Exhibit 10.4
EXHIBIT M-1
TO CREDIT AGREEMENT
 
 
SECURITY AGREEMENT
made by
NOVELIS INC.,
as Canadian Borrower,
NOVELIS CORPORATION,
as U.S. Borrower
and
THE GUARANTORS FROM TIME TO TIME PARTY HERETO
in favor of
UBS AG, STAMFORD BRANCH,
as Collateral Agent
 
Dated as of July 6, 2007
 
 

 

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TABLE OF CONTENTS

                      Page  
 
           
PREAMBLE
        1  
 
           
RECITALS
        1  
 
           
AGREEMENT
        2  
 
            ARTICLE I
DEFINITIONS AND INTERPRETATION

 
           
SECTION 1.1.
  DEFINITIONS     2  
SECTION 1.2.
  INTERPRETATION     9  
SECTION 1.3.
  RESOLUTION OF DRAFTING AMBIGUITIES     9  
SECTION 1.4.
  PERFECTION CERTIFICATE     9  
 
            ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS

 
           
SECTION 2.1.
  GRANT OF SECURITY INTEREST     9  
SECTION 2.2.
  FILINGS     10  
 
            ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL

 
           
SECTION 3.1.
  DELIVERY OF CERTIFICATED SECURITIES COLLATERAL     11  
SECTION 3.2.
  PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL     12  
SECTION 3.3.
 
FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY
INTEREST
    12  
SECTION 3.4.
  OTHER ACTIONS     13  
SECTION 3.5.
  JOINDER OF ADDITIONAL GUARANTORS     16  
SECTION 3.6.
  SUPPLEMENTS; FURTHER ASSURANCES     16  
 
            ARTICLE IV
  REPRESENTATIONS, WARRANTIES AND COVENANTS

 
           
SECTION 4.1.
  TITLE     17  
SECTION 4.2.
  VALIDITY OF SECURITY INTEREST     17  

 

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                      Page  
 
           
SECTION 4.3.
  DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED COLLATERAL     17  
SECTION 4.4.
  OTHER FINANCING STATEMENTS     18  
SECTION 4.5.
  INVENTORY AND EQUIPMENT     18  
SECTION 4.6.
  DUE AUTHORIZATION AND ISSUANCE     19  
SECTION 4.7.
  CONSENTS, ETC.     19  
SECTION 4.8.
  PLEDGED COLLATERAL     19  
SECTION 4.9.
  INSURANCE     19  
 
            ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 
           
SECTION 5.1.
  PLEDGE OF ADDITIONAL SECURITIES COLLATERAL     19  
SECTION 5.2.
  VOTING RIGHTS; DISTRIBUTIONS; ETC.     20  
SECTION 5.3.
  DEFAULTS, ETC     21  
SECTION 5.4.
  ORGANIZATIONAL DOCUMENTS     21  
SECTION 5.5.
  CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS    
21  
 
            ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL

 
           
SECTION 6.1.
  GRANT OF INTELLECTUAL PROPERTY LICENSE     22  
SECTION 6.2.
  PROTECTION AND MAINTENANCE OF INTELLECTUAL PROPERTY COLLATERAL     22  
SECTION 6.3.
  AFTER-ACQUIRED PROPERTY     23  
SECTION 6.4.
  LITIGATION     23  
 
            ARTICLE VII
CERTAIN PROVISIONS CONCERNING RECEIVABLES

 
           
SECTION 7.1.
  MAINTENANCE OF RECORDS     24  
SECTION 7.2.
  MODIFICATION OF TERMS, ETC     24  
SECTION 7.3.
  COLLECTION     24  
 
            ARTICLE VIII
TRANSFERS

 
           
SECTION 8.1.
  TRANSFERS OF PLEDGED COLLATERAL     25  

 

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                      Page  
 
            ARTICLE IX
REMEDIES

 
           
SECTION 9.1.
  REMEDIES     25  
SECTION 9.2.
  NOTICE OF SALE     27  
SECTION 9.3.
  WAIVER OF NOTICE AND CLAIMS     27  
SECTION 9.4.
  CERTAIN SALES OF PLEDGED COLLATERAL     27  
SECTION 9.5.
  NO WAIVER; CUMULATIVE REMEDIES     29  
SECTION 9.6.
  CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY     29  
 
            ARTICLE X
APPLICATION OF PROCEEDS

 
           
SECTION 10.1.
  APPLICATION OF PROCEEDS     29  
 
            ARTICLE XI
MISCELLANEOUS

 
           
