Exhibit 10.2

EXECUTION COPY

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (as the same may be amended, restated,
supplemented or otherwise modified from time to time, this “Security Agreement”)
is entered into as of February 8, 2017 (the “Security Agreement Effective Date”)
by and among MICROCHIP TECHNOLOGY INCORPORATED, a Delaware corporation (the
“Borrower”), the Subsidiaries of the Borrower listed on the signature pages
hereto (together with the Borrower, the “Initial Grantors,” and together with
any additional Subsidiaries, whether now existing or hereafter formed or
acquired which become parties to this Security Agreement from time to time, in
accordance with the terms of the Credit Agreement (as defined below), by
executing a Supplement hereto in substantially the form of Annex I, the
“Grantors”), and JPMORGAN CHASE BANK, N.A., a national banking association, in
its capacity as administrative agent (the “Administrative Agent”) for itself and
for the Secured Parties (as defined in the Credit Agreement identified below).

PRELIMINARY STATEMENT

The Borrower, the Administrative Agent and the Lenders have entered into that
certain Amended and Restated Credit Agreement dated as of June 27, 2013, as
amended and restated as of February 4, 2015 (as may be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
The Grantors are entering into this Security Agreement in order to induce the
Lenders to continue to extend credit to the Borrower under the Credit Agreement.

AGREEMENT

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured
Parties, hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1. Terms Defined in the Credit Agreement. All capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise
defined in this Security Agreement are used herein as defined in the UCC.

1.3. Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the Preliminary Statement, the
following terms shall have the following meanings:

“Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Affected Domestic Subsidiary” means any Domestic Subsidiary that is a
subsidiary of a “controlled foreign corporation” as defined in Section 957 of
the Code.

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“Article” means a numbered article of this Security Agreement, unless another
document is specifically referenced.

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

“Collateral” means all Accounts, Chattel Paper, Commercial Tort Claims,
Copyrights, Deposit Accounts, Documents, Equipment, Fixtures, General
Intangibles, Goods, Instruments, Inventory, Investment Property, letters of
credit, Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Supporting
Obligations, Trademarks and Other Collateral, wherever located, in which any
Grantor now has or hereafter acquires any right or interest, and the proceeds
(including Stock Rights), insurance proceeds and products thereof, together with
all books and records, customer lists, credit files, computer files, programs,
printouts and other computer materials and records related thereto; provided
that, notwithstanding the foregoing, Collateral shall expressly exclude the
Excluded Assets.

“Collateral Disclosure Letter” means the collateral disclosure letter, dated as
of the Security Agreement Effective Date, as supplemented from time to time and
delivered by the Grantors to the Administrative Agent for the benefit of the
Secured Parties.

“Commercial Tort Claims” means commercial tort claims, as defined in the UCC of
any Grantor, including each commercial tort claim (with a value reasonably
believed by such Grantor to be in excess of $10,000,000) specifically described
in Schedule “F” to the Collateral Disclosure Letter.

“Control” shall have the meaning set forth in Article 8 or, if applicable, in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“Copyrights” means, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing;
(d) the right to sue for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.

“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

“Documents” shall have the meaning set forth in Article 9 of the UCC.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a
jurisdiction located in the United States of America, other than a Foreign Sub
Holdco.

“Equipment” shall have the meaning set forth in Article 9 of the UCC.

“Exhibit” refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced.

“First-Tier Foreign Subsidiary” means each Foreign Subsidiary with respect to
which any one or more of the Borrower and its Domestic Subsidiaries (other than
an Affected Domestic Subsidiary) directly owns or Controls more than 50% of such
Foreign Subsidiary’s issued and outstanding Equity Interests.

“Fixtures” shall have the meaning set forth in Article 9 of the UCC.

 

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“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Foreign Sub Holdco” means any Subsidiary organized under the laws of a
jurisdiction located in the United States of America substantially all the
assets of which consists of stock (or stock and debt obligations owed or treated
as owed) in one or more “controlled foreign corporations” as defined in
Section 957 of the Code and/or one or more Subsidiaries described in this
definition.

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC
and, in any event, 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), Patents, Trademarks, Copyrights, URLs and domain names, 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 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 UCC, and any other personal property other than
Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, Goods,
Investment Property, negotiable Collateral, and oil, gas, or other minerals
before extraction.

“Goods” shall have the meaning set forth in Article 9 of the UCC.

“Instruments” shall have the meaning set forth in Article 9 of the UCC.

“Intellectual Property” means all Patents, Trademarks, Copyrights and any other
intellectual property.

“Inventory” shall have the meaning set forth in Article 9 of the UCC.

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

“Letter of Credit Rights” shall have the meaning set forth in Article 9 of the
UCC.

“Licenses” means, with respect to any Person, all of such Person’s right, title,
and interest in and to (a) any and all licensing agreements or similar
arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income,
royalties, damages, claims, and payments now or hereafter due or payable under
and with respect thereto, including, without limitation, damages and payments
for past and future breaches thereof, and (c) all rights to sue for past,
present, and future breaches thereof.

“Other Collateral” means any personal property of the Grantors, not included
within the defined terms Accounts, Chattel Paper, Commercial Tort Claims,
Copyrights, Deposit Accounts, Documents, Equipment, Fixtures, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Supporting
Obligations and Trademarks, including, without limitation, all cash on hand,
letters of credit, Stock Rights or any other deposits (general or special, time
or demand, provisional or final) with any bank or other financial institution,
it being intended that the Collateral include all personal property of the
Grantors, subject to the limitations contained in Article II of this Security
Agreement.

 

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“Patents” means, with respect to any Person, all of such Person’s right, title,
and interest in and to: (a) any and all patents and patent applications; (b) all
inventions and improvements described and claimed therein; (c) all reissues,
divisions, continuations, renewals, extensions, and continuations-in-part
thereof; (d) all licenses of the foregoing whether as licensee or licensor;
(e) all income, royalties, damages, claims, and payments now or hereafter due or
payable under and with respect thereto, including, without limitation, damages
and payments for past and future infringements thereof; (f) all rights to sue
for past, present, and future infringements thereof; and (g) all rights
corresponding to any of the foregoing throughout the world.

“Pledged Collateral” means all Instruments, Securities and other Investment
Property of the Grantors that is included in the Collateral, whether or not
physically delivered to the Administrative Agent pursuant to this Security
Agreement.

“Pledged Deposits” means all time deposits of money (other than Deposit Accounts
and Instruments), whether or not evidenced by certificates, which a Grantor may
from time to time designate as pledged to the Administrative Agent or to any
Secured Party as security for any Obligations, and all rights to receive
interest on said deposits.

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments or Pledged Deposits, and any other rights or claims to receive money
which are General Intangibles or which are otherwise included as Collateral.

“Section” means a numbered section of this Security Agreement, unless another
document is specifically referenced.

“Security” shall have the meaning set forth in Article 8 of the UCC.

“Securities Account” has the meaning set forth in Article 8 of the UCC.

“Stock Rights” means any securities, dividends, instruments or other
distributions and any other right or property which any Grantor shall receive or
shall become entitled to receive for any reason whatsoever with respect to, in
substitution for or in exchange for any Equity Interest constituting Collateral,
any right to receive an Equity Interest and any right to receive earnings, in
which any Grantor now has or hereafter acquires any right, issued by an issuer
of such securities.

“Supporting Obligation” shall have the meaning set forth in Article 9 of the
UCC.

“Trademarks” means, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress, and trade styles and the registrations
and applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income,
royalties, damages, and payments now or hereafter due or payable with respect
thereto, including, without limitation, damages, claims, and payments for past
and future infringements thereof; (e) all rights to sue for past, present, and
future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights
corresponding to any of the foregoing throughout the world.

“Voting Power” means with respect to any share of voting Equity Interests, the
number of votes that the holder of such share may cast in an election of members
of the Board of Directors (or analogous governing body) of the issuer of such
share.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

 

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ARTICLE II

GRANT OF SECURITY INTEREST

Each of the Grantors hereby pledges, collaterally assigns and grants to the
Administrative Agent, on behalf of and for the benefit of the Secured Parties, a
security interest in all of such Grantor’s right, title and interest, whether
now owned or hereafter acquired, in and to the Collateral to secure the prompt
and complete payment and performance of the Obligations. For the avoidance of
doubt, (i) the grant of a security interest herein shall not be deemed to be an
assignment of intellectual property rights owned by the Grantors and (ii) the
security interest granted under this Security Agreement shall not extend to, and
the definition of “Collateral” and definitions of and references to asset
categories in the definition of Collateral and elsewhere in this Security
Agreement or any agreement entered into or pursuant to this Security Agreement
shall not include, Excluded Assets and, for the avoidance of doubt, no provision
of this Agreement including, without limitation, any representation, warranty or
covenant shall apply to any such Excluded Assets.

