Exhibit 10.2

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (this “Agreement”), dated as of March 21, 2008 among
Grantors listed on the signature pages hereof and those additional entities that
hereafter become parties hereto by executing the form of Supplement attached
hereto as Annex 1 (collectively, jointly and severally, the “Grantors” and each,
individually, a “Grantor”), and WELLS FARGO FOOTHILL, LLC, in its capacity as
agent for the Lender Group and the Bank Product Providers (together with its
successors, the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time,
including all schedules thereto, the “Credit Agreement”) among UTStarcom
Personal Communications LLC, as borrower (“Borrower”), the lenders party thereto
as “Lenders” (“Lenders”), and Agent, the Lender Group has agreed to make certain
financial accommodations available to Borrower from time to time pursuant to the
terms and conditions thereof, and

 

WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group
and the Bank Product Providers in connection with the transactions contemplated
by the Credit Agreement and this Agreement, and

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents and to induce the Lender Group to make financial
accommodations to Borrower as provided for in the Credit Agreement, Grantors
have agreed to grant a continuing security interest in and to the Collateral in
order to secure the prompt and complete payment, observance and performance of,
among other things, the Secured Obligations, and

 

NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:

 

1.             Defined Terms. All capitalized terms used herein (including in
the preamble and recitals hereof) without definition shall have the meanings
ascribed thereto in the Credit Agreement.  Any terms used in this Agreement that
are defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein or in the Credit Agreement; provided, however,
that to the extent that the Code is used to define any term herein and if such
term is defined differently in different Articles of the Code, the definition of
such term contained in Article 9 of the Code shall govern. In addition to those
terms defined elsewhere in this Agreement, as used in this Agreement, the
following terms shall have the following meanings:

 

(a)           “Account” means an account (as that term is defined in Article 9
of the Code).

 

(b)           “Account Debtor” means an account debtor (as that term is defined
in the Code).

 

(c)           “Agent” has the meaning specified therefore in the preamble to
this Agreement.

 

(d)           “Agent’s Lien” has the meaning specified therefor in the Credit
Agreement.

 

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(e)           “Bank Product Obligations” has the meaning specified therefor in
the Credit Agreement.

 

(f)            “Bank Product Provider” has the meaning specified therefor in the
Credit Agreement.

 

(g)           “Books” means books and records (including each Grantor’s Records
indicating, summarizing, or evidencing such Grantor’s assets (including the
Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s
business operations or financial condition, and each Grantor’s goods or General
Intangibles related to such information).

 

(h)           “Borrower” has the meaning specified therefor in the recitals to
this Agreement.

 

(i)            “Cash Equivalents” has the meaning specified therefor in the
Credit Agreement.

 

(j)            “Chattel Paper” means chattel paper (as that term is defined in
the Code) and includes tangible chattel paper and electronic chattel paper.

 

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

 

(l)            “Collateral” has the meaning specified therefor in Section 2.

 

(m)          “Collections” has the meaning specified therefor in the Credit
Agreement.

 

(n)           “Commercial Tort Claims” means commercial tort claims (as that
term is defined in the Code), and includes those commercial tort claims listed
on Schedule 1 attached hereto.

 

(o)           “Controlled Account” has the meaning specified therefor in
Section 6(l).

 

(p)           “Controlled Account Agreements” means those certain cash
management agreements, in form and substance reasonably satisfactory to Agent,
each of which is among Borrower or one of its Subsidiaries, Agent, and one of
the Controlled Account Banks.

 

(q)           “Controlled Account Bank” has the meaning specified therefor in
Section 6(l).

 

(r)            “Copyrights” means any and all copyrights and copyright
registrations, including, (i) the copyright registrations and recordings thereof
and all applications in connection therewith listed on Schedule 2 attached
hereto and made a part hereof, (ii) all reissues, continuations, extensions or
renewals thereof, (iii) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments
for past or future infringements or dilutions thereof, (iv) the right to sue for
past, present and future infringements and dilutions thereof, (v) the goodwill
of each Grantor’s business symbolized by the foregoing or connected therewith,
and (vi) all of each Grantor’s rights corresponding thereto throughout the
world.

 

(s)           “Copyright Security Agreement” means each Copyright Security
Agreement among Grantors, or any of them, and Agent, for the benefit of the
Lender Group and the Bank Product Providers, in substantially the form of
Exhibit A attached hereto, pursuant to which Grantors have granted to Agent, for
the benefit of the Lender Group and the Bank Product Providers, a security
interest in all their respective Copyrights.

 

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(t)            “Credit Agreement” has the meaning specified therefor in the
recitals to this Agreement.

 

(u)           “Deposit Account” means a deposit account (as that term is defined
in the Code).

 

(v)           “Equipment” means equipment (as that term is defined in the Code).

 

(w)          “Event of Default” has the meaning specified therefor in the Credit
Agreement.

 

(x)            “General Intangibles” means general intangibles (as that term is
defined in the Code) and includes payment intangibles, contract rights, rights
to payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill (including the goodwill associated with any
Trademark, Patent, or Copyright), Patents, Trademarks, Copyrights, URLs and
domain names, industrial designs, other industrial or Intellectual Property or
rights therein or applications therefor, whether under license or otherwise,
programs, programming materials, blueprints, drawings, purchase orders, customer
lists, monies due or recoverable from pension funds, route lists, rights to
payment and other rights under any royalty or licensing agreements, including
Intellectual Property Licenses, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, pension plan refunds, pension plan refund claims, insurance premium
rebates, tax refunds, and tax refund claims, interests in a partnership or
limited liability company which do not constitute a security under Article 8 of
the Code, and any other personal property other than Commercial Tort Claims,
money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related
Property, Negotiable Collateral, and oil, gas, or other minerals before
extraction.

 

(y)           “Grantor” and “Grantors” have the respective meanings specified
therefor in the recitals to this Agreement.

 

(z)            “Guaranty” has the meaning specified therefor in the Credit
Agreement.

 

(aa)         “Insolvency Proceeding” has the meaning specified therefor in the
Credit Agreement.

 

(bb)         “Intellectual Property” means any and all Intellectual Property
Licenses, Patents, Copyrights, Trademarks, the goodwill associated with such
Trademarks, trade secrets and customer lists.

 

(cc)         “Intellectual Property Licenses” means rights under or interests in
any patent, trademark, copyright or other intellectual property, including
software license agreements with any other party, whether the applicable Grantor
is a licensee or licensor under any such license agreement (but excluding any
off-the-shelf software license agreement), including the license agreements
listed on Schedule 3 attached hereto and made a part hereof, and the right to
use the foregoing in connection with the enforcement of the Lender Group’s
rights under the Loan Documents, including the right to prepare for sale and
sell any and all Inventory and Equipment now or hereafter owned by any Grantor
and now or hereafter covered by such licenses.

 

(dd)         “Inventory” means inventory (as that term is defined in the Code).

 

(ee)         “Investment Related Property” means (i) any and all investment
property (as that term is defined in the Code), and (ii) any and all of the
following (regardless of whether classified as investment property under the
Code):  all Pledged Interests, Pledged Operating Agreements, and Pledged
Partnership Agreements.

 

(ff)           “Lender Group” has the meaning specified therefor in the Credit
Agreement.

 

(gg)         “Loan Document” has the meaning specified therefor in the Credit
Agreement.

 

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(hh)         “Loan Party” has the meaning specified therefor in the Credit
Agreement.

 

(ii)           “Negotiable Collateral” means letters of credit, letter-of-credit
rights, instruments, promissory notes, drafts and documents (as that term is
defined in the Code).

 

(jj)           “Obligations” has the meaning specified therefor in the Credit
Agreement.

 

(kk)         “Patents” means patents and patent applications, including, (i) the
patents and patent applications listed on Schedule 4 attached hereto and made a
part hereof, (ii) all renewals thereof, (iii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past or future infringements or dilutions thereof,
(iv) the right to sue for past, present and future infringements and dilutions
thereof, and (v) all of each Grantor’s rights corresponding thereto throughout
the world.

 

(ll)           “Patent Security Agreement” means each Patent Security Agreement
among Grantors, or any of them, and Agent, for the benefit of the Lender Group
and the Bank Product Providers, in substantially the form of Exhibit B attached
hereto, pursuant to which Grantors have granted to Agent, for the benefit of the
Lender Group and the Bank Product Providers, a security interest in all their
respective Patents.

 

(mm)       “Permitted Liens” has the meaning specified therefor in the Credit
Agreement.

 

(nn)         “Person” has the meaning specified therefor in the Credit
Agreement.

 

(oo)         “Pledged Companies” means, each Person listed on Schedule 5 hereto
as a “Pledged Company”, together with each other Person, all or a portion of
whose Stock, is acquired or otherwise owned by a Grantor after the Closing Date.

 

(pp)         “Pledged Interests” means all of each Grantor’s right, title and
interest in and to all of the Stock now or hereafter owned by such Grantor,
regardless of class or designation, including, in each of the Pledged Companies,
and all substitutions therefor and replacements thereof, all proceeds thereof
and all rights relating thereto, also including any certificates representing
the Stock, the right to receive any certificates representing any of the Stock,
all warrants, options, share appreciation rights and other rights, contractual
or otherwise, in respect thereof and the right to receive all dividends,
distributions of income, profits, surplus, or other compensation by way of
income or liquidating distributions, in cash or in kind, and all cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing.

 

(qq)         “Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit C to this Agreement.

 

(rr)           “Pledged Operating Agreements” means all of each Grantor’s
rights, powers, and remedies under the limited liability company operating
agreements of each of the Pledged Companies that are limited liability
companies.