SECTION 11.1.
  CONCERNING COLLATERAL AGENT     30  
SECTION 11.2.
  COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT    
31  
SECTION 11.3.
  CONTINUING SECURITY INTEREST; ASSIGNMENT     31  
SECTION 11.4.
  TERMINATION; RELEASE     32  
SECTION 11.5.
  MODIFICATION IN WRITING     32  
SECTION 11.6.
  NOTICES     32  
SECTION 11.7.
  GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL     32  
SECTION 11.8.
  SEVERABILITY OF PROVISIONS     32  
SECTION 11.9.
  EXECUTION IN COUNTERPARTS     32  
SECTION 11.10.
  BUSINESS DAYS     33  
SECTION 11.11.
  NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION     33  
SECTION 11.12.
  NO CLAIMS AGAINST COLLATERAL AGENT     33  
SECTION 11.13.
  NO RELEASE     33  
SECTION 11.14.
  OBLIGATIONS ABSOLUTE     33  
SECTION 11.15.
  INTERCREDITOR AGREEMENT GOVERNS     34  
SECTION 11.16.
  DELIVERY OF COLLATERAL     34  
SECTION 11.17.
  MORTGAGES     34  
SECTION 11.18.
  CONFLICTS     34  
 
           
SIGNATURES
        S-1  

 

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EXHIBIT 1
  Form of Issuer’s Acknowledgment
EXHIBIT 2
  Form of Securities Pledge Amendment
EXHIBIT 3
  Form of Joinder Agreement
EXHIBIT 4
  Form of Copyright Security Agreement
EXHIBIT 5
  Form of Patent Security Agreement
EXHIBIT 6
  Form of Trademark Security Agreement
EXHIBIT 7
  Form of Bailee Letter

 

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SECURITY AGREEMENT
          This SECURITY AGREEMENT, dated as of July 6, 2007 (as amended, amended
and restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this “Agreement”), made by NOVELIS INC., a
corporation formed under the Canada Business Corporations Act (the “Canadian
Borrower”), NOVELIS CORPORATION, a Texas corporation (the “U.S. Borrower”) and
the Guarantors from to time to time party hereto (the “Guarantors”), as
pledgors, assignors and debtors (the Canadian Borrower and the U.S. Borrower,
together with the Guarantors, in such capacities and together with any
successors in such capacities, the “Pledgors”, and each, a “Pledgor”), in favor
of UBS AG, STAMFORD BRANCH, in its capacity as collateral agent pursuant to the
Credit Agreement (as hereinafter defined) (in such capacity and together with
any successors in such capacity, the “Collateral Agent”).
RECITALS:
          A. The Canadian Borrower, the U.S. Borrower, AV Aluminum Inc., a
corporation formed under the Canada Business Corporations Act, and the other
Loan Parties from time to time party thereto, the Lenders from time to time
party thereto, UBS AG, Stamford Branch, as Administrative Agent and as
Collateral Agent, and the other parties thereto have, in connection with the
execution and delivery of this Agreement, entered into that certain Credit
Agreement, dated as of July 6, 2007 (as amended, restated, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
which term shall also include and refer to any increase in the amount of
indebtedness under the Credit Agreement and any refinancing or replacement of
the Credit Agreement (whether under a bank facility, securities offering or
otherwise) or one or more successor or replacement facilities whether or not
with a different group of agents or lenders (whether under a bank facility,
securities offering or otherwise) and whether or not with different obligors
upon the Administrative Agent’s acknowledgment of the termination of the
predecessor Credit Agreement).
          B. Each Guarantor has, pursuant to the Credit Agreement,
unconditionally guaranteed the Secured Obligations.
          C. Each Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Credit
Agreement and the other Loan Documents and each is, therefore, willing to enter
into this Agreement.
          D. This Agreement is given by each Pledgor in favor of the Collateral
Agent for the benefit of the Secured Parties to secure the payment and
performance of all of the Secured Obligations.
          F. It is a condition to (i) the obligations of the Lenders to make the
Loans under the Credit Agreement and (ii) the performance of the obligations of
the Secured Parties under Hedging Agreements that constitute Secured Obligations
that each Pledgor execute and deliver the applicable Loan Documents, including
this Agreement.
 