For the avoidance of doubt, in accordance with the terms of the Credit
Agreement, (i) Microchip Technology LLC and Silicon Storage Technology LLC shall
be Grantors under this Security Agreement and (ii) in the aggregate (taking into
account the pledges of all Grantors), 65% of voting Equity Interests and 100% of
non-voting Equity Interests in Microchip Technology (Barbados) II Incorporated
shall be pledged as Collateral. Notwithstanding anything to the contrary in any
Loan Document, the guarantee provided by each of Microchip Technology LLC and
Silicon Storage Technology LLC, so long as each remains a Foreign Sub Holdco,
shall be without recourse to voting Equity Interests in excess of 65%, in the
aggregate, of Microchip Technology (Barbados) II Incorporated.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each of the Initial Grantors represents and warrants to the Administrative Agent
and the Secured Parties, and each Grantor that becomes a party to this Security
Agreement pursuant to the execution of a Security Agreement Supplement in
substantially the form of Annex I represents and warrants (after giving effect
to supplements to the Collateral Disclosure Letter with respect to such
subsequent Grantor as attached to such Security Agreement Supplement), that:

3.1. Title, Authorization, Validity and Enforceability. Such Grantor has good
and valid rights in or the power to transfer the Collateral owned by it and
title to the Collateral with respect to which it has purported to grant a
security interest hereunder, free and clear of all Liens except for Liens
permitted under Section 4.1.6 hereof, and has full corporate, limited liability
company or partnership, as applicable, power and authority to grant to the
Administrative Agent the security interest in such Collateral pursuant hereto.
The execution and delivery by such Grantor of this Security Agreement have been
duly authorized by proper corporate, limited liability company, limited
partnership or partnership, as applicable, proceedings on the part of such
Grantor, and this Security Agreement constitutes a legal, valid and binding
obligation of such Grantor and creates a security interest which is enforceable
against such Grantor in all Collateral it now owns or hereafter acquires, except
as enforceability may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws relating to or affecting the
enforcement of creditors’ rights generally, (ii) general equitable principles
(whether considered in a proceeding in equity or at law), and (iii) requirements
of reasonableness, good faith and fair dealing. When financing statements have
been filed in the appropriate offices against such Grantor in the locations
listed in Schedule “E” to the Collateral Disclosure Letter or any jurisdictions
that may be required from time to time pursuant to Section 4.1.7 hereof, the
Administrative Agent will have a fully perfected first priority security
interest in the Collateral owned by such Grantor in which a security interest
may be perfected by filing of a financing statement under the UCC, subject only
to Liens permitted under Section 4.1.6 hereof.

 

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3.2. Conflicting Laws and Contracts. Neither the execution and delivery by such
Grantor of this Security Agreement, the creation and perfection of the security
interest in the Collateral granted hereunder, nor compliance by such Grantor
with the terms and provisions hereof will violate (i) any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on such Grantor, or
(ii) such Grantor’s charter, articles or certificate of incorporation,
partnership agreement or by-laws (or similar constitutive documents), or
(iii) the provisions of any indenture or any material instrument or agreement to
which such Grantor is a party or is subject, or by which it, or its property may
be bound or affected, or conflict with or constitute a default thereunder, or
result in or require the creation or imposition of any Lien in, of or on the
property of such Grantor pursuant to the terms of any such indenture or any
material instrument or agreement (other than any Lien of the Administrative
Agent on behalf of the Secured Parties).

3.3. Principal Location. As of the Security Agreement Effective Date (or in the
case of a subsequent Grantor, the date of the applicable Security Agreement
Supplement), the location of such Grantor’s chief executive office is disclosed
in Schedule “A” to the Collateral Disclosure Letter.

3.4. Property Locations. As of the Security Agreement Effective Date (or in the
case of a subsequent Grantor, the date of the applicable Security Agreement
Supplement), Schedule “A” to the Collateral Disclosure Letter lists each
location where each Grantor maintains Inventory, Equipment and Fixtures (other
than (i) moveable items of Collateral, such as laptop computers and other mobile
electronic equipment, and (ii) Inventory in transit) with a value exceeding
$10,000,000 per location. All of said locations are owned by such Grantor except
for locations which are leased by such Grantor as lessee and designated in
Schedule “A” to the Collateral Disclosure Letter.

3.5. No Other Names; Etc.. Within the five-year period ending as of the date
such Person becomes a Grantor hereunder, such Grantor has not conducted business
under any name, changed its jurisdiction of organization, merged with or into or
consolidated with any other Person, except as disclosed in Schedule “A” to the
Collateral Disclosure Letter. The name in which such Grantor has executed this
Security Agreement is the exact name as it appears in such Grantor’s
organizational documents, as amended, as filed with such Grantor’s jurisdiction
of organization as of the date such Person becomes a Grantor hereunder.

3.6. [Intentionally Omitted].

3.7. [Intentionally Omitted].

3.8. Filing Requirements. None of the Collateral owned by such Grantor is of a
type for which security interests or liens may be perfected by filing under any
federal statute except for (i) motor vehicles described in Part B of Schedule
“B” to the Collateral Disclosure Letter and (ii) Patents, Trademarks and
Copyrights held by such Grantor and described in Part C of Schedule “B” to the
Collateral Disclosure Letter.

3.9. No Financing Statements, Security Agreements. No financing statement or
security agreement describing all or any portion of the Collateral which has not
lapsed or been terminated naming such Grantor as debtor has been filed or is of
record in any jurisdiction except financing statements (i) naming the
Administrative Agent on behalf of the Secured Parties as the secured party and
(ii) in respect of Liens permitted by Section 6.02 of the Credit Agreement.

 

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3.10. Federal Employer Identification Number; State Organization Number;
Jurisdiction of Organization. As of the Security Agreement Effective Date (or in
the case of a subsequent Grantor, the date of the applicable Security Agreement
Supplement), such Grantor’s federal employer identification number is, and if
such Grantor is a registered organization, such Grantor’s State of organization,
type of organization and State of organization identification number are, listed
in Schedule “G” to the Collateral Disclosure Letter.

3.11. Pledged Securities and Other Investment Property. Schedule “D” to the
Collateral Disclosure Letter sets forth a complete and accurate list as of the
Security Agreement Effective Date (or in the case of a subsequent Grantor, the
date of the applicable Security Agreement Supplement) of the Instruments with a
face value exceeding $10,000,000 and Equity Interests in Pledge Subsidiaries
constituting Collateral and delivered (or to be delivered) to the Administrative
Agent pursuant to the terms of the Loan Documents. Each Grantor is the direct
and beneficial owner of each Instrument and each Equity Interest in Pledge
Subsidiaries listed in Schedule “D” to the Collateral Disclosure Letter as being
owned by it, free and clear of any Liens, except for the security interest
granted to the Administrative Agent for the benefit of the Secured Parties
hereunder or as permitted by Section 6.02 of the Credit Agreement. Each Grantor
further represents and warrants that (i) all Pledged Collateral owned by it
constituting an Equity Interest has been (to the extent such concepts are
relevant with respect to such Pledged Collateral) duly authorized and validly
issued, are fully paid and non-assessable and, in the case of Equity Interests
in Pledge Subsidiaries, constitute the percentage of the issued and outstanding
shares of stock (or other Equity Interests) of the respective issuers thereof
indicated in Schedule “D” to the Collateral Disclosure Letter, and (ii) with
respect to any certificates delivered to the Administrative Agent representing
an Equity Interest, either such certificates are Securities as defined in
Article 8 of the UCC of the applicable jurisdiction as a result of actions by
the issuer or otherwise, or, if such certificates are not Securities, such
Grantor has so informed the Administrative Agent so that the Administrative
Agent may take steps to perfect its security interest therein as a General
Intangible.

3.12. Intellectual Property.

3.12.1 Schedule “B” to the Collateral Disclosure Letter contains a complete and
accurate listing as of the Security Agreement Effective Date of all the
following owned by any Grantor: (i) U.S. trademark registrations and trademark
applications, (ii) U.S. patent registrations and patents applications, together
with all reissuances, continuations, continuations in part, revisions,
extensions, and reexaminations thereof, and (iii) U.S. copyright registrations
and copyright applications. All of the material U.S. registrations, applications
for registration or applications for issuance of the Intellectual Property are
valid and subsisting, in good standing and are recorded or in the process of
being recorded in the name of the applicable Grantor.

3.12.2 Such Intellectual Property is valid, subsisting, unexpired (where
registered) and enforceable and has not been abandoned or adjudged invalid or
unenforceable, in whole or in part, except in each case as could not be
reasonably expected to result in a Material Adverse Effect.

