3-16 (“Rule 3-16”) of Regulation S-X
under the Securities Act of 1933, as amended, as amended, modified or
interpreted by the Securities Exchange Commission (“SEC”), would then require
(or is replaced with another rule or regulation, or any other law, rule or
regulation is adopted, which would then require) the filing with the SEC (or any
other Governmental Authority) of separate financial statements of the Issuer or
any

 

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Subsidiary of the Issuer due to the fact that such Person’s Equity Interests
secure the Other Second Lien Obligations affected thereby, then the Equity
Interests of such Person (the “Regulation S-X Excluded Collateral”) will
automatically be deemed not to be part of the Collateral securing the relevant
Series of Other Second Lien Obligations affected thereby, as applicable, but
only to the extent necessary to not be subject to such requirement and only for
so long as required to not be subject to such requirement. In such event, this
Agreement may be amended or modified, without the consent of any Secured Party,
to the extent necessary to release the Lien on the Regulation S-X Excluded
Collateral in favor of the Collateral Agent with respect only to the relevant
Series of Other Second Lien Obligations. In the event that Rule 3-10 or Rule
3-16 is amended, modified or interpreted by the SEC to permit (or is replaced
with another rule or regulation, or any other law, rule or regulation is
adopted, which would permit) any Regulation S-X Excluded Collateral to secure
the relevant Series of Other Second Lien Obligations in excess of the amount
then pledged without the filing with the SEC (or any other Governmental
Authority) of separate financial statements of such Person, then the Equity
Interests of such Person will automatically be deemed to be a part of the
Collateral for the relevant Series of Other Second Lien Obligations. For the
avoidance of doubt and notwithstanding anything to the contrary in this
Agreement, nothing in this paragraph shall limit the pledge of such Equity
Interests and other securities from securing the Secured Obligations (other than
the relevant Series of Other Second Lien Obligations) at all relevant times or
from securing any Series of Other Second Lien Obligations that are not in
respect of securities subject to regulation by the SEC. To the extent any
Proceeds of any collection or sale of Equity Interests deemed by this paragraph
to no longer constitute part of the Collateral for the relevant Series of Other
Second Lien Obligations are to be applied by the Collateral Agent in accordance
with Section 4.02 hereof, such Proceeds shall, notwithstanding the terms of
Section 4.02 and the First Lien/Second Lien Intercreditor Agreement and any
other applicable Intercreditor Agreement (upon and during the effectiveness
thereof), not be applied to the payment of such Series of Other Second Lien
Obligations.

SECTION 2.02. Delivery of the Pledged Collateral. (a) Each Pledgor agrees
promptly to deliver or cause to be delivered to the Applicable Collateral Agent
(acting as gratuitous bailee for the Collateral Agent for perfection purposes,
pursuant to Section 5.5 of the Existing First Lien/Second Lien ICA (or analogous
provision of any other then-applicable Intercreditor Agreement), if the
Applicable Collateral Agent is not the Collateral Agent), for the benefit of the
Secured Parties, any and all Pledged Securities to the extent such Pledged
Securities are either (i) Equity Interests in Subsidiaries of such Pledgor or
(ii) in the case of promissory notes or other instruments evidencing
Indebtedness, are required to be delivered pursuant to paragraph (b) of this
Section 2.02.

(b) To the extent any Indebtedness for borrowed money constituting Pledged
Collateral (other than (i) intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management operations of
Holdings, the Issuer and its Subsidiaries and (ii) to the extent that a pledge
of such promissory note or instrument would violate applicable law) owed to any
Pledgor is evidenced by a promissory note in an amount in excess of $10,000,000,
such Pledgor shall promptly cause such promissory note to be pledged and
delivered to the Applicable Collateral Agent (acting as gratuitous bailee for
the Collateral Agent for perfection purposes, pursuant to Section 5.5

 

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of the Existing First Lien/Second Lien ICA (or analogous provision of any other
then-applicable Intercreditor Agreement), if the Applicable Collateral Agent is
not the Collateral Agent), for the benefit of the Secured Parties, pursuant to
the terms hereof. To the extent any such promissory note is a demand note, each
Pledgor party thereto agrees, if requested by the Applicable Collateral Agent,
to immediately demand payment thereunder upon an Event of Default specified
under Section 6.01(a), (b), (f) or (g) of the Notes Indenture or any equivalent
provision under any Other Second Lien Agreement, unless such demand would not be
commercially reasonable or would otherwise expose such Pledgor to liability to
the maker.

(c) Upon delivery to the Applicable Collateral Agent, (i) any Pledged Securities
required to be delivered pursuant to the foregoing paragraphs (a) and (b) of
this Section 2.02 shall be accompanied by stock powers or note powers, as
applicable, duly executed in blank or other instruments of transfer reasonably
satisfactory to the Applicable Collateral Agent, and by such other instruments
and documents as the Applicable Collateral Agent may reasonably request and
(ii) all other property comprising part of the Pledged Collateral delivered
pursuant to the terms of this Agreement shall be accompanied to the extent
necessary to perfect the security interest in or allow realization on the
Pledged Collateral by proper instruments of assignment duly executed by the
applicable Pledgor and such other instruments or documents (including issuer
acknowledgments in respect of uncertificated securities) as the Applicable
Collateral Agent may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities, which schedule
shall be attached hereto as Schedule II (or a supplement to Schedule II, as
applicable) and made a part hereof; provided that failure to attach any such
schedule hereto shall not affect the validity of such pledge of such Pledged
Securities. Each schedule so delivered shall supplement any prior schedules so
delivered.

SECTION 2.03. Representations, Warranties and Covenants. The Pledgors, jointly
and severally, represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:

(a) Schedule II correctly sets forth (and, with respect to any Pledged Stock
issued by an issuer that is not a subsidiary of the Issuer, correctly sets
forth, to the knowledge of the relevant Pledgor), as of the Issue Date, the
percentage of the issued and outstanding units of each class of the Equity
Interests of the issuer thereof represented by the Pledged Stock and includes
(i) all Equity Interests pledged hereunder and (ii) all debt obligations and
promissory notes or instruments evidencing Indebtedness, in each case under this
clause (ii) pledged hereunder and in an aggregate principal amount in excess of
$10,000,000;

(b) the Pledged Stock and Pledged Debt (and, with respect to any Pledged Stock
or Pledged Debt issued by an issuer that is not a subsidiary of the Issuer, to
the knowledge of the relevant Pledgor), as of the Issue Date, (x) have been duly
and validly authorized and issued by the issuers thereof and (y) (i) in the case
of Pledged Stock, are fully paid and, with respect to Equity Interests
constituting capital stock of a corporation, nonassessable and (ii) in the case
of Pledged Debt, are legal, valid and binding obligations of the issuers
thereof, subject

 

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to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding at
law or in equity) and an implied covenant of good faith and fair dealing;

(c) except for the security interests granted hereunder (or otherwise not
prohibited by the Notes Documents or any Other Second Lien Agreement), each
Pledgor (i) is and, subject to any transfers made not in violation of the Notes
Indenture or any Other Second Lien Agreement, will continue to be the direct
owner, beneficially and of record, of the Pledged Securities indicated on
Schedule II (as may be supplemented from time to time pursuant to
Section 2.02(c)) as owned by such Pledgor, (ii) holds the same free and clear of
all Liens, other than Permitted Liens, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest
in or other Lien on, the Pledged Collateral, other than pursuant to a
transaction not prohibited by the Notes Indenture or any Other Second Lien
Agreement and other than Permitted Liens and (iv) subject to the rights of such
Pledgor under the Notes Documents and any Other Second Lien Agreement to Dispose
of Pledged Collateral, will use commercially reasonable efforts to defend its
title or interest thereto or therein against any and all Liens (other than
Permitted Liens), however arising, of all persons;

(d) other than as set forth in the Notes Indenture or any Other Second Lien
Agreement, and except for restrictions and limitations imposed by the Notes
Documents, any Other Second Lien Agreements or securities laws generally or
otherwise not prohibited by the Notes Indenture or any Other Second Lien
Agreement, the Pledged Stock (other than partnership interests) is and will
continue to be freely transferable and assignable, and none of the Pledged Stock
is or will be subject to any option, right of first refusal, shareholders
agreement, charter, by-law, memorandum of association or articles of association
provisions or contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Pledged Stock hereunder, the
Disposition thereof pursuant hereto or the exercise by the Collateral Agent of
rights and remedies hereunder other than under applicable Requirements of Law;

(e) each Pledgor has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated;

(f) other than as set forth in the Notes Indenture, as of the Issue Date, no
consent or approval of any Governmental Authority, any securities exchange or
any other person was or is necessary to the validity of the pledge effected
hereby (or the transfer of the Pledged Securities upon a foreclosure thereof
(other than compliance with any securities law applicable to the transfer of
securities)), in each case other than such as have been obtained and are in full
force and effect;

 

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(g) by virtue of the execution and delivery by the Pledgors of this Agreement,
when any Pledged Securities (including Pledged Stock of any Domestic Subsidiary)
are delivered to the Applicable Collateral Agent (acting as gratuitous bailee
for the Collateral Agent for perfection purposes, pursuant to Section 5.5 of the
Existing First Lien/Second Lien ICA (or analogous provision of any other
then-applicable Intercreditor Agreement), if the Applicable Collateral Agent is
not the Collateral Agent), for the benefit of the Secured Parties, in accordance
with this Agreement and a financing statement naming the Collateral Agent as the
secured party and covering the Pledged Collateral to which such Pledged
Securities relate is filed in the appropriate filing office, the Collateral
Agent will obtain, for the benefit of the Secured Parties, a legal, valid and
perfected lien upon and security interest in such Pledged Collateral under the
New York UCC, subject only to Permitted Liens, as security for the payment and
performance of the Secured Obligations, to the extent such perfection is
governed by the Uniform Commercial Code of any applicable jurisdiction; and

(h) each Pledgor that is an issuer of the Pledged Collateral confirms that it
has received notice of the security interest granted hereunder and consents to
such security interest and, subject to the terms of the First Lien/Second Lien
Intercreditor Agreement and any other then-applicable Intercreditor Agreement,
agrees to transfer record ownership of the securities issued by it in connection
with any request by the Applicable Collateral Agent if an Event of Default has
occurred and is continuing.

SECTION 2.04. Certification of Limited Liability Company and Limited Partnership
Interests.

(a) As of the Issue Date, except as set forth on Schedule II, the Equity
Interests in limited liability companies that are pledged by the Pledgors
hereunder and do not have a certificate number listed on Schedule II (and, with
respect to any Pledged Stock issued by an issuer that is not a subsidiary of the
Issuer, to the relevant Pledgor’s knowledge) do not constitute a security under
Section 8-103 of the New York UCC or the corresponding code or statute of any
other applicable jurisdiction.

