Exhibit 10.3

 

EXECUTION VERSION

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

MICRON TECHNOLOGY, INC.

 

and certain of its Subsidiaries

 

in favor of

 

MORGAN STANLEY SENIOR FUNDING, INC.,

 

as Collateral Agent

 

Dated as of April 26, 2016

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

SECTION 1.

Defined Terms

1

 

 

 

1.1

Definitions

1

1.2

Other Definitional Provisions

7

 

 

 

SECTION 2.

Guarantee

7

 

 

 

2.1

Guarantee

7

2.2

Right of Contribution

8

2.3

No Subrogation

8

2.4

Amendments, etc with respect to the Guaranteed Obligations

9

2.5

Guarantee Absolute and Unconditional

9

2.6

Reinstatement

10

2.7

Payments

10

 

 

 

SECTION 3.

Grant of Security Interest

10

 

 

 

SECTION 4.

Representations and Warranties

11

 

 

 

4.1

Title; No Other Liens

11

4.2

Perfected First Priority Liens

11

4.3

Jurisdiction of Organization; Chief Executive Office

12

4.4

Investment Property

12

4.5

Intellectual Property

12

 

 

 

SECTION 5.

Covenants

13

 

 

 

5.1

Maintenance of Perfected Security Interest; Further Documentation

13

5.2

Changes in Name, etc.

14

5.3

Intellectual Property

14

5.4

Delivery of Pledged Notes

16

5.5

Investment Property

16

 

 

 

SECTION 6.

Remedial Provisions

16

 

 

 

6.1

Certain Matters Relating to Receivables

16

6.2

Communications with Obligors; Grantors Remain Liable

17

6.3

Investment Property and Instruments

17

6.4

Proceeds to be Turned Over to Collateral Agent

18

6.5

Application of Proceeds

18

6.6

Code and Other Remedies

19

6.7

Registration Rights

20

6.8

Subordination

20

6.9

Deficiency

21

6.10

Pari Passu Intercreditor Agreement

21

 

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TABLE OF CONTENTS
(Continued)

 

 

 

Page

 

 

 

SECTION 7.

The Collateral Agent

21

 

 

 

7.1

Collateral Agent’s Appointment as Attorney-in-Fact, etc.

21

7.2

Duty of Collateral Agent

23

7.3

Financing Statements

23

7.4

Authority of Collateral Agent

23

7.5

Pari Passu Intercreditor Agreement

23

 

 

 

SECTION 8.

Miscellaneous

24

 

 

 

8.1

Amendments in Writing

24

8.2

Notices

24

8.3

No Waiver by Course of Conduct; Cumulative Remedies

24

8.4

Enforcement Expenses; Indemnification

24

8.5

Successors and Assigns

25

8.6

Set-Off; Limitation on Individual Actions

25

8.7

Counterparts

25

8.8

Severability

25

8.9

Section Headings

26

8.10

Integration

26

8.11

GOVERNING LAW

26

8.12

Submission To Jurisdiction; Waivers

26

8.13

Acknowledgements

26

8.14

Additional Grantors; Release of Guarantors; Releases of Collateral

27

8.15

WAIVER OF JURY TRIAL

28

 

ANNEXES

 

 

Annex I

—

Name of Guarantors

Annex II

—

Assumption Agreement

 

 

 

EXHIBITS

 

 

Exhibit A

—

Copyright Security Agreement

Exhibit B

—

Patent Security Agreement

Exhibit C

—

Trademark Security Agreement

 

 

 

SCHEDULES

 

 

Schedule 1

—

Notice Address

Schedule 2

—

Investment Property

Schedule 3

—

Perfection Matters

Schedule 4

—

Jurisdiction of Organizational and Chief Executive Offices

 

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TABLE OF CONTENTS
(Continued)

 

 

 

Page

 

Schedule 5

—

Intellectual Property

 

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GUARANTEE AND COLLATERAL AGREEMENT

 

GUARANTEE AND COLLATERAL AGREEMENT, dated as of April 26, 2016, made by MICRON
TECHNOLOGY, INC. (the “Borrower”) and each of the signatories from time to time
hereto (the “Guarantors”), in favor of MORGAN STANLEY SENIOR FUNDING, INC., as
Collateral Agent (in such capacity, the “Collateral Agent”) for the banks and
other financial institutions or entities (the “Lenders”) from time to time party
to the Credit Agreement, dated as of April 26, 2016 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Borrower, the Lenders, and Morgan Stanley Senior Funding, Inc., as the
administrative agent (in such capacity, the “Administrative Agent”) and
Collateral Agent.

 

W I T N E S S E T H :

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

 

WHEREAS, the Borrower and the other Grantors are engaged in related businesses,
and each Grantor will derive substantial direct and indirect benefit from the
making of the extensions of credit under the Credit Agreement;

 

WHEREAS, the Grantors would also like to induce other creditors to make
available from time to time First Lien Debt (other than as described above)
subject to the terms of the Pari Passu Intercreditor Agreement;

 

WHEREAS, each of the Guarantors has agreed to guaranty the Obligations and to
secure its respective Obligations by granting to the Collateral Agent, for the
benefit of the Secured Parties, a first-priority security interest in the
Collateral described herein; and

 

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent for the ratable benefit of the Secured Parties.

 

NOW, THEREFORE, in consideration of the premises and to induce the Collateral
Agent and the Lenders to enter into and make their respective extensions of
credit to the Borrower under the Credit Agreement, each Grantor hereby agrees
with the Collateral Agent, for the ratable benefit of the Secured Parties, as
follows:

 

SECTION 1.                            Defined Terms

 

1.1                                 Definitions.  (a)  Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit
Agreement, and the following terms are used herein as defined in the New York
UCC:  Accounts (as defined in Article 9 of the New York UCC), Certificated
Security, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Fixture,

 

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General Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights and
Supporting Obligations.

 

(b)                                 The following terms shall have the following
meanings:

 

“After-Acquired Material Intellectual Property”: as defined in Section 5.3(c).

 

“Agreement”: this Guarantee and Collateral Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Borrower Obligations”:  the collective reference to the unpaid principal of and
interest on the Term Loans and all other obligations and liabilities of the
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
respective Term Loans and interest accruing at the then applicable rate provided
in the Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) to the Administrative Agent, the Collateral Agent
or any Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, this Agreement, the other Loan
Documents, or any other document made, delivered or given in connection with any
of the foregoing, in each case whether on account of principal, interest,
premiums (if any), reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements of
counsel to the Collateral Agent or to the Lenders that are required to be paid
by the Borrower pursuant to the terms of any of the foregoing agreements).

 

“Capital Lease Obligations”: the obligations of any Person to pay rent or other
amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.

 

“CFC”: a controlled foreign corporation within the meaning of Section 957 of the
Code.

 

“Closing Date”:  April 26, 2016.

 

“Collateral”: as defined in Section 3.

 

“Collateral Account”: any collateral account established by the Collateral Agent
as provided in Section 6.1 or Section 6.4.

 

“Copyrights”:  (i) all copyrights, database rights, design rights, mask works
and works of authorship arising under the laws of the United States, any other
country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished (including, without limitation, those
listed in Schedule 5), all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright
Office, and (ii) the right to obtain all renewals thereof.

 

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“Copyright Licenses”:  any written agreement naming any Grantor as a party,
granting any right under any Copyright, including, without limitation, the grant
of rights to reproduce, prepare derivative works based upon, perform, display,
manufacture, distribute, exploit and sell materials derived from any Copyright.

 

“Copyright Security Agreement”: as defined in Section 5.3(b).

 

“Credit Agreement”: as defined in the preamble hereto.

 

“Default”: any “Default” under and as defined in this Agreement or the Credit
Agreement.

 

“Deposit Account”: as defined in the Uniform Commercial Code of any applicable
jurisdiction and, in any event, including, without limitation, any demand, time,
savings, passbook or like account maintained with a depositary institution.