 

(ss)         “Pledged Partnership Agreements” means all of each Grantor’s
rights, powers, and remedies under the partnership agreements of each of the
Pledged Companies that are partnerships.

 

(tt)           “Proceeds” has the meaning specified therefor in Section 2.

 

(uu)         “Real Property” means any estates or interests in real property now
owned or hereafter acquired by any Grantor or any Subsidiary of any Grantor and
the improvements thereto.

 

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(vv)         “Records” means information that is inscribed on a tangible medium
or which is stored in an electronic or other medium and is retrievable in
perceivable form.

 

(ww)       “Secured Obligations” means each and all of the following: (a) all of
the present and future obligations of Grantors arising from this Agreement, the
Credit Agreement, or the other Loan Documents (including any Guaranty), (b) all
Bank Product Obligations, and (c) all Obligations of Borrower, including, in the
case of each of clauses (a), (b) and (c),  reasonable attorneys fees and
expenses and any interest, fees, or expenses that accrue after the filing of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any Insolvency Proceeding.

 

(xx)          “Securities Account” means a securities account (as that term is
defined in the Code).

 

(yy)         “Security Interest” has the meaning specified therefor in
Section 2.

 

(zz)          “Stock” has the meaning specified therefor in the Credit Agreement

 

(aaa)       “Supporting Obligations” means supporting obligations (as such term
is defined in the Code) and includes letters of credit and guaranties issued in
support of Accounts, Chattel Paper, documents, General Intangibles, instruments
or Investment Related Property.

 

(bbb)      “Trademarks” means any and all trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and
service mark applications, including (i) the trade names, registered trademarks,
trademark applications, registered service marks and service mark applications
listed on Schedule 6 attached hereto and made a part hereof, (ii) all renewals
thereof, (iii) all income, royalties, damages and payments now and hereafter due
or payable under and with respect thereto, including payments under all licenses
entered into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (iv) the right to sue for past, present and
future infringements and dilutions thereof, (v) the goodwill of each Grantor’s
business symbolized by the foregoing or connected therewith, and (vi) all of
each Grantor’s rights corresponding thereto throughout the world.

 

(ccc)       “Trademark Security Agreement” means each Trademark Security
Agreement among Grantors, or any of them, and Agent, for the benefit of the
Lender Group and the Bank Product Providers, in substantially the form of
Exhibit D attached hereto, pursuant to which Grantors have granted to Agent, for
the benefit of the Lender Group and the Bank Product Providers, a security
interest in all their respective Trademarks.

 

(ddd)      “URL” means “uniform resource locator,” an internet web address.

 

2.             Grant of Security.  Each Grantor hereby unconditionally grants
and pledges to Agent, for the benefit of the Lender Group and the Bank Product
Providers, to secure the Secured Obligations, a continuing security interest
hereinafter referred to as the “Security Interest” in all personal property of
such Grantor whether now owned or hereafter acquired or arising and wherever
located, including such Grantor’s right, title, and interest in and to the
following, whether now owned or hereafter acquired or arising and wherever
located (the “Collateral”):

 

(a)           all of such Grantor’s Accounts;

 

(b)           all of such Grantor’s Books;

 

(c)           all of such Grantor’s Chattel Paper;

 

(d)           all of such Grantor’s interest with respect to any Deposit
Account;

 

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(e)           all of such Grantor’s Equipment and fixtures;

 

(f)            all of such Grantor’s General Intangibles;

 

(g)           all of such Grantor’s Inventory;

 

(h)           all of such Grantor’s Investment Related Property;

 

(i)            all of such Grantor’s Negotiable Collateral;

 

(j)            all of such Grantor’s rights in respect of Supporting
Obligations;

 

(k)           all of such Grantor’s interest with respect to any Commercial Tort
Claims;

 

(l)            all of such Grantor’s money, Cash Equivalents, or other assets of
each such Grantor that now or hereafter come into the possession, custody, or
control of Agent or any other member of the Lender Group;

 

(m)          all of the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance or Commercial Tort
Claims covering or relating to any or all of the foregoing, and any and all
Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, General
Intangibles, Inventory, Investment Related Property, Negotiable Collateral,
Supporting Obligations, money, or other tangible or intangible property
resulting from the sale, lease, license, exchange, collection, or other
disposition of any of the foregoing, the proceeds of any award in condemnation
with respect to any of the foregoing, any rebates or refunds, whether for taxes
or otherwise, and all proceeds of any such proceeds, or any portion thereof or
interest therein, and the proceeds thereof, and all proceeds of any loss of,
damage to, or destruction of the above, whether insured or not insured, and, to
the extent not otherwise included, any indemnity, warranty, or guaranty payable
by reason of loss or damage to, or otherwise with respect to any of the
foregoing (the “Proceeds”).  Without limiting the generality of the foregoing,
the term “Proceeds” includes whatever is receivable or received when Investment
Related Property or proceeds are sold, exchanged, collected, or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guaranty payable to any Grantor or Agent from time
to time with respect to any of the Investment Related Property.

 

Notwithstanding anything contained in this Agreement to the contrary, the term
“Collateral” shall not include: (i) voting Stock of any CFC, solely to the
extent that such Stock represents more than 65% of the outstanding voting Stock
of such CFC; or (ii) any rights or interest in any contract, lease, permit,
license, charter or license agreement covering real or personal property of any
Grantor if under the terms of such contract, lease, permit, license, charter or
license agreement, or applicable law with respect thereto, the grant of a
security interest or lien therein is prohibited as a matter of law or under the
terms of such contract, lease, permit, license, charter or license agreement and
such prohibition has not been waived or the consent of the other party to such
contract, lease, permit, license, charter or license agreement has not been
obtained (provided, that, the foregoing exclusions of this clause (ii) shall in
no way be construed (A) to apply to the extent that any described prohibition is
unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the Code or other
applicable law, (B) to limit, impair, or otherwise affect the Lender Group’s
continuing security interests in and liens upon any rights or interests of any
Grantor in or to (x) monies due or to become due under any described contract,
lease, permit, license, charter or license agreement (including any Accounts),
or (y) any proceeds from the sale, license, lease, or other dispositions of any
such contract, lease, permit, license, charter, license agreement, or Stock, or
(C) apply to the extent that any consent or waiver has been obtained that would
permit the security interest of lien notwithstanding the prohibition).

 

3.             Security for Obligations.  The Security Interest created hereby
secures the payment and performance of the Secured Obligations, whether now
existing or arising hereafter.  Without limiting the

 

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generality of the foregoing, this Agreement secures the payment of all amounts
which constitute part of the Secured Obligations and would be owed by Grantors,
or any of them, to Agent, the Lender Group, the Bank Product Providers or any of
them, but for the fact that they are unenforceable or not allowable due to the
existence of an Insolvency Proceeding involving any Grantor.

 

4.             Grantors Remain Liable.  Anything herein to the contrary
notwithstanding, (a) each of the Grantors shall remain liable under the
contracts and agreements included in the Collateral, including the Pledged
Operating Agreements and the Pledged Partnership Agreements, to perform all of
the duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by Agent or any other member of the
Lender Group of any of the rights hereunder shall not release any Grantor from
any of its duties or obligations under such contracts and agreements included in
the Collateral, and (c) none of the members of the Lender Group shall have any
obligation or liability under such contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any of the members of the
Lender Group be obligated to perform any of the obligations or duties of any
Grantors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.  Until an Event of Default shall occur and be
continuing, except as otherwise provided in this Agreement, the Credit
Agreement, or other Loan Documents, Grantors shall have the right to possession
and enjoyment of the Collateral for the purpose of conducting the ordinary
course of their respective businesses, subject to and upon the terms hereof and
of the Credit Agreement and the other Loan Documents.  Without limiting the
generality of the foregoing, it is the intention of the parties hereto that
record and beneficial ownership of the Pledged Interests, including all voting,
consensual, and dividend rights, shall remain in the applicable Grantor until
the occurrence of an Event of Default and until Agent shall notify the
applicable Grantor of Agent’s exercise of voting, consensual, or dividend rights
with respect to the Pledged Interests pursuant to Section 15 hereof.

 

5.             Representations and Warranties.  Each Grantor hereby represents
and warrants as follows:

 

(a)           The exact legal name of each of the Grantors is set forth on the
signature pages of this Agreement or a written notice provided to Agent pursuant
to Section 6.5 of the Credit Agreement.

 

(b)           Schedule 7 attached hereto sets forth all Real Property owned by
Grantors as of the Closing Date.

 

(c)           As of the Closing Date, no Grantor has any interest in, or title
to, any Copyrights, Intellectual Property Licenses, Patents, or Trademarks
except as set forth on Schedules 2, 3, 4, and 6, respectively, attached hereto. 
This Agreement is effective to create a valid and continuing Lien on such
Copyrights, Intellectual Property Licenses, Patents and Trademarks and, upon
filing of the Copyright Security Agreement with the United States Copyright
Office and filing of the Patent Security Agreement and the Trademark Security
Agreement with the United States Patent and Trademark Office, and the filing of
appropriate financing statements in the jurisdictions listed on Schedule 8
hereto, all action necessary or desirable to protect and perfect the Security
Interest in and to on each Grantor’s Patents, Trademarks, or Copyrights has been
taken and such perfected Security Interest is enforceable as such as against any
and all creditors of and purchasers from any Grantor.  No Grantor has any
interest in any Copyright that is necessary in connection with the operation of
such Grantor’s business, except for those Copyrights identified on Schedule 2
attached hereto which have been registered with the United States Copyright
Office.