(b) The Pledgors shall at no time elect to treat any interest in any limited
liability company or limited partnership Controlled by a Pledgor and pledged
hereunder as a “security” within the meaning of Article 8 of the New York UCC or
issue any certificate representing such interest, unless promptly thereafter
(and in any event within 30 days or such longer period as the Collateral Agent
may permit in its reasonable discretion) the applicable Pledgor provides
notification to the Collateral Agent of such election and delivers, as
applicable, any such certificate to the Applicable Collateral Agent (acting as
gratuitous bailee for the Collateral Agent for perfection purposes, pursuant to
Section 5.5 of the Existing First Lien/Second Lien ICA (or analogous provision
of any other then-applicable Intercreditor Agreement), if the Applicable
Collateral Agent is not the Collateral Agent) pursuant to the terms hereof.

 

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SECTION 2.05. Registration in Nominee Name; Denominations. Subject to the First
Lien/Second Lien Intercreditor Agreement and any other Intercreditor Agreement
(if entered into), the Applicable Collateral Agent (acting as gratuitous bailee
for the Collateral Agent for perfection purposes, pursuant to Section 5.5 of the
Existing First Lien/Second Lien ICA (or analogous provision of any other
then-applicable Intercreditor Agreement), if the Applicable Collateral Agent is
not the Collateral Agent), on behalf of the Secured Parties, shall have the
right (in its sole and absolute discretion) to hold the Pledged Securities in
the name of the applicable Pledgor, endorsed or assigned in blank or in favor of
the Applicable Collateral Agent or, if an Event of Default shall have occurred
and be continuing, in its own name as pledgee or the name of its nominee (as
pledgee or as sub-agent). Following any continuing Event of Default, each
Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. Subject to the First Lien/Second Lien
Intercreditor Agreement and any other Intercreditor Agreement (if entered into),
if an Event of Default shall have occurred and be continuing, the Applicable
Collateral Agent (acting as gratuitous bailee for the Collateral Agent for
perfection purposes, pursuant to Section 5.5 of the Existing First Lien/Second
Lien ICA (or analogous provision of any other then-applicable Intercreditor
Agreement), if the Applicable Collateral Agent is not the Collateral Agent)
shall have the right to exchange the certificates representing Pledged
Securities held by it for certificates of smaller or larger denominations for
any purpose consistent with this Agreement, the First Lien/Second Lien
Intercreditor Agreement and any other applicable Intercreditor Agreement. Each
Pledgor shall use its commercially reasonable efforts to cause any Subsidiary
that is not a party to this Agreement to comply with a request by the Applicable
Collateral Agent, pursuant to this Section 2.05, to exchange certificates
representing Pledged Securities of such Subsidiary for certificates of smaller
or larger denominations.

SECTION 2.06. Voting Rights; Dividends and Interest, Etc. (a) Subject to the
First Lien/Second Lien Intercreditor Agreement and any other Intercreditor
Agreement (if entered into), unless and until an Event of Default shall have
occurred and be continuing and the Applicable Collateral Agent shall have given
written notice to the relevant Pledgors of the Applicable Collateral Agent’s
intention to exercise its rights hereunder or under the First Lien/Second Lien
Intercreditor Agreement and any other applicable Intercreditor Agreement:

(i) Each Pledgor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose not prohibited by the terms of this Agreement, the
Notes Documents or any Other Second Lien Agreement; provided that, except as not
prohibited by the Notes Indenture or any Other Second Lien Agreement, such
rights and powers shall not be exercised in any manner that could be reasonably
likely to materially and adversely affect the rights and remedies of any of the
Collateral Agent or the other Secured Parties under this Agreement, any Notes
Document or any Other Second Lien Agreement or the ability of the Secured
Parties to exercise the same.

 

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(ii) The Applicable Collateral Agent shall promptly execute and deliver to each
Pledgor, or cause to be executed and delivered to such Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may reasonably
request for the purpose of enabling such Pledgor to exercise the voting and/or
consensual rights and powers it is entitled to exercise pursuant to paragraph
(a)(i) of this Section 2.06.

(iii) Each Pledgor shall be entitled to receive and retain any and all
dividends, interest, principal and other distributions paid on or distributed in
respect of the Pledged Collateral to the extent and only to the extent that such
dividends, interest, principal and other distributions are not prohibited by,
and otherwise paid or distributed in accordance with, the terms and conditions
of the Notes Documents, any Other Second Lien Agreement and applicable laws;
provided that (a) any noncash dividends, interest, principal or other
distributions, payments or other consideration in respect thereof, including any
rights to receive the same to the extent not so distributed or paid, that would
constitute Pledged Securities to the extent such Pledgor has the rights to
receive such Pledged Securities if they were declared, distributed and paid on
the date of this Agreement, whether resulting from a subdivision, combination or
reclassification of the outstanding Equity Interests of the issuer of any
Pledged Securities, received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise or (b) any non-cash dividends and other distributions paid or payable
in respect of any Pledged Securities that would constitute Pledged Securities to
the extent such Pledgor has the rights to receive such Pledged Securities if
they were declared, distributed and paid on the date of this Agreement, in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid in surplus, shall be and
become part of the Pledged Collateral, and, if received by any Pledgor, shall
not be commingled by such Pledgor with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for the
benefit of the Collateral Agent, for the benefit of the Secured Parties, and
shall be promptly delivered to the Applicable Collateral Agent (acting as
gratuitous bailee for the Collateral Agent for perfection purposes, pursuant to
Section 5.5 of the Existing First Lien/Second Lien ICA (or analogous provision
of any other applicable Intercreditor Agreement), if the Applicable Collateral
Agent is not the Collateral Agent), for the benefit of the Secured Parties, in
the same form as so received (endorsed in a manner reasonably satisfactory to
the Applicable Collateral Agent).

(b) Subject to the First Lien/Second Lien Intercreditor Agreement and any other
Intercreditor Agreement (if entered into), upon the occurrence and during the
continuance of an Event of Default and after written notice by the Applicable
Collateral Agent to the relevant Pledgors of the Applicable Collateral Agent’s
intention to exercise its rights hereunder or under the First

 

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Lien/Second Lien Intercreditor Agreement or any other applicable Intercreditor
Agreement, all rights of any Pledgor to receive dividends, interest, principal
or other distributions that such Pledgor is authorized to receive pursuant to
paragraph (a)(iii) of this Section 2.06 shall cease, and all such rights shall
thereupon become vested, for the benefit of the Secured Parties, in the
Applicable Collateral Agent subject to the First Lien/Second Lien Intercreditor
Agreement and any other Intercreditor Agreement (if entered into), which shall
have the sole and exclusive right and authority to receive and retain such
dividends, interest, principal or other distributions; provided that the
Collateral Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Pledgors to receive and retain
such amounts; provided, further, that, notwithstanding the occurrence of an
Event of Default, any Pledgor may continue to exercise dividend and distribution
rights solely to the extent permitted under subclause (xii) and subclause
(xiii) of Section 4.04(b) of the Notes Indenture (or equivalent provisions of
any Other Second Lien Agreement). All dividends, interest, principal or other
distributions received by any Pledgor contrary to the provisions of this
Section 2.06 shall not be commingled by such Pledgor with any of its other funds
or property but shall be held separate and apart therefrom, shall be held in
trust for the benefit of the Applicable Collateral Agent (acting as gratuitous
bailee for the Collateral Agent for perfection purposes, pursuant to Section 5.5
of the Existing First Lien/Second Lien ICA (or analogous provision of any other
then-applicable Intercreditor Agreement), if the Applicable Collateral Agent is
not the Collateral Agent), for the benefit of the Secured Parties, and shall be
forthwith delivered to the Applicable Collateral Agent, for the benefit of the
Secured Parties, in the same form as so received (endorsed in a manner
reasonably satisfactory to the Applicable Collateral Agent). Any and all money
and other property paid over to or received by the Applicable Collateral Agent
pursuant to the provisions of this paragraph (b) shall be retained by the
Applicable Collateral Agent in an account to be established by the Applicable
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 4.02. After all Events of
Default have been cured or waived and the Issuer has delivered to the Applicable
Collateral Agent a certificate to that effect, the Applicable Collateral Agent
shall promptly repay to each Pledgor (without interest) all dividends, interest,
principal or other distributions that such Pledgor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 2.06 and
that remain in such account.

(c) Subject to the First Lien/Second Lien Intercreditor Agreement and any other
Intercreditor Agreement (if entered into), upon the occurrence and during the
continuance of an Event of Default and after written notice by the Applicable
Collateral Agent to the Issuer of the Applicable Collateral Agent’s intention to
exercise its rights hereunder, or under the First Lien/Second Lien Intercreditor
Agreement or any other applicable Intercreditor Agreement, all rights of any
Pledgor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to paragraph (a)(i) of this Section 2.06, and the
obligations of the Applicable Collateral Agent under paragraph (a)(ii) of this
Section 2.06, shall cease, and all such rights shall thereupon become vested in
the

 

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Applicable Collateral Agent (acting as gratuitous bailee for the Collateral
Agent for perfection purposes, pursuant to Section 5.5 of the Existing First
Lien/Second Lien ICA (or analogous provision of any other then-applicable
Intercreditor Agreement), if the Applicable Collateral Agent is not the
Collateral Agent), for the benefit of the Secured Parties, which shall have the
sole and exclusive right and authority to exercise such voting and consensual
rights and powers; provided that the Applicable Collateral Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Pledgors to exercise such rights. After all Events of
Default have been cured or waived and the Issuer has delivered to the Applicable
Collateral Agent a certificate to that effect, each Pledgor shall have the right
to exercise the voting and/or consensual rights and powers that such Pledgor
would otherwise be entitled to exercise pursuant to the terms of paragraph
(a)(i) of this Section 2.06 and the obligations of the Applicable Collateral
Agent under paragraph (a)(ii) of this Section 2.06 shall be in effect.

ARTICLE III

Security Interests in Other Personal Property

SECTION 3.01. Security Interest. (a) As security for the payment or performance
when due (whether at the stated maturity, by acceleration or otherwise), as the
case may be, in full of the Secured Obligations, each Pledgor hereby assigns and
pledges to the Collateral Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the benefit of the Secured Parties, a
security interest (the “Security Interest”) in all right, title and interest in
or to any and all of the following assets and properties now owned or at any
time hereafter acquired by such Pledgor or in which such Pledgor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Article 9 Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all cash and Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all Fixtures;

(vii) all General Intangibles;

(viii) all Instruments (other than the Pledged Collateral, which are governed by
Article II);

 

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(ix) all Inventory and all other Goods not otherwise described above;

(x) all Investment Property (other than the Pledged Collateral, which are
governed by Article II);

(xi) all Letter of Credit Rights;

(xii) all Commercial Tort Claims individually in excess of $10,000,000, as
described on Schedule IV (as may be supplemented from time to time pursuant to
Section 3.04);

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

(xiv) to the extent not otherwise included, all Proceeds, Supporting Obligations
and products of any and all of the foregoing and all collateral security and
guarantees given by any person with respect to any of the foregoing.