3.12.3 [Intentionally Omitted].

3.12.4 Each Grantor has taken or caused to be taken steps so that none of its
material Intellectual Property, the value of which to the Grantors are
contingent upon maintenance of the confidentiality thereof, have been disclosed
by such Grantor to any Person other than employees, contractors, customers,
representatives and agents of the Grantors and other third parties who are
parties to customary confidentiality and nondisclosure agreements with the
Grantors.

 

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3.12.5 To each Grantor’s knowledge, no Person has violated, infringed upon or
breached, or is currently violating, infringing upon or breaching, any of the
rights of the Grantors to the Intellectual Property or has breached or is
breaching any duty or obligation owed to the Grantors in respect of the
Intellectual Property except where those breaches, violations or infringements,
individually or in the aggregate, could not be reasonably expected to result in
a Material Adverse Effect.

3.12.6 No settlement or consents, covenants not to sue, nonassertion assurances,
or releases have been entered into by any Grantor or to which any Grantor is
bound that adversely affects its rights to own or use any Intellectual Property
except as could not be reasonably expected to result in a Material Adverse
Effect, in each case individually or in the aggregate.

3.12.7 No Grantor has received any written notice that remains outstanding
challenging the validity, enforceability, or ownership of any Intellectual
Property except where those challenges could not reasonably be expected to
result in a Material Adverse Effect, and to such Grantor’s knowledge at the date
hereof there are no facts upon which such a challenge could be made.

3.12.8 Each Grantor owns directly or is entitled to use, by license or
otherwise, all Intellectual Property necessary for the conduct of such Grantor’s
business.

3.12.9 Each Grantor uses adequate standards of quality in the manufacture,
distribution, and sale of all products sold and in the provision of all services
rendered under or in connection with all trademarks and has taken all
commercially reasonable action necessary to insure that all licensees of the
trademarks owned or licensed by such Grantor use such adequate standards of
quality, except where the failure to use adequate standards of quality could not
reasonably be expected to result in a Material Adverse Effect.

3.12.10 The consummation of the transactions contemplated by the Loan Documents
will not result in the loss, termination or material impairment of any of the
Intellectual Property that is material to any Grantor’s business.

ARTICLE IV

COVENANTS

From the date of this Security Agreement and thereafter until this Security
Agreement is terminated, each of the Initial Grantors agrees, and from and after
the effective date of any Security Agreement Supplement applicable to any
Grantor (and after giving effect to supplements to the Collateral Disclosure
Letter with respect to such subsequent Grantor as attached to such Security
Agreement Supplement) and thereafter until this Security Agreement is terminated
each such subsequent Grantor agrees:

4.1. General.

4.1.1 Inspection. Each Grantor will permit the Administrative Agent or any
Secured Party, by its representatives and agents to inspect the Collateral in
the manner set forth in Section 5.06 of the Credit Agreement as if it were a
party thereto.

4.1.2 Taxes. Such Grantor will comply with Section 5.04 of the Credit Agreement
as if it were a party thereto.

 

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4.1.3 Records and Reports. Each Grantor comply with Section 5.06 of the Credit
Agreement as if it were a party thereto.

4.1.4 Financing Statements and Other Actions; Defense of Title. Each Grantor
hereby authorizes the Administrative Agent to file, and if requested will
execute and deliver to the Administrative Agent, all financing statements
describing the Collateral owned by such Grantor and, subject to the limitations
set forth in the Credit Agreement, take such other actions as may from time to
time reasonably be requested by the Administrative Agent in order to maintain a
first priority, perfected security interest in and, if applicable, Control of,
the Collateral owned by such Grantor, subject to Liens permitted under
Section 6.02 of the Credit Agreement. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner as
the Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure that the perfection of the security interest in
the Collateral granted to the Administrative Agent herein, including, without
limitation, describing such property as “all assets of the debtor whether now
owned or hereafter acquired and wheresoever located, including all accessions
thereto and proceeds thereof.” Each Grantor will take any and all actions that
are reasonable and necessary to defend title to any material portion of the
Collateral owned by such Grantor against all persons and to defend the security
interest of the Administrative Agent in such Collateral and the priority thereof
against any Lien not expressly permitted hereunder.

4.1.5 Disposition of Collateral. No Grantor will sell, lease or otherwise
dispose of the Collateral owned by such Grantor except as permitted by the
Credit Agreement.

4.1.6 Liens. No Grantor will create, incur, or suffer to exist any Lien on the
Collateral owned by such Grantor except Liens permitted pursuant to Section 6.02
of the Credit Agreement.

4.1.7 Change in Corporate Existence, Type or Jurisdiction of Organization,
Location, Name. Each Grantor will:

 

  (i) not change its type of legal entity;

 

  (ii) not change its name or jurisdiction of organization;

 

  (iii) not maintain its place of business (if it has only one) or its chief
executive office (if it has more than one place of business) at a location other
than a location specified in Schedule “A” to the Collateral Disclosure Letter;
and

 

  (iv) not change its taxpayer identification number,

unless, in each such case, such Grantor shall have given the Administrative
Agent not less than five (5) Business Days’ prior written notice of such event
or occurrence (or such shorter notice as may be acceptable to the Administrative
Agent).

4.1.8 Other Financing Statements. 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 herewith without the
prior written consent of the Administrative Agent, subject to such Grantor’s
rights under Section 9-509(d)(2) of the UCC.

 

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4.2. Receivables.

4.2.1 Delivery of Invoices. Each Grantor will deliver to the Administrative
Agent immediately upon its request after the occurrence and during the
continuance of an Event of Default duplicate invoices with respect to each
Account owned by such Grantor bearing such language of assignment as the
Administrative Agent shall specify.

4.2.2 [Intentionally Omitted].

4.3. Maintenance of Goods. Each Grantor will do all things necessary to
maintain, preserve, protect and keep the Inventory and the Equipment owned by
such Grantor in good repair, working order and saleable condition (ordinary wear
and tear excepted) and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times, except in each case where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

4.4. Instruments, Securities, Chattel Paper, Documents and Pledged Deposits.
Each Grantor will (i) deliver to the Administrative Agent immediately upon
execution of this Security Agreement (or such later date as may be agreed by the
Administrative Agent) the originals of all Chattel Paper with a face value
exceeding $10,000,000, Instruments with a face value exceeding $10,000,000 and
stock certificates and related stock powers in respect of Equity Interests in
Pledge Subsidiaries (to the extent certificated), in each case constituting
Collateral (if any then exist), (ii) hold in trust for the Administrative Agent
upon receipt and, concurrently with the delivery of each compliance certificate
provided to the Administrative Agent pursuant to Section 5.01(c) of the Credit
Agreement, deliver to the Administrative Agent any Chattel Paper with a face
value exceeding $10,000,000, Instruments with a face value exceeding $10,000,000
and stock certificates and related stock powers in respect of Equity Interests
in Pledge Subsidiaries (to the extent certificated), in each case constituting
Collateral, (iii) upon the designation of any Pledged Deposits (as set forth in
the definition thereof), deliver to the Administrative Agent, concurrently with
the delivery of each compliance certificate provided to the Administrative Agent
pursuant to Section 5.01(c) of the Credit Agreement, such Pledged Deposits with
a value exceeding $10,000,000 which are evidenced by certificates included in
the Collateral endorsed in blank, marked with such legends and assigned as the
Administrative Agent shall specify, (iv) upon the Administrative Agent’s
request, after the occurrence and during the continuance of an Event of Default,
deliver to the Administrative Agent (and thereafter hold in trust for the
Administrative Agent upon receipt and immediately deliver to the Administrative
Agent) any Document evidencing or constituting Collateral, and (v) upon the
Administrative Agent’s request, deliver to the Administrative Agent a duly
executed amendment to this Security Agreement, in the form of Exhibit “A” hereto
(the “Amendment”), pursuant to which such Grantor will pledge such additional
Collateral. Such Grantor hereby authorizes the Administrative Agent to attach
each Amendment to this Security Agreement and agrees that all additional
Collateral owned by it set forth in such Amendments shall be considered to be
part of the Collateral. Notwithstanding anything to the contrary herein, it is
understood and agreed that the stock certificates and related stock powers
thereto in respect of any Domestic Pledge Subsidiary listed on Schedule “D” to
the Collateral Disclosure Letter as of the Security Agreement Effective Date
shall be delivered within thirty (30) days (or such later date as may be agreed
upon by the Administrative Agent) of the Security Agreement Effective Date.