 

(d)           This Agreement creates a valid security interest in the Collateral
of each of Grantors, to the extent a security interest therein can be created
under the Code, securing the payment of the Secured Obligations.  Except to the
extent a security interest in the Collateral cannot be perfected by the filing
of a financing statement under the Code,  all filings and other actions
necessary or desirable to perfect and protect such security interest have been
duly taken or will have been taken upon the filing of financing statements
listing each applicable Grantor, as a debtor, and Agent, as secured party, in
the jurisdictions listed next to such Grantor’s name on Schedule 8 attached
hereto.  Upon the making of such filings, Agent shall have a first priority
perfected security interest in the Collateral of each Grantor to the extent such
security interest can be

 

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perfected by the filing of a financing statement.  All action by any Grantor
necessary to protect and perfect such security interest on each item of
Collateral has been duly taken.

 

(e)           Except for the Security Interest created hereby, each Grantor is
and will at all times be the sole holder of record and the legal and beneficial
owner, free and clear of all Liens other than Permitted Liens, of the Pledged
Interests indicated on Schedule 5 as being owned by such Grantor and, when
acquired by such Grantor, any Pledged Interests acquired after the Closing Date;
(ii) all of the Pledged Interests are duly authorized, validly issued, fully
paid and nonassessable and the Pledged Interests constitute or will constitute
the percentage of the issued and outstanding Stock of the Pledged Companies of
such Grantor identified on Schedule 5 hereto as supplemented or modified by any
Pledged Interests Addendum or any Supplement to this Agreement; (ii) such
Grantor has the right and requisite authority to pledge, the Investment Related
Property pledged by such Grantor to Agent as provided herein; (iii) all actions
necessary or desirable to perfect, establish the first priority of, or otherwise
protect, Agent’s Liens in the Investment Related Property, and the proceeds
thereof, have been duly taken, (A) upon the execution and delivery of this
Agreement; (B) upon the taking of possession by Agent of any certificates
constituting the Pledged Interests, to the extent such Pledged Interests are
represented by certificates, together with undated powers endorsed in blank by
the applicable Grantor; (C) upon the filing of financing statements in the
applicable jurisdiction set forth on Schedule 8 attached hereto for such Grantor
with respect to the Pledged Interests of such Grantor that are not represented
by certificates, and (D) with respect to any Securities Accounts, upon the
delivery of Control Agreements with respect thereto; and (iv) each Grantor has
delivered to and deposited with Agent (or, with respect to any Pledged Interests
created or obtained after the Closing Date, will deliver and deposit in
accordance with Sections 6(a) and 8 hereof) all certificates representing the
Pledged Interests owned by such Grantor to the extent such Pledged Interests are
represented by certificates, and undated powers endorsed in blank with respect
to such certificates. None of the Pledged Interests owned or held by such
Grantor has been issued or transferred in violation of any securities
registration, securities disclosure, or similar laws of any jurisdiction to
which such issuance or transfer may be subject.

 

(f)            No consent, approval, authorization, or other order or other
action by, and no notice to or filing with, any Governmental Authority or any
other Person is required (i) for the grant of a Security Interest by such
Grantor in and to the Collateral pursuant to this Agreement or for the
execution, delivery, or performance of this Agreement by such Grantor, or
(ii) for the exercise by Agent of the voting or other rights provided for in
this Agreement with respect to the Investment Related Property or the remedies
in respect of the Collateral pursuant to this Agreement, except as may be
required in connection with such disposition of Investment Related Property by
laws affecting the offering and sale of securities generally.  No material
Intellectual Property License to which such Grantor is a party requires any
consent for such Grantor to grant the security interest granted hereunder in
such Grantor’s right, title or interest in or to any Copyrights, Patents,
Trademarks or material Intellectual Property Licenses.

 

6.             Covenants.  Each Grantor, jointly and severally, covenants and
agrees with Agent that from and after the date of this Agreement and until the
date of termination of this Agreement in accordance with Section 22 hereof:

 

(a)           Possession of Collateral.  In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral,
Investment Related Property, or Chattel Paper, and if and to the extent that
perfection or priority of Agent’s Security Interest is dependent on or enhanced
by possession, and such Collateral has a value in excess of $100,000, the
applicable Grantor, immediately upon the request of Agent, shall execute such
other documents and instruments as shall be requested by Agent or, if
applicable, endorse and deliver physical possession of such Negotiable
Collateral, Investment Related Property, or Chattel Paper to Agent, together
with such undated powers endorsed in blank as shall be requested by Agent;

 

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(b)           Chattel Paper.

 

(i)         Each Grantor shall take all steps reasonably necessary to grant
Agent control of all electronic Chattel Paper having a value in excess of
$100,000 in accordance with the Code and all “transferable records” as that term
is defined in Section 16 of the Uniform Electronic Transaction Act and
Section 201 of the federal Electronic Signatures in Global and National Commerce
Act as in effect in any relevant jurisdiction;

 

(ii)        If any Grantor retains possession of any Chattel Paper or
instruments (which retention of possession shall be subject to the extent
permitted hereby and by the Credit Agreement), promptly upon the request of
Agent, such Chattel Paper and instruments shall be marked with the following
legend: “This writing and the obligations evidenced or secured hereby are
subject to the Security Interest of Wells Fargo Foothill, LLC, as Agent for the
benefit of the Lender Group and the Bank Product Providers”;

 

(c)           Control Agreements.

 

(i)         Except to the extent otherwise permitted by the Credit Agreement,
each Grantor shall obtain an authenticated Control Agreement, from each bank
maintaining a Deposit Account for such Grantor;

 

(ii)        Except to the extent otherwise permitted by the Credit Agreement,
each Grantor shall obtain an authenticated Control Agreement, from each issuer
of uncertificated securities, securities intermediary, or commodities
intermediary issuing or holding any financial assets or commodities to or for
any Grantor;

 

(iii)       Except to the extent otherwise permitted by the Credit Agreement,
each Grantor shall obtain an authenticated Control Agreement with respect to all
of such Grantor’s electronic chattel paper, investment property, and
letter-of-credit rights;

 

(d)           Letter-of-Credit Rights.  Each Grantor that is or becomes the
beneficiary of a letter of credit having a face value in excess of $100,000
shall promptly (and in any event within 5 Business Days after becoming a
beneficiary), notify Agent thereof and, upon the request by Agent, enter into a
tri-party agreement with Agent and the issuer or confirming bank with respect to
letter-of-credit rights assigning such letter-of-credit rights to Agent and
directing all payments thereunder to Agent’s Account, all in form and substance
satisfactory to Agent;

 

(e)           Commercial Tort Claims.  Each Grantor shall promptly (and in any
event within 5 Business Days of receipt thereof), notify Agent in writing upon
incurring or otherwise obtaining a Commercial Tort Claim for an amount in excess
of $100,000 after the date hereof and, upon request of Agent, promptly amend
Schedule 1 to this Agreement to describe such after-acquired Commercial Tort
Claim in a manner that reasonably identifies such Commercial Tort Claim, and
hereby authorizes the filing of additional financing statements or amendments to
existing financing statements describing such Commercial Tort Claims, and agrees
to do such other acts or things deemed necessary or desirable by Agent to give
Agent a first priority, perfected security interest in any such Commercial Tort
Claim;

 

(f)            Government Contracts.  If any Account or Chattel Paper arises out
of a contract or contracts with the United States of America or any department,
agency, or instrumentality thereof pursuant to which more than $100,000 or more
may be paid in any calendar year, Grantors shall promptly (and in any event
within 5 Business Days of the creation thereof) notify Agent thereof in writing
and execute any instruments or take any steps reasonably required by Agent in
order that all moneys due or to become due under such contract or contracts
shall be assigned to Agent, for the benefit of the Lender Group and the Bank
Product Providers, and shall provide written notice thereof under the Assignment
of Claims Act or other applicable law;

 

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(g)           Intellectual Property.

 

(i)         Upon request of Agent, in order to facilitate filings with the
United States Patent and Trademark Office and the United States Copyright
Office, each Grantor shall execute and deliver to Agent one or more Copyright
Security Agreements, Trademark Security Agreements, or Patent Security
Agreements to further evidence Agent’s Lien on such Grantor’s Patents,
Trademarks, or Copyrights, and the General Intangibles of such Grantor relating
thereto or represented thereby;

 

(ii)        Each Grantor shall have the duty, to the extent required or
materially economically desirable in the operation of such Grantor’s business,
(A) to promptly sue for infringement, misappropriation, or dilution of any
Intellectual Property and to recover any and all damages for such infringement,
misappropriation, or dilution, (B) to prosecute diligently any trademark
application or service mark application that is part of the Trademarks pending
as of the date hereof or hereafter until the termination of this Agreement,
(C) to prosecute diligently any patent application that is part of the Patents
pending as of the date hereof or hereafter until the termination of this
Agreement, and (D) to take all reasonable and necessary action to preserve and
maintain all of such Grantor’s Trademarks, Patents, Copyrights, Intellectual
Property Licenses, and its rights therein, including the filing of applications
for renewal, affidavits of use, affidavits of noncontestability and opposition
and interference and cancellation proceedings.  Each Grantor shall promptly file
an application with the United States Copyright Office for any Copyright that
has not been registered with the United States Copyright Office if such
Copyright is necessary in connection with the operation of such Grantor’s
business. Any expenses incurred in connection with the foregoing shall be borne
by the appropriate Grantor.  Each Grantor further agrees not to abandon any
Trademark, Patent, Copyright, or Intellectual Property License that is required
or materially economically desirable in the operation of such Grantor’s
business;

 

(iii)       Grantors acknowledge and agree that the Lender Group shall have no
duties with respect to the Trademarks, Patents, Copyrights, or Intellectual
Property Licenses.  Without limiting the generality of this Section 6(g),
Grantors acknowledge and agree that no member of the Lender Group shall be under
any obligation to take any steps necessary to preserve rights in the Trademarks,
Patents, Copyrights, or Intellectual Property Licenses against any other Person,
but any member of the Lender Group may do so at its option from and after the
occurrence and during the continuance of an Event of Default, and all expenses
incurred in connection therewith (including reasonable fees and expenses of
attorneys and other professionals) shall be for the sole account of Borrower and
shall be chargeable to the Loan Account;

 

(iv)       In no event shall any Grantor, either itself or through any agent,
employee, licensee, or designee, file an application for the registration of any
Copyright with the United States Copyright Office without giving Agent prior
written notice thereof or any Patent or Trademark with the United States Patent
and Trademark Office without giving Agent written notice thereof promptly
thereafter.  Promptly upon any such filing, each Grantor shall comply with
Section 6(g)(i) hereof;

 

(h)           Investment Related Property.