Notwithstanding anything to the contrary in this Agreement, the other Notes
Documents or any Other Second Lien Agreement, this Agreement shall not
constitute a grant of a security interest in (and the Article 9 Collateral shall
not include), and the other provisions of the Notes Documents and any Other
Second Lien Agreement with respect to Collateral need not be satisfied with
respect to, the Excluded Property.

(b) Each Pledgor hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Collateral or any
part thereof and amendments thereto that contain the information required by
Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the
filing of any financing statement or amendment, including (i) whether such
Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) in the case of a financing
statement filed as a fixture filing, a sufficient description of the real
property to which such Collateral relates and (iii) a description of collateral
that describes such property in any other manner as the Collateral Agent may
reasonably determine is necessary or advisable to ensure the perfection of the
security interest in the Collateral granted under this Agreement, including
describing such property as “all assets” or “all personal property” or words of
similar effect. Each Pledgor agrees to provide such information to the
Collateral Agent promptly upon request.

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office such documents as may be
reasonably necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Pledgor in such Pledgor’s Patents, Trademarks and Copyrights, without the
signature of such Pledgor, and naming such Pledgor or the Pledgors as debtors
and the Collateral Agent as secured party. Notwithstanding anything to the
contrary herein, no Pledgor shall be required to take any

 

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action under the laws of any jurisdiction other than the United States of
America (or any political subdivision thereof) and its territories and
possessions for the purpose of perfecting the Security Interest in any Article 9
Collateral of such Pledgor constituting Patents, Trademarks or Copyrights or any
other assets.

(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Pledgor with respect to or arising out of the
Article 9 Collateral.

(d) Notwithstanding anything to the contrary in this Agreement, (A) the
Collateral Agent, at the direction of each Authorized Representative, may grant
extensions of time or waiver of the requirement for the creation or perfection
of security interests or the obtaining of insurance (including title insurance
or surveys with respect to particular assets) (including extensions beyond the
Issue Date for the perfection of security interests in the assets of the Issuer,
the Co-Issuer or the Subsidiary Guarantors on such date) where it reasonably
determines, in consultation with the Issuer, that perfection or the obtaining of
such items cannot be accomplished without undue effort or expense by the time or
times at which it would otherwise be required by the indenture or the other
Security Documents, (B) none of the Pledgors shall be required to enter into any
control agreements or control, lockbox or similar arrangements with respect to
any Deposit Accounts, Securities Accounts, Commodities Accounts or any other
assets (other than the delivery of Pledged Securities to the Collateral Agent to
the extent required by Article II), (C) no landlord, mortgagee or bailee waivers
shall be required, (D) no foreign-law governed security documents or perfection
under foreign law shall be required and (E) no notice shall be required to be
sent to account debtors or other contractual third parties prior to an Event of
Default.

SECTION 3.02. Representations and Warranties. The Pledgors jointly and severally
represent and warrant to the Collateral Agent, for the benefit of the Secured
Parties, that:

(a) Each Pledgor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder, except where the failure to have such rights and title would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and has full power and authority to grant to the Collateral
Agent the Security Interest in such Article 9 Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person as of the
Issue Date other than any consent or approval that has been obtained and is in
full force and effect or has otherwise been disclosed herein or in the Notes
Indenture.

(b) Except as provided in the Notes Indenture, the Uniform Commercial Code
financing statements or other appropriate filings, recordings or registrations
containing a description of the Article 9 Collateral that have been prepared for
filing constitute all the filings, recordings and registrations (other than
filings required to be made in the United States Patent and Trademark Office and
the United States Copyright Office

 

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in order to perfect the Security Interest in Article 9 Collateral consisting of
United States Patents, United States registered Trademarks and United States
registered Copyrights) that are necessary as of the Issue Date to publish notice
of and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Collateral Agent (for the benefit of the
Secured Parties) in respect of all Article 9 Collateral in which the Security
Interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof), and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements or amendments. Except as
provided in the Notes Indenture, each Pledgor represents and warrants that the
Notices of Grant of Security Interest in Intellectual Property executed by the
applicable Pledgors containing descriptions of all Article 9 Collateral that
consists of material United States federally issued Patents (and Patents for
which United States federal registration applications are pending), material
United States federally registered Trademarks (and Trademarks for which United
States federal registration applications are pending) and material United States
federally registered Copyrights (and Copyrights for which United States federal
registration applications are pending) have been delivered to the Collateral
Agent for recording with the United States Patent and Trademark Office and the
United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or
17 U.S.C. § 205 and the regulations thereunder, as applicable, and reasonably
requested by the Collateral Agent, to protect the validity of and to establish a
legal, valid and perfected security interest (or, in the case of Patents and
Trademarks, notice thereof) in favor of the Collateral Agent, for the benefit of
the Secured Parties, in respect of all Article 9 Collateral consisting of such
Intellectual Property as of the Issue Date in which a security interest may be
perfected by recording with the United States Patent and Trademark Office and
the United States Copyright Office, and no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration is necessary
(other than such actions as are necessary to perfect the Security Interest with
respect to any Article 9 Collateral consisting of material United States
federally issued, registered or pending Patents, Trademarks and Copyrights
acquired or developed after the Issue Date).

(c) The Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the Secured
Obligations, as applicable, (ii) subject to the filings described in
Section 3.02(b), as of the Issue Date a perfected security interest in all
Article 9 Collateral in which a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in the
United States (or any political subdivision thereof) pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in which a
security interest may be perfected upon the receipt and recording of the Notices
of Grant of Security Interest in Intellectual Property with the United States
Patent and Trademark Office and the United States Copyright Office, as
applicable. The Security Interest is and shall be prior to any other Lien on any
of the Article 9 Collateral other than Permitted Liens.

 

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(d) The Article 9 Collateral is owned by the Pledgors free and clear of any
Lien, other than Permitted Liens. None of the Pledgors has filed or consented to
the filing of (i) any financing statement or analogous document under the
Uniform Commercial Code or any other applicable laws covering any Article 9
Collateral, (ii) any assignment in which any Pledgor assigns any Article 9
Collateral or any security agreement or similar instrument covering any
Article 9 Collateral with the United States Patent and Trademark Office or the
United States Copyright Office for the benefit of a third party or (iii) any
assignment in which any Pledgor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Permitted Liens.

(e) None of the Pledgors holds any Commercial Tort Claim individually reasonably
estimated to exceed $10,000,000 as of the Issue Date except as indicated on
Schedule IV.

(f) As to itself and its Article 9 Collateral consisting of Intellectual
Property (the “Intellectual Property Collateral”), to each Pledgor’s knowledge:

(i) The Intellectual Property Collateral set forth on Schedule III includes a
true and complete list of all of the material issued and applied for United
States federal Patents, material registered and applied for United States
Trademarks and material United States federal registered Copyrights owned by
such Pledgor as of the date hereof.

(ii) The Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable in whole or in part and, to the best of such
Pledgor’s knowledge, is valid and enforceable, except as would not reasonably be
expected to have a Material Adverse Effect. Such Pledgor is not aware of any
current uses of any item of Intellectual Property Collateral that would be
expected to lead to such item becoming invalid or unenforceable, except as would
not reasonably be expected to have a Material Adverse Effect.

(iii) Except as would not reasonably be expected to have a Material Adverse
Effect, (a) such Pledgor has made or performed all commercially reasonable acts,
including without limitation filings, recordings and payment of all required
fees and taxes, required to maintain and protect its interest in each and every
item of Intellectual Property Collateral in full force and effect in the United
States and (b) such Pledgor has used proper statutory notice in connection with
its use of each Patent, Trademark and Copyright in the Intellectual Property
Collateral.

(iv) With respect to each IP Agreement, the absence, termination or violation of
which would reasonably be expected to have a Material Adverse Effect: (a) such
Pledgor has not received any notice of termination or cancellation under such IP
Agreement; (b) such Pledgor has not received a notice of a breach or default
under such IP Agreement, which breach or default has not been cured or waived;
and (c) such Pledgor is not in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination, modification or
acceleration under such IP Agreement.

 

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(v) Except as would not reasonably be expected to have a Material Adverse
Effect, no Intellectual Property Collateral is subject to any outstanding
consent, settlement, decree, order, injunction, judgment or ruling restricting
the use of any Intellectual Property Collateral or that would impair the
validity or enforceability of such Intellectual Property Collateral.

SECTION 3.03. Covenants. (a) Each Pledgor agrees promptly to notify the
Collateral Agent in writing of any change (i) in its corporate or organization
name, (ii) in its identity or type of organization, (iii) in its organizational
identification number or (iv) in its jurisdiction of organization. Each Pledgor
agrees not to effect or permit any change referred to in the first sentence of
this paragraph (a) unless all filings have been made, or will have been made
within the time period required under the Uniform Commercial Code or otherwise
in order for the Collateral Agent to continue at all times following such change
to have a valid, legal and perfected security interest in all the Article 9
Collateral in which a security interest may be perfected by such filing, for the
benefit of the Secured Parties.

(b) Subject to any rights of such Pledgor to Dispose of Collateral provided for
in the Notes Documents and each Other Second Lien Agreement, each Pledgor shall,
at its own expense, use commercially reasonable efforts to defend title to the
Article 9 Collateral against all persons and to defend the Security Interest of
the Collateral Agent, for the benefit of the Secured Parties, in the Article 9
Collateral and the priority thereof against any Lien that is not a Permitted
Lien.

(c) Each Pledgor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Collateral Agent may from time to time reasonably
request to better assure, preserve, protect, defend and perfect the Security
Interest and the rights and remedies created hereby, including the payment of
any fees and taxes required in connection with the execution and delivery of
this Agreement and the granting of the Security Interest and the filing of any
financing statements (including fixture filings) or other documents in
connection herewith or therewith, all in accordance with the terms hereof and
the terms of the Notes Indenture.

Without limiting the generality of the foregoing, each Pledgor hereby authorizes
the Collateral Agent, with prompt notice thereof to the Pledgors, to supplement
this Agreement by supplementing Schedule III or adding additional schedules
hereto to specifically identify any asset or item that may constitute an issued
or applied for United States federal Patent, registered or applied for United
States Trademark or registered United States federal Copyright; provided that
any Pledgor shall have the right, exercisable within 90 days after the Issuer
has been notified by the Collateral Agent of the specific

 

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identification of such Article 9 Collateral (or such later date as the
Collateral Agent may agree), to advise the Collateral Agent in writing of any
inaccuracy of the representations and warranties made by such Pledgor hereunder
with respect to such Article 9 Collateral. Each Pledgor agrees that it will use
its commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct with respect to such Article 9 Collateral within 45 days after the date
it has been notified by the Collateral Agent of the specific identification of
such Article 9 Collateral (or such later date as the Collateral Agent may
agree).