4.5. Uncertificated Securities and Certain Other Investment Property. Each
Grantor will permit the Administrative Agent from time to time to cause the
appropriate Pledge Subsidiaries of such Grantor that are issuers of
uncertificated securities which are Collateral owned by such Grantor to mark
their books and records with the numbers and face amounts of all such
uncertificated securities and all rollovers and replacements therefor to reflect
the Lien of the Administrative Agent granted pursuant to this Security
Agreement.

 

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4.6. Stock and Other Ownership Interests.

4.6.1 Changes in Capital Structure of Issuers. Except as permitted in the Credit
Agreement, no Grantor will (i) permit or suffer any Subsidiary to dissolve,
liquidate, retire any of its capital stock or other Instruments or Securities
evidencing ownership, reduce its capital or merge or consolidate with any other
entity, or (ii) vote any of the Instruments, Securities or other Investment
Property in favor of any of the foregoing.

4.6.2 Registration of Pledged Securities and other Investment Property. Each
Grantor will permit any registrable Collateral owned by such Grantor to be
registered in the name of the Administrative Agent or its nominee at any time at
the option of the Required Lenders following the occurrence and during the
continuance of an Event of Default and without any further consent of such
Grantor.

4.6.3 Exercise of Rights in Pledged Securities and other Investment Property.
Each Grantor will permit the Administrative Agent or its nominee at any time
during the continuance of an Event of Default, without notice, to exercise or
refrain from exercising any and all voting and other consensual rights
pertaining to the Collateral owned by such Grantor or any part thereof, and to
receive all dividends and interest in respect of such Collateral.

4.7. [Intentionally Omitted].

4.8. [Intentionally Omitted].

4.9. [Intentionally Omitted].

4.10. No Interference. Each Grantor agrees that it will not interfere with any
right, power and remedy of the Administrative Agent provided for in this
Security Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Administrative Agent of any one or more of such rights, powers or remedies, in
each case to the extent exercised in accordance with the Loan Documents and
applicable law.

4.11. [Intentionally Omitted].

4.12. Intellectual Property.

4.12.1 .If, after the date hereof, any Grantor registers, is issued, applies
for, or otherwise acquires ownership of any U.S. Patent, Trademark or Copyright
in addition to the owned U.S. Patents, Trademarks and Copyrights described in
Part C of Schedule “B” to the Collateral Disclosure Letter, which are all of
such Grantor’s U.S. trademark registrations and trademark applications, U.S.
patents and patents applications, and U.S. copyright registrations and
applications as of the Security Agreement Effective Date, or if any Grantor
files a statement of use or an amendment to allege use with respect to any
intent-to-use trademark application, then such Grantor shall give the
Administrative Agent notice thereof, as part of each compliance certificate
provided to the Administrative Agent pursuant to Section 5.01(c) of the Credit
Agreement. Each Grantor agrees promptly upon request by the Administrative Agent
to execute and deliver to the Administrative Agent any supplement to this
Security Agreement or any other document reasonably requested by the
Administrative Agent to evidence such security interest in a form appropriate
for recording in the applicable federal office. Each Grantor also hereby
authorizes the Administrative Agent to modify this Security Agreement
unilaterally (i) by amending Part C of Schedule “B” to the Collateral Disclosure
Letter to include any of the

 

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foregoing U.S. Patents, Trademarks and/or Copyrights of which the Administrative
Agent receives notification from such Grantor pursuant hereto and (ii) by
recording, in addition to and not in substitution for this Security Agreement, a
duplicate original of this Security Agreement containing in Part C of Schedule
“B” to the Collateral Disclosure Letter a description of such owned U.S.
Patents, Trademarks and/or Copyrights.

4.12.2 As of the Security Agreement Effective Date, no Grantor has any interest
in, or title to, any owned U.S. trademark registrations, or trademark
applications, U.S. patents or patents applications, or U.S. copyright
registrations or copyright applications, except as set forth in Schedule “B” to
the Collateral Disclosure Letter. This Agreement is effective to create a valid
and continuing Lien on such owned U.S. Copyrights, Patents and Trademarks and,
upon filing of the Confirmatory Grant of Security Interest in Copyrights with
the United States Copyright Office and filing of the Confirmatory Grant of
Security Interest in Patents and the Confirmatory Grant of Security Interest in
Trademarks with the United States Patent and Trademark Office, and the filing of
appropriate financing statements in the jurisdictions listed in Schedule “E” to
the Collateral Disclosure Letter, all action necessary or desirable to protect
and perfect the security interest in, to and on each Grantor’s owned U.S.
trademark registrations and trademark applications, U.S. patents and patent
applications, and U.S. copyright registrations and copyright applications has
been taken and such perfected security interest is enforceable as such as
against any and all creditors of and purchasers from any Grantor. As of the
Security Agreement Effective Date, no Grantor has any interest in any owned U.S.
copyright registration or application that is necessary in connection with the
operation of such Grantor’s business, except for those owned U.S. copyright
registrations and applications identified in Schedule “B” to the Collateral
Disclosure Letter.

4.13. Commercial Tort Claims. If, after the date hereof, any Grantor identifies
the existence of a Commercial Tort Claim (with a value reasonably believed by
such Grantor to be in excess of $10,000,000) belonging to such Grantor that has
arisen in the course of such Grantor’s business in addition to the Commercial
Tort Claims described in Schedule “F” to the Collateral Disclosure Letter, which
are all of such Grantor’s Commercial Tort Claims (with a value reasonably
believed by such Grantor to be in excess of $10,000,000) as of the Security
Agreement Effective Date, then such Grantor shall give the Administrative Agent
notice thereof as part of the certificate of a Financial Officer of the Borrower
as required by Section 5.01(c) of the Credit Agreement. Each Grantor agrees
promptly upon request by the Administrative Agent to execute and deliver to the
Administrative Agent any supplement to this Security Agreement or any other
document reasonably requested by the Administrative Agent to evidence the grant
of a security interest therein in favor of the Administrative Agent.

4.14. Updating of Collateral Disclosure Letter. The Borrower will provide to the
Administrative Agent, concurrently with the delivery of the certificate of a
Financial Officer of the Borrower as required by Section 5.01(c) of the Credit
Agreement in respect of each fiscal year of the Borrower (as contemplated by
Section 5.01(b) of the Credit Agreement), updated versions of the Collateral
Disclosure Letter (provided that if there have been no changes to any Schedules
to the Collateral Disclosure Letter since the previous provision or updating
thereof required hereby, the Borrower shall indicate that there has been “no
change” to the applicable Schedule(s)).

ARTICLE V

DEFAULT

5.1. The occurrence of an Event of Default under and as defined in the Credit
Agreement shall constitute an Event of Default under this Security Agreement.

 

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5.2. Remedies.

5.2.1 Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and at the direction of the Required Lenders shall,
exercise any or all of the following rights and remedies:

 

  (i) Those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document, provided that this clause (i) shall not
be understood to limit any rights or remedies available to the Administrative
Agent and the Secured Parties prior to an Event of Default.

 

  (ii) Those rights and remedies available to a secured party under the UCC
(whether or not the UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise of
a bank’s right of setoff or bankers’ lien) when a debtor is in default under a
security agreement.

 

  (iii) [Intentionally Omitted].

 

  (iv) Without notice, demand or advertisement of any kind (in each case except
as specifically provided in Section 8.1 hereof or elsewhere herein or in any
other Loan Document) to any Grantor or any other Person enter the premises of
any Grantor where any Collateral is located (through self-help and without
judicial process) to collect, receive, assemble, process, appropriate, sell,
lease, assign, grant an option or options to purchase or otherwise dispose of,
deliver, or realize upon, the Collateral or any part thereof in one or more
parcels at public or private sale or sales (which sales may be adjourned or
continued from time to time with or without notice and may take place at any
Grantor’s premises or elsewhere), for cash, on credit or for future delivery
without assumption of any credit risk, and upon such other terms as the
Administrative Agent may deem commercially reasonable.

 

  (v) Concurrently with written notice to the applicable Grantor, transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, to exercise the voting and all other rights as a holder
with respect thereto, to collect and receive all cash dividends, interest,
principal and other distributions made thereon and to otherwise act with respect
to the Pledged Collateral as though the Administrative Agent was the outright
owner thereof.

5.2.2 The Administrative Agent, on behalf of the Secured Parties, may comply
with any applicable state or federal law requirements in connection with a
disposition of the Collateral, and such compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

5.2.3 The Administrative Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Administrative Agent and the other Secured
Parties, the whole or any part of the Collateral so sold, free of any right of
equity redemption, which equity redemption the Grantor hereby expressly releases
to the extent permitted by applicable law.