 

(i)         If any Grantor shall receive or become entitled to receive any
Pledged Interests after the Closing Date, it shall promptly (and in any event
within 5 Business Days of receipt thereof) deliver to Agent a duly executed
Pledged Interests Addendum identifying such Pledged Interests;

 

(ii)        All sums of money and property paid or distributed in respect of the
Investment Related Property which are received by any Grantor shall be held by
the Grantors in trust for the benefit of Agent segregated from such Grantor’s
other property, and such Grantor shall deliver it forthwith to Agent’s in the
exact form received;

 

(iii)       Each Grantor shall promptly deliver to Agent a copy of each notice
or other communication received by it in respect of any Pledged Interests;

 

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(iv)       No Grantor shall make or consent to any amendment or other
modification or waiver with respect to any Pledged Interests, Pledged Operating
Agreement, or Pledged Partnership Agreement, or enter into any agreement or
permit to exist any restriction with respect to any Pledged Interests other than
pursuant to the Loan Documents;

 

(v)        Each Grantor agrees that it will cooperate with Agent in obtaining
all necessary approvals and making all necessary filings under federal, state,
local, or foreign law in connection with the Security Interest on the Investment
Related Property or any sale or transfer thereof;

 

(vi)       As to all limited liability company or partnership interests, issued
under any Pledged Operating Agreement or Pledged Partnership Agreement, each
Grantor hereby represents, warrants and covenants that the Pledged Interests
issued pursuant to such agreement (A) are not and shall not be dealt in or
traded on securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be held
by such Grantor in a securities account.  In addition, none of the Pledged
Operating Agreements, the Pledged Partnership Agreements, or any other
agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, provide or shall provide
that such Pledged Interests are securities governed by Article 8 of the Uniform
Commercial Code as in effect in any relevant jurisdiction;

 

(i)            Real Property; Fixtures.  Each Grantor covenants and agrees that
upon the acquisition of any fee interest in Real Property it will promptly (and
in any event within 5 Business Days of acquisition) notify Agent of the
acquisition of such Real Property and will grant to Agent, for the benefit of
the Lender Group and the Bank Product Providers, a first priority Mortgage on
each fee interest in Real Property now or hereafter owned by such Grantor and
shall deliver such other documentation and opinions, in form and substance
satisfactory to Agent, in connection with the grant of such Mortgage as Agent
shall request in its Permitted Discretion, including title insurance policies,
financing statements, fixture filings and environmental audits and such Grantor
shall pay all recording costs, intangible taxes and other fees and costs
(including reasonable attorneys fees and expenses) incurred in connection
therewith.  Each Grantor acknowledges and agrees that, to the extent permitted
by applicable law, all of the Collateral shall remain personal property
regardless of the manner of its attachment or affixation to real property;

 

(j)            Transfers and Other Liens.  Grantors shall not (i) sell, assign
(by operation of law or otherwise) or otherwise dispose of, or grant any option
with respect to, any of the Collateral, except expressly permitted by the Credit
Agreement, or (ii) create or permit to exist any Lien upon or with respect to
any of the Collateral of any of Grantors, except for Permitted Liens.  The
inclusion of Proceeds in the Collateral shall not be deemed to constitute
Agent’s consent to any sale or other disposition of any of the Collateral except
as expressly permitted in this Agreement or the other Loan Documents;

 

(k)           Other Actions as to Any and All Collateral.  Each Grantor shall
promptly (and in any event within 5 Business Days of acquiring or obtaining such
Collateral) notify Agent in writing upon (i) acquiring or otherwise obtaining
any Collateral after the date hereof consisting of Trademarks, Patents,
Copyrights, Intellectual Property Licenses (other than inbound licenses from
customers granting a license to use such customer’s trade names, trademarks and
logos for packaging purposes), Investment Related Property, Chattel Paper
(electronic, tangible or otherwise), documents (as defined in Article 9 of  the
Code), promissory notes (as defined in the Code, or instruments (as defined in
the Code), in each case, in an amount in excess of $100,000 or (ii) any amount
payable in excess of $100,000 under or in connection with any of the Collateral
being or becoming evidenced after the date hereof by any Chattel Paper,
documents, promissory notes, or instruments and, in each such case upon the
request of Agent, promptly execute such other documents, or if applicable,
deliver such Chattel Paper, other documents or certificates evidencing any
Investment Related Property and do such other acts or things deemed necessary or
desirable by Agent to protect Agent’s Security Interest therein;

 

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(l)            Controlled Accounts.

 

(i)         Borrower shall and shall cause each Loan Party to (i) establish and
maintain cash management services of a type and on terms reasonably satisfactory
to Agent at one or more of the banks set forth on Schedule 6(l) (each a
“Controlled Account Bank”), and shall take reasonable steps to ensure that all
of its and its Subsidiaries’ Account Debtors forward payment of the amounts owed
by them directly to such Controlled Account Bank, and (ii) deposit or cause to
be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all of their Collections (including those
sent directly by their Account Debtors to a Loan Party) into a bank account of
such Loan Party (each, a “Controlled Account”) at one of the Controlled Account
Banks.

 

(ii)        Each Controlled Account Bank shall establish and maintain Controlled
Account Agreements with Agent and the applicable Loan Party, in form and
substance reasonably acceptable to Agent.  Each such Controlled Account
Agreement shall provide, among other things, that (a) the Controlled Account
Bank will comply with any instructions originated by Agent directing the
disposition of the funds in such Controlled Account without further consent by
the applicable Loan Party, (b) the Controlled Account Bank has no rights of
setoff or recoupment or any other claim against the applicable Controlled
Account other than for payment of its service fees and other charges directly
related to the administration of such Controlled Account and for returned checks
or other items of payment, and (c) the Controlled Account Bank will forward, by
daily sweep, all amounts in the applicable Controlled Account to the Agent’s
Account.

 

(iii)       So long as no Default or Event of Default has occurred and is
continuing, Borrower may amend Schedule 6(l) to add or replace a Controlled
Account Bank or Controlled Account; provided, however, that (i) such prospective
Controlled Account Bank shall be reasonably satisfactory to Agent, and
(ii) prior to the time of the opening of such Controlled Account, the applicable
Loan Party and such prospective Controlled Account Bank shall have executed and
delivered to Agent a Controlled Account Agreement.  Borrower shall and shall
cause each Loan Party to close any of its Controlled Accounts (and establish
replacement Controlled Account accounts in accordance with the foregoing
sentence) as promptly as practicable and in any event within 45 days of notice
from Agent that the operating performance, funds transfer, or availability
procedures or performance of the Controlled Account Bank with respect to
Controlled Account accounts or Agent’s liability under any Controlled Account
Agreement with such Controlled Account Bank is no longer acceptable in Agent’s
reasonable judgment; and

 

(m)          Motor Vehicles.  Upon the reasonable request of Agent, with respect
to all motor vehicles owned by any Grantor having a value in excess of $75,000,
Grantor shall deliver to Agent, a certificate of title for all such motor
vehicles and shall cause those title certificates to be filed (with the Agent’s
Lien noted thereon) in the appropriate state motor vehicle filing office.

 

7.             Relation to Other Security Documents.  The provisions of this
Agreement shall be read and construed with the other Loan Documents referred to
below in the manner so indicated.

 

(a)           Credit Agreement. In the event of any conflict between any
provision in this Agreement and a provision in the Credit Agreement, such
provision of the Credit Agreement shall control.

 

(b)           Patent, Trademark, Copyright Security Agreements.  The provisions
of the Copyright Security Agreements, Trademark Security Agreements, and Patent
Security Agreements are supplemental to the provisions of this Agreement, and
nothing contained in the Copyright Security Agreements, Trademark Security
Agreements, or the Patent Security Agreements shall limit any of the rights or
remedies of Agent hereunder.

 

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8.             Further Assurances.

 

(a)           Each Grantor agrees that from time to time, at its own expense,
such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or that Agent may
reasonably request, in order to perfect and protect the Security Interest
granted or purported to be granted hereby or to enable Agent to exercise and
enforce its rights and remedies hereunder with respect to any of the Collateral.

 

(b)           Each Grantor authorizes the filing by Agent of financing or
continuation statements, or amendments thereto, and such Grantor will execute
and deliver to Agent such other instruments or notices, as may be necessary or
as Agent may reasonably request, in order to perfect and preserve the Security
Interest granted or purported to be granted hereby.

 

(c)           Each Grantor authorizes Agent at any time and from time to time to
file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as “all personal property of debtor” or
“all assets of debtor” or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater detail, or
(iii) that contain any information required by part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance. Each Grantor also hereby
ratifies any and all financing statements or amendments previously filed by
Agent in any jurisdiction.

 

(d)           Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement filed in connection with this Agreement without the prior
written consent of Agent, subject to such Grantor’s rights under
Section 9-509(d)(2) of the Code.