(d) Subject to the First Lien/Second Lien Intercreditor Agreement and any other
Intercreditor Agreement (if entered into), after the occurrence of an Event of
Default and during the continuance thereof, the Collateral Agent shall have the
right to verify under reasonable procedures the validity, amount, quality,
quantity, value, condition and status of, or any other matter relating to, the
Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral
in the possession of any third person, by contacting Account Debtors or the
third person possessing such Article 9 Collateral for the purpose of making such
a verification. The Collateral Agent shall have the right to share any
information it gains from such inspection or verification with any Secured
Party, subject to any confidentiality provisions of the Notes Indenture and any
equivalent provision of any Other Second Lien Agreement.

(e) Subject to the First Lien/Second Lien Intercreditor Agreement and any other
Intercreditor Agreement (if entered into), the Collateral Agent may discharge
past due taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Article 9 Collateral and not a
Permitted Lien, and may pay for the maintenance and preservation of the
Article 9 Collateral to the extent any Pledgor fails to do so as required by the
Notes Indenture, this Agreement or any Other Second Lien Agreement, and each
Pledgor jointly and severally agrees to reimburse the Collateral Agent on demand
for any reasonable and documented payment made or any reasonable and documented
out-of-pocket expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 3.03(e) shall be
interpreted as excusing any Pledgor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Pledgor with respect to taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Notes Documents or any Other Second Lien
Agreement.

(f) Each Pledgor (rather than the Collateral Agent or any Secured Party) shall
remain liable for the observance and performance of all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Article 9 Collateral and each Pledgor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.

(g) None of the Pledgors shall make or permit to be made an assignment, pledge
or hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as not prohibited by the Notes
Indenture or any Other Second Lien Agreement. None of the Pledgors shall make or
permit to be made any transfer of the Article 9 Collateral, except as not
prohibited by the Notes Indenture, any Other Second Lien Agreement or any
Intercreditor Agreement.

 

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(h) Subject to the First Lien/Second Lien Intercreditor Agreement and any other
Intercreditor Agreement (if entered into), each Pledgor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Pledgor’s true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Pledgor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Pledgor at any time or times shall fail
to obtain or maintain any of the policies of insurance required by the Notes
Documents or any Other Second Lien Agreement or to pay any premium in whole or
part relating thereto, the Collateral Agent may, without waiving or releasing
any obligation or liability of the Pledgors hereunder or any Event of Default,
in its sole discretion, obtain and maintain such policies of insurance and pay
such premium and take any other actions with respect thereto as the Collateral
Agent reasonably deems advisable. All sums disbursed by the Collateral Agent in
connection with this Section 3.03(h), including reasonable and documented
attorneys’ fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Pledgors to the Collateral Agent and shall be
additional Secured Obligations secured hereby.

(i) The Pledgors shall use commercially reasonable efforts to satisfy the items
described on Schedule V within 120 days (or such longer period of time as agreed
to by the Collateral Agent in its reasonable discretion, at the direction of
each Authorized Representative) following the Issue Date.

SECTION 3.04. Other Actions. Subject to the First Lien/Second Lien Intercreditor
Agreement, in order to further ensure the attachment, perfection and priority
of, and the ability of the Collateral Agent to enforce, for the benefit of the
Secured Parties, the Security Interest in the Article 9 Collateral, each Pledgor
agrees, in each case at such Pledgor’s own expense, to take the following
actions with respect to the following Article 9 Collateral:

(a) Instruments and Tangible Chattel Paper. If any Pledgor shall at any time own
or acquire any Instruments (other than debt obligations which are governed by
Article II and checks received and processed in the ordinary course of business)
or Tangible Chattel Paper evidencing an amount in excess of $10,000,000, such
Pledgor shall promptly (and in any event within 45 days of its acquisition or
such longer period as the Applicable Collateral Agent may permit in its
reasonable discretion) notify the Collateral Agent and promptly (and in any
event within 5 days following such notice or such longer period as the
Applicable Collateral Agent may permit in its reasonable discretion) endorse,
assign and deliver the same to the Applicable Collateral Agent (acting as
gratuitous bailee for the Collateral Agent for perfection purposes, pursuant to
Section 5.5 of the Existing First Lien/Second Lien ICA (or analogous provision
of any other then-applicable Intercreditor Agreement), if the Applicable
Collateral Agent is not the Collateral Agent), accompanied by such instruments
of transfer or assignment duly executed in blank as the Applicable Collateral
Agent may from time to time reasonably request.

 

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(b) Commercial Tort Claims. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $10,000,000,
such Pledgor shall promptly notify the Collateral Agent thereof in a writing
signed by such Pledgor, including a summary description of such claim, and
deliver to the Collateral Agent in writing a supplement to Schedule IV including
such description.

SECTION 3.05. Covenants Regarding Patent, Trademark and Copyright Collateral.
Except as not prohibited by the Notes Indenture or any Other Second Lien
Agreement:

(a) Each Pledgor agrees that it will not knowingly do any act or omit to do any
act (and will exercise commercially reasonable efforts to prevent its licensees
from doing any act or omitting to do any act) whereby any Patent that is
material to the normal conduct of such Pledgor’s business may become prematurely
invalidated, abandoned, lapsed or dedicated to the public.

(b) Each Pledgor will, and will use its commercially reasonable efforts to cause
its licensees or its sublicensees to, for each material Trademark necessary to
the normal conduct of such Pledgor’s business, (i) maintain such Trademark in
full force free from any adjudication of abandonment or invalidity for non-use
and (ii) maintain the quality of products and services offered under such
Trademark in a manner consistent with the operation of such Pledgor’s business.

(c) Each Pledgor shall notify the Collateral Agent promptly if it knows that any
United States federally issued or applied for Patent, United States federally
registered or applied for Trademark or United States federally registered
Copyright material to the normal conduct of such Pledgor’s business may
imminently become abandoned, lapsed or dedicated to the public, or of any
materially adverse determination or development, excluding non-final office
actions in the ordinary course of such Pledgor’s business and similar
determinations or developments in the United States Patent and Trademark Office,
United States Copyright Office, any court or any similar office of any country,
regarding such Pledgor’s ownership of any such material Patent, Trademark or
Copyright or its right to register or to maintain the same.

(d) Each Pledgor, either by itself or through any agent, employee, licensee or
designee, shall (i) inform the Collateral Agent on an annual basis of each
application for, or registration or issuance of, any Patent or Trademark with
the United States Patent and Trademark Office and each registration of any
Copyright with the United States Copyright Office filed by or on behalf of, or
issued to, or acquired by, any Pledgor during the preceding twelve-month period,
and (ii) upon the reasonable request of the Applicable Collateral Agent, execute
and deliver any and all agreements, instruments, documents and papers necessary
or as the Applicable Collateral Agent may otherwise reasonably request to
evidence the Collateral Agent’s Security Interest in such Patent,

 

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Trademark or Copyright and the perfection thereof, including appropriate filings
with the United States Patent and Trademark Office or the United States
Copyright Office, provided that the provisions hereof shall automatically apply
to any such Patent, Trademark or Copyright and any such Patent, Trademark or
Copyright shall automatically constitute Collateral as if such would have
constituted Collateral at the time of execution hereof and be subject to the
Lien and Security Interest created by this Agreement without further action by
any party.

(e) Each Pledgor shall exercise its reasonable business judgment consistent with
its past practice in any proceeding before the United States Patent and
Trademark Office or the United States Copyright Office with respect to
maintaining and pursuing each application relating to any Patent, Trademark
and/or Copyright (and obtaining the relevant grant or registration) material to
the normal conduct of such Pledgor’s business and to maintain (i) each United
States federally issued Patent that is material to the normal conduct of such
Pledgor’s business and (ii) the registrations of each United States federally
registered Trademark and each United States federally registered Copyright that
is material to the normal conduct of such Pledgor’s business, including, when
applicable and necessary in such Pledgor’s reasonable business judgment, timely
filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if any Pledgor believes
necessary in its reasonable business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.

(f) In the event that any Pledgor knows or has reason to know that any Article 9
Collateral consisting of a Patent, Trademark or Copyright material to the normal
conduct of its business has been materially infringed, misappropriated or
diluted by a third party, such Pledgor shall promptly notify the Collateral
Agent and shall, if such Pledgor deems it necessary in its reasonable business
judgment, promptly sue and recover any and all damages, and take such other
actions as are reasonably appropriate under the circumstances.

(g) Upon and during the continuance of an Event of Default, at the reasonable
request of the Collateral Agent, each Pledgor shall use commercially reasonable
efforts to obtain all requisite consents or approvals from each licensor under
each Copyright License, Patent License or Trademark License to effect the
assignment of all such Pledgor’s right, title and interest thereunder to (in the
Collateral Agent’s sole discretion) the designee of the Collateral Agent or the
Collateral Agent; provided, however, that nothing contained in this
Section 3.05(g) should be construed as an obligation of any Pledgor to incur any
costs or expenses in connection with obtaining such approval.

ARTICLE IV

Remedies

SECTION 4.01. Remedies Upon Default. In accordance with, and to the extent
consistent with, the terms of the First Lien/Second Lien Intercreditor Agreement
and any other applicable Intercreditor Agreement, the Collateral Agent may take
any action

 

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specified in this Section 4.01. Upon the occurrence and during the continuance
of an Event of Default, each Pledgor agrees to deliver each item of Collateral
to the Collateral Agent on demand. It is agreed that the Collateral Agent shall
have the right to take any of or all the following actions at the same or
different times: (a) with respect to any Article 9 Collateral consisting of
Intellectual Property, on demand, to cause the Security Interest to become an
assignment, transfer and conveyance of any of or all such Article 9 Collateral
by the applicable Pledgors to the Collateral Agent or to license or sublicense
(subject to any such licensee’s obligation to maintain the quality of the goods
and/or services provided under any Trademark consistent with the quality of such
goods and/or services provided by the Pledgors immediately prior to the Event of
Default), whether general, special or otherwise, and whether on an exclusive or
a nonexclusive basis, any such Article 9 Collateral throughout the world on such
terms and conditions and in such manner as the Collateral Agent shall determine
(other than in violation of any then-existing licensing or trademark
co-existence arrangements to the extent that waivers thereunder cannot be
obtained with the use of commercially reasonable efforts, which each Pledgor
hereby agrees to use) and (b) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Article 9
Collateral and without liability for trespass to the applicable Pledgor to enter
any premises where the Article 9 Collateral may be located for the purpose of
taking possession of or removing the Article 9 Collateral and, generally, to
exercise any and all rights afforded to a secured party under the applicable
Uniform Commercial Code or other applicable law or in equity. The Collateral
Agent agrees and covenants not to exercise any of the rights or remedies set
forth in the preceding sentence unless and until the occurrence and during the
continuance of an Event of Default. Without limiting the generality of the
foregoing, each Pledgor agrees that the Collateral Agent shall have the right,
subject to the First Lien/Second Lien Intercreditor Agreement, any other
Intercreditor Agreement (if entered into) and the mandatory requirements of
applicable law, to sell or otherwise Dispose of all or any part of the
Collateral at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized in connection with any sale of a security (if it deems it advisable
to do so) pursuant to the foregoing to restrict the prospective bidders or
purchasers to persons who represent and agree that they are purchasing such
security for their own account, for investment, and not with a view to the
distribution or sale thereof. Upon consummation of any such Disposition of
Collateral pursuant to this Section 4.01, the Collateral Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold (other than in violation of any then-existing licensing or
trademark co-existence arrangements to the extent that waivers thereunder cannot
be obtained with the use of commercially reasonable efforts, which each Pledgor
hereby agrees to use). Each such purchaser at any such Disposition shall hold
the property sold absolutely, free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases (to the extent permitted by
law) all rights of redemption, stay, valuation and appraisal that such Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.