 

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5.2.4 Until the Administrative Agent is able to effect a sale, lease, or other
disposition of Collateral, the Administrative Agent shall have the right to hold
or use Collateral, or any part thereof, to the extent that it deems appropriate
for the purpose of preserving Collateral or its value or for any other purpose
deemed appropriate by the Administrative Agent. The Administrative Agent may, if
it so elects, seek the appointment of a receiver or keeper to take possession of
Collateral and to enforce any of the Administrative Agent’s remedies (for the
benefit of the Administrative Agent and other Secured Parties), with respect to
such appointment without prior notice or hearing as to such appointment.

5.2.5 Notwithstanding the foregoing, neither the Administrative Agent nor any
other Secured Party shall be required to (i) make any demand upon, or pursue or
exhaust any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Obligations or to pursue or exhaust any of their rights or remedies with respect
to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Obligations or to resort to
the Collateral or any such guarantee in any particular order, or (iii) effect a
public sale of any Collateral.

5.2.6 Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Collateral and may be compelled
to resort to one or more private sales thereof in accordance with Section 5.2.1
above. Each Grantor also acknowledges that any private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of such sale being private. The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Collateral for the
period of time necessary to permit any Grantor or the issuer of the Pledged
Collateral to register such securities for public sale under the Securities Act
of 1933, as amended, or under applicable state securities laws, even if the
applicable Grantor and the issuer would agree to do so.

5.3. Grantors’ Obligations Upon Default. Upon the request of the Administrative
Agent after the occurrence and during the continuance of an Event of Default,
each Grantor will:

5.3.1 Assembly of Collateral. Assemble and make available to the Administrative
Agent the Collateral and all books and records relating thereto at any place or
places specified by the Administrative Agent.

5.3.2 Secured Party Access. Permit the Administrative Agent, by the
Administrative Agent’s representatives and agents, to enter, occupy and use any
premises where all or any part of the Collateral, or the books and records
relating thereto, or both, are located, to take possession of all or any part of
the Collateral, or the books and records relating thereto, or both, to remove
all or any part of the Collateral, or the books and records relating thereto, or
both, and to conduct sales of the Collateral, without any obligation to pay the
Grantor for such use and occupancy.

5.3.3 Prepare and file, or use commercially reasonable efforts to cause an
issuer of Pledged Collateral to prepare and file, with the Securities and
Exchange Commission or any other applicable government agency, registration
statements, a prospectus and such other documentation in connection with the
Pledged Collateral as the Administrative Agent may request, all in form and
substance reasonably satisfactory to the Administrative Agent, and furnish to
the Administrative Agent, or use commercially reasonable efforts to cause an
issuer of Pledged Collateral to furnish to the Administrative Agent, any
information regarding the Pledged Collateral in such detail as the
Administrative Agent may specify.

 

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5.3.4 Take, or cause an issuer of Pledged Collateral to take, any and all
actions necessary to register or qualify the Pledged Collateral to enable the
Administrative Agent to consummate a public sale or other disposition of the
Pledged Collateral.

5.4. License. The Administrative Agent is hereby granted (to the extent
grantable without such Grantor breaching or violating any agreement) a
non-exclusive license or other right to use (subject, in the case of Trademarks,
to sufficient rights to quality control and inspection in favor of such Grantor
to avoid the risk of invalidation of such Trademarks and in the case of trade
secrets, to an obligation of the Administrative Agent to take reasonable steps
under the circumstances to keep the trade secrets confidential to avoid the risk
of invalidation of such trade secrets), following the occurrence and during the
continuance of an Event of Default, without charge, each Grantor’s labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral, and, following
the occurrence and during the continuance of an Event of Default, such Grantor’s
rights under all licenses and all franchise agreements shall inure to the
Administrative Agent’s benefit. In addition, each Grantor hereby irrevocably
agrees that the Administrative Agent may, following the occurrence and during
the continuance of an Event of Default, sell any of such Grantor’s Inventory
directly to any person, including without limitation persons who have previously
purchased such Grantor’s Inventory from such Grantor and in connection with any
such sale or other enforcement of the Administrative Agent’s rights under this
Security Agreement, may sell Inventory which bears any trademark owned by or
licensed to such Grantor and any Inventory that is covered by any copyright
owned by or licensed to such Grantor and the Administrative Agent may (but shall
have no obligation to) finish any work in process and affix any trademark owned
by or licensed to such Grantor and sell such Inventory as provided herein. The
license granted under this Section 5.4 shall continue in effect until payment in
full of all of the Obligations (other than obligations under any Swap Agreement
or Banking Services Agreement, in each case not due and payable, and other
obligations expressly stated to survive such payment or termination) and
expiration or termination of all Letters of Credit (or cash collateralization or
other arrangements for such Letters of Credit reasonably satisfactory to the
Administrative Agent) and termination of this Security Agreement in accordance
with its terms, at which time this license shall immediately terminate.

ARTICLE VI

WAIVERS, AMENDMENTS AND REMEDIES

No delay or omission of the Administrative Agent or any Secured Party to
exercise any right or remedy granted under this Security Agreement shall impair
such right or remedy or be construed to be a waiver of any Default or Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right or remedy shall not preclude any other or further exercise thereof or
the exercise of any other right or remedy. No waiver, amendment or other
variation of the terms, conditions or provisions of this Security Agreement
whatsoever shall be valid unless in writing signed by the Administrative Agent
and each Grantor, and then only to the extent in such writing specifically set
forth, provided that the addition of any Subsidiary as a Grantor hereunder by
execution of a Security Agreement Supplement in the form of Annex I (with such
modifications as shall be acceptable to the Administrative Agent) and an
supplements to the Collateral Disclosure Letter shall not require receipt of any
consent from or execution of any documentation by any other Grantor party hereto
(or the Administrative Agent in the case of supplements to the Collateral
Disclosure Letter). All rights and remedies contained in this Security Agreement
or by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Secured Parties until the Obligations (other than
obligations under any Swap Agreement or Banking Services Agreement, in each case
not due and payable, and other Obligations expressly stated to survive such
payment and termination) have been paid in full and all Letters of Credit have
expired or terminated (or otherwise become subject to cash collateralization or
other arrangements reasonably satisfactory to the Administrative Agent).

 

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ARTICLE VII

APPLICATION OF PROCEEDS

7.1. Application of Proceeds. The proceeds of the Collateral shall be applied by
the Administrative Agent to payment of the Obligations as provided under Article
VII of the Credit Agreement.

ARTICLE VIII

GENERAL PROVISIONS

8.1. Notice of Disposition of Collateral; Condition of Collateral. Each Grantor
hereby waives, to the fullest extent permitted by applicable law, notice of the
time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made shall
be deemed reasonable if sent to the Borrower, addressed as set forth in Article
IX, at least ten (10) days prior to (i) the date of any such public sale or
(ii) the time after which any such private sale or other disposition may be
made. The Administrative Agent shall have no obligation to clean-up or otherwise
prepare the Collateral for sale. To the maximum extent permitted by applicable
law, each Grantor waives all claims, damages, and demands against the
Administrative Agent or any other Secured Party arising out of the repossession,
retention or sale of the Collateral, except such as arise solely out of the
gross negligence or willful misconduct of the Administrative Agent or such other
Secured Party as finally determined by a court of competent jurisdiction. To the
extent it may lawfully do so, each Grantor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert against
the Administrative Agent or any other Secured Party, any valuation, stay,
appraisal, extension, moratorium, redemption or similar laws and any and all
rights or defenses it may have as a surety now or hereafter existing which, but
for this provision, might be applicable to the sale of any Collateral made under
the judgment, order or decree of any court, or privately under the power of sale
conferred by this Security Agreement, or otherwise. Except as otherwise
specifically provided herein, each Grantor hereby waives presentment, demand,
protest or any notice (to the maximum extent permitted by applicable law) of any
kind in connection with this Security Agreement or any Collateral.