 

“Excluded Property”:  with respect to any Grantor, (i) Foreign Subsidiary Voting
Stock constituting more than 65% of the total voting power of all outstanding
Capital Stock of such subsidiary (including for this purpose any voting debt
security or other voting instrument that is treated as equity for U.S. federal
income tax purposes); (ii) any Equity Interests of an Excluded Property
Subsidiary, or joint ventures and non-wholly owned Subsidiaries which cannot be
pledged without the consent of third parties, (iii) any fee-owned real property
(other than the Mortgaged Property), Fixtures (other than Fixtures on or to
Mortgaged Property) or leasehold interest in real property, (iv) all vehicles
and other assets covered by a certificate of title, (v) property subject to a
purchase money arrangement or Capital Lease Obligation only to the extent and
for so long as the contract or other agreement in which such Lien is granted
prohibits the creation of any other Lien securing Indebtedness on such property,
(vi) any governmental licenses or state or local franchises, charters and
authorizations, to the extent security interests in such licenses, franchises,
charters or authorizations are prohibited or restricted thereby only for so long
as the applicable license, franchise, charter or authorization prohibits or
restricts the creation by such Grantor of a security interest in such license,
franchise, charter or authorization, (vii) any lease, license, contract or
agreement to which any Grantor is a party or any of its rights or interests
thereunder if and for so long as the grant of such security interest shall
constitute or result in (A) the abandonment, invalidation, voiding or
unenforceability of any right, title or interest of any Grantor therein or (B) a
breach or termination pursuant to the terms of, or a default under, any such
lease, license, contract or agreement (other than to the extent that any such
term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the Uniform Commercial Code (or any successor provision or provisions)
of any relevant jurisdiction or any other applicable Requirement of Law or
principles of equity), provided, however, that such security interest shall
attach immediately and automatically at such time as the condition causing such
abandonment, invalidation, voiding or unenforceability shall be remedied and, to
the extent severable, shall attach immediately to any portion of such lease,
license, contract or agreement that does not result in any of the consequences
specified in (A) or (B) including any Proceeds of such lease, license, contract
or agreement, (viii) any property of a Grantor to the extent and for so long as
the grant of a security interest pursuant to this Agreement in such Grantor’s
right, title or interest therein is prohibited by applicable Requirement of Law
(including any requirement to obtain the consent of any Governmental Authority
or third party); provided, that the foregoing exclusions in this clause
(vii) shall in no way be construed to apply to the extent that

 

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the prohibition is unenforceable under Sections 9-406, 9-407, 9-408 or 9-409 of
the Uniform Commercial Code (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable Requirement of Law or principles
of equity; provided, further, that such security interest shall attach
immediately and automatically without further action when such prohibition is
repealed, rescinded or otherwise ceases to be effective, (ix) all Commercial
Tort Claims and any Letter-of-Credit Rights (whether or not the letter of credit
is evidenced by a writing), (x) Deposit Accounts (other than the Collateral
Accounts), (xi) any intent-to-use application for registration of a Trademark
prior to the filing of a Statement of Use or an Amendment to Allege Use, solely
to the extent, and for so long as, the grant or creation by any Grantor of a
security interest therein would impair the registrability thereof, or the
validity or enforceability of any registration issuing therefrom, (xii) any
assets to the extent a security interest in such assets could result in material
adverse tax consequences to Borrower or any of its Subsidiaries as reasonably
determined by the Borrower in consultation with the Collateral Agent, and
(xiii) any other asset or property with respect to which the Borrower and the
Collateral Agent determine that the costs of obtaining a security interest
therein are excessive in relation to the value of the security afforded thereby.

 

“Event of Default”:  any “Event of Default” under, and as defined in, the Credit
Agreement.

 

“Excluded Property Subsidiary”: (a) each Subsidiary of the Borrower that is not
a Restricted Subsidiary, (b) each Immaterial Subsidiary and (c) any
not-for-profit Subsidiaries, captive insurance companies or other special
purpose subsidiaries designated by Borrower from time to time.

 

“First Lien Documents”: as defined in the Pari Passu Intercreditor Agreement.

 

“Foreign Subsidiary”: any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.

 

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary or any FSHCO.

 

“Guaranteed Obligations”: in (i) the case of the Borrower, all Other Loan Party
Obligations of each Non-Borrower Guarantor and (ii) the case of any Non-Borrower
Guarantor, all Borrower Obligations and all Other Loan Party Obligations of each
other Guarantor.

 

“Guarantors”: as defined in the preamble hereto.

 

“Grantors”: the collective reference to the Borrower and each Guarantor
identified as a Grantor on Annex I to the signature page hereto, together with
any other entity that may become a party hereto (and is identified as a Grantor)
as provided herein.

 

“Immaterial Subsidiary”: a Subsidiary that is not a Material Subsidiary.

 

“Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark Licenses, trade secrets, and any
transferable

 

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rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

 

“Intellectual Property Security Agreements”: as defined in Section 5.3(b).

 

“Investment Property”: the collective reference to all “investment property” as
such term is defined in Section 9-102(a)(49) of the New York UCC (other than any
Foreign Subsidiary Voting Stock excluded from the definition of “Pledged
Stock”).

 

“IP Agreements”: all agreements, permits, consents, orders and franchises
relating to the license (including, without limitation, the Copyright Licenses,
Patent Licenses and Trademark Licenses), development, use or disclosure of any
Material Intellectual Property to which a Grantor, now or hereafter, is a party
or a beneficiary.

 

“IP Domestic Security Agreement Supplement”: as defined in Section 5.3(c).

 

“Issuers”: the collective reference to each issuer of any Investment Property or
any Pledged Note.

 

“Lenders”: as defined in the preamble hereto.

 

“Material Intellectual Property”: any of the Intellectual Property owned by a
Grantor and the material rights of a Grantor under any IP Agreement, including
material rights under a license agreement, that (i) is related to computer
memory products manufactured and sold in commercial volumes, or processes used
to make such products, by Borrower and the Domestic Restricted Subsidiaries and
(ii) are rights that, if the Borrower and the Domestic Restricted Subsidiaries
failed to own or have such rights, would reasonably be expected to have a
Material Adverse Effect.

 

“Material Subsidiary”: each wholly-owned direct Subsidiary that, as of the last
day of the fiscal quarter of Borrower most recently ended for which financial
statements are available, had total assets (based on book value) as of the end
of such quarter in excess of $100,000,000 or that is designated by Borrower as a
“Material Subsidiary”.

 

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

 

“Non-Borrower Guarantor”: each Guarantor other than the Borrower.

 

“Obligations”:  (i) in the case of the Borrower, the Borrower Obligations, and
(ii) in the case of each Non-Borrower Guarantor, its Other Loan Party
Obligations.

 

“Officer’s Certificate”: a certificate of a Responsible Officer of the Borrower.

 

“Other Loan Party Obligations”: with respect to any Non-Borrower Guarantor, all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement (including, without limitation, pursuant
to Section 2 hereof), any Credit Agreement or any other Loan Document, in each
case whether on account of guarantee obligations, reimbursement

 

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obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the applicable
Administrative Agent, the Collateral Agent, or to the Lenders that are required
to be paid by such Guarantor pursuant to the terms of this Agreement, the Credit
Agreement or any other Loan Document).

 

“Patents”:  (i) all letters patent and patent rights of the United States, any
other country or any political subdivision thereof, all reissues,
reexaminations, and extensions thereof, including, without limitation, any of
the foregoing referred to in Schedule 5, (ii) all applications for letters
patent of the United States or any other country and all divisionals,
continuations and continuations-in-part thereof, including, without limitation,
any of the foregoing referred to in Schedule 5, and (iii) all rights to obtain
any reissues or extensions of the foregoing.

 

“Patent License”: all agreements, whether written or oral, providing for the
grant by or to any Grantor of any right to make, have made, manufacture, use,
sell, offer to sell, have sold, import or export any invention covered in whole
or in part by a Patent.

 

“Patent Security Agreement”: as defined in Section 5.3(b).

 

“Pledged Notes”: the promissory notes listed on Schedule 2, and all other
promissory notes held by and payable to any Grantor (other than promissory notes
issued in connection with extensions of trade credit by any Grantor in the
ordinary course of business) for Indebtedness in excess of $100,000,000 in
aggregate principal amount.