To the extent any notice is required by applicable law, the Collateral Agent
shall give the applicable Pledgors 10 Business Days’ written notice (which each
Pledgor agrees is reasonable notice within the meaning of Section 9-611 of the
New York UCC or

 

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its equivalent in other jurisdictions) of the Collateral Agent’s intention to
make any sale of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker’s
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix and state in the notice (if any)
of such sale. At any such sale, the Collateral, or the portion thereof, to be
sold may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In the case of any sale of all or any part
of the Collateral made on credit or for future delivery, the Collateral so sold
may be retained by the Collateral Agent until the sale price is paid by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in the event that any such purchaser or purchasers shall fail to take
up and pay for the Collateral so sold and, in the case of any such failure, such
Collateral may be sold again upon notice given in accordance with provisions
above. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section 4.01, any Secured Party may bid for or purchase for
cash, free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Pledgor (all such rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and such Secured Party may, upon compliance
with the terms of sale, hold, retain and Dispose of such property in accordance
with Section 4.02 without further accountability to any Pledgor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; the Collateral Agent shall be free
to carry out such sale pursuant to such agreement and no Pledgor shall be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the Secured
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, subject to the provisions of the First Lien/Second
Lien Intercreditor Agreement and any other applicable Intercreditor Agreement
(upon and during the effectiveness thereof), the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 4.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

SECTION 4.02. Application of Proceeds. The Collateral Agent shall, subject to
the First Lien/Second Lien Intercreditor Agreement and any other applicable
Intercreditor Agreement, promptly apply the proceeds, moneys or balances of any
collection or sale of Collateral realized through the exercise by the Collateral
Agent of its

 

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remedies hereunder, as well as any Collateral consisting of cash at any time
when remedies are being exercised hereunder, as follows:

FIRST, to the payment of all out-of-pocket costs and expenses incurred by the
Collateral Agent in connection with such collection or sale or otherwise in
connection with any Notes Indenture Document, any Other Second Lien Agreement or
any of the Secured Obligations secured by such Collateral, including all court
costs and the fees and expenses of its agents and legal counsel, the repayment
of all advances made by the Collateral Agent under any Notes Indenture Document
or any Other Second Lien Agreement on behalf of any Pledgor, any other costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other Notes Indenture Document or any Other Second Lien
Agreement, and all other fees, indemnities and other amounts owing or
reimbursable to the Collateral Agent under any Notes Indenture Document or any
Other Second Lien Agreement in its capacity as such;

SECOND, to the payment in full of the Secured Obligations secured by such
Collateral (the amounts so applied to be distributed between the Notes Secured
Parties and any Other Second Lien Secured Parties pro rata based on the
respective amounts of such Secured Obligations owed to them on the date of any
such distribution (or in accordance with such other method of distribution as
may be set forth in any applicable Intercreditor Agreement)), with (x) the
portion thereof distributed to the Notes Secured Parties to be further
distributed in accordance with the order of priority set forth in Section 6.10
of the Notes Indenture and (y) the portion thereof distributed to the Secured
Parties of any other Series to be further distributed in accordance with the
applicable provisions of the Other Second Lien Agreements governing such Series;
and

THIRD, to the Pledgors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct;

provided, that in no event shall the proceeds of any collection or sale of any
Specified Excluded Collateral be applied to the relevant Series of Secured
Obligations under any Other Second Lien Agreement that is not secured by such
Specified Excluded Collateral.

The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon the request of the Collateral Agent prior to any distribution
under this Section 4.02, each Authorized Representative shall provide to the
Collateral Agent certificates, in form and substance reasonably satisfactory to
the Collateral Agent, setting forth the respective amounts referred to in this
Section 4.02 that each applicable Secured Party or its Authorized Representative
believes it is entitled to receive, and the Collateral Agent shall be fully
entitled to rely on such certificates. Upon any sale of Collateral by the
Collateral Agent (including pursuant to a power of sale granted by statute or
under a judicial proceeding), the receipt of the purchase money by the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.

 

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SECTION 4.03. Securities Act, Etc. In view of the position of the Pledgors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as
amended, or any similar federal statute hereafter enacted analogous in purpose
or effect (such Act and any such similar statute as from time to time in effect
being called the “Federal Securities Laws”) with respect to any Disposition of
the Pledged Collateral permitted hereunder. Each Pledgor understands that
compliance with the Federal Securities Laws might very strictly limit the course
of conduct of the Collateral Agent if the Collateral Agent were to attempt to
Dispose of all or any part of the Pledged Collateral, and might also limit the
extent to which or the manner in which any subsequent transferee of any Pledged
Collateral could Dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting the Collateral Agent in any attempt to
Dispose of all or part of the Pledged Collateral under applicable Blue Sky or
other state securities laws or similar laws analogous in purpose or effect. Each
Pledgor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, subject to the First Lien/Second Lien
Intercreditor Agreement and any other applicable Intercreditor Agreement, in its
sole and absolute discretion, (a) may proceed to make such a sale whether or not
a registration statement for the purpose of registering such Pledged Collateral
or part thereof shall have been filed under the Federal Securities Laws or, to
the extent applicable, Blue Sky or other state securities laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale.
Each Pledgor acknowledges and agrees that any such sale might result in prices
and other terms less favorable to the seller than if such sale were a public
sale without such restrictions. In the event of any such sale, the Collateral
Agent shall incur no responsibility or liability for selling all or any part of
the Pledged Collateral at a price that the Collateral Agent, subject to the
First Lien/Second Lien Intercreditor Agreement and any other applicable
Intercreditor Agreement, in its sole and absolute discretion, may in good faith
deem reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 4.03 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.

ARTICLE V

Miscellaneous

SECTION 5.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 13.01 of the Notes Indenture. All communications and notices hereunder
to any Pledgor shall be given to it in care of the Issuer, with such notice to
be given as provided in Section 13.01 of the Notes Indenture. All communications
and notices to any holders of obligations under any Other Second Lien Agreement
shall be addressed to the Authorized Representative of such holders at its
address set forth in the Other Second Lien Secured Party Consent, as such
address may be changed by written notice to the Collateral Agent.

 

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SECTION 5.02. Security Interest Absolute. To the extent permitted by law, all
rights of the Collateral Agent hereunder, the Security Interest in the Article 9
Collateral, the security interest in the Pledged Collateral and all obligations
of each Pledgor hereunder shall be absolute and unconditional irrespective of
(a) any lack of validity or enforceability of any Notes Document, any Other
Second Lien Agreement, any other agreement with respect to any of the Secured
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any Notes Document, any Other
Second Lien Agreement, any Intercreditor Agreement or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the Secured
Obligations or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the Secured
Obligations or this Agreement (other than a defense of payment or performance).

SECTION 5.03. Limitation By Law. All rights, remedies and powers provided in
this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law that may be controlling and to be limited to the extent necessary so that
they shall not render this Agreement invalid, unenforceable, in whole or in
part, or not entitled to be recorded, registered or filed under the provisions
of any applicable law.

SECTION 5.04. Binding Effect; Several Agreements. This Agreement shall become
effective as to any party to this Agreement when a counterpart hereof executed
on behalf of such party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such party and the Collateral Agent and
their respective permitted successors and assigns, and shall inure to the
benefit of such party, the Collateral Agent and the other Secured Parties and
their respective permitted successors and assigns, except that no party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as not prohibited by this Agreement, the Notes Indenture or any
Other Second Lien Agreement. This Agreement shall be construed as a separate
agreement with respect to each party and may be amended, modified, supplemented,
waived or released in accordance with Section 5.09 or 5.15, as applicable.

SECTION 5.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party and all covenants, promises and
agreements by or on behalf of any Pledgor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective permitted successors and assigns, provided that no Pledgor may
assign, transfer or delegate any of its rights or obligations under this
Agreement except as permitted by Section 5.04.

 

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SECTION 5.06. Collateral Agent’s Fees and Expenses; Indemnification.

(a) The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder by the Pledgors, and the
Collateral Agent and other Indemnitees shall be indemnified by the Pledgors, in
each case of this clause (a), mutatis mutandis, as provided in Section 7.06 of
the Notes Indenture or any equivalent provision of any Other Second Lien
Agreement.

(b) Any such amounts payable as provided hereunder shall be additional Secured
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 5.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement, any other Notes Document or any
Other Second Lien Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Secured Obligations, the invalidity or
unenforceability of any term or provision of this Agreement, any other Notes
Document or any Other Second Lien Agreement, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 5.06 shall be payable within fifteen days (or such longer period as
the Collateral Agent may agree) of written demand therefor accompanied by
reasonable documentation with respect to any reimbursement, indemnification or
other amount requested.

(c) The agreements in this Section 5.06 shall survive the resignation of the
Collateral Agent and the termination of this Agreement.

SECTION 5.07. Collateral Agent Appointed Attorney-in-Fact. Subject to the First
Lien/Second Lien Intercreditor Agreement and any other applicable Intercreditor
Agreement, each Pledgor hereby appoints the Collateral Agent the
attorney-in-fact of such Pledgor for the purpose of carrying out the provisions
of this Agreement and, upon the occurrence and during the continuance of an
Event of Default, taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, subject to applicable Requirements of
Law, the First Lien/Second Lien Intercreditor Agreement and any other applicable
Intercreditor Agreement, the Collateral Agent shall have the right, upon the
occurrence and during the continuance of an Event of Default, with full power of
substitution either in the Collateral Agent’s name or in the name of such
Pledgor, (a) to receive, endorse, assign or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating
to the Collateral or any part thereof; (b) to demand, collect, receive payment
of, give receipt for and give discharges and releases of all or any of the
Collateral; (c) to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral; (d) to sign the name of any Pledgor on any invoice or bill of
lading relating to

 

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any of the Collateral; (e) to send verifications of Accounts to any Account
Debtor; (f) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise, realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (g) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral;
(h) to notify, or to require any Pledgor to notify, Account Debtors to make
payment directly to the Collateral Agent; and (i) to use, sell, assign,
transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things necessary to carry
out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own or their
Related Parties gross negligence or willful misconduct.

SECTION 5.08. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE
OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.