8.2. Limitation on Administrative Agent’s and other Secured Parties’ Duty with
Respect to the Collateral. The Administrative Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Administrative Agent
and each other Secured Party shall use reasonable care with respect to the
Collateral in its possession or under its control. Neither the Administrative
Agent nor any other Secured Party shall have any other duty as to any Collateral
in its possession or control or in the possession or control of any agent or
nominee of the Administrative Agent or such other Secured Party, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on
the Administrative Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable
for the Administrative Agent (i) to fail to incur expenses deemed significant by
the Administrative Agent to prepare Collateral for disposition or otherwise to
transform raw material or work in process into finished goods or other finished
products for disposition, (ii) if not otherwise required by applicable law or
contractual restriction, to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to

 

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fail to exercise collection remedies against account debtors or other Persons
obligated on Collateral or to remove Liens on or any adverse claims against
Collateral, (iv) to exercise collection remedies against account debtors and
other Persons obligated on Collateral directly or through the use of collection
agencies and other collection specialists, (v) to advertise dispositions of
Collateral through publications or media of general circulation, whether or not
the Collateral is of a specialized nature, (vi) to contact other Persons,
whether or not in the same business as such Grantor, for expressions of interest
in acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of Collateral, or
(xii) to the extent deemed appropriate by the Administrative Agent, to obtain
the services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that the purpose
of this Section 8.2 is to provide non-exhaustive indications of what actions or
omissions by the Administrative Agent would be commercially reasonable in the
Administrative Agent’s exercise of remedies against the Collateral and that
other actions or omissions by the Administrative Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section 8.2. Without limitation upon the foregoing, nothing contained in this
Section 8.2 shall be construed to grant any rights to any Grantor or to impose
any duties on the Administrative Agent that would not have been granted or
imposed by this Security Agreement or by applicable law in the absence of this
Section 8.2.

8.3. Compromises and Collection of Collateral. Each Grantor and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable. In view of the foregoing, each Grantor agrees that
the Administrative Agent may at any time and from time to time, if a Default has
occurred and is continuing, compromise with the obligor on any Receivable,
accept in full payment of any Receivable such amount as the Administrative Agent
in its sole discretion shall determine or abandon any Receivable, and any such
action by the Administrative Agent shall be commercially reasonable so long as
the Administrative Agent acts in good faith based on information known to it at
the time it takes any such action.

8.4. Secured Party Performance of Grantor’s Obligations. Without having any
obligation to do so, the Administrative Agent may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Security Agreement and
such Grantor shall reimburse the Administrative Agent for any reasonable amounts
paid by the Administrative Agent pursuant to this Section 8.4. Each Grantor’s
obligation to reimburse the Administrative Agent pursuant to the preceding
sentence shall be an Obligation payable on demand.

8.5. Authorization for Secured Party to Take Certain Action. Each Grantor
irrevocably authorizes the Administrative Agent at any time and from time to
time in the sole discretion of the Administrative Agent and appoints the
Administrative Agent as its attorney in fact (i) to execute on behalf of such
Grantor as debtor and to file financing statements necessary or desirable in the
Administrative Agent’s sole discretion to perfect and to maintain the perfection
and priority of the Administrative Agent’s security interest in the Collateral,
(ii) to indorse and collect any cash proceeds of the Collateral, (iii) to file a
carbon, photographic or other reproduction of this Security Agreement or any
financing

 

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statement with respect to the Collateral as a financing statement and to file
any other financing statement or amendment of a financing statement (which does
not add new collateral or add a debtor) in such offices as the Administrative
Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the Administrative Agent’s security
interest in the Collateral, (iv) to contact and enter into one or more
agreements with the issuers of uncertificated securities which are Collateral
owned by such Grantor and which are Securities or with financial intermediaries
holding other Investment Property as may be necessary or advisable to give the
Administrative Agent Control over such Securities or other Investment Property,
(v) subject to the terms of Section 4.1.5 hereof, to enforce payment of the
Instruments, Accounts and Receivables in the name of the Administrative Agent or
such Grantor, (vi) to apply the proceeds of any Collateral received by the
Administrative Agent to the Obligations as provided in Article VII and (vii) to
discharge past due taxes, assessments, charges, fees or Liens on the Collateral
(except for such Liens as are specifically permitted hereunder or under any
other Loan Document), and each Grantor agrees to reimburse the Administrative
Agent on demand for any reasonable payment made or any reasonable expense
incurred by the Administrative Agent in connection therewith, provided that this
authorization shall not relieve any Grantor of any of its obligations under this
Security Agreement or under the Credit Agreement; provided further that the
Administrative Agent may exercise the authorizations in the foregoing clause
(ii) and clauses (iv) through (vii) only during the existence of an Event of
Default.

8.6. [Intentionally Omitted].

8.7. Use and Possession of Certain Premises. Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall be entitled
to occupy and use any premises owned or leased by the Grantors where any of the
Collateral or any records relating to the Collateral are located until the
Obligations (other than obligations under any Swap Agreement or Banking Services
Agreement, in each case not due and payable, and other obligations expressly
stated to survive such payment or termination) are paid in full and all Letters
of Credit expire or terminate (or otherwise become subject to cash
collateralization or other arrangements reasonably satisfactory to the
Administrative Agent) or the Collateral is removed therefrom, whichever first
occurs, without any obligation to pay any Grantor for such use and occupancy.

8.8. [Intentionally Omitted].

8.9. Reinstatement. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Grantor for liquidation or reorganization, should any Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Grantor’s assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

8.10. Benefit of Agreement; No Third Party Beneficiaries, etc. The terms and
provisions of this Security Agreement shall be binding upon and inure to the
benefit of the Grantors, the Administrative Agent and the Secured Parties and
their respective successors and assigns (including all persons who become bound
as a debtor to this Security Agreement), except that the Grantors shall not have
the right to assign their rights or delegate their obligations under this
Security Agreement or any interest herein, without the prior written consent of
the Administrative Agent. No sales of participations, assignments,

 

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transfers, or other dispositions of any agreement governing the Obligations or
any portion thereof or interest therein shall in any manner impair the Lien
granted to the Administrative Agent, for the benefit of the Administrative Agent
and the other Secured Parties, hereunder. No provision of this Security
Agreement will inure to the benefit of any other creditor of any Grantor or any
bankruptcy trustee, debtor-in-possession, creditor trust or other representative
of an estate, including where any such trustee, debtor-in-possession, creditor
trust or other representative of an estate is the beneficiary of a Lien securing
Collateral by virtue of the avoidance of such Lien in an insolvency, bankruptcy,
reorganization or liquidation proceeding.

8.11. Survival of Representations. All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.

8.12. Taxes and Expenses. Section 2.17 and Section 9.03 of the Credit Agreement
shall be applicable, mutatis mutandis, to all payments made by any Grantor under
this Security Agreement. Any Indemnified Taxes payable or ruled payable by a
Federal or State Governmental Authority in respect of this Security Agreement
shall be paid by the Grantors, together with interest and penalties, if any.
Without duplication of any amounts so paid pursuant to the Credit Agreement, the
Grantors shall reimburse the Administrative Agent for any and all reasonable
out-of-pocket expenses paid or incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration, collection
and enforcement of this Security Agreement and in the audit, analysis,
administration, collection, preservation or sale of the Collateral (including
the expenses and charges associated with any periodic or special audit of the
Collateral). Any and all costs and expenses incurred by the Grantors in the
performance of actions required pursuant to the terms hereof shall be borne
solely by the Grantors.

8.13. Headings. The title of and section headings in this Security Agreement are
for convenience of reference only, and shall not govern the interpretation of
any of the terms and provisions of this Security Agreement.

8.14. Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Obligations
outstanding) until such time as the principal and interest on the Loans, all LC
Disbursements, the fees, expenses and other amounts payable under the Loan
Documents and the other Obligations (other than obligations under any Swap
Agreement or Banking Services Agreement, in each case not due and payable, and
other Obligations expressly stated to survive such payment and termination)
shall have been paid in full in cash, the Commitments shall have been terminated
and no Letters of Credit shall be outstanding (or with respect to any
outstanding Letters of Credit, a cash deposit or backup Letter of Credit has
been delivered to the Administrative Agent as required by the Credit Agreement).
The Liens granted under this Security Agreement shall be released in accordance
with Section 9.19 of the Credit Agreement.

8.15. Entire Agreement. This Security Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the Grantors
and the Administrative Agent relating to the Collateral and supersedes all prior
agreements and understandings among the Grantors and the Administrative Agent
relating to the Collateral.

8.16. Governing Law; Jurisdiction; Waiver of Jury Trial.

8.16.1 THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

 

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8.16.2 Each Grantor hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County, Borough of Manhattan and of the
United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Security Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Security Agreement or any
other Loan Document shall affect any right that the Administrative Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Security Agreement or any other Loan Document against any
Grantor or its properties in the courts of any jurisdiction.

8.16.3 Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Security Agreement or any other Loan Document
in any court referred to in Section 8.16.2. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

8.16.4 Each party to this Security Agreement irrevocably consents to service of
process in the manner provided for notices in Article IX of this Security
Agreement, and each of the Grantors hereby appoints the Borrower as its agent
for service of process. Nothing in this Security Agreement or any other Loan
Document will affect the right of any party to this Security Agreement to serve
process in any other manner permitted by law.