 

“Pledged Stock”: the shares of Capital Stock listed on Schedule 2, together with
any other shares, stock certificates, options, interests or rights of any nature
whatsoever in respect of the Capital Stock of any Person (other than an Excluded
Property Subsidiary) that may be issued or granted to, or held by, a Grantor
while this Agreement is in effect; provided that in no event shall more than 65%
of the total outstanding Foreign Subsidiary Voting Stock be required to be
pledged hereunder.

 

“Permitted Prior Lien”:  a Permitted Lien of the type described in any of
clauses (2), (3), (4), (5) or (13) of the definition thereof, or of the type
described in clause (17) with respect to Liens of the type described in any of
clauses (2), (4), (5) or (13) of the definition thereof.

 

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.

 

“Receivable”: any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).

 

“Responsible Officer”: any of the Borrower’s Chief Executive Officer, President,
Chief Operating Officer, any Vice President, Chief Financial Officer,
Controller, Treasurer, any Assistant Treasurer or Secretary.

 

“Secured Debt Termination Date”: as defined in the Pari Passu Intercreditor
Agreement.

 

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“Securities Act”: the Securities Act of 1933, as amended.

 

“Series of First Lien Debt”: as defined in the Pari Passu Intercreditor
Agreement.

 

“Trademarks”: (i) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos, domain names, and other source or business identifiers, and all
goodwill associated therewith, all registrations and recordings thereof, and all
applications in connection therewith (other than “intent to use” applications
included in Excluded Property), whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in Schedule 5, and (ii) the right
to obtain all renewals thereof.

 

“Trademark License”: any agreement, whether written or oral, providing for the
grant by or to any Grantor of any right to use any Trademark.

 

“Trademark Security Agreement”: as defined in Section 5.3(b).

 

1.2                                 Other Definitional Provisions.  (a)  The
words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.

 

(b)                                 The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.

 

(c)                                  Where the context requires, terms relating
to the Collateral or any part thereof, when used in relation to a Grantor, shall
refer to such Grantor’s Collateral or the relevant part thereof.

 

SECTION 2.                            Guarantee

 

2.1                                 Guarantee.  (a)  Each of the Guarantors
hereby, jointly and severally, absolutely, unconditionally and irrevocably,
guarantees to the Collateral Agent, for the ratable benefit of the Secured
Parties and their respective successors, indorsees, transferees and assigns, as
a primary obligor and not merely as surety, the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of all Guaranteed Obligations.

 

(b)                                 Without limiting the generality of anything
herein, or in any other First Lien Documents to the contrary notwithstanding,
the maximum liability of each Non-Borrower Guarantor hereunder shall be limited
to such amount as will, after giving effect to such maximum liability and all
other liabilities (contingent or otherwise) of such Guarantor that are relevant
under applicable Federal or state bankruptcy or insolvency laws, fraudulent
conveyance or transfer laws, or similar such laws, result in the obligations of
such Guarantor hereunder not constituting a fraudulent transfer or conveyance
under applicable Federal or state laws (after giving effect to all rights of
subrogation, contribution or reimbursement, subject to Section 2.3 ).

 

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(c)                                  Each Non-Borrower Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the amount
of the liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of the
Collateral Agent or any Secured Party hereunder.

 

(d)                                 The guarantee contained in
this Section 2 shall remain in full force and effect until the Secured Debt
Termination Date with respect to the First Lien Debt shall have occurred.

 

(e)                                  No payment made by the Borrower, any of the
Non-Borrower Guarantors, any other guarantor or any other Person or received or
collected by the Collateral Agent or any Secured Party from the Borrower, any of
the Non-Borrower Guarantors, any other guarantor or any other Person by virtue
of any action or proceeding or any set-off or appropriation or application at
any time or from time to time in reduction of or in payment of the Guaranteed
Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Guaranteed Obligations or any payment received or collected from such Guarantor
in respect of the Guaranteed Obligations), remain liable for the Guaranteed
Obligations up to the maximum liability of such Guarantor hereunder until the
Secured Debt Termination Date with respect to the First Lien Debt shall have
occurred.

 

2.2                                 Right of Contribution.  Each Non-Borrower
Guarantor hereby agrees that to the extent that a Non-Borrower Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such
Non-Borrower Guarantor shall be entitled to seek and receive contribution from
and against any other Non-Borrower Guarantor hereunder which has not paid its
proportionate share of such payment.  Each Non-Borrower Guarantor’s right of
contribution shall be subject to the terms and conditions of Section 2.3.  The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Collateral Agent and the Secured Parties,
and each Guarantor shall remain liable to the Collateral Agent and the Secured
Parties for the full amount guaranteed by such Guarantor hereunder.

 

2.3                                 No Subrogation.  Notwithstanding any payment
made by any Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Collateral Agent or any Secured Party, no Guarantor shall be
entitled to seek or enforce its right to be subrogated to any of the rights of
the Collateral Agent or any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by the
Collateral Agent or any Secured Party for the payment of the Guaranteed
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Collateral Agent and the Secured Parties by the Borrower on account of the
Borrower Obligations are paid in full (other than contingent indemnification
obligations for which no claim has been asserted) and the Secured Debt
Termination Date with respect to the First Lien Debt shall have occurred.  If
any amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Borrower Obligations shall not have been paid in
full or such payment is otherwise prohibited pursuant to the immediately
preceding sentence, such amount shall be held by such Guarantor in trust for the
Collateral Agent and the Secured Parties, segregated from other funds of such
Guarantor, and shall,

 

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forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent
in the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Collateral Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Collateral Agent
may determine.

 

2.4                                 Amendments, etc with respect to the
Guaranteed Obligations.  Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to or further assent by any Guarantor, any demand for payment
of any of the Guaranteed Obligations made by the Collateral Agent or any other
Secured Party may be rescinded by the Collateral Agent or such Secured Party and
any of the Guaranteed Obligations may be continued, and the Guaranteed
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Collateral Agent or any Secured Party, and the First Lien Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Collateral
Agent (or the relevant Secured Parties, as the case may be) may deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Collateral Agent or any Secured Party for the payment of
the Guaranteed Obligations may be sold, exchanged, waived, surrendered or
released.  Neither the Collateral Agent nor any Lender nor any Secured Party
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Guaranteed Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.

 

2.5                                 Guarantee Absolute and Unconditional.  Each
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Guaranteed Obligations and notice of or proof of reliance
by the Collateral Agent or any other Secured Party upon the guarantee contained
in this Section 2 or acceptance of the guarantee contained in this Section 2;
the Guaranteed Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantee contained in this Section 2; and all
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Collateral Agent and the Secured Parties, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2.  Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Non-Borrower Guarantors with respect to the
Guaranteed Obligations.  Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of any First Lien Documents, any of the Guaranteed
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Collateral Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Collateral Agent or any other Secured Party, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower, such
Guarantor or any other Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower or any other obligor
for the Guaranteed Obligations, or of such Guarantor under the guarantee

 

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contained in this Section 2, in bankruptcy or in any other instance.  When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Collateral Agent or any other Secured Party
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Guaranteed Obligations or any right of offset with respect thereto, and
any failure by the Collateral Agent or any other Secured Party to make any such
demand, to pursue such other rights or remedies or to collect any payments from
the Borrower, any other Guarantor or any other Person or to realize upon any
such collateral security or guarantee or to exercise any such right of offset,
or any release of the Borrower, any other Guarantor or any other Person or any
such collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Collateral Agent or any other Secured Party against any
Guarantor.  For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

 

2.6                                 Reinstatement.  The guarantee contained in
this Section 2 shall continue to be effective, or be reinstated, as the case may
be, if at any time payment, or any part thereof, of any of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent or any other Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Non-Borrower
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Non-Borrower Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

 

2.7                                 Payments.  Each Guarantor hereby jointly and
severally guarantees that payments hereunder will be paid to the applicable
Administrative Agent without set-off or counterclaim in Dollars at the
applicable Funding Office.