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AGREEMENT:
          NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
          SECTION 1.1. Definitions.
          (a) Unless otherwise defined herein or in the Credit Agreement,
capitalized terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC; provided that in any event, the following
terms shall have the meanings assigned to them in the UCC:
          “Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”;
“Commodity Account”; “Commodity Contract”; “Commodity Intermediary”;
“Documents”; “Electronic Chattel Paper”; “Entitlement Order”; “Equipment”;
“Financial Asset”; “Fixtures”; “Goods”, “Inventory”; “Letter-of-Credit Rights”;
“Letters of Credit”; “Money”; “Payment Intangibles”; “Proceeds”; “ Records”;
“Securities Account”; “Securities Entitlement”; “Securities Intermediary”;
“Supporting Obligations”; and “Tangible Chattel Paper.”
          (b) Capitalized terms used but not otherwise defined herein that are
defined in the Credit Agreement shall have the meanings given to them in the
Credit Agreement. Sections 1.03, 1.04 and 1.05 of the Credit Agreement shall
apply herein mutatis mutandis.
          (c) The following terms shall have the following meanings:
          “Account Debtor” shall mean each person who is obligated on a
Receivable or Supporting Obligation related thereto.
          “Agreement” shall have the meaning assigned to such term in the
Preamble hereof.
          “Bankruptcy Code” shall mean Title 11 of the United States Code
entitled “Bankruptcy”, as now and hereinafter in effect, or any successor
statute.
          “Bailee Letter” shall be an agreement in form substantially similar to
Exhibit 7 hereto or in such other form and substance reasonably satisfactory to
the Collateral Agent.
          “Canadian Borrower” shall have the meaning assigned to such term in
the Preamble hereof.
          “Collateral Agent” shall have the meaning assigned to such term in the
Preamble hereof.
          “Collateral Report” means any certificate, report or other document
delivered by any Pledgor to any Agent with respect to the Pledged Collateral
pursuant to any Loan Document.
 

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          “Collateral Support” shall mean all property (real or personal)
assigned, hypothecated or otherwise securing any Pledged Collateral and shall
include any security agreement or other agreement granting a lien or security
interest in such real or personal property.
          “Commodity Account Control Agreement” shall mean a control agreement
in a form that is reasonably satisfactory to the Collateral Agent establishing
the Collateral Agent’s Control with respect to any Commodity Account.
          “Contracts” shall mean, collectively, with respect to each Pledgor,
the Acquisition Documents, all sale, service, performance, equipment or property
lease contracts, licenses, agreements and grants and all other contracts,
licenses, agreements or grants (in each case, whether written or oral, or third
party or intercompany), between such Pledgor and any third party, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof.
          “Control” shall mean (i) in the case of each Deposit Account,
“control”, as such term is defined in Section 9-104 of the UCC, (ii) in the case
of any Security Entitlement, “control”, as such term is defined in Section 8-106
of the UCC, and (iii) in the case of any Commodity Contract, “control”, as such
term is defined in Section 9-106 of the UCC.
          “Control Agreements” shall mean, collectively, the Deposit Account
Control Agreement, the Securities Account Control Agreement and the Commodity
Account Control Agreement.
          “Copyrights” shall mean, collectively, all copyrights (whether
statutory or common law, whether established, registered or recorded in the
United States or any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished) and all mask
works (as such term is defined in 17 U.S.C. Section 901, et seq.), together with
any and all (i) copyright registrations and applications, (ii) rights and
privileges arising under applicable law with respect to such copyrights,
(iii) renewals and extensions thereof and amendments thereto, (iv) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable with
respect thereto, including damages and payments for past, present or future
infringements or other violations thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to sue for past, present or future
infringements thereof.
          “Copyright Security Agreement” shall mean an agreement substantially
in the form of Exhibit 4 hereto.
          “Credit Agreement” shall have the meaning assigned to such term in
Recital A hereof.
          “Deposit Account Control Agreement” shall mean an agreement in form
and substance reasonably satisfactory to the Collateral Agent establishing the
Collateral Agent’s Control with respect to any Deposit Account.
          “Deposit Accounts” shall mean, collectively, with respect to each
Pledgor, (i) all “deposit accounts” as such term is defined in the UCC and in
any event shall include all accounts and sub-accounts relating to any of the
foregoing accounts and (ii) all cash, funds, checks, notes and instruments from
time to time on deposit in any of the accounts or sub-accounts described in
clause (i) of this definition.
          “Discharge of Revolving Credit Obligations” shall have the meaning
assigned to such term in the Intercreditor Agreement.
 