 

9.             Agent’s Right to Perform Contracts, Exercise Rights, etc. Upon
the occurrence and during the continuance of an Event of Default, Agent (or its
designee) (a) may proceed to perform any and all of the obligations of any
Grantor contained in any contract, lease, or other agreement and exercise any
and all rights of any Grantor therein contained as fully as such Grantor itself
could, (b) shall have the right to use any Grantor’s rights under Intellectual
Property Licenses in connection with the enforcement of the Agent’s rights
hereunder, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request that
any Stock that is pledged hereunder be registered in the name of Agent or any of
its nominees.

 

10.           Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints Agent its attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor or otherwise, at such time as an
Event of Default has occurred and is continuing under the Credit Agreement, to
take any action and to execute any instrument which Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:

 

(a)           to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Accounts or any other Collateral of such Grantor;

 

(b)           to receive and open all mail addressed to such Grantor and to
notify postal authorities to change the address for the delivery of mail to such
Grantor to that of Agent;

 

(c)           to receive, indorse, and collect any drafts or other instruments,
documents, Negotiable Collateral or Chattel Paper;

 

(d)           to file any claims or take any action or institute any proceedings
which Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;

 

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(e)           to repair, alter, or supply goods, if any, necessary to fulfill in
whole or in part the purchase order of any Person obligated to such Grantor in
respect of any Account of such Grantor;

 

(f)            to use any labels, Patents, Trademarks, trade names, URLs, domain
names, industrial designs, Copyrights, advertising matter or other industrial or
intellectual property rights, in advertising for sale and selling Inventory and
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and

 

(g)           Agent on behalf of the Lender Group shall have the right, but
shall not be obligated, to bring suit in its own name to enforce the Trademarks,
Patents, Copyrights and Intellectual Property Licenses and, if Agent shall
commence any such suit, the appropriate Grantor shall, at the request of Agent,
do any and all lawful acts and execute any and all proper documents reasonably
required by Agent in aid of such enforcement.

 

To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.

 

11.           Agent May Perform. If any of the Grantors fails to perform any
agreement contained herein, Agent may itself perform, or cause performance of,
such agreement, and the reasonable expenses of Agent incurred in connection
therewith shall be payable, jointly and severally, by Grantors.

 

12.           Agent’s Duties. The powers conferred on Agent hereunder are solely
to protect Agent’s interest in the Collateral, for the benefit of the Lender
Group and the Bank Product Providers, and shall not impose any duty upon Agent
to exercise any such powers. Except for the safe custody of any Collateral in
its actual possession and the accounting for moneys actually received by it
hereunder, Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its actual possession
if such Collateral is accorded treatment substantially equal to that which Agent
accords its own property.

 

13.           Collection of Accounts, General Intangibles and Negotiable
Collateral. At any time upon the occurrence and during the continuation of an
Event of Default, Agent or Agent’s designee may, to the extent permitted by law,
(a) notify Account Debtors of

any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable
Collateral have been assigned to Agent, for the benefit of the Lender Group and
the Bank Product Providers, in connection with the exercise of its remedies
hereunder, or that Agent has a security interest therein, and (b) collect the
Accounts, General Intangibles and Negotiable Collateral directly, and any
collection costs and expenses shall constitute part of such Grantor’s Secured
Obligations under the Loan Documents.

 

14.           Disposition of Pledged Interests by Agent. None of the Pledged
Interests existing as of the date of this Agreement are, and none of the Pledged
Interests hereafter acquired on the date of acquisition thereof will be,
registered or qualified under the various federal or state securities laws of
the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack
of such registration. Each Grantor understands that in connection with such
disposition, Agent may approach only a restricted number of potential purchasers
and further understands that a sale under such circumstances may yield a lower
price for the Pledged Interests than if the Pledged Interests were registered
and qualified pursuant to federal and state securities laws and sold on the open
market. Each Grantor, therefore, agrees that:  (a) if Agent shall, pursuant to
the terms of this Agreement, sell or cause the Pledged Interests or any portion
thereof to be sold at a private sale, Agent shall have the right to rely upon
the advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interest or any portion
thereof for sale and

 

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as to the best price reasonably obtainable at the private sale thereof; and
(b) such reliance shall be conclusive evidence that Agent has handled the
disposition in a commercially reasonable manner.

 

15.           Voting Rights.

 

(a)           Upon the occurrence and during the continuation of an Event of
Default, (i) Agent may, at its option, and with 2 Business Days prior notice to
any Grantor, and in addition to all rights and remedies available to Agent under
any other agreement, at law, in equity, or otherwise, exercise all voting
rights, and all other ownership or consensual rights in respect of the Pledged
Interests owned by such Grantor, but under no circumstances is Agent obligated
by the terms of this Agreement to exercise such rights, and (ii) if Agent duly
exercises its right to vote any of such Pledged Interests, each Grantor hereby
appoints Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE
PROXY to vote such Pledged Interests in any manner Agent deems advisable for or
against all matters submitted or which may be submitted to a vote of
shareholders, partners or members, as the case may be. The power-of-attorney
granted hereby is coupled with an interest and shall be irrevocable.

 

(b)           For so long as any Grantor shall have the right to vote the
Pledged Interests owned by it, such Grantor covenants and agrees that it will
not, without the prior written consent of Agent, vote or take any consensual
action with respect to such Pledged Interests which would materially adversely
affect the rights of Agent and the other members of the Lender Group or the
value of the Pledged Interests.

 

16.           Remedies. Upon the occurrence and during the continuance of an
Event of Default:

 

(a)           Agent may, and, at the instruction of the Required Lenders, shall
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein, in the other Loan Documents, or otherwise available to it,
all the rights and remedies of a secured party on default under the Code or any
other applicable law. Without limiting the generality of the foregoing, each
Grantor expressly agrees that, in any such event, Agent without demand of
performance or other demand, advertisement or notice of any kind (except a
notice specified below of time and place of public or private sale) to or upon
any of Grantors or any other Person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), may take immediate
possession of all or any portion of the Collateral and (i) require Grantors to,
and each Grantor hereby agrees that it will at its own expense and upon request
of Agent forthwith, assemble all or part of the Collateral as directed by Agent
and make it available to Agent at one or more locations where such Grantor
regularly maintains Inventory, and (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of Agent’s offices or elsewhere, for cash, on credit,
and upon such other terms as Agent may deem commercially reasonable. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least 10 days notice to any of Grantors of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification and specifically such notice shall constitute a
reasonable “authenticated notification of disposition” within the meaning of
Section 9-611 of the Code. Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

 

(b)           Agent is hereby granted a license or other right to use, without
liability for royalties or any other charge, each Grantor’s labels, Patents,
Copyrights, rights of use of any name, trade secrets, trade names, Trademarks,
service marks and advertising matter, URLs, domain names, industrial designs,
other industrial or intellectual property or any property of a similar nature,
whether owned by any of Grantors or with respect to which any of the Grantors
have rights under license, sublicense, or other agreements, as it pertains to
the Collateral, in preparing for sale, advertising for sale and selling any
Collateral, and each Grantor’s rights under all licenses and all franchise
agreements shall inure to the benefit of Agent.

 

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(c)           Agent may, in addition to other rights and remedies provided for
herein, in the other Loan Documents, or otherwise available to it under
applicable law and without the requirement of notice to or upon any of Grantors
or any other Person (which notice is hereby expressly waived to the maximum
extent permitted by the Code or any other applicable law), (i) with respect to
any of Grantors’ Deposit Accounts in which Agent’s Liens are perfected by
control under Section 9-104 of the Code, instruct the bank maintaining such
Deposit Account for the applicable Grantor to pay the balance of such Deposit
Account to or for the benefit of Agent, and (ii) with respect to any of
Grantors’ Securities Accounts in which the Agent’s Liens are perfected by
control under Section 9-106 of the Code, instruct the securities intermediary
maintaining such Securities Account for the applicable Grantor to (A) transfer
any cash in such Securities Account to or for the benefit of Agent, or
(B) liquidate any financial assets in such Securities Account that are
customarily sold on a recognized market and transfer the cash proceeds thereof
to or for the benefit of Agent.

 

(d)           Any cash held by Agent as Collateral and all cash proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied against the
Secured Obligations in the order set forth in the Credit Agreement. In the event
the proceeds of Collateral are insufficient to satisfy all of the Secured
Obligations in full, each Grantor shall remain jointly and severally liable for
any such deficiency.

 

(e)           Each Grantor hereby acknowledges that the Secured Obligations
arose out of a commercial transaction, and

agrees that if an Event of Default shall occur and be continuing Agent shall
have the right to an immediate writ of possession without notice of a hearing.
Agent shall have the right to the appointment of a receiver for the properties
and assets of each of Grantors, and each Grantor hereby consents to such rights
and such appointment and hereby waives any objection such Grantors may have
thereto or the right to have a bond or other security posted by Agent.

 

17.           Remedies Cumulative. Each right, power, and remedy of Agent as
provided for in this Agreement or in the other Loan Documents or now or
hereafter existing at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power,
or remedy provided for in this Agreement or in the other Loan Documents or now
or hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by Agent, of any one or more of such
rights, powers, or remedies shall not preclude the simultaneous or later
exercise by Agent of any or all such other rights, powers, or remedies.

 

18.           Marshaling. Agent  shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of its rights and remedies hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising. To
the extent that it lawfully may, each Grantor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of Agent’s rights and remedies under this Agreement
or under any other instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is outstanding or by
which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.