8.16.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

8.17. Indemnity. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify the Administrative Agent and the Secured Parties, and
their respective successors, assigns, agents and employees (each, and
“Indemnitee”), from and against any and all liabilities, damages, penalties,
suits and reasonable and documented out-of-pocket costs and expenses (including
the reasonable and documented fees, charges and disbursements of any counsel for
any Indemnitee) of any kind and nature (including, without limitation, all
expenses of litigation or preparation therefor whether or not the Administrative
Agent or any Secured Party is a party thereto) imposed on, incurred by or
asserted against the Administrative Agent or the Secured Parties, or their
respective successors, assigns, agents

 

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and employees, in any way relating to or arising out of this Security Agreement,
or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of any
Collateral (including, without limitation, latent and other defects, whether or
not discoverable by the Administrative Agent or the Secured Parties or any
Grantor, and any claim for patent, trademark or copyright infringement);
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from (x) the gross negligence or willful misconduct of
such Indemnitee or (y) a material breach in bad faith by such Indemnitee of its
express contractual obligations under this Security Agreement or any other Loan
Document pursuant to a claim made by such Grantor. This Section 8.17 shall not
apply with respect to Taxes other than any Taxes that represent losses or
damages arising from any non-Tax claim.

8.18. Subordination of Intercompany Indebtedness. Each Grantor agrees that any
and all claims of such Grantor against any other Grantor (each an “Obligor”)
with respect to any “Intercompany Indebtedness” (as hereinafter defined), or
against any of its properties, shall be subordinate and subject in right of
payment to the prior payment, in full and in cash, of all Obligations (other
than obligations under any Swap Agreement or Banking Services Agreement, in each
case not due and payable, and other obligations expressly stated to survive such
payment or termination) and expiration or termination of all Letters of Credit
(or cash collateralization or other arrangements for such Letters of Credit
reasonably satisfactory to the Administrative Agent), provided that, and not in
contravention of the foregoing, so long as no Event of Default has occurred and
is continuing, such Grantor may make loans to and receive payments with respect
to such Intercompany Indebtedness from each such Obligor to the extent not
prohibited by the terms of this Security Agreement and the other Loan Documents.
Notwithstanding any right of any Grantor to ask, demand, sue for, take or
receive any payment from any Obligor, all rights, liens and security interests
of such Grantor, whether now or hereafter arising and howsoever existing, in any
assets of any other Obligor shall be and are subordinated to the rights of the
Secured Parties and the Administrative Agent in those assets until the payment
in full in cash, of all Obligations (other than obligations under any Swap
Agreement or Banking Services Agreement, in each case not due and payable, and
other obligations expressly stated to survive such payment or termination) and
expiration or termination of all Letters of Credit (or cash collateralization or
other arrangements for such Letters of Credit reasonably satisfactory to the
Administrative Agent), provided that, and not in contravention of the foregoing,
so long as no Event of Default has occurred and is continuing, such Grantor may
ask, demand, take or receive any payment or take such other actions to the
extent not prohibited by the terms of this Security Agreement and the other Loan
Documents. If an Event of Default exists, no Grantor shall have any right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until this Security Agreement has
terminated in accordance with Section 8.14. If all or any part of the assets of
any Obligor, or the proceeds thereof, are subject to any distribution, division
or application to the creditors of such Obligor, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of any such Obligor is dissolved or if
substantially all of the assets of any such Obligor are sold, then, and in any
such event (such events being herein referred to as an “Insolvency Event”), any
payment or distribution of any kind or character, either in cash, securities or
other property, which shall be payable or deliverable upon or with respect to
any indebtedness of any Obligor to any Grantor (“Intercompany Indebtedness”)
shall, if an Event of Default has occurred and is continuing, be paid or
delivered directly to the Administrative Agent for application on any of the
Obligations, due or to become due, until such Obligations (other than contingent
indemnity obligations) shall have first been fully paid and satisfied (in cash).
Should any payment, distribution, security or instrument or proceeds thereof be
received by the applicable Grantor upon or with respect to the Intercompany
Indebtedness after any Insolvency Event and prior to the termination of this
Security Agreement in accordance with Section 8.14, such Grantor shall receive
and hold the same in trust, as trustee, for the benefit of the Secured Parties
and shall, if an Event of Default has occurred and is

 

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continuing, forthwith deliver the same to the Administrative Agent, for the
benefit of the Secured Parties, in precisely the form received (except for the
endorsement or assignment of the Grantor where necessary), for application to
any of the Obligations, due or not due, and, until so delivered, the same shall
be held in trust by the Grantor as the property of the Secured Parties. If any
such Grantor fails to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its officers or
employees is irrevocably authorized to make the same. Each Grantor agrees that
until the termination of this Security Agreement in accordance with
Section 8.14, except by operation of law pursuant to a merger permitted by the
Credit Agreement no Grantor will assign or transfer to any Person (other than
the Administrative Agent or the Borrower or another Grantor) any claim any such
Grantor has or may have against any Obligor.

8.19. Severability. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Security Agreement are declared to be severable.

8.20. Counterparts. This Security Agreement may be executed in counterparts (and
by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Security Agreement by telecopy, e-mailed .pdf or any other electronic means that
reproduces an image of the actual executed signature page shall be effective as
delivery of a manually executed counterpart of this Security Agreement. The
words “execution,” “signed,” “signature,” “delivery,” and words of like import
in or relating to any document to be signed in connection with this Security
Agreement and the transactions contemplated hereby shall be deemed to include
Electronic Signatures, deliveries or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

8.21. California Waivers. To the extent California law applies, in addition to
and not in lieu of any other provisions of this Security Agreement, each Grantor
represents, warrants, covenants and agrees as follows:

8.21.1 The obligations of such Grantor under this Security Agreement shall be
performed without demand by any Secured Party and shall be unconditional
irrespective of the genuineness, validity, regularity or enforceability of any
of the Loan Documents, Swap Agreements or Banking Services Agreements, and
without regard to any other circumstance which might otherwise constitute a
legal or equitable discharge of a surety or a guarantor. Each Grantor hereby
waives to the extent permitted by law any and all benefits and defenses under
California Civil Code Section 2810 and agrees that by doing so such Grantor
shall be liable even if the Borrower or the relevant Subsidiary had no liability
at the time of execution of the applicable Loan Documents, Swap Agreements or
Banking Services Agreements, or thereafter ceases to be liable. Each Grantor
hereby waives to the extent permitted by law any and all benefits and defenses
under California Civil Code Section 2809 and agrees that by doing so such
Grantor’s liability may be larger in amount and more burdensome than that of the
Borrower and/or the relevant Subsidiary. Each Grantor hereby waives to the
extent permitted by law the benefit of all principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of this
Security Agreement and agrees that such Grantor’s obligations

 

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shall not be affected by any circumstances, whether or not referred to in this
Security Agreement which might otherwise constitute a legal or equitable
discharge of a surety or a guarantor. Each Grantor hereby waives to the extent
permitted by law the benefits of any right of discharge under any and all
statutes or other laws relating to guarantors or sureties and any other rights
of sureties and guarantors thereunder.

8.21.2 In accordance with Section 2856 of the California Civil Code, each
Grantor hereby waives to the extent permitted by law all rights and defenses
arising out of an election of remedies by any Secured Party even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for the Obligations, has destroyed or otherwise impaired such Grantor’s rights
of subrogation and reimbursement against the principal. Each Grantor hereby
authorizes and empowers the Secured Parties to exercise, in their sole and
absolute discretion, any right or remedy, or any combination thereof, which may
then be available, since it is the intent and purpose of such Grantor that its
obligations under this Security Agreement shall be absolute, independent and
unconditional under any and all circumstances. Specifically, and without in any
way limiting the foregoing, each Grantor hereby waives to the extent permitted
by law any rights of subrogation, indemnification, contribution or reimbursement
arising under Sections 2846, 2847, 2848 and 2849 of the California Civil Code or
any other right of recourse to or with respect to the Borrower or any
Subsidiary, any constituent of the Borrower or any Subsidiary, any other Person,
or the assets or property of any of the foregoing or to any collateral for the
Obligations until all of the Obligations (other than obligations under any Swap
Agreement or Banking Services Agreement, in each case not due and payable, and
other obligations expressly stated to survive such payment or termination) have
been paid and satisfied in full in cash and the Commitments have terminated or
expired and all Letters of Credit have expired or terminated (or otherwise
become subject to cash collateralization or other arrangements reasonably
satisfactory to the Administrative Agent). In connection with the foregoing,
each Grantor expressly waives to the extent permitted by law any and all rights
of subrogation against the Borrower or any Subsidiary, and each Grantor hereby
waives to the extent permitted by law any rights to enforce any remedy which any
Secured Party may have against the Borrower or any Subsidiary and any right to
participate in any collateral for the Obligations.