 

SECTION 3.                            Grant of Security Interest

 

Each Grantor hereby grants to the Collateral Agent, for the ratable benefit of
the Secured Parties, a security interest in all of the following property now
owned or at any time hereafter acquired by such Grantor or in which such Grantor
now has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor’s Obligations:

 

(a)                                 all Accounts;

 

(b)                                 all Chattel Paper;

 

(c)                                  all Documents;

 

(d)                                 all Collateral Accounts;

 

(e)                                  all Equipment;

 

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(f)                                   all Fixtures on or to Mortgaged Property;

 

(g)                                  all General Intangibles;

 

(h)                                 all Instruments;

 

(i)                                     all Intellectual Property;

 

(j)                                    all Inventory;

 

(k)                                 all Goods;

 

(l)                                     all Investment Property;

 

(m)                             all books and records pertaining to the
Collateral; and

 

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

 

provided, however, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not constitute a grant of a security
interest in any Excluded Property.  For the avoidance of doubt, and
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no Obligation shall be (i) guaranteed by any Foreign Subsidiary, FSHCO
or other Subsidiary that is not a Grantor, or (ii) secured by any assets of any
Foreign Subsidiary, FSHCO, or other Subsidiary that is not a Grantor (including
any Equity Interests held directly or indirectly thereby, or any rights to or
interest in intangible property under a license agreement or other arrangement
related to the development, ownership, or exploitation of intangible property).

 

SECTION 4.                            Representations and Warranties

 

To induce the Collateral Agent and the Lenders to enter into and to make their
respective extensions of credit pursuant to the Credit Agreement, each Grantor
hereby represents and warrants to the Collateral Agent that:

 

4.1                                 Title; No Other Liens.  Except for Permitted
Liens and Liens not prohibited by Section 6.2 of the Credit Agreement, such
Grantor owns, or has rights in, each item of the Collateral free and clear of
any and all Liens.  No effective financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, pursuant to this Agreement or as
are filed with respect to Permitted Liens or Liens not prohibited by Section 6.2
of the Credit Agreement.

 

4.2                                 Perfected First Priority Liens.  The
security interests granted pursuant to this Agreement (a) upon completion of the
filings and other actions specified on Schedule 3 (which, in the case of all
filings and other documents referred to on said Schedule, have been delivered to
the Collateral Agent in completed and duly executed form to the extent required
to be delivered prior to

 

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the Closing Date) will constitute valid perfected security interests in all of
the Collateral for which such filings and actions are effective to perfect such
security interests in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, as collateral security for such Grantor’s Obligations,
enforceable in accordance with the terms hereof and (b) are prior to all other
Liens on the Collateral other than Permitted Liens and Liens not prohibited by
Section 6.2 of the Credit Agreement.

 

4.3                                 Jurisdiction of Organization; Chief
Executive Office.  On the date hereof, such Grantor’s jurisdiction of
organization, identification number from the jurisdiction of organization (if
any), and the location of such Grantor’s chief executive office or sole place of
business, as the case may be, are specified on Schedule 4.

 

4.4                                 Investment Property.  (a)  The shares of
Pledged Stock pledged by such Grantor hereunder constitute all the issued and
outstanding shares of all classes of the Capital Stock of each Issuer owned by
such Grantor or, in the case of Foreign Subsidiary Voting Stock, 65% of the
outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.

 

(b)                                 All the shares of Pledged Stock issued by an
Issuer which is a Subsidiary of a Grantor have been duly and validly issued and
are, if such shares are shares of stock in a domestic corporation, fully paid
and nonassessable.

 

(c)                                  Each of the Pledged Notes issued by an
Issuer which is a Subsidiary of such Grantor constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

 

4.5                                 Intellectual Property.  (a)  Except as
either individually or in the aggregate could not be reasonably expected to have
a Material Adverse Effect (i) to the knowledge of each Grantor, the operation of
such Grantor’s business as currently conducted and the use of the Material
Intellectual Property in connection therewith do not infringe, misappropriate,
dilute, misuse or otherwise violate the intellectual property rights of any
third party; and (ii) such Grantor is the exclusive owner or joint owner of all
right, title and interest in and to the Material Intellectual Property, or is
entitled to use all such Material Intellectual Property subject only to the
terms of the related IP Agreements.

 

(b)                                 The Intellectual Property set forth on
Schedule 5 includes all registrations of or applications for Patents, Trademarks
and Copyrights that are Material Intellectual Property owned by a Grantor.  For
the avoidance of doubt, the inclusion of specific Intellectual Property on
Schedule 5 shall not create any implication that any such Intellectual Property
constitutes Material Intellectual Property.

 

(c)                                  The owned Material Intellectual Property
owned by each Grantor is subsisting and has not been adjudged invalid or
unenforceable in whole or part, and to the knowledge of such Grantor, is valid
and enforceable. For clarity, the foregoing representation and

 

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warranty shall not apply to Material Intellectual Property constituting rights
under any IP Agreement.

 

(d)                                 The consummation of the transactions
contemplated by the Credit Agreement will not result in the termination or
impairment of any of the Material Intellectual Property or any Grantor’s rights
therein.  For clarity, the foregoing representation and warranty shall not apply
to the exercise by the Collateral Agent, the Administrative Agent, or the
Lenders of any remedy under this Agreement, including the direct enforcement of
any rights under any IP Agreement.

 

SECTION 5.                            Covenants

 

Each Grantor covenants and agrees with the Collateral Agent and the Secured
Parties that, from and after the date of this Agreement and until the Secured
Debt Termination Date with respect to the First Lien Debt:

 

5.1                                 Maintenance of Perfected Security Interest;
Further Documentation.  (a)  Such Grantor shall maintain the security interest
created by this Agreement as a perfected security interest having the priority
described in clause (b) of Section 4.2 and shall defend such security interest
against the claims and demands of all Persons whomsoever; provided that such
Grantor shall not be required to take any action to perfect a security interest
in the Collateral other than those actions described in clause (a) of
Section 4.2, Section 5.3, Section 5.4 or Section 5.5.

 

(b)                                 At any time and from time to time, upon the
written request of the Collateral Agent, and at the sole expense of such
Grantor, such Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation authorize, and have recorded, any
financing or continuation statements under the Uniform Commercial Code (or other
similar laws) with the applicable filing office in the jurisdiction of formation
or incorporation of each Grantor with respect to the security interests created,
but subject in each case to the limitations set forth in Section 5.1(a).

 

(c)                                  For the avoidance of doubt, notwithstanding
anything herein to the contrary, except as set forth in clause (a) of
Section 5.1, no Grantor shall be required to (A) take any action with respect to
perfection by any other means besides filings of the type specified in
Section 4.2, which other methods include possession or “control” under the
Uniform Commercial Code (whether effected by transfer of possession, control
agreements or other steps) or any other method with respect to any Documents,
Instruments, Investment Property, Chattel Paper, cash, Deposit Accounts,
commodities and securities accounts (including securities entitlements and
related assets), except, with respect to Pledged Stock and Pledged Notes, for
the actions required pursuant to Section 5.3, Section 5.4 and Section 5.5,
(B) obtain landlord lien waivers, estoppels or collateral access letters with
respect to any leasehold interests in real property, (C) authorize or have filed
any financing statement as a fixture filing, (D) take any action with respect to
perfection that may be required under non-U.S. laws, (E) take any action to
obtain any consents or agreements from third parties to permit the grant of a

 

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security interest in any Excluded Property or (F) take any action with respect
to perfection with respect to any consignment of goods. For the further
avoidance of doubt, notwithstanding anything herein to the contrary, except as
set forth in clause (a) of Section 5.1, prior to an enforcement event following
the occurrence and continuation of an Event of Default no notices shall be sent
by the Collateral Agent to, or required by the Collateral Agent to be sent by
any Grantor, to account debtors or other third party obligors notifying such
account debtors or obligors of the security interests created hereby or
directing such account debtors or third party obligors to make payment to a
different person or account.