 

19.           Indemnity and Expenses.

 

(a)           Each Grantor agrees to indemnify Agent and the other members of
the Lender Group from and against all claims, lawsuits and liabilities
(including reasonable attorneys fees) growing out of or resulting from this
Agreement (including enforcement of this Agreement) or any other Loan Document
to which such Grantor is a party, except claims, losses or liabilities resulting
from the gross negligence or willful misconduct of the party seeking
indemnification as determined by a final non-appealable order of a court of

 

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competent jurisdiction. This provision shall survive the termination of this
Agreement and the Credit Agreement and the repayment of the Secured Obligations.

 

(b)           Grantors, jointly and severally, shall, upon demand, pay to Agent
(or Agent, may charge to the Loan Account) all the Lender Group Expenses which
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or, upon an Event of
Default, the sale of, collection from, or other realization upon, any of the
Collateral in accordance with this Agreement and the other Loan Documents,
(iii) the exercise or enforcement of any of the rights of Agent hereunder or
(iv) the failure by any of Grantors to perform or observe any of the provisions
hereof.

 

20.           Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES. No waiver of any provision of this Agreement, and no consent to any
departure by any of Grantors herefrom, shall in any event be effective unless
the same shall be in writing and signed by Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment of any provision of this Agreement shall
be effective unless the same shall be in writing and signed by Agent and each of
Grantors to which such amendment applies.

 

21.           Addresses for Notices. All notices and other communications
provided for hereunder shall be given in the form and manner and delivered to
Agent at its address specified in the Credit Agreement, and to any of the
Grantors at their respective addresses specified in the Credit Agreement or
Guaranty, as applicable, or, as to any party, at such other address as shall be
designated by such party in a written notice to the other party.

 

22.           Continuing Security Interest: Assignments under Credit Agreement.
This Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the Obligations have been paid
in full in cash in accordance with the provisions of the Credit Agreement and
the Commitments have expired or have been terminated, (b) be binding upon each
of Grantors, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any the
Lender may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such the
Lender herein or otherwise. Upon payment in full in cash of the Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Commitments, the Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantors or any other
Person entitled thereto. At such time, Agent will authorize the filing of
appropriate termination statements to terminate such Security Interests. No
transfer or renewal, extension, assignment, or termination of this Agreement or
of the Credit Agreement, any other Loan Document, or any other instrument or
document executed and delivered by any Grantor to Agent nor any additional
Advances or other loans made by any the Lender to Borrower, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to Grantors,
or any of them, by Agent, nor any other act of the Lender Group or the Bank
Product Providers, or any of them, shall release any of Grantors from any
obligation, except a release or discharge executed in writing by Agent in
accordance with the provisions of the Credit Agreement. Agent shall not by any
act, delay, omission or otherwise, be deemed to have waived any of its rights or
remedies hereunder, unless such waiver is in writing and signed by Agent and
then only to the extent therein set forth. A waiver by Agent of any right or
remedy on any occasion shall not be construed as a bar to the exercise of any
such right or remedy which Agent would otherwise have had on any other occasion.

 

17

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

 

23.           Governing Law.

 

(a)           THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER,

GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)           THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 23(b).

 

(c)           TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND
EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

24.           New Subsidiaries. Pursuant to Section 5.11 of the Credit
Agreement, any new direct or indirect U.S. Subsidiary (whether by acquisition or
creation) of Grantor is required to enter into this Agreement by executing and
delivering in favor of Agent a supplement to this Agreement in the form of Annex
1 attached hereto. Upon the execution and delivery of Annex 1 by such new U.S.
Subsidiary, such U.S. Subsidiary shall become a Grantor hereunder with the same
force and effect as if originally named as a Grantor herein. The execution and
delivery of any instrument adding an additional Grantor as a party to this
Agreement shall not require the consent of any Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor hereunder.

 

25.           Agent. Each reference herein to any right granted to, benefit
conferred upon or power exercisable by the “Agent” shall be a reference to
Agent, for the benefit of the Lender Group and the Bank Product Providers.

 

26.           Miscellaneous.

 

(a)           This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. Delivery of an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Agreement. Any party delivering an

 

18

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

 

executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.
The foregoing shall apply to each other Loan Document mutatis mutandis.

 

(b)           Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.

 

(c)           Headings used in this Agreement are for convenience only and shall
not be used in connection with the interpretation of any provision hereof.

 

(d)           The pronouns used herein shall include, when appropriate, either
gender and both singular and plural, and the grammatical construction of
sentences shall conform thereto.

 

(e)           Unless the context of this Agreement or any other Loan Document
clearly requires otherwise, references to the plural include the singular,
references to the singular include the plural, the terms “includes” and 
“including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.”  The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein or in any
other Loan Document to the satisfaction or repayment in full of the Obligations
shall mean the repayment in full in cash (or cash collateralization in
accordance with the terms of the Credit Agreement) of all Obligations other than
unasserted contingent indemnification Obligations and other than any Bank
Product Obligations that, at such time, are allowed by the Bank Product
Providers to remain outstanding and that are not required by the provisions of
the Credit Agreement to be repaid or cash collateralized. Any reference herein
to any Person shall be construed to include such Person’s successors and
assigns. Any requirement of a writing contained herein or in any other Loan
Document shall be satisfied by the transmission of a Record.

 

19

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

 

IN WITNESS WHEREOF, the undersigned parties hereto have executed this Agreement
by and through their duly authorized officers, as of the day and year first
above written.

 

 

GRANTORS:

UTSTARCOM PERSONAL COMMUNICATIONS LLC

 

 

 

 

 

By:

 

/s/ KEITH SAN FELIPE

 

Name:

Keith San Felipe

 

Title:

Treasurer

 

 

AGENT:

WELLS FARGO FOOTHILL, LLC, as Agent

 

 

 

By:

 

/s/ ERIK R. SAWYER

 

Name:

Erik R. Sawyer

 

Title:

Senior Vice President

 

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

 

SCHEDULE 1

 

COMMERCIAL TORT CLAIMS

 

[include specific case caption or descriptions per Official Code Comment 5 to
Section 9-108 of the Code]

 

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

 

SCHEDULE 2

 

COPYRIGHTS

 

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

 

SCHEDULE 3

 

INTELLECTUAL PROPERTY LICENSES

 

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

 

SCHEDULE 4

 

PATENTS

 

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

 

SCHEDULE 5

 

PLEDGED COMPANIES

 

Name of Pledgor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Class of
Interests

 

Percentage of
Class Owned

 

Certificate
Nos.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE 6

 

TRADEMARKS

 

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

 

SCHEDULE 6(l)

 

CONTROLLED ACCOUNT BANKS

 

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

 

SCHEDULE 7

 

OWNED REAL PROPERTY

 

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

 

SCHEDULE 8

 

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

 

Grantor

Jurisdictions

 

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

 

ANNEX 1 TO SECURITY AGREEMENT
FORM OF SUPPLEMENT

 

Supplement No.          (this “Supplement”) dated as of
                              , to the Security Agreement dated March 21, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”) by each of the parties listed on the signature
pages thereto and those additional entities that thereafter become parties
thereto (collectively, jointly and severally, “Grantors” and each individually
“Grantor”) and WELLS FARGO FOOTHILL, LLC in its capacity as Agent for the Lender
Group and the Bank Product Providers (together with the successors, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated March 21, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among UTStarcom Personal Communications LLC, as borrower
(“Borrower”), the lenders party thereto as “Lenders” (“Lenders”), and Agent, the
Lender Group is willing to make certain financial accommodations available to
Borrower from time to time pursuant to the terms and conditions thereof; and

 

WHEREAS, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement or the Credit
Agreement; and

 

WHEREAS, Grantors have entered into the Security Agreement in order to induce
the Lender Group to make certain financial accommodations to Borrower; and

 

WHEREAS, pursuant to Section 5.11 of the Credit Agreement, new direct or
indirect U.S. Subsidiaries of Borrower, must execute and deliver certain Loan
Documents, including the Security Agreement, and the execution of the Security
Agreement by the undersigned new Grantor or Grantors (collectively, the “New
Grantors”) may be accomplished by the execution of this Supplement in favor of
Agent, for the benefit of the Lender Group and the Bank Product Providers;

 

NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:

 

1.             In accordance with Section 24 of the Security Agreement, each New
Grantor, by its signature below, becomes a “Grantor” under the Security
Agreement with the same force and effect as if originally named therein as a
“Grantor” and each New Grantor hereby (a) agrees to all of the terms and
provisions of the Security Agreement applicable to it as a “Grantor” thereunder
and (b) represents and warrants that the representations and warranties made by
it as a “Grantor” thereunder are true and correct on and as of the date hereof. 
In furtherance of the foregoing, each New Grantor, as security for the payment
and performance in full of the Secured Obligations, does hereby grant and pledge
to Agent, for the benefit of the Lender Group and the Bank Product Providers, a
security interest in and security title to all assets of such New Grantor
including, all property of the type described in Section 2 of the Security
Agreement to secure the full and prompt payment of the Secured Obligations,
including, any interest thereon, plus reasonable attorneys’ fees and expenses if
the Secured Obligations represented by the Security Agreement are collected by
law, through an attorney-at-law, or under advice therefrom.  Schedule 1, 
“Commercial Tort Claims”, Schedule 2, “Copyrights”, Schedule 3, “Intellectual
Property Licenses”, Schedule 4, “Patents”, Schedule 5, “Pledged Companies”, 
Schedule 6, “Trademarks”, Schedule 6(1), “Controlled Account Banks”,  Schedule
7, “Owned Real Property,” and Schedule 8, “List of Uniform Commercial Code
Filing Jurisdictions”  attached hereto supplement Schedule 1, Schedule 2,
Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule 6(1), Schedule 7 and
Schedule 8 respectively, to the Security Agreement and shall be deemed a part
thereof for all purposes of the Security Agreement.  Each reference to a
“Grantor” in the Security Agreement shall be deemed to include each New
Grantor.  The Security Agreement is incorporated herein by reference.