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          “Distributions” shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
          “Excluded Commodities Accounts” shall mean Commodities Accounts with
Investment Property or other property held in or credited to such Commodities
Accounts with an aggregate value of less than $1,000,000 at any time with
respect to any particular Commodities Account and less than $2,500,000 at any
time in the aggregate for all such Commodities Accounts.
          “Excluded Deposit Accounts” shall mean (i) Deposit Accounts used
solely to fund payroll, payroll taxes and similar employment taxes or employee
benefits in the ordinary course of business and (ii) Deposit Accounts with an
amount on deposit of less than $1,000,000 at any time with respect to any
particular Deposit Account and less than $2,500,000 at any time in the aggregate
for all such Deposit Accounts; provided that notwithstanding the foregoing, no
525 Collateral Account or Net Cash Proceeds Account shall be an Excluded Deposit
Account.
          “Excluded Securities Accounts” shall mean (i) Securities Accounts with
Investment Property or other property held in or credited to such Securities
Accounts with an aggregate value of less than $10,000,000 at any time in the
aggregate for all such Securities Accounts and (ii) Securities Accounts with
property held in or credited to such Securities Accounts consisting solely of
the Equity Interests of Aluminum Company of Malaysia Berhard (Malaysia).
          “Excluded Property” shall mean
     (a) any permit or license issued by a Governmental Authority to any Pledgor
or any agreement to which any Pledgor is a party, in each case, only to the
extent and for so long as the terms of such permit, license or agreement or any
Requirement of Law applicable thereto, validly prohibit the creation by such
Pledgor of a security interest in such permit, license or agreement in favor of
the Collateral Agent (after giving effect to Sections 9-406(d), 9-407(a),
9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any
other applicable law (including the Bankruptcy Code) or principles of equity),
     (b) any “Venture Interests” as defined in the Joint Venture Agreement,
dated January 18, 1985, between Arco Logan Inc. and Alcan Aluminum Corporation,
as such Joint Venture Agreement may have been amended prior to January 7, 2005,
and any Equity Interest in any other joint ventures to the extent the terms of
the applicable joint venture agreement validly prohibit the creation by the
applicable Pledgor of a security interest in such other Equity Interests in
favor of the Collateral Agent, but only to the extent and for so long as (i) the
terms of the applicable agreement prohibit the creation by the applicable
Pledgor of a security interest in such “Venture Interests” or other Equity
Interests in favor of the Collateral Agent (after giving effect to
Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor
provision or provisions) or any other applicable law (including the Bankruptcy
Code) or principles of equity) and (ii) such prohibition is permitted by
Section 6.19 of the Credit Agreement,
     (c) any property owned by any Pledgor on the date hereof or hereafter
acquired that is subject to a Lien securing a Purchase Money Obligation or
Capital Lease Obligation permitted
 

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to be incurred pursuant to the provisions of the Credit Agreement if the
contract or other agreement in which such Lien is granted (or the documentation
providing for such Purchase Money Obligation or Capital Lease Obligation)
validly prohibits the creation of any other Lien on such property,
     (d) any United States trademark or service mark application filed on the
basis of a Pledgor’s intent-to-use such mark, in each case, unless and until
evidence of the use of such trademark in interstate commerce is submitted to and
accepted by the United States Patent and Trademark Office, and
     (e) any Equity Interests of Novelis de Mexico, S.A. de C.V. so long as
(i) such Subsidiary is an Excluded Collateral Subsidiary and (ii) the pledge of
or grant of a security interest in the Equity Interests of such Subsidiary
pursuant hereto would constitute an investment of earnings in United States
property under Section 956 (or a successor provision) of the Code, which
investment would or could reasonably be expected to trigger an increase in the
net income of a United States shareholder of such Subsidiary pursuant to
Section 951 (or a successor provision) of the Code, as reasonably determined by
the Collateral Agent; provided, however, that Excluded Property shall not
include (x) Voting Stock of such Subsidiary representing not more than 65% of
the total voting power of all outstanding Voting Stock of such Subsidiary and
(y) 100% of the Equity Interests not constituting Voting Stock of such
Subsidiary, except that any such Equity Interests constituting “stock entitled
to vote” within the meaning of Treasury Regulation Section 1.956-2(c)(2) shall
be treated as Voting Stock for purposes of this clause (e);
provided, however, that Excluded Property shall not include any Proceeds,
substitutions or replacements of any Excluded Property referred to in clauses
(a) through (e) (unless such Proceeds, substitutions or replacements would
constitute Excluded Property referred to in clauses (a), (b), (c), (d) or (e)).
          “General Intangibles” shall mean, collectively, with respect to each
Pledgor, all “general intangibles”, as such term is defined in the UCC, of such
Pledgor and, in any event, shall include (i) all of such Pledgor’s rights, title
and interest in, to and under all Contracts and insurance policies (including
all rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in
respect of any Contract), (ii) all know-how and warranties relating to any of
the Pledged Collateral or the Mortgaged Property, (iii) any and all other
rights, claims, choses-in-action and causes of action of such Pledgor against
any other person and the benefits of any and all collateral or other security
given by any other person in connection therewith, (iv) all guarantees,
endorsements and indemnifications on, or of, any of the Pledged Collateral or
any of the Mortgaged Property, (v) all intellectual property, (vi) all lists,
books, records, correspondence, ledgers, printouts, files (whether in printed
form or stored electronically), tapes and other papers or materials containing
information relating to any of the Pledged Collateral or any of the Mortgaged
Property, including all customer or tenant lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports, manuals,
standards, processing standards, performance standards, catalogs, research data,
computer and automatic machinery software and programs and the like, field
repair data, accounting information pertaining to such Pledgor’s operations or
any of the Pledged Collateral or any of the Mortgaged Property and all media in
which or on which any of the information or knowledge or data or records may be
recorded or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data, (vii) all licenses,
consents, permits, variances, certifications, authorizations and approvals,
however characterized, now or hereafter acquired or held by such Pledgor,
including building permits, certificates of occupancy, environmental
certificates, industrial permits or
 