SECTION 5.09. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent or any other Secured Party in exercising any right, power or remedy
hereunder or under any other Notes Document or any Other Second Lien Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy, or any abandonment or discontinuance of steps
to enforce such a right, power or remedy, preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights, powers
and remedies of the Collateral Agent and the other Secured Parties hereunder and
under the other Notes Documents and any Other Second Lien Agreements are
cumulative and are not exclusive of any rights, powers or remedies that they
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by any Pledgor therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section 5.09, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
incurrence of any Other Second Lien Obligation shall not be construed as a
waiver of any Default or Event of Default, regardless of whether the Collateral
Agent or any other Secured Party may have had notice or knowledge of such
Default or Event of Default at the time. No notice or demand on any Pledgor in
any case shall entitle any Pledgor to any other or further notice or demand in
similar or other circumstances.

 

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(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Pledgor or Pledgors with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Article IX of the Notes Indenture, and the consent of each
other Authorized Representative if and to the extent required by (and in
accordance with) the applicable Other Second Lien Agreement, and except as
otherwise provided in the First Lien/Second Lien Intercreditor Agreement or any
other any applicable Intercreditor Agreement. The Collateral Agent may
conclusively rely on a certificate of an officer of the Issuer as to whether any
amendment contemplated by this Section 5.09(b) is permitted.

(c) Notwithstanding anything to the contrary contained herein, the Collateral
Agent may grant extensions of time or waivers of the requirement for the
creation or perfection of security interests in or the obtaining of insurance
(including title insurance) or surveys with respect to particular assets
(including extensions beyond the Issue Date for the perfection of security
interests in the assets of the Pledgors on such date) where it reasonably
determines, in consultation with the Issuer, that perfection or obtaining of
such items cannot be accomplished without undue effort or expense by the time or
times at which it would otherwise be required by this Agreement, the other Notes
Documents or any Other Second Lien Agreement.

SECTION 5.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER NOTES DOCUMENT OR ANY OTHER
SECOND LIEN AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10.

SECTION 5.11. Severability. In the event any one or more of the provisions
contained in this Agreement, any other Notes Document or any Other Second Lien
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 5.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 5.04. Delivery of an executed counterpart to this Agreement
by facsimile or other electronic transmission (or other electronic transmission
pursuant to procedures approved by the Collateral Agent) shall be as effective
as delivery of a manually signed original.

 

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SECTION 5.13. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 5.14. Jurisdiction; Consent to Service of Process. (a) Each party to
this Agreement hereby irrevocably and unconditionally agrees that it will not
commence any action, litigation or proceeding of any kind or description,
whether in law or equity, whether in contract or in tort or otherwise, against
any other party or any affiliate thereof, in any way relating to this Agreement,
any other Notes Document or any Other Second Lien Agreement or the transactions
relating hereto or thereto, in any forum other than the courts of the State of
New York sitting in New York County, and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, and
each of the parties hereto irrevocably and unconditionally submits to the
jurisdiction of such courts and agrees that all claims in respect of any such
action, litigation or proceeding may be heard and determined in such New York
State court or, to the fullest extent permitted by applicable law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action, litigation or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement, any other Notes Document or any Other Second
Lien Agreement shall affect any right that the Collateral Agent or any other
Secured Party may otherwise have to bring any action or proceeding relating to
this Agreement, any other Notes Document or any Other Second Lien Agreement
against any Pledgor or its properties in the courts of any jurisdiction.

(b) Each party to this Agreement hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement, any other Notes
Document or any Other Second Lien Agreement in any New York State or federal
court sitting in New York County and any appellate court from any thereof. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.

(c) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 5.01. Nothing in this Agreement, any
other Notes Document or any Other Second Lien Agreement will affect the right of
any party to this Agreement, any other Notes Document or any Other Second Lien
Agreement to serve process in any other manner permitted by law.

 

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SECTION 5.15. Termination or Release. In each case subject to the terms of the
First Lien/Second Lien Intercreditor Agreement and any other applicable
Intercreditor Agreement:

(a) This Agreement and the pledges made by the Pledgors herein and all other
security interests granted by the Pledgors hereby shall automatically terminate
and be released upon the occurrence of the Termination Date or, if any Other
Second Lien Obligations are outstanding on the Termination Date, the date when
any Other Second Lien Obligations (other than contingent or unliquidated
obligations or liabilities not then due and any other obligations that, by the
terms of any Other Second Lien Agreements, are not required to be paid in full
prior to termination and release of the Collateral) have been paid in full and
the Secured Parties have no further commitment to extend credit under any Other
Second Lien Agreement.

(b) A Subsidiary Guarantor shall automatically be released from its obligations
hereunder and the security interests in the Collateral of such Subsidiary
Guarantor shall be automatically released upon the consummation of any
transaction not prohibited by the Notes Indenture or any Other Second Lien
Agreement then in effect as a result of which such Subsidiary Guarantor ceases
to be a Subsidiary of the Issuer or otherwise becomes an Excluded Subsidiary or
ceases to be a Subsidiary Guarantor or is otherwise released from its
obligations under the Notes Indenture, all without delivery of any instrument or
performance of any act by any party, and all rights to the applicable portions
of the Collateral shall revert to such Subsidiary Guarantor.

(c) The security interests in any Collateral shall automatically be released,
all without delivery of any instrument or performance of any act by any party,
(i) upon any sale or other transfer by any Pledgor of any Collateral that is not
prohibited by the Notes Indenture or any Other Second Lien Agreement to any
person that is not a Pledgor, (ii) upon the effectiveness of any written consent
to the release of the security interest granted hereby in such Collateral
pursuant to Article IX of the Notes Indenture and any equivalent provision of
any Other Second Lien Agreement (in each case, to the extent required thereby)
or (iii) as otherwise may be provided in the First Lien/Second Lien
Intercreditor Agreement or any other applicable Intercreditor Agreement.

(d) [Reserved].

(e) Solely with respect to the Notes Secured Obligations, a Pledgor shall
automatically be released from its obligations hereunder and/or the security
interests in any Collateral securing the Notes Secured Obligations shall in each
case be automatically released upon the occurrence of any of the circumstances
set forth in Article XI or Article XII of the Notes Indenture without delivery
of any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to any applicable Pledgor.

(f) [Reserved].

(g) Solely with respect to any Series of Other Second Lien Obligations, a
Pledgor shall automatically be released from its obligations hereunder and/or
the security interests in any Collateral securing such Series of Other Second
Lien Obligations shall in each case be automatically released upon the
occurrence of any of the circumstances set forth in the section governing
release of collateral in the applicable Other Second Lien Agreement governing
such Series of Other Second Lien Obligations, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to any applicable Pledgor.

 

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(h) In connection with any termination or release pursuant to this Section 5.15,
the Collateral Agent shall execute and deliver to any Pledgor all documents that
such Pledgor shall reasonably request to evidence such termination or release
(including Uniform Commercial Code termination statements), and will duly assign
and transfer to such Pledgor, such of the Pledged Collateral that may be in the
possession of the Collateral Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. Any execution and
delivery of documents pursuant to this Section 5.15 shall be made without
recourse to or warranty by the Collateral Agent. In connection with any release
pursuant to this Section 5.15, the Pledgors shall be permitted to take any
action in connection therewith consistent with such release including, without
limitation, the filing of Uniform Commercial Code termination statements. Upon
the receipt of any necessary or proper instruments of termination, satisfaction
or release prepared by the Issuer, the Collateral Agent shall execute, deliver
or acknowledge such instruments or releases to evidence the release of any
Collateral permitted to be released pursuant to this Agreement. The Pledgors
agree to pay all reasonable and documented out-of-pocket expenses incurred by
the Collateral Agent (and its representatives and counsel) in connection with
the execution and delivery of such release documents or instruments.

SECTION 5.16. Additional Subsidiaries. Upon execution and delivery by any
Subsidiary that is required or permitted to become a party hereto by
Section 4.11 of the Notes Indenture or by any Other Second Lien Agreement of an
instrument substantially in the form of Exhibit I hereto (or another instrument
reasonably satisfactory to the Collateral Agent and the Issuer), such subsidiary
shall become a Subsidiary Guarantor hereunder with the same force and effect as
if originally named as a Subsidiary Guarantor herein. The execution and delivery
of any such instrument shall not require the consent of any other party to this
Agreement. The rights and obligations of each party to this Agreement shall
remain in full force and effect notwithstanding the addition of any new party to
this Agreement.

SECTION 5.17. General Authority of the Collateral Agent.

(a) By acceptance of the benefits of this Agreement and any other Security
Documents, each Secured Party (whether or not a signatory hereto) shall be
deemed irrevocably (i) to consent to the appointment of the Collateral Agent as
its agent hereunder and under such other Security Documents, (ii) to confirm
that the Collateral Agent shall have the authority to act as the exclusive agent
of such Secured Party for the enforcement of any provision of this Agreement and
such other Security Documents against any Pledgor, the exercise of remedies
hereunder or thereunder and the giving or withholding of any consent or approval
hereunder thereunder relating to any Collateral or any Pledgor’s obligations
with respect thereto, (iii) to agree that it shall not take any action to
enforce any provisions of this Agreement or any other Security Document against
any Pledgor, to exercise any remedy hereunder or thereunder or to give any
consents or approvals hereunder or thereunder except as expressly provided in
this Agreement or any other Security Document and (iv) to agree to be bound by
the terms of this Agreement, the First Lien/Second Lien Intercreditor Agreement
and any other Security Documents and any applicable Intercreditor Agreement then
in effect.

 

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(b) Each Pledgor acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Collateral Agent and the Secured Parties, be governed by the Notes Indenture,
any Other Second Lien Agreement and such other agreements with respect thereto
as may exist from time to time among them (including any applicable
Intercreditor Agreement then in effect, including the First Lien/Second Lien
Intercreditor Agreement), but, as between the Collateral Agent and the Pledgors,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the applicable Secured Parties with full and valid authority so to act or
refrain from acting, and no Pledgor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority. The Collateral Agent
shall only be permitted, subject to the terms of the First Lien/Second Lien
Intercreditor Agreement, applicable law and the next sentence, to exercise
remedies and sell the Collateral at the direction of the holders of a majority
in the aggregate principal amount of the Notes and Other Second Lien
Obligations. The Collateral Agent and the Trustee, as applicable, shall be
authorized to take, but shall not be required to take, such actions with regard
to a default or an Event of Default which the Collateral Agent and the Trustee,
in good faith, believe to be reasonably required to promote and protect the
interests of the holders of the Notes and the holders of Other Second Lien
Obligations and to preserve the value of the Collateral. Any action taken or not
taken without the vote of any holder of the Notes or holder of Other Second Lien
Obligations pursuant to and in accordance with the remedies section of the
Security Documents and the Notes Indenture shall nevertheless be binding on such
party.

SECTION 5.18. Subject to Intercreditor Agreements; Conflicts. Notwithstanding
anything herein to the contrary, (i) the Liens and security interests granted to
the Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and (ii) the exercise of any right or remedy by the Collateral Agent
hereunder or the application of proceeds (including insurance and condemnation
proceeds) of any Collateral, in each case, are subject to the limitations and
provisions of the First Lien/Second Lien Intercreditor Agreement and any other
applicable Intercreditor Agreement to the extent provided therein. In the event
of any conflict between the terms of such applicable Intercreditor Agreement and
the terms of this Agreement, the terms of the First Lien/Second Lien
Intercreditor Agreement or such other applicable Intercreditor Agreement shall
govern.