 

5.2                                 Changes in Name, etc.  Such Grantor will
promptly (and in any event within 20 days or such longer period as is reasonably
agreed to by the Collateral Agent) provide prior written notice to the
Collateral Agent and delivery to the Collateral Agent of all additional
financing statements and other executed documents reasonably requested by the
Collateral Agent to maintain the validity, perfection and priority of the
security interests provided for herein, if such Grantor (i) changes its
jurisdiction of organization from that referred to in Section 4.3 or
(ii) changes its name, and such Grantor shall deliver to the Collateral Agent
additional financing statements as reasonably requested by the Collateral Agent
to maintain the validity, perfection and priority of the security interests
provided for herein.

 

5.3                                 Intellectual Property.  (a)  Except as could
not reasonably be expected to have a Material Adverse Effect, subject to the
provisions of paragraph (iv) below:

 

(i)                   With respect to each item of its Material Intellectual
Property, each Grantor agrees to take, at its expense, actions, which may
include, without limitation, registering in the U.S. Patent and Trademark Office
and the U.S. Copyright Office, to (x) maintain the validity and enforceability
of such Material Intellectual Property and maintain such Material Intellectual
Property in full force and effect, and (y) pursue the registration and
maintenance of each Patent, Trademark, or Copyright registration or application,
now or hereafter included in such Material Intellectual Property of such
Grantor, including, without limitation, the payment of required fees and taxes,
the filing of responses to office actions issued by the U.S. Patent and
Trademark Office or the U.S. Copyright Office, the filing of applications for
renewal or extension, the filing of affidavits under Sections 8 and 15 of the
U.S. Trademark Act, the filing of divisional, continuation,
continuation-in-part, reissue and renewal applications or extensions, the
payment of maintenance fees and the participation in interference,
reexamination, opposition, cancellation, inter partes review, infringement and
misappropriation proceedings.

 

(ii)                No Grantor shall do or permit any act or knowingly omit to
do any act whereby any of its Material Intellectual Property may lapse, be
terminated or become invalid or unenforceable or placed in the public domain
(or, in case of a trade secret, lose its competitive value).

 

(iii)             Each Grantor shall take actions to preserve and protect each
item of its Material Intellectual Property.

 

(iv)            Notwithstanding anything herein to the contrary, each Grantor
shall only be required to take actions or refrain from taking or omit to take
actions pursuant to the foregoing

 

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clauses (i) through (iii) as it determines in the exercise of its reasonable
business judgment are commercially reasonable, and nothing in the foregoing
clauses (i) through (iii) shall be construed as prohibiting or restricting a
Grantor from effecting any transaction not prohibited by the Credit Agreement
(including, without limitation, a transfer, conveyance, sale or other
disposition or license not prohibited by the Credit Agreement).

 

(b)                                 With respect to its Material Intellectual
Property, within 30 days of the Closing Date or such later date which the
Collateral Agent consents to in writing, each Grantor agrees to execute and
deliver to the Collateral Agent, with respect to all Material Intellectual
Property that is registered or with respect to which registration is pending
(i) an agreement, in substantially the form set forth in Exhibit A hereto or
otherwise in form and substance reasonably satisfactory to the Collateral Agent
(a “Copyright Security Agreement”), (ii) an agreement, in substantially the form
set forth in Exhibit B hereto or otherwise in form and substance reasonably
satisfactory to the Collateral Agent (a “Patent Security Agreement”) and
(iii) an agreement, in substantially the form set forth in Exhibit C hereto or
otherwise in form and substance reasonably satisfactory to the Collateral Agent
(a “Trademark Security Agreement” and, together with each Copyright Security
Agreement and each Patent Security Agreement, the “Intellectual Property
Security Agreements”), in each case, for recording the security interest granted
hereunder to the Collateral Agent in such Material Intellectual Property with
the U.S. Patent and Trademark Office or the U.S. Copyright Office, as
applicable.  For the avoidance of doubt, the inclusion of specific Intellectual
Property in any Intellectual Property Security Agreement shall not create any
implication that any such Intellectual Property constitutes Material
Intellectual Property.

 

(c)                                  Each Grantor agrees that should it obtain
an ownership interest in any Intellectual Property that is not on the date
hereof a part of the Material Intellectual Property (“After-Acquired Material
Intellectual Property”) (i) the provisions of this Agreement shall automatically
apply thereto, and (ii) any such After-Acquired Material Intellectual Property
and, in the case of Trademarks, the goodwill symbolized thereby, shall
automatically become part of the Material Intellectual Property if and to the
extent such After-Acquired Material Intellectual Property meets the definition
of Material Intellectual Property, subject to the terms and conditions of this
Agreement with respect thereto.  Following the acquisition of its interest in
any such After-Acquired Material Intellectual Property (on at least a quarterly
basis, and with respect to After-Acquired Material Intellectual Property
constituting registered Copyrights, within thirty (30) days of such
acquisition), each Grantor shall provide written notice to the Collateral Agent
identifying the registered or applied-for Patents, Trademarks and/or Copyrights
that are not on the date hereof a part of the Material Intellectual Property,
including any such After-Acquired Material Intellectual Property, (other than
any such registered or applied-for Patents, Trademarks and Copyrights as to
which a prior notice under this Section 5.3(c) has been provided and an IP
Domestic Security Agreement Supplement, as hereinafter defined, has been
recorded as required by this Section 5.3(c)) and such notice shall include all
such new After-Acquired Material Intellectual Property, and such Grantor shall
execute and deliver to the Collateral Agent with such written notice, or
otherwise authenticate, an agreement in form and substance reasonably
satisfactory to the Collateral Agent (an “IP Domestic Security Agreement
Supplement”) covering such Intellectual Property, which IP Domestic Security
Agreement Supplement shall be recorded with the U.S. Patent and Trademark
Office, the U.S. Copyright Office and/or any other U.S. governmental authorities
necessary to perfect the security interest hereunder in any such Intellectual
Property. Notwithstanding anything to the contrary herein,

 

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nothing in this Agreement or any other Loan Document shall require any Loan
Party or any of their Subsidiaries to make any filings or take any actions to
record or perfect the Collateral Agent’s Lien on and security interest in any
Intellectual Property other than Material Intellectual Property.  For the
avoidance of doubt, the inclusion of specific Intellectual Property in any
notice of After-Acquired Material Intellectual Property or in any IP Domestic
Security Agreement Supplement shall not create any implication that any such
Intellectual Property constitutes Material Intellectual Property.

 

(d)                                 Notwithstanding anything to the contrary in
this Agreement or any other Loan Document, no Grantor shall be obligated to
(a) effect any filings with respect to Material Intellectual Property outside of
the United States, or (b) perfect any Lien in any Intellectual Property
established in any jurisdiction other than the United States.

 

5.4                                 Delivery of Pledged Notes.  If any
Instrument is or becomes a Pledged Note, such Instrument shall promptly be
delivered to the Collateral Agent, duly indorsed in a manner satisfactory to the
Collateral Agent, to be held as Collateral pursuant to this Agreement.

 

5.5                                 Investment Property.  If such Grantor shall
become entitled to receive or shall receive any certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Pledged Stock (constituting Collateral hereunder) of any Material
Subsidiary of such Grantor, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock of a Material
Subsidiary of such Grantor, or otherwise in respect thereof, such Grantor shall
promptly deliver to the Collateral Agent in the exact form received, duly
indorsed by such Grantor to the Collateral Agent, together with an undated stock
power covering such certificate duly executed in blank by such Grantor and with,
if the Collateral Agent so requests, signature guaranteed, to be held by the
Collateral Agent, subject to the terms hereof, as additional collateral security
for the Obligations; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock be required to be delivered or
pledged hereunder.

 

SECTION 6.                            Remedial Provisions

 

6.1                                 Certain Matters Relating to Receivables. If
required by the Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within three Business
Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Collateral Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Collateral Agent, subject
to withdrawal by the Collateral Agent for the account of the Secured Parties
only as provided in Section 6.4, and (ii) until so turned over, shall be held by
such Grantor in trust for the Collateral Agent and the Secured Parties,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.