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licenses and certificates of operation and (viii) all rights to reserves,
deferred payments, deposits, refunds, indemnification of claims and claims for
tax or other refunds against any Governmental Authority.
          “Guarantors” shall have the meaning assigned to such term in the
Preamble hereof.
          “Immaterial Intellectual Property Collateral” shall mean Intellectual
Property Collateral that is not Material Intellectual Property Collateral.
          “Instruments” shall mean, collectively, with respect to each Pledgor,
all “instruments”, as such term is defined in Article 9, rather than Article 3,
of the UCC, and shall include all promissory notes, drafts, bills of exchange or
acceptances.
          “Intellectual Property” shall mean, collectively, Patents, Trademarks,
Copyrights, Intellectual Property Licenses and Trade Secrets and Other
Proprietary Rights.
          “Intellectual Property Collateral” shall mean, collectively, the
Patents, Trademarks, Copyrights, Intellectual Property Licenses and Trade
Secrets and Other Proprietary Rights of the Pledgors, in each case, other than
any Excluded Property.
          “Intellectual Property Licenses” shall mean, collectively, with
respect to each Pledgor, all license agreements, distribution agreements and
covenants not to sue (regardless of whether such agreements and covenants are
contained within an agreement that also covers other matters, such as
development or consulting) with respect to any Patent, Trademark, Copyright or
Trade Secrets and Other Proprietary Rights, whether such Pledgor is a licensor
or licensee, distributor or distributee under any such agreement, together with
any and all (i) amendments, renewals, extensions, supplements and continuations
thereof, (ii) income, fees, royalties, damages, claims and payments now and
hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future infringements or violations
thereof, (iii) rights to sue for past, present and future infringements,
breaches or violations thereof and (iv) other rights to use, exploit or practice
any or all Patents, Trademarks, Copyrights or Trade Secrets and Other
Proprietary Rights.
          “Intercompany Notes” shall mean, with respect to each Pledgor, all
intercompany notes described in Schedule 11 to the Perfection Certificate and
intercompany notes hereafter acquired by such Pledgor and all certificates,
instruments or agreements evidencing such intercompany notes, and all
assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
          “Intercreditor Agreement” shall mean that certain Intercreditor
Agreement, dated as of the date hereof, by and among the Pledgors and the other
Companies party thereto, the Administrative Agent, the Collateral Agent, and the
Revolving Credit Agents, and certain other persons which may be or become
parties thereto or become bound thereto from time to time, as the same may be
amended, restated, amended and restated, supplemented or otherwise modified from
time to time.
          “Investment Property” shall mean a security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, excluding, however, the Securities Collateral.
          “Joinder Agreement” shall mean an agreement substantially in the form
of Exhibit 3 hereto.
 