SECTION 5.19. Other Second Lien Obligations. On or after Issue Date and so long
as not prohibited by the Notes Indenture or any Other Second Lien Agreement then
in effect, the Issuer may from time to time designate obligations in respect of
indebtedness to be secured (except with respect to any applicable Specified
Excluded Collateral) on a pari passu basis with the then-outstanding Secured
Obligations as Other Second Lien Obligations hereunder by delivering to the
Collateral Agent and each Authorized Representative (a) a certificate of the
Issuer (i) identifying the obligations so

 

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designated and the initial aggregate principal amount or face amount thereof,
(ii) stating that such obligations are designated as Other Second Lien
Obligations for purposes hereof, (iii) representing that such designation of
such obligations as Other Second Lien Obligations is not prohibited by the Note
Indenture or any Other Second Lien Agreement then in effect, and (iv) specifying
the name and address of the Authorized Representative for such obligations,
(b) an Other Second Lien Secured Party Consent executed by the Authorized
Representative for such obligations and the Issuer, (c) a joinder to the First
Lien/Second Lien Intercreditor Agreement executed by the Authorized
Representative for such obligations in the form and to the extent required
thereby and (d) a pari passu Intercreditor Agreement executed by the Authorized
Representative for such obligations (or, if a pari passu Intercreditor Agreement
is then in effect, a joinder thereto to the extent requested thereby). Upon the
satisfaction of all conditions set forth in the preceding sentence, (x) the
Collateral Agent shall act as collateral agent under and subject to the terms of
the Security Documents for the benefit of all Secured Parties, including without
limitation, any Secured Parties that hold any such Other Second Lien Obligations
(except with respect to any applicable Specified Excluded Collateral), and shall
execute and deliver the acknowledgement at the end of the Other Second Lien
Secured Party Consent, (y) each Authorized Representative agrees to the
appointment, and acceptance of the appointment, of the Collateral Agent or its
sub-agent, as applicable, as collateral agent for the holders of such Other
Second Lien Obligations as set forth in each Other Second Lien Secured Party
Consent and agrees, on behalf of itself and each Secured Party it represents, to
be bound by this Agreement, the First Lien/Second Lien Intercreditor Agreement
and each other applicable Intercreditor Agreement and (z) to the extent provided
thereunder, such Other Second Lien Obligations shall automatically be deemed to
be “Second Lien Obligations” (or analogous term) in the Existing First
Lien/Second Lien ICA and each other applicable Intercreditor Agreement. The
rights and obligations of each party to this Agreement shall remain in full
force and effect notwithstanding the addition of any new Secured Obligations to
this Agreement.

SECTION 5.20. Person Serving as Collateral Agent. On the Issue Date, the
Collateral Agent hereunder is the Trustee. Written notice of resignation by the
Trustee under the Notes Indenture pursuant to the Notes Indenture shall also
constitute notice of resignation as the Collateral Agent under this Agreement.
Upon the acceptance of any appointment as the Trustee under the Notes Indenture
by a successor, that successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Collateral Agent
pursuant hereto. Immediately upon the occurrence of the Termination Date, if any
other Series of Secured Obligations is then outstanding, the Authorized
Representative of such Series (or, if more than one such Series is outstanding,
the applicable Authorized Representative determined pursuant to the terms of
(and as defined in) the applicable Intercreditor Agreement or designated by all
then extant Authorized Representatives) shall be deemed the Collateral Agent for
all purposes under this Agreement. The Collateral Agent immediately prior to any
change in Collateral Agent pursuant to this Section 5.20 (the “Prior Collateral
Agent”) shall be deemed to have assigned all of its rights, powers and duties
hereunder to the successor Collateral Agent determined in accordance with this
Section 5.20 (the “Successor Collateral Agent”) and the Successor Collateral
Agent shall be deemed to have accepted, assumed and succeeded to such rights,
powers and duties. The Prior Collateral Agent shall cooperate with the

 

40

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

Pledgors and such Successor Collateral Agent to ensure that all actions are
taken that are necessary or reasonably requested by the Successor Collateral
Agent to vest in such Successor Collateral Agent the rights granted to the Prior
Collateral Agent hereunder with respect to the Collateral, including (a) the
filing of amended financing statements in the appropriate filing offices
(provided that the Prior Collateral Agent shall not be required to make any such
filings), (b) subject to the First Lien/Second Lien Intercreditor Agreement and
any other applicable Intercreditor Agreement, to the extent that the Prior
Collateral Agent holds, or a third party (other than the Applicable Collateral
Agent, if the Applicable Collateral Agent is not the Collateral Agent) holds on
its behalf, physical possession of or “control” (as defined in the New York UCC
or the Uniform Commercial Code of any other applicable jurisdiction) (or any
similar concept under foreign law) over Collateral pursuant to this Agreement or
any other Security Document, the delivery to the Successor Collateral Agent of
the Collateral in its possession or control together with any necessary
endorsements to the extent required by this Agreement, and (c) the execution and
delivery of any further documents, financing statements or agreements and the
taking of all such further action that may be required under any applicable law,
or that the Successor Collateral Agent may reasonably request, all without
recourse to, or representation or warranty by, the Collateral Agent, and at the
sole cost and expense of the Pledgors.

SECTION 5.21. Rights and Privileges of Collateral Agent. For the avoidance of
doubt, in addition to any rights, privileges, protections, immunities, benefits
and indemnities provided to it under this Agreement (including those
incorporated pursuant to this paragraph), the Collateral Agent is also entitled
to the rights, privileges, protections, immunities, benefits and indemnities
provided to the Trustee under the Notes Indenture. No provision of this
Agreement shall require the Collateral Agent to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers.

[Signature Pages Follow]

 

41

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

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.

 

PRIME SECURITY SERVICES BORROWER, LLC

By:  

/s/ Jeffrey Likosar

  Name: Jeffrey Likosar   Title: Executive Vice President, Chief Financial
Officer and Treasurer

PRIME FINANCE INC.

ASG HOLDINGS LLC

ALARM SECURITY GROUP LLC

ASG GOVERNMENT SERVICES LLC

SECURITY MONITORING SERVICES, INC.

THE ADT SECURITY CORPORATION ADT LLC

ADVANCED CABLING SYSTEMS, LLC

FIRE & SECURITY HOLDINGS, LLC

ADT COMMERCIAL LLC

RED HAWK FIRE & SECURITY (NY), LLC

RED HAWK FIRE & SECURITY (CA), LLC

RED HAWK SECURITY SYSTEMS, LLC

TELE-TECTOR OF MARYLAND, INC.

FIRE SYSTEMS INTERNATIONAL, INC.

PRATT LANDRY ASSOCIATES, INC.

CENTURY SPRINKLER HOLDINGS CORPORATION

CHAIN ELECTRIC HOLDINGS, INC.

RED HAWK FIRE & SECURITY (CHES), LLC

ATCI COMMUNICATIONS, INC.

MSA SYSTEMS INTEGRATION, INC.

AA/ACME LOCKSMITHS, INC.

ARONSON SECURITY GROUP, INC.

DATASHIELD, LLC

I-VIEW NOW LLC

By:

 

/s/ Jeffrey Likosar

  Name: Jeffrey Likosar   Title: Executive Vice President and Chief Financial
Officer

[Signature Page to Collateral Agreement (Second Lien)]

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent

By:  

/s/ Stefan Victory

  Name: Stefan Victory   Title:   Vice President

[Signature Page to Collateral Agreement (Second Lien)]

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Exhibit I to the

Collateral Agreement (Second Lien)

Form of Supplement to the Collateral Agreement (Second Lien)

SUPPLEMENT NO. [    ] (this “Supplement”), dated as of [    ], 20[    ][    ],
to the Collateral Agreement (Second Lien) dated as of January 28, 2020 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Collateral Agreement”), among PRIME SECURITY SERVICES BORROWER, LLC (the
“Issuer”), PRIME FINANCE INC. (the “Co-Issuer”), each Subsidiary of the Issuer
from time to time party thereto (each, a “Subsidiary Guarantor”) and WELLS FARGO
BANK, NATIONAL ASSOCIATION, as collateral agent (together with its successors
and assigns in such capacity, the “Collateral Agent”) for the Secured Parties
(as defined therein).

A. Reference is made to the Indenture, dated as of January 28, 2020 (as amended,
restated, supplemented or otherwise modified from time to time, the “Notes
Indenture”), among the Issuer, the Co-Issuer and Wells Fargo Bank, National
Association, as trustee (in such capacity, the “Trustee”).

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Notes Indenture or the Collateral
Agreement, as applicable.

C. The Pledgors have entered into the Collateral Agreement pursuant to the
requirements set forth in Section 4.11 of the Notes Indenture. Section 5.16 of
the Collateral Agreement provides that additional Subsidiaries of the Issuer may
become Subsidiary Guarantors and Pledgors under the Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in
accordance with the requirements of the Notes Indenture to become a Subsidiary
Guarantor and a Pledgor under the Collateral Agreement.

Accordingly, the New Subsidiary agrees as follows:

SECTION 1. In accordance with Section 5.16 of the Collateral Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Guarantor and a Pledgor
under the Collateral Agreement with the same force and effect as if originally
named therein as a Subsidiary Guarantor and a Pledgor and the New Subsidiary
hereby (a) agrees to all the terms and provisions of the Collateral Agreement
applicable to it as a Subsidiary Guarantor and a Pledgor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Pledgor thereunder are true and correct in all material respects on and as
of the date hereof. In furtherance of the foregoing, the New Subsidiary, as
security for the payment and performance in full of the Secured Obligations,
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Subsidiary’s right, title and
interest in and to the Collateral (as defined in the Collateral Agreement) of
the New Subsidiary. Each reference to a “Subsidiary Guarantor”

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

or a “Pledgor” in the Collateral Agreement shall be deemed to include the New
Subsidiary (except as otherwise provided in clause (ii) of the definition of
Pledgor to the extent applicable). The Collateral Agreement is hereby
incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
(i) the effects of bankruptcy, insolvency, fraudulent conveyance or other
similar laws affecting creditors’ rights generally, (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and (iii) implied covenants of good faith and fair dealing.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received a counterpart of this Supplement that bears the signature of the
New Subsidiary. Delivery of an executed signature page to this Supplement by
facsimile or other electronic transmission shall be as effective as delivery of
a manually signed counterpart of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that, as of the
date hereof, (a) set forth on Schedule I attached hereto is a true and correct
schedule of any and all of (and, with respect to any Pledged Stock issued by an
issuer that is not a subsidiary of the Issuer, correctly sets forth, to the
knowledge of the New Subsidiary) the percentage of the issued and outstanding
units of each class of the Equity Interests of the issuer thereof represented by
the Pledged Stock and includes (i) all Equity Interests pledged hereunder and
(ii) the debt obligations and promissory notes or instruments evidencing
Indebtedness, in each case under this clause (ii) pledged hereunder and in an
aggregate principal amount in excess of $10,000,000 now owned by the New
Subsidiary (other than any Excluded Property), (b) set forth on Schedule II
attached hereto is a list of any and all Intellectual Property now owned by the
New Subsidiary consisting of Patents and Trademarks applied for or registered
with the United States Patent and Trademark Office and Copyrights registered
with the United States Copyright Office, (c) set forth on Schedule III hereto is
a list of all Commercial Tort Claims in excess of $10,000,000 held by the New
Subsidiary, and (d) set forth under its signature hereto is the true and correct
legal name of the New Subsidiary, its jurisdiction of organization and the
location of its chief executive office.