 

2.             Each New Grantor represents and warrants to Agent, the Lender
Group and the Bank Product Providers that this Supplement has been duly executed
and delivered by such New Grantor and

 

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

 

constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other
similar laws affecting creditors’ rights generally and general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).

 

3.             This Supplement may be executed in multiple counterparts, each of
which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument.  Delivery of a
counterpart hereof by facsimile transmission or by e-mail transmission shall be
as effective as delivery of a manually executed counterpart hereof.

 

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

 

5.             This Supplement shall be construed in accordance with and
governed by the laws of the State of New York, without regard to the conflict of
laws principles thereof.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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

 

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

 

NEW GRANTORS:

[Name of New Grantor]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

[Name of New Grantor]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

WELLS FARGO FOOTHILL, LLC

AGENT:

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made
this        day of                   ,
20              , among Grantors listed on the signature pages hereof (
collectively, jointly and severally, “Grantors” and each individually
“Grantor”), and WELLS FARGO FOOTHILL, LLC, in its capacity as Agent for the
Lender Group and the Bank Product Providers (together with its successors, the
“Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated March 21, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among UTStarcom Personal Communications LLC, as borrower (
“Borrower”), the lenders party thereto as “Lenders” (“Lenders”), and Agent, the
Lender Group is willing to make certain financial accommodations available to
Borrower pursuant to the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrower as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement dated March 21, 2008 (including all
annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”);

 

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Copyright Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:

 

1.             DEFINED TERMS.  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or the
Credit Agreement.

 

2.             GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL.  Each Grantor
hereby grants to Agent, for the benefit of the Lender Group and the Bank Product
Providers, a continuing first priority security interest in all of such
Grantor’s right, title and interest in, to and under the following, whether
presently existing or hereafter created or acquired (collectively, the
“Copyright Collateral”):

 

(a)           all of such Grantor’s Copyrights including those referred to on
Schedule I hereto;

 

(b)           all reissues, continuations or extensions of the foregoing; and

 

(c)           all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement or
dilution of any Copyright.

 

Notwithstanding the foregoing or anything contained herein to the contrary, the
term “Copyright Collateral” shall not include any rights or interest in any
contract, lease, permit, license, charter or license agreement covering real or
personal property of any Grantor if under the terms of such contract, lease,
permit, license, charter or license agreement, or applicable law with respect
thereto, the grant of a security interest or lien therein is prohibited as a
matter of law or under the terms of such contract, lease, permit, license,
charter

 

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

 

or license agreement and such prohibition has not been waived or the consent of
the other party to such contract, lease, permit, license, charter or license
agreement has not been obtained (provided, that, the foregoing exclusions of
this clause shall in no way be construed (A) to apply to the extent that any
described prohibition is unenforceable under Section 9-406, 9-407, 9-408, or
9-409 of the Code or other applicable law, (B) to limit, impair, or otherwise
affect the Lender Group’s continuing security interests in and liens upon any
rights or interests of any Grantor in or to (x) monies due or to become due
under any described contract, lease, permit, license, charter or license
agreement (including any Accounts), or (y) any proceeds from the sale, license,
lease, or other dispositions of any such contract, lease, permit, license,
charter, license agreement, or Stock, or (C) apply to the extent that any
consent or waiver has been obtained that would permit the security interest of
lien notwithstanding the prohibition).

 

3.             SECURITY FOR OBLIGATIONS.  This Copyright Security Agreement and
the Security Interest created hereby secures the payment and performance of all
the Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Copyright Security Agreement
secures the payment of all amounts which constitute part of the Obligations and
would be owed by Grantors, or any of them, to Agent, the Lender Group, the Bank
Product Providers or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.

 

4.             SECURITY AGREEMENT.  The security interests granted pursuant to
this Copyright Security Agreement are granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Security Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the security interest in the Copyright Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.

 

5.             AUTHORIZATION TO SUPPLEMENT.  Grantors shall give Agent notice in
writing of any additional United States copyright registrations or applications
therefor after the date hereof pursuant to the terms of the Security Agreement. 
Grantors hereby authorize Agent unilaterally to modify this Agreement by
amending Schedule I to include any future United States registered copyrights or
applications therefor of Grantors.  Notwithstanding the foregoing, no failure to
so modify this Copyright Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent’s continuing security interest in all
Collateral, whether or not listed on Schedule I.

 

6.             COUNTERPARTS.  This Copyright Security Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
but all such separate counterparts shall together constitute but one and the
same instrument.  In proving this Copyright Security Agreement or any other Loan
Document in any judicial proceedings, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom such
enforcement is sought.  Any signatures delivered by a party by facsimile
transmission or by e-mail transmission shall be deemed an original signature
hereto.

 

7.             CONSTRUCTION.  Unless the context of this Copyright Security
Agreement or any other Loan Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the terms “includes” and  “including” are not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Copyright Security Agreement or any other Loan Document
refer to this Copyright Security Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Copyright
Security Agreement or such other Loan Document, as the case may be.  Section,
subsection, clause, schedule, and exhibit references herein are to this
Copyright Security Agreement unless otherwise specified.  Any reference in this
Copyright Security Agreement or in any other Loan Document to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions,

 

2

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

 

modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein).  Any reference herein or in any other Loan Document to the
satisfaction or repayment in full of the Obligations shall mean the repayment in
full in cash (or cash collateralization in accordance with the terms of the
Credit Agreement) of all Obligations other than unasserted contingent
indemnification Obligations and other than any Bank Product Obligations that, at
such time, are allowed by the applicable Bank Product Providers to remain
outstanding and that are not required by the provisions of the Credit Agreement
to be repaid or cash collateralized.  Any reference herein to any Person shall
be construed to include such Person’s successors and assigns.  Any requirement
of a writing contained herein or in any other Loan Document shall be satisfied
by the transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.

 

[SIGNATURE PAGE FOLLOWS]

 

3

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

 

IN WITNESS WHEREOF, each Grantor has caused this Copyright Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

 

WELLS FARGO FOOTHILL, LLC, as Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT

 

COPYRIGHT REGISTRATIONS

 

Grantor

 

Country

 

Copyright

 

Registration No.

 

Registration Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this
       day of            , 20        , among the Grantors listed on the
signature pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO FOOTHILL, LLC, in its capacity as
administrative agent for the Lender Group and the Bank Product Providers
(together with its successors,  “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated March 21, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among UTStarcom Personal Communications LLC, as borrower
(the “Borrower”), the lenders party thereto as “Lenders” (“Lenders”), and Agent,
the Lender Group is willing to make certain financial accommodations available
to the Borrower pursuant to the terms and conditions thereof; and

 

WHEREAS, the members of Lender Group are willing to make the financial
accommodations to Borrower as provided for in the Credit Agreement, but only
upon the condition, among others, that the Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement dated March 21, 2008 (including all
annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”);

 

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of the Lender Group and the Bank Product
Providers, this Patent Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1.             DEFINED TERMS.  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or the
Credit Agreement.

 

2.             GRANT OF SECURITY INTEREST IN PATENT COLLATERAL.  Each Grantor
hereby grants to Agent, for the benefit of the Lender Group and the Bank Product
Providers, a continuing first priority security interest in all of such
Grantor’s right, title and interest in, to and under the following, whether
presently existing or hereafter created or acquired (collectively, the “Patent
Collateral”):

 

(a)           all of its Patents including those referred to on Schedule I
hereto;

 

(b)           all reissues, continuations or extensions of the foregoing; and

 

(c)           all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement or
dilution of any Patent.

 

Notwithstanding the foregoing or anything contained herein to the contrary, the
term “Patent Collateral” shall not include any rights or interest in any
contract, lease, permit, license, charter or license agreement covering real or
personal property of any Grantor if under the terms of such contract, lease,
permit,

 

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

 

license, charter or license agreement, or applicable law with respect thereto,
the grant of a security interest or lien therein is prohibited as a matter of
law or under the terms of such contract, lease, permit, license, charter or
license agreement and such prohibition has not been waived or the consent of the
other party to such contract, lease, permit, license, charter or license
agreement has not been obtained (provided, that, the foregoing exclusions of
this clause shall in no way be construed (A) to apply to the extent that any
described prohibition is unenforceable under Section 9-406, 9-407, 9-408, or
9-409 of the Code or other applicable law, (B) to limit, impair, or otherwise
affect the Lender Group’s continuing security interests in and liens upon any
rights or interests of any Grantor in or to (x) monies due or to become due
under any described contract, lease, permit, license, charter or license
agreement (including any Accounts), or (y) any proceeds from the sale, license,
lease, or other dispositions of any such contract, lease, permit, license,
charter, license agreement, or Stock, or (C) apply to the extent that any
consent or waiver has been obtained that would permit the security interest of
lien notwithstanding the prohibition).

 

3.             SECURITY FOR OBLIGATIONS.  This Patent Security Agreement and the
Security Interest created hereby secures the payment and performance of all the
Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Patent Security Agreement secures
the payment of all amounts which constitute part of the Obligations and would be
owed by Grantors, or any of them, to Agent, the Lender Group, the Bank Product
Providers or any of them, whether or not they are unenforceable or not allowable
due to the existence of an Insolvency Proceeding involving any Grantor.

 

4.             SECURITY AGREEMENT.  The security interests granted pursuant to
this Patent Security Agreement are granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Security Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the security interest in the Patent Collateral made and granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.