 

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6.2                                 Communications with Obligors; Grantors
Remain Liable.  (a) The Collateral Agent in its own name or in the name of
others may at any time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Receivables constituting
Collateral hereunder and parties to the contracts constituting Collateral
hereunder to verify with them to the Collateral Agent’s satisfaction the
existence, amount and terms of any such Receivables or contracts.

 

(b)                                 Upon the request of the Collateral Agent at
any time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables constituting Collateral
hereunder and parties to the contracts constituting Collateral hereunder that
such Receivables and the contracts have been assigned to the Collateral Agent
for the ratable benefit of the Secured Parties and that payments in respect
thereof shall be made directly to the Collateral Agent.

 

(c)                                  Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Receivables
and contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise thereto. Neither the Collateral Agent nor any Secured
Party shall have any obligation or liability under any Receivable (or any
agreement giving rise thereto) or contract by reason of or arising out of this
Agreement or the receipt by the Collateral Agent or any Secured Party of any
payment relating thereto, nor shall the Collateral Agent or any Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto) or
contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

 

6.3                                 Investment Property and Instruments.  (a) 
Unless an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have given written notice to the relevant Grantor of the
Collateral Agent’s intent to exercise its corresponding rights pursuant to
Section 6.3(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Investment Property (including Pledged Stock) and all
payments made in respect of Instruments (including the Pledged Notes), in each
case paid in the normal course of business of the relevant Issuer and consistent
with past practice and to exercise all voting and corporate or other
organizational rights with respect to the Investment Property; provided that no
vote shall be cast or corporate or other organizational right exercised or other
action taken which would be inconsistent with or result in any violation of any
provision of the Credit Agreement or this Agreement.

 

(b)                                 If an Event of Default shall occur and be
continuing and the Collateral Agent shall give written notice of its intent to
exercise its rights to the relevant Grantor or Grantors, (i) the Collateral
Agent shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Investment Property constituting
Collateral hereunder and make application thereof to the Obligations in such
order as the Collateral Agent may determine, and (ii) the Collateral Agent shall
have the right to cause any or all of the Investment Property to be registered
in the name of the Collateral Agent or its nominee, and the Collateral Agent or
its

 

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nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property constituting Collateral hereunder upon
the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate or other organizational structure of any Issuer, or upon
the exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of such Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.

 

(c)                                  Each Grantor hereby authorizes and
instructs each Issuer of any Investment Property pledged by such Grantor
hereunder to (i) comply with any instruction received by it from the Collateral
Agent in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Agreement,
without any other or further instructions from such Grantor, and each Grantor
agrees that each Issuer shall be fully protected in so complying, and
(ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Investment Property directly to the Collateral
Agent.

 

6.4                                 Proceeds to be Turned Over to Collateral
Agent.  In addition to the rights of the Collateral Agent and the Secured
Parties specified in Section 6.1 with respect to payments of Receivables, if an
Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other near-cash items shall be held by
such Grantor in trust for the Collateral Agent and the Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Collateral Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Collateral Agent,
if required).  All Proceeds constituting Collateral hereunder received by the
Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral
Account maintained under its sole dominion and control.  All Proceeds
constituting Collateral hereunder while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Collateral Agent and the
Secured Parties) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.

 

6.5                                 Application of Proceeds.  At such intervals
as may be agreed upon by the Borrower and the Collateral Agent, or, if an Event
of Default shall have occurred and be continuing, at any time at the Collateral
Agent’s election, the Collateral Agent may apply all or any part of Proceeds
constituting Collateral, and any proceeds of the guarantee set forth in
Section 2, in payment of the Obligations in the following order:

 

First, to pay incurred and unpaid fees and expenses of the Collateral Agent
under the First Lien Documents;

 

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Second, to the Collateral Agent, for application by it towards payment of
amounts then due and owing and remaining unpaid in respect of the Obligations,
pro rata among the Secured Parties according to the amounts of the Obligations
then due and owing and remaining unpaid to the Secured Parties;

 

Third, to the Collateral Agent, for application by it towards prepayment of the
Obligations, pro rata among the Secured Parties according to the amounts of the
Obligations then held by the Secured Parties; and

 

Fourth, any balance remaining after the Secured Debt Termination Date with
respect to the First Lien Debt shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same;

 

provided that in the event of any inconsistency between the terms of the Pari
Passu Intercreditor Agreement and this Section 6.5, the term of the Pari Passu
Intercreditor Agreement shall govern.

 

6.6                                 Code and Other Remedies.  (a)  If an Event
of Default shall occur and be continuing, the Collateral Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the New York UCC or any other applicable law. Without
limiting the generality of the foregoing, the Collateral Agent, without demand
of performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may, subject to the requirements
of applicable law, in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker’s board or office of the Collateral Agent or any Secured Party
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent or any Secured Party 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 the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Collateral Agent’s request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.
The Collateral Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Collateral Agent and the Secured Parties hereunder, including,
without limitation, reasonable attorneys’ fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as the Collateral Agent
may elect, and only after such application and after the payment by the
Collateral Agent of any other amount required by any provision of law,
including, without limitation, Section 9-615(a)(3) of the New York UCC, need the
Collateral Agent account for the surplus, if any, to any Grantor. To the extent
permitted by

 

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applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Collateral Agent or any Secured Party arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.

 

(b)                                 For the purpose of enabling the Collateral
Agent, during the continuance of an Event of Default, to exercise rights and
remedies hereunder at such time as the Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Grantor hereby grants to the Collateral Agent, an irrevocable, non-exclusive
license to use, reproduce, distribute, perform, display, prepare derivative
works based upon, make, have made, sell, offer to sell, have sold, import,
export, practice, make improvements, license or sublicense any of the
Intellectual Property constituting Collateral now owned or hereafter acquired by
such Grantor, wherever the same may be located.  Such license shall include
access to all media in which any of the Intellectual Property constituting
Collateral may be recorded or stored and to all computer programs used for the
compilation or printout hereof.  With respect to Trademarks, such license shall
be subject to the requirement that the quality of goods and services offered
under the Trademarks be substantially consistent with the quality of the goods
and services offered thereunder by such Grantor prior to the Collateral Agent’s
exercise of rights and remedies.

 

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

 

(b)                                 Each Grantor agrees to use its commercially
reasonable efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Pledged Stock
pursuant to this Section 6.7 valid and binding and in compliance with any and
all other applicable Requirements of Law. Each Grantor further agrees that a
breach of any of the covenants contained in this Section 6.7 will cause
irreparable injury to the Collateral Agent and the Secured Parties, that the
Collateral Agent and the Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred.

 

6.8                                 Subordination.  Each Grantor hereby agrees
that, upon the occurrence and during the continuance of an Event of Default,
unless otherwise agreed by the Collateral Agent,

 

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all Indebtedness owing by it to any Domestic Restricted Subsidiary of the
Borrower shall be fully subordinated to the indefeasible payment in full in cash
of such Grantor’s Obligations.

 

6.9                                 Deficiency.  Each Grantor shall remain
liable for any deficiency if the proceeds of any sale or other disposition of
the Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by the Collateral Agent or any Secured
Party to collect such deficiency.

 

6.10                          Pari Passu Intercreditor Agreement. 
Notwithstanding anything to the contrary in this Section 6 or Section 7.1, the
Pari Passu Intercreditor Agreement shall govern the exercise of rights and the
enforcement of remedies hereunder by the Collateral Agent and the Secured
Parties. In the event of any conflict between the terms of this Section 6 and
the Pari Passu Intercreditor Agreement, the Pari Passu Intercreditor Agreement
shall govern.