8.21.3 Without limiting the generality of the foregoing, each Grantor hereby
waives, to the fullest extent permitted by law, diligence in collecting the
Obligations, presentment, demand for payment, protest, all notices with respect
to this Security Agreement, or any other Loan Document, Swap Agreement or
Banking Services Agreement which may be required by statute, rule of law or
otherwise to preserve the Secured Parties’ rights against such Grantor under
this Security Agreement, including, but not limited to, notice of acceptance,
notice of any amendment of the Loan Documents, any Swap Agreement or any Banking
Services Agreement, notice of the occurrence of any default, notice of intent to
accelerate, notice of acceleration, notice of dishonor, notice of foreclosure,
notice of protest, and notice of the incurring by the Borrower or any Subsidiary
of any obligation or Indebtedness.

8.21.4 Without limiting the foregoing, each Grantor waives to the extent
permitted by law all rights of subrogation, reimbursement, indemnification, and
contribution and any other rights and defenses that are or may become available
to such Grantor by reason of California Civil Code Sections 2787 to 2855,
inclusive, including any and all rights or defenses such Grantor may have by
reason of protection afforded to the Borrower or any Subsidiary with respect to
any of the obligations of such Grantor under this Security Agreement by reason
of a nonjudicial foreclosure or pursuant to the antideficiency or other laws of
the State of California limiting or discharging the Obligations. Without
limiting the generality of the foregoing, each Grantor hereby expressly waives
to the extent permitted by law any and all benefits under

 

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California Code of Civil Procedure Sections 580b(b) (which Section, if such
Grantor had not given this waiver, would otherwise limit the Secured Parties’
right to recover a deficiency judgment with respect to purchase money
obligations).

8.21.5 Likewise, each Grantor waives to the extent permitted by law (i) any and
all rights and defenses available to such Grantor under California Civil Code
Sections 2899 and 3433 and (ii) any rights or defenses such Grantor may have
with respect to its obligations as a guarantor by reason of any election of
remedies by any Secured Party.

ARTICLE IX

NOTICES

9.1. Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent (and deemed received) in the manner and to the
addresses set forth in Section 9.01 of the Credit Agreement. Any notice
delivered to the Borrower shall be deemed to have been delivered to all of the
Grantors.

9.2. Change in Address for Notices. Each of the Grantors, the Administrative
Agent and the Lenders may change the address for service of notice upon it by a
notice in writing to the other parties in accordance with Section 9.01 of the
Credit Agreement.

ARTICLE X

THE ADMINISTRATIVE AGENT

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the
Secured Parties hereunder pursuant to Article VIII of the Credit Agreement. It
is expressly understood and agreed by the parties to this Security Agreement
that any authority conferred upon the Administrative Agent hereunder is subject
to the terms of the delegation of authority made by the Secured Parties to the
Administrative Agent pursuant to the Credit Agreement, and that the
Administrative Agent has agreed to act (and any successor Administrative Agent
shall act) as such hereunder only on the express conditions contained in such
Article VIII. Any successor Administrative Agent appointed pursuant to Article
VIII of the Credit Agreement shall be entitled to all the rights, interests and
benefits of the Administrative Agent hereunder.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, each of the Grantors and the Administrative Agent have
executed this Security Agreement as of the date first above written.

 

MICROCHIP TECHNOLOGY INCORPORATED,

as a Grantor

By:   /s/ J. Eric Bjornholt

Name:   J. Eric Bjornholt Title:   Vice President and Chief Financial Officer

 

MICROCHIP TECHNOLOGY LLC,

as a Grantor

 

By: Microchip Technology Incorporated,

its sole member

By:   /s/ J. Eric Bjornholt

Name:   J. Eric Bjornholt Title:   Vice President and Chief Financial Officer

 

SILICON STORAGE TECHNOLOGY, INC.,

as a Grantor

By:   /s/ J. Eric Bjornholt

Name:   J. Eric Bjornholt Title:   Chief Financial Officer

 

SILICON STORAGE TECHNOLOGY LLC,

as a Grantor

 

By: Silicon Storage Technology, Inc.,

its sole member

By:   /s/ J. Eric Bjornholt

Name:   J. Eric Bjornholt Title:   Chief Financial Officer

 

Signature Page to Pledge and Security Agreement

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

ATMEL CORPORATION,

as a Grantor

By:   /s/ J. Eric Bjornholt

Name:   J. Eric Bjornholt Title:   Chief Financial Officer

 

Signature Page to Pledge and Security Agreement

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

MICROCHIP HOLDING CORPORATION,

as a Grantor

By:   /s/ J. Eric Bjornholt

Name:   J. Eric Bjornholt Title:   President

 

Signature Page to Pledge and Security Agreement

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

JPMORGAN CHASE BANK, N.A., as Administrative Agent By:   /s/ Caitlin Stewart

Name:   Caitlin Stewart Title:   Vice President

 

Signature Page to Pledge and Security Agreement

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

EXHIBIT “A”

(See Section 4.4 of Security Agreement)

AMENDMENT

This Amendment, dated                     , 20         is delivered pursuant to
Section 4.4 of the Security Agreement referred to below. All defined terms
herein shall have the meanings ascribed thereto or incorporated by reference in
the Security Agreement. The undersigned hereby certifies that the
representations and warranties in Article III of the Security Agreement are and
continue to be true and correct. The undersigned further agrees that this
Amendment may be attached to that certain Pledge and Security Agreement, dated
February [    ], 2017, between the undersigned, as the Grantors, and JPMorgan
Chase Bank, N.A., as the Administrative Agent, (the “Security Agreement”) and
that the Collateral listed on Schedule I to this Amendment shall be and become a
part of the Collateral referred to in said Security Agreement and shall secure
all Obligations referred to in said Security Agreement.

 

By:    

Name:   Title:  

 

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SCHEDULE I TO AMENDMENT

STOCKS

 

Name of Grantor

  

Issuer

  

Certificate Number(s)

  

Number of Shares

  

Class of Stock

  

Percentage of
Outstanding Shares

                                                     

BONDS

 

Name of Grantor

  

Issuer

  

Number

  

Face Amount

  

Coupon Rate

  

Maturity

                                                     

GOVERNMENT SECURITIES

 

Name of Grantor

  

Issuer

  

Number

  

Type

  

Face Amount

  

Coupon Rate

  

Maturity

                                   

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

 

Name of Grantor

  

Issuer

  

Description of Collateral

  

Percentage Ownership Interest

                 

[Add description of custody accounts or arrangements with securities
intermediary, if applicable]

 

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ANNEX I

to

PLEDGE AND SECURITY AGREEMENT

Reference is hereby made to the Pledge and Security Agreement (as amended,
restated, supplemented or otherwise modified from time to time, the
“Agreement”), dated as of February [__], 2017, made by each of MICROCHIP
TECHNOLOGY INCORPORATED, a Delaware corporation (the “Borrower”), and the other
Subsidiaries of the Borrower listed on the signature pages thereto (together
with the Borrower, the “Initial Grantors”, and together with any additional
Subsidiaries, including the undersigned, which become parties thereto by
executing a Supplement in substantially the form hereof, the “Grantors”), in
favor of the Administrative Agent. Capitalized terms used herein and not defined
herein shall have the meanings given to them in the Agreement.

By its execution below, the undersigned, [NAME OF NEW GRANTOR], a
[                    ] [corporation/limited liability company/limited
partnership] (the “New Grantor”) agrees to become, and does hereby become, a
Grantor under the Agreement and agrees to be bound by the Agreement as if
originally a party thereto. The New Grantor hereby collaterally assigns and
pledges to the Administrative Agent for the benefit of the Secured Parties, and
grants to the Administrative Agent for the benefit of the Secured Parties, a
security interest in all of the New Grantor’s right, title and interest in and
to the Collateral, whether now owned or hereafter acquired, to secure the prompt
and complete payment and performance of the Obligations. For the avoidance of
doubt, the grant of a security interest herein shall not be deemed to be an
assignment of intellectual property rights owned by the New Grantor.

By its execution below, the undersigned represents and warrants as to itself
that all of the representations and warranties contained in the Agreement are
true and correct in all respects as of the date hereof. The New Grantor
represents and warrants that the supplements to the Collateral Disclosure Letter
attached hereto are true and correct in all respects and that such supplements
set forth all information required to be scheduled under the Agreement with
respect to the New Grantor. The New Grantor shall take all steps necessary and
required under the Agreement, subject to the limitations set forth in the Credit
Agreement, to perfect, in favor of the Administrative Agent, a first-priority
security interest in and lien against the New Grantor’s Collateral.

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Grantor has executed and delivered this Security
Agreement Supplement as of this                      day of
                    , 20    .

 

[NAME OF NEW GRANTOR] By:    

Title:    

 

1