 

5.             AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights
to any new patentable inventions or become entitled to the benefit of any patent
application or patent for any reissue, division, or continuation, of any patent,
the provisions of this Patent Security Agreement shall automatically apply
thereto. Grantors shall give notice in writing to Agent with respect to any such
new patent rights pursuant to the terms of the Security Agreement.  Without
limiting Grantors’ obligations under this Section, Grantors hereby authorize
Agent unilaterally to modify this Agreement by amending Schedule I to include
any such new patent rights of Grantors.  Notwithstanding the foregoing, no
failure to so modify this Patent Security Agreement or amend Schedule I shall in
any way affect, invalidate or detract from Agent’s continuing security interest
in all Collateral, whether or not listed on Schedule I.

 

6.             COUNTERPARTS.  This Patent Security Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.  In proving this Patent Security Agreement or any other Loan
Document in any judicial proceedings, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom such
enforcement is sought.  Any signatures delivered by a party by facsimile
transmission or by e-mail transmission shall be deemed an original signature
hereto.

 

7.             CONSTRUCTION.  Unless the context of this Patent Security
Agreement or any other Loan Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the terms “includes” and  “including” are not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Patent Security Agreement or any other Loan Document refer
to this Patent Security Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Patent Security
Agreement or such other Loan Document, as the case may be.  Section, subsection,
clause, schedule, and exhibit references herein are to this Patent Security
Agreement unless otherwise specified.  Any reference in this Patent Security
Agreement or in any other Loan Document to

 

2

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

 

any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein).  Any reference herein or in any other Loan
Document to the satisfaction or repayment in full of the Obligations shall mean
the repayment in full in cash (or cash collateralization in accordance with the
terms of the Credit Agreement) of all Obligations other than unasserted
contingent indemnification Obligations and other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product
Providers to remain outstanding and that are not required by the provisions of
the Credit Agreement to be repaid or cash collateralized.  Any reference herein
to any Person shall be construed to include such Person’s successors and
assigns.  Any requirement of a writing contained herein or in any other Loan
Document shall be satisfied by the transmission of a Record and any Record so
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.

 

[SIGNATURE PAGE FOLLOWS]

 

3

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

 

IN WITNESS WHEREOF, each Grantor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

 

WELLS FARGO FOOTHILL, LLC., as Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

SCHEDULE I
to
PATENT SECURITY AGREEMENT

 

Patent Registrations/Applications

 

Grantor

 

Country

 

Mark

 

Application/
Registration No.

 

App/Reg Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT C

 

PLEDGED INTERESTS ADDENDUM

 

This Pledged Interests Addendum, dated as of
                                    ,                       , is delivered
pursuant to Section 6 of the Security Agreement referred to below.  The
undersigned hereby agrees that this Pledged Interests Addendum may be attached
to that certain Security Agreement, dated as of March 21, 2008, (as amended,
restated, supplemented or otherwise modified from time to time, the “Security
Agreement”), made by the undersigned, together with the other Grantors named
therein, to Wells Fargo Foothill, LLC, as Agent.  Initially capitalized terms
used but not defined herein shall have the meaning ascribed to such terms in the
Security Agreement or the Credit Agreement.  The undersigned hereby agrees that
the additional interests listed on this Pledged Interests Addendum as set forth
below shall be and become part of the Pledged Interests pledged by the
undersigned to the Agent in the Security Agreement and any pledged company set
forth on this Pledged Interests Addendum as set forth below shall be and become
a “Pledged Company” under the Security Agreement, each with the same force and
effect as if originally named therein.

 

The undersigned hereby certifies that the representations and warranties set
forth in Section 5 of the Security Agreement of the undersigned are true and
correct as to the Pledged Interests listed herein on and as of the date hereof.

 

 

[                                     ]

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Title

 

 

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

 

Name of Pledgor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Class of
Interests

 

Percentage of
Class Owned

 

Certificate
Nos.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT D

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made
this        day of               , 20            , among Grantors listed on the
signature pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO FOOTHILL, LLC, in its capacity as Agent
for the Lender Group and the Bank Product Providers (together with its
successors, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated March 21, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among UTStarcom Personal Communications LLC; as borrower (
“Borrower”), the lenders party thereto as “Lenders” (“Lenders”) and Agent, the
Lender Group is willing to make certain financial accommodations available to
Borrower pursuant to the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrower as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of Lender Group and the Bank Product
Providers, that certain Security Agreement dated March 21, 2008 (including all
annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the “Security Agreement”);

 

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute
and deliver to Agent, for the benefit of Lender Group and the Bank Product
Providers, this Trademark Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1.             DEFINED TERMS.  All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or the
Credit Agreement.

 

2.             GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL.  Each Grantor
hereby grants to Agent, for the benefit of the Lender Group and the Bank Product
Providers, a continuing first priority security interest in all of such
Grantor’s right, title and interest in, to and under the following, whether
presently existing or hereafter created or acquired (collectively, the
“Trademark Collateral”):

 

(a)           all of its Trademarks including those referred to on Schedule I
hereto;

 

(b)           all goodwill, trade secrets, proprietary or confidential
information, technical information, procedures, formulae, quality control
standards, designs, operating and training manuals, customer lists, and other
General Intangibles with respect to the foregoing;

 

(c)           all reissues, continuations or extensions of the foregoing;

 

(d)           all goodwill of the business connected with the use of, and
symbolized by, each Trademark; and

 

(e)           all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future (i) infringement
or dilution of any Trademark or (ii) injury to the goodwill associated with any
Trademark.

 

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

 

Notwithstanding the foregoing or anything contained herein to the contrary, the
term “Trademark Collateral” shall not include any rights or interest in any
contract, lease, permit, license, charter or license agreement covering real or
personal property of any Grantor if under the terms of such contract, lease,
permit, license, charter or license agreement, or applicable law with respect
thereto, the grant of a security interest or lien therein is prohibited as a
matter of law or under the terms of such contract, lease, permit, license,
charter or license agreement and such prohibition has not been waived or the
consent of the other party to such contract, lease, permit, license, charter or
license agreement has not been obtained (provided, that, the foregoing
exclusions of this clause shall in no way be construed (A) to apply to the
extent that any described prohibition is unenforceable under Section 9-406,
9-407, 9-408, or 9-409 of the Code or other applicable law, (B) to limit,
impair, or otherwise affect the Lender Group’s continuing security interests in
and liens upon any rights or interests of any Grantor in or to (x) monies due or
to become due under any described contract, lease, permit, license, charter or
license agreement (including any Accounts), or (y) any proceeds from the sale,
license, lease, or other dispositions of any such contract, lease, permit,
license, charter, license agreement, or Stock, or (C) apply to the extent that
any consent or waiver has been obtained that would permit the security interest
of lien notwithstanding the prohibition).

 

3.             SECURITY FOR OBLIGATIONS.  This Trademark Security Agreement and
the Security Interest created hereby secures the payment and performance of all
the Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Trademark Security Agreement
secures the payment of all amounts which constitute part of the Obligations and
would be owed by Grantors, or any of them, to Agent, the Lender Group, the Bank
Product Providers or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.

 

4.             SECURITY AGREEMENT.  The security interests granted pursuant to
this Trademark Security Agreement are granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Security Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the security interest in the Trademark Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.

 

5.             AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights
to any new trademarks, the provisions of this Trademark Security Agreement shall
automatically apply thereto. Grantors shall give notice in writing to Agent with
respect to any such new trademarks or renewal or extension of any trademark
registration pursuant to the terms of the Security Agreement.   Without limiting
Grantors’ obligations under this Section, Grantors hereby authorize Agent
unilaterally to modify this Agreement by amending Schedule I to include any such
new trademark rights of Grantors.  Notwithstanding the foregoing, no failure to
so modify this Trademark Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent’s continuing security interest in all
Collateral, whether or not listed on Schedule I.

 

6.             COUNTERPARTS.  This Trademark Security Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
but all such separate counterparts shall together constitute but one and the
same instrument.  In proving this Trademark Security Agreement or any other Loan
Document in any judicial proceedings, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom such
enforcement is sought.  Any signatures delivered by a party by facsimile
transmission or by e-mail transmission shall be deemed an original signature
hereto.

 

7.             CONSTRUCTION.  Unless the context of this Trademark Security
Agreement or any other Loan Document clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural,
the terms “includes” and  “including” are not limiting, and the term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and
similar terms in this Trademark Security Agreement or any other Loan

 

2

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

 

Document refer to this Trademark Security Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Trademark Security Agreement or such other Loan Document, as the case may be. 
Section, subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified.  Any reference in this Trademark Security
Agreement or in any other Loan Document to any agreement, instrument, or
document shall include all alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements,
thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein).  Any
reference herein or in any other Loan Document to the satisfaction or repayment
in full of the Obligations shall mean the repayment in full in cash (or cash
collateralization in accordance with the terms of the Credit Agreement) of all
Obligations other than unasserted contingent indemnification Obligations and
other than any Bank Product Obligations that, at such time, are allowed by the
applicable Bank Product Providers to remain outstanding and that are not
required by the provisions of the Credit Agreement to be repaid or cash
collateralized.  Any reference herein to any Person shall be construed to
include such Person’s successors and assigns.  Any requirement of a writing
contained herein or in any other Loan Document shall be satisfied by the
transmission of a Record and any Record so transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.

 

[signature page follows]

 

3

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

 

IN WITNESS WHEREOF, each Grantor has caused this Trademark Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

 

WELLS FARGO FOOTHILL, LLC, as Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

 

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

 

Trademark Registrations/Applications

 

Grantor

 

Country

 

Mark

 

Application/
Registration No.

 

App/Reg Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade Names

 

Common Law Trademarks

 

Trademarks Not Currently In Use

 

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