 

SECTION 7.                            The Collateral Agent

 

7.1                                 Collateral Agent’s Appointment as
Attorney-in-Fact, etc.  (a)  Each Grantor hereby irrevocably constitutes and
appoints the Collateral Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement. At any time when an Event of Default has
occurred and is continuing and without limiting the generality of the foregoing,
each Grantor hereby gives the Collateral Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:

 

(i)             in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Receivable or contract
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any and all
such moneys due under any Receivable or contract or with respect to any other
Collateral whenever payable;

 

(ii)          in the case of any Intellectual Property, execute and deliver, and
have recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent’s and
the Secured Parties’ security interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

 

(iii)       pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement and pay all or any part of the premiums therefor and the
costs thereof;

 

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(iv)      execute, in connection with any sale provided for in Section 6.6 or
6.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and

 

(v)         (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Collateral Agent or as the Collateral Agent shall direct;
(2) ask or demand for, collect, and receive payment of and receipt for, any and
all moneys, claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral; (3) sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Collateral Agent may deem appropriate;
(7) assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains), throughout
the world for such term or terms, on such conditions, and in such manner, as the
Collateral Agent shall in its sole discretion determine; and (8) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Collateral
Agent were the absolute owner thereof for all purposes, and do, at the
Collateral Agent’s option and such Grantor’s expense, at any time, or from time
to time, all acts and things which the Collateral Agent deems necessary to
protect, preserve or realize upon the Collateral and the Collateral Agent’s and
the Secured Parties’ security interests therein and to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.

 

Notwithstanding anything to the contrary in this Section 7.1(a), the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.

 

(b)                                 If any Grantor fails to perform or comply
with any of its agreements contained herein, the Collateral Agent, at its
option, but without any obligation so to do, may perform or comply, or otherwise
cause performance or compliance, with such agreement.

 

(c)                                  The reasonable expenses of the Collateral
Agent incurred in connection with actions undertaken as provided in this
Section 7.1, together with interest thereon at a rate per annum equal to the
highest rate per annum at which interest would then be payable on any category
of past due Term Loans under the Credit Agreement, from the date of payment by
the Collateral Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Collateral Agent on demand.

 

(d)                                 Each Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

 

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7.2                                 Duty of Collateral Agent.  To the full
extent permitted by applicable law, the Collateral Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the New York UCC or otherwise, shall
be to deal with it in the same manner as the Collateral Agent deals with similar
property for its own account (and, for the avoidance of doubt, the Collateral
Agent shall not be permitted to create a security interest in Collateral in its
possession pursuant to Section 9-207(c) of the New York UCC). Neither the
Collateral Agent, any Secured Party nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof, except as provided
herein. The powers conferred on the Collateral Agent and the Secured Parties
hereunder are solely to protect the Collateral Agent’s and the Secured Parties’
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any Secured Party to exercise any such powers. The Collateral Agent and
the Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

 

7.3                                 Financing Statements.  Pursuant to any
applicable law, each Grantor authorizes the Collateral Agent to file or record
financing statements and other filing or recording documents or instruments with
respect to the Collateral without the signature of such Grantor in such form and
in such offices as the Collateral Agent determines appropriate to perfect the
security interests of the Collateral Agent under this Agreement. Each Grantor
authorizes the Collateral Agent to use the collateral description “all personal
property” in any such financing statements. Each Grantor hereby ratifies and
authorizes the filing by the Collateral Agent of any financing statement with
respect to the Collateral made on or prior to the date hereof.

 

7.4                                 Authority of Collateral Agent.  Each Grantor
acknowledges that the rights and responsibilities of the Collateral Agent under
this Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and the
Secured Parties, be governed by the Pari Passu Intercreditor Agreement and/or
relevant First Lien Documents, and by such other agreements with respect thereto
as may exist from time to time among any of them, but, as between the Collateral
Agent and the Grantors, the Collateral Agent shall be conclusively presumed to
be acting as agent for the Secured Parties with full and valid authority so to
act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.

 

7.5                                 Pari Passu Intercreditor Agreement. 
Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Collateral Agent pursuant to this Agreement and the exercise of
any right or remedy by the Collateral Agent hereunder are subject to the
provisions of the Pari Passu Intercreditor Agreement. Each party hereto (and
each Secured Party) acknowledges and agrees that the Collateral Agent may act in
accordance with, and shall be required to take certain actions as required by,
the terms of the Pari Passu Intercreditor Agreement. Each

 

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party hereto (and each Secured Party) acknowledges and agrees that the
Collateral Agent may act in accordance with, and shall be required to take
certain actions as required by, the terms of the Pari Passu Intercreditor
Agreement. Each of the parties hereto (and each Secured Party) acknowledges and
agrees that any such actions shall be permitted, and further agrees that in the
event of a conflict between the provisions of this Agreement and the Pari Passu
Intercreditor Agreement, the relevant provisions of the Pari Passu Intercreditor
Agreement shall control. The parties hereto (and each Secured Party) also
acknowledge and agree that the Collateral Agent shall have the benefit of the
provisions contained in the Pari Passu Intercreditor Agreement.

 

SECTION 8.                            Miscellaneous

 

8.1                                 Amendments in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 9.1 of the Credit Agreement and
Section 5.02 of the Pari Passu Intercreditor Agreement; provided that the
Company and the Collateral Agent may amend this Agreement without consent of any
Secured Party to add Collateral for the benefit of the Secured Parties and add
provisions related thereto with respect to the exercise of remedies by the
Collateral Agent on behalf of the Secured Parties.

 

8.2                                 Notices.  All notices, requests and demands
to or upon the Collateral Agent or any Grantor hereunder shall be effected in
the manner provided for in Section 9.2 of the Credit Agreement.

 

8.3                                 No Waiver by Course of Conduct; Cumulative
Remedies.  Neither the Collateral Agent nor any Secured Party shall by any act
(except by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of the Collateral Agent or any Secured
Party any right, power or privilege hereunder shall operate as a waiver thereof.
No single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Collateral Agent or any Lender of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Collateral Agent or such Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

8.4                                 Enforcement Expenses; Indemnification.  (a) 
Each Guarantor agrees to pay or reimburse each Secured Party and the Collateral
Agent for all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Agreement and the other First Lien Documents to
which such Guarantor is a party, including, without limitation, the fees and
disbursements of counsel to each Secured Party and of counsel to the Collateral
Agent.

 

(b)                                 Each Guarantor agrees to pay, and to save
the Collateral Agent and the Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be

 

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payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

 

(c)                                  Each Guarantor agrees to pay, and to save
the Collateral Agent and the Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Borrower would be required to do so pursuant to
Section 9.5 of the Credit Agreement or relevant provisions of any other First
Lien Document.

 

(d)                                 The agreements in this Section 8.4 shall
survive repayment of the Obligations and all other amounts payable under the
First Lien Documents.

 

8.5                                 Successors and Assigns.  This Agreement
shall be binding upon the successors and assigns of each Grantor and shall inure
to the benefit of the Collateral Agent and the Secured Parties and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Agent.

 

8.6                                 Set-Off; Limitation on Individual
Actions. In addition to any rights and remedies of the Secured Parties provided
by law, each Secured Party shall have the right, without notice to any Grantor,
any such notice being expressly waived by each Grantor to the extent permitted
by applicable law, upon any Obligations becoming due and payable by any Grantor
(whether at the stated maturity, by acceleration or otherwise), to apply to the
payment of such Obligations, by setoff or otherwise, any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Secured Party, any affiliate thereof or any of their
respective branches or agencies to or for the credit or the account of such
Grantor. Each Secured Party agrees promptly to notify in writing the relevant
Grantor and the Collateral Agent after any such application made by such Secured
Party, provided that the failure to give such notice shall not affect the
validity of such application.

 

8.7                                 Counterparts.  This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by electronic transmission or telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.

 

8.8                                 Severability.  Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

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8.9                                 Section Headings.  The Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.

 

8.10                          Integration.  This Agreement, the Pari Passu
Intercreditor Agreement and the other First Lien Documents represent the entire
agreement of the Grantors, the Collateral Agent and the Secured Parties with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Collateral Agent or any
Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein, in the Pari Passu Intercreditor Agreement or in the
other First Lien Documents.