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          “Material Intellectual Property Collateral” shall mean any
Intellectual Property Collateral that is material (i) to the use and operation
of any material Pledged Collateral or Mortgaged Property or (ii) to the
business, results of operations, prospects or condition, financial or otherwise,
of any Pledgor.
          “Mortgaged Property” shall have the meaning assigned to such term in
the Mortgages.
          “Patents” shall mean, collectively, all patents, patent applications,
certificates of inventions, industrial designs and rights corresponding thereto
throughout the world (whether established or registered or recorded in the
United States or any other country or any political subdivision thereof),
together with any and all (i) rights and privileges arising under applicable law
with respect to any of the foregoing, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto,
(iv) income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable thereunder and with respect thereto including damages and
payments for past, present or future infringements or other violations thereof,
(v) rights corresponding thereto throughout the world and (vi) rights to sue for
past, present or future infringements or other violations thereof.
          “Patent Security Agreement” shall mean an agreement substantially in
the form of Exhibit 5 hereto.
          “Perfection Certificate” shall mean, individually and collectively, as
the context may require, each perfection certificate dated July 6, 2007,
executed and delivered by each Pledgor in favor of the Agents, and each other
Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Collateral Agent) executed and delivered by the applicable
Pledgor in favor of the Administrative Agent and Collateral Agent for the
benefit of the Secured Parties contemporaneously with the execution and delivery
of each Joinder Agreement executed in accordance with Section 3.5 hereof, in
each case, as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the Credit Agreement.
          “Permitted Encumbrances” shall mean Permitted Liens of the type
described in Section 6.02(a), (b), (c), (d), (f), (g), (h), (i), (j), (k) (to
the extent provided in the Intercreditor Agreement), (n), (o), (q), (r), (s) and
(t) of the Credit Agreement which have priority over the Liens granted pursuant
to this Agreement (and in each case, subject to the proviso to Section 6.02 of
the Credit Agreement).
          “person” shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
          “Pledge Amendment” shall have the meaning assigned to such term in
Section 5.1 hereof.
          “Pledged Collateral” shall have the meaning assigned to such term in
Section 2.1 hereof.
          “Pledged Securities” shall mean, collectively, with respect to each
Pledgor, (i) all issued and outstanding Equity Interests of each issuer set
forth on Schedule 10 to the Perfection Certificate as being owned by such
Pledgor and all options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and
powers of such Pledgor relating to such Equity Interests in each such issuer or
under any Organizational Document of each such issuer, and the certificates,
instruments and agreements representing such Equity Interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such Equity Interests, (ii) all Equity Interests of
any
 

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issuer, which Equity Interests are hereafter acquired by such Pledgor (including
by issuance) and all options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and
powers of such Pledgor relating to such Equity Interests or under any
Organizational Document of any such issuer, and the certificates, instruments
and agreements representing such Equity Interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by such Pledgor
in any manner, and (iii) all Equity Interests issued in respect of the Equity
Interests referred to in clause (i) or (ii) upon any consolidation or merger of
any issuer of such Equity Interests.
          “Pledgor” shall have the meaning assigned to such term in the Preamble
hereof.
          “Receivables” shall mean all (i) Accounts, (ii) Chattel Paper,
(iii) Payment Intangibles, (iv) General Intangibles, (v) Instruments and
(vi) all other rights to payment, whether or not earned by performance, for
goods or other property sold, leased, licensed, assigned or otherwise disposed
of, or services rendered or to be rendered, regardless of how classified under
the UCC together with all of Pledgors’ rights, if any, in any goods or other
property giving rise to such right to payment and all Collateral Support and
Supporting Obligations related thereto and all Records relating thereto.
          “Revolving Credit Agents” shall have the meaning assigned to such term
in the Intercreditor Agreement.
          “Revolving Credit Security Documents” shall have the meaning assigned
to such term in the Intercreditor Agreement
          “Securities Account Control Agreement” shall mean an agreement in form
and substance reasonably satisfactory to the Collateral Agent establishing the
Collateral Agent’s Control with respect to any Securities Account.
          “Securities Collateral” shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
          “Trade Secrets and Other Proprietary Rights” shall mean, collectively,
all trade secrets, proprietary information and data and databases, know-how and
processes, designs, inventions, technology and software and any other intangible
rights to the extent not covered by the definitions of Patents, Trademarks and
Copyrights; whether registered or unregistered, whether statutory or common law,
and whether established or registered in the United States or any other country
or any political subdivision thereof, including, without limitation, any of the
foregoing listed on Schedule 12(