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

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF
CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.

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

SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 8. All communications and notices hereunder shall (except as otherwise
expressly permitted by the Collateral Agreement) be in writing and given as
provided in Section 5.01 of the Collateral Agreement.

SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable and documented out-of-pocket expenses in connection with this
Supplement, including the reasonable and documented fees, other charges and
disbursements of counsel for the Collateral Agent.

IN WITNESS WHEREOF, the New Subsidiary has duly executed this Supplement to the
Collateral Agreement as of the day and year first above written.

[Signature Page Follows]

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

[NAME OF NEW SUBSIDIARY] BY:       Name:   Title Address: Legal Name:
Jurisdiction of Formation:

[Signature Page to Supplement to Collateral Agreement (Second Lien)]

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

Schedule I to

Supplement No. __ to the

Collateral Agreement (Second Lien)

Pledged Stock; Pledged Debt

A. Pledged Stock

 

Issuer

  

Record

Owner

  

Certificate

No.

  

Number

and Class

  

Percentage

of Equity

Interest

Owned

  

Percent (of

Owned

Equity

Interests)

Pledged

                                            

B. Pledged Debt

 

Payee

  

Payor

  

Principal

  

Date of

Issuance

  

Maturity Date

                                   

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

Schedule II to

Supplement No. __ to the

Collateral Agreement (Second Lien)

Intellectual Property

A. U.S. Federally Issued or Applied for Patents Owned by [New Subsidiary]

U.S. Patent Registrations

 

Title

  

Patent No.

  

Issue Date

                 

U.S. Patent Applications

 

Title

  

Application No.

  

Filing Date

                 

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

B. U.S. Federally Registered Copyrights Owned by [New Subsidiary]

U.S. Copyright Registrations

 

Title

  

Registration No.

  

Registration Date

                 

U.S. Copyright Applications

 

Title

  

Registration No.

  

Registration Date

                 

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

C. U.S. Federally Registered or Applied for Trademarks Owned by [New Subsidiary]

U.S. Trademark Registrations

 

Mark

  

Registration No.

  

Registration Date

           

U.S. Trademark Applications

 

Mark

  

Application No.

  

Filing Date

           

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

Schedule III to

Supplement No. __ to the

Collateral Agreement (Second Lien)

Commercial Tort Claims

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

Exhibit II to the

Collateral Agreement (Second Lien)

AS SET FORTH MORE FULLY IN SECTION 5.18 OF THE COLLATERAL AGREEMENT, THIS NOTICE
OF GRANT OF SECURITY INTEREST (SECOND LIEN) IS SUBJECT TO THE PROVISIONS OF
(I) THE FIRST LIEN/SECOND LIEN INTERCREDITOR AGREEMENT AND (II) ANY OTHER
“INTERCREDITOR AGREEMENT” AS DEFINED THEREIN

Form of Notice of Grant of Security Interest (Second Lien) in Intellectual
Property

[FORM OF] NOTICE OF GRANT OF SECURITY INTEREST (SECOND LIEN) IN [COPYRIGHTS]
[PATENTS] [TRADEMARKS], dated as of [DATE] (this “Agreement”), made by [•], a
[•] [•] (the “Pledgor”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Collateral Agent (as defined below).

Reference is made to the Collateral Agreement (Second Lien), dated as of
January 28, 2020 (as amended, restated, supplemented or otherwise modified from
time to time, the “Collateral Agreement”), among Prime Security Services
Borrower, LLC (the “Issuer”), each subsidiary of the Issuer identified therein
and Wells Fargo Bank, National Association, as collateral agent (together with
its successors and assigns in such capacity, the “Collateral Agent”) for the
Secured Parties (as defined therein). The parties hereto agree as follows:

SECTION 1. Terms. Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings specified in the Collateral Agreement. The
rules of construction specified in Section 1.01(b) of the Collateral Agreement
also apply to this Agreement.

SECTION 2. Grant of Security Interest. As security for the payment and
performance, as applicable, in full of the Secured Obligations, the Pledgor
pursuant to the Collateral Agreement did, and hereby does, grant, assign and
pledge to the Collateral Agent, its successors and permitted assigns, for the
benefit of the Secured Parties, a security interest in all of such Pledgor’s
right, title and interest in, to and under any and all of the following assets
now owned or at any time hereafter acquired by such Pledgor or in which such
Pledgor now has or at any time in the future may acquire any right, title or
interest (collectively, but excluding any Excluded Property, the “IP
Collateral”):

[all Patents of the United States of America of such Pledgor, including those
listed on Schedule I;]

[all Copyrights of the United States of America of such Pledgor, including those
listed on Schedule I;]

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[all Trademarks of the United States of America of such Pledgor, including those
listed on Schedule I;]

[provided, however, that the foregoing pledge, assignment and grant of security
interest will not cover any “intent-to-use” applications for trademark or
service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15
U.S.C. §1051, unless and until an Amendment to Allege Use or a Statement of Use
under Section 1(c) or 1(d) of the Lanham Act has been filed, to the extent, if
any, that any assignment of an “intent-to-use” application prior to such filing
would violate the Lanham Act.]

SECTION 3. Collateral Agreement. The security interests granted to the
Collateral Agent herein are granted in furtherance, and not in limitation of,
the security interests granted to the Collateral Agent pursuant to the
Collateral Agreement. Each Pledgor hereby acknowledges and affirms that the
rights and remedies of the Collateral Agent with respect to the IP Collateral
are more fully set forth in the Collateral Agreement, the terms and provisions
of which are hereby incorporated herein by reference as if fully set forth
herein. In the event of any conflict between the terms of this Agreement and the
Collateral Agreement, the terms of the Collateral Agreement shall govern.

SECTION 4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract. Delivery of an executed
counterpart to this Agreement by facsimile or other electronic transmission
shall be as effective as delivery of a manually signed original.

SECTION 5. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF
CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.

[Signature Pages Follow]

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

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

[Name of Pledgor] By:       Name:   Title:

[Signature Page to Notice of Grant of Security Interest in
[Patents][Trademarks][Copyrights] (Second Lien)]

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

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Collateral Agent

By:       Name:   Title:

[Signature Page to Notice of Grant of Security Interest in
[Patents][Trademarks][Copyrights] (Second Lien)]

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

Schedule I

to Notice of Grant of Security Interest (Second Lien) in Patents

Patents Owned by [Name of Pledgor]

U.S. Patent Registrations

 

Title

  

Patent No.

  

Issue Date

           

U.S. Patent Applications

 

Title

  

Application No.

  

Filing Date

           

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

Schedule I

to Notice of Grant of Security Interest (Second Lien) in Copyrights

Copyrights Owned by [Name of Pledgor]

U.S. Copyright Registrations

 

Title

  

Registration No.

  

Registration Date

           

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

Schedule I

to Notice of Grant of Security Interest (Second Lien) in Trademarks

Trademarks Owned by [Name of Pledgor]

U.S. Trademark Registrations

 

Mark

  

Registration No.

  

Registration Date

           

U.S. Trademark Applications

 

Mark

  

Application No.

  

Filing Date

           

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

Exhibit III to the

Collateral Agreement (Second Lien)

Form of Other Second Lien Secured Party Consent

OTHER SECOND LIEN SECURED PARTY CONSENT

[Name of Authorized Representative]

[Address of Authorized Representative]

[Date]

[Name of Collateral Agent]

[Address of Collateral Agent]

The undersigned is the Authorized Representative for persons wishing to become
Secured Parties (the “New Secured Parties”) under the Collateral Agreement
(Second Lien), dated as of January 28, 2020 (as amended, restated, supplemented
or otherwise modified from time to time, the “Collateral Agreement”), among
PRIME SECURITY SERVICES BORROWER, LLC (the “Issuer”), PRIME FINANCE INC. (the
“Co-Issuer”), each Subsidiary Guarantor and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as collateral agent (together with its successors and assigns in
such capacity, the “Collateral Agent”) for the Secured Parties (as defined
therein). Capitalized terms used but not otherwise defined in this Other Second
Lien Secured Party Consent have the meanings set forth in the Collateral
Agreement.

In consideration of the foregoing, the undersigned hereby:

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

(ii) acknowledges that it has received a copy of the Collateral Agreement, the
First Lien/Second Lien Intercreditor Agreement and each other applicable
Intercreditor Agreement;

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

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

(iv) accepts and acknowledges the terms of the Collateral Agreement and each
other Security Document applicable to such New Secured Parties, the First
Lien/Second Lien Intercreditor Agreement and each other Intercreditor Agreement
applicable to it and the New Secured Parties and agrees to serve as Authorized
Representative for the New Secured Parties with respect to the New Secured
Obligations and agrees on its own behalf and on behalf of the New Secured
Parties to be bound by the terms thereof applicable to holders of Other Second
Lien Obligations, with all the rights and obligations of a Secured Party
thereunder and bound by all the provisions thereof as fully as if it had been a
Secured Party on the date of the Collateral Agreement, the First Lien/Second
Lien Intercreditor Agreement and each other Intercreditor Agreement applicable
to it and agrees that its address for receiving notices pursuant to the Security
Documents shall be as follows:

[Address].

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

THIS OTHER SECOND LIEN SECURED PARTY CONSENT AND ANY CLAIMS, CONTROVERSY,
DISPUTE OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED
UPON, ARISING OUT OF OR RELATING TO THIS OTHER SECOND LIEN SECURED PARTY CONSENT
(OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE
OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW.

[Signature pages follow]

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

IN WITNESS WHEREOF, the undersigned has caused this Other Second Lien Secured
Party Consent to be duly executed by its authorized officer as of the date first
set forth above.

 

[NAME OF AUTHORIZED REPRESENTATIVE]

By:       Name:   Title:

[Signature Page to Other Second Lien Secured Party Consent]

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

Acknowledged and Agreed:

WELLS FARGO BANK, NATIONAL ASSOCIATION.,

as Collateral Agent

By:       Name:   Title:

[Signature Page to Other Second Lien Secured Party Consent]

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

Acknowledged and Agreed: PRIME SECURITY SERVICES BORROWER, LLC, for itself and
on behalf of the other Pledgors

By:       Name:   Title:

[Signature Page to Other Second Lien Secured Party Consent]