 

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

 

8.12                          Submission To Jurisdiction; Waivers.  Each Grantor
hereby irrevocably and unconditionally:

 

(a)                                 submits for itself and its property in any
legal action or proceeding relating to this Agreement, the Pari Passu
Intercreditor Agreement and the other First Lien Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;

 

(b)                                 consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Grantor at its address referred to in Section 8.2 or at such other address
of which the Collateral Agent shall have been notified pursuant thereto;

 

(d)                                 agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction;

 

(e)                                  waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal action
or proceeding referred to in this Section any special, exemplary, punitive or
consequential damages;

 

8.13                          Acknowledgements.  Each Grantor hereby
acknowledges that:

 

(a)                                 it has been advised by counsel in the
negotiation, execution and delivery of this Agreement, the Pari Passu
Intercreditor Agreement and the other First Lien Documents to which it is a
party;

 

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(b)                                 neither the Collateral Agent nor any Secured
Party has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement, the Pari Passu Intercreditor Agreement or
any other First Lien Documents, and the relationship between the Grantors, on
the one hand, and the Collateral Agent and the Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and

 

(c)                                  no joint venture is created hereby, by the
Pari Passu Intercreditor Agreement or the other First Lien Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Grantors and the Secured Parties.

 

8.14                          Additional Grantors; Release of Guarantors;
Releases of Collateral.  (a) Each Subsidiary of the Borrower that is required to
become a party to this Agreement pursuant to the relevant provision of any First
Lien Document shall become a Grantor (and a Guarantor) for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex II hereto.

 

(b)                                 Non-Borrower Guarantors shall be released
from this Agreement to the extent provided below, in each case at the request
and expense of the Borrower:

 

(i)             A Non-Borrower Guarantor shall be released from its obligations
hereunder in the event that (1) the Indebtedness of or Guarantee by such
Non-Borrower Guarantor that resulted in the obligation to Guarantee the
Obligations pursuant to Section 6.1(a) of the Credit Agreement (or would have
resulted in the creation of a Guarantee had such Guarantee not already been in
place) is released or discharged (other than a discharge of (A) a Guarantee as a
result of payment under such Guarantee or (B) Indebtedness as a result of the
acceleration of such Indebtedness due to a default or event of default under the
terms thereof); (2) the Capital Stock of such Non-Borrower Guarantor is sold or
otherwise disposed of (including by way of consolidation or merger) such that
such Non-Borrower Guarantor is no longer a Domestic Restricted Subsidiary of the
Borrower; and (3) if such Subsidiary was not required to Guarantee the
Obligations pursuant to Section 6.1(a) of the Credit Agreement but did so at its
option, upon the request by such Non-Borrower Guarantor of release at any time;
provided that after giving effect to such release the Borrower would be in
compliance with the covenant set forth in this Section 6.1 of the Credit
Agreement.

 

(ii)          One or more Non-Borrower Guarantors may be released from their
obligations hereunder at any time if (1) consent to release of such Non-Borrower
Guarantors has been given by the Required Lenders as provided for in the Credit
Agreement, and (2) the Borrower has delivered an Officer’s Certificate to the
Collateral Agent certifying as to the consents of the Required Lenders that are
necessary for such release and that any such necessary consents have been
obtained.

 

(iii)       In connection with any release of any Non-Borrower Guarantor
pursuant to this Section 8.14, the Collateral Agent shall execute and deliver to
the Borrower, at the Borrower’s expense, all documents that the Borrower shall
reasonably request to evidence such release. Any execution and delivery of
documents pursuant to this Section 8.14 shall be without recourse to or warranty
by the Collateral Agent.

 

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(c)                                  Releases of Collateral shall be effected in
accordance with the relevant provisions of Section 4.04 of the Pari Passu
Intercreditor Agreement.

 

(d)                                 Upon the grant of a Permitted Prior Lien in
any item of the Collateral or any sale, lease, transfer or other disposition of
any item of Collateral of any Grantor not prohibited by the Credit Agreement,
the Lien of the Collateral Agent in such Collateral will be automatically
released, and such Permitted Prior Lien, sale, lease, transfer or other
disposition of such item of Collateral shall be free and clear of the Lien of
the Collateral Agent, without requirement for consent or approval from the
Lenders or the Collateral Agent and the Collateral Agent will, at such Grantor’s
expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence the release of such item of Collateral from
the assignment and security interest granted by this Agreement; provided,
however, that, in connection with such request to evidence the release of such
item, such Grantor shall have delivered to the Collateral Agent a written
request for release describing the item of Collateral and, if applicable, the
grant of a Permitted Prior Lien or the terms of the sale, lease, transfer or
other disposition in reasonable detail and an Officer’s Certificate to the
effect that the transaction is in compliance with the Credit Agreement and as to
such other matters as the Collateral Agent may reasonably request; provided,
further, that to the extent and at such time as any property that would
otherwise constitute Collateral hereunder is no longer subject to a Permitted
Prior Lien, such property shall be Collateral and shall be subject to the Lien
of the Collateral Agent.

 

8.15                          WAIVER OF JURY TRIAL.  EACH GRANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE PARI PASSU INTERCREDITOR AGREEMENT OR
ANY OTHER FIRST LIEN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

 

MICRON TECHNOLOGY, INC.

 

 

 

 

 

 

By:

/s/ Ernest E. Maddock

 

 

Name:

Ernest E. Maddock

 

 

Title:

Chief Financial Officer and

 

 

 

Vice President, Finance

 

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Accepted and agreed as of the date first written above

 

 

 

by: MICRON SEMICONDUCTOR PRODUCTS, INC.

 

 

 

 

By:

/s/ Steven L. Thorsen, Jr.

 

 

Name:

Steven L. Thorsen, Jr.

 

 

Title:

President

 

 

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MORGAN STANLEY SENIOR FUNDING, INC.,

 

as Collateral Agent

 

 

 

 

 

 

By:

/s/ Jonathan Rauen

 

 

Name:

Jonathan Rauen

 

 

Title:

Authorized Signatory

 

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ANNEX I

 

Name of Guarantor

 

Micron Semiconductor Products, Inc.

 

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ANNEX II

 

ASSUMPTION AGREEMENT, dated as of                        , 20  , made by
                                                           (the “Additional
Grantor”), in favor of Morgan Stanley Senior Funding, Inc., as Collateral Agent
(in such capacity, the “Collateral Agent”) for the Secured Parties referred to
below. All capitalized terms not defined herein shall have the meaning ascribed
to them in the Guarantee and Collateral Agreement referred to below.

 

W I T N E S S E T H:

 

WHEREAS, Micron Technology, Inc. (the “Borrower”), the Lenders and the
Collateral Agent have entered into a Credit Agreement, dated as of April 26,
2016 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”);

 

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of
its Subsidiaries (other than the Additional Grantor) have entered into the
Guarantee and Collateral Agreement, dated as of April 26, 2016 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Collateral Agent for the ratable benefit
of the Secured Parties (as defined therein);

 

WHEREAS, the Additional Grantor is required or has elected to become a party to
the Guarantee and Collateral Agreement; and

 

WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.                                      Guarantee and Collateral Agreement. By
executing and delivering this Assumption Agreement, the Additional Grantor, as
provided in Section 8.14 of the Guarantee and Collateral Agreement, hereby
becomes a party to the Guarantee and Collateral Agreement as a Grantor and as a
Guarantor thereunder with the same force and effect as if originally named
therein as a Grantor and a Guarantor and, without limiting the generality of the
foregoing, hereby expressly assumes all obligations and liabilities of a Grantor
and a Guarantor thereunder and transfers and assigns to the Collateral Agent,
and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, and a Lien on, its Collateral as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of such Grantor’s
Obligations. The information set forth in Annex II-A hereto is hereby added to
the information set forth in the Schedules to the Guarantee and Collateral
Agreement. The Additional Grantor hereby represents and warrants that each of
the representations and warranties contained in Section 4 of the Guarantee and
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date.

 

2.                                      GOVERNING LAW. THIS ASSUMPTION AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.

 

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IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be
duly executed and delivered as of the date first above written.

 

 

 

[ADDITIONAL GRANTOR]

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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ANNEX II-A to
Assumption Agreement

 

Supplement to Schedule 1

 

Supplement to Schedule 2

 

Supplement to Schedule 3

 

Supplement to Schedule 4

 

Supplement to Schedule 5

 

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EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

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EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

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EXHIBIT C

 

TRADEMARK SECURITY AGREEMENT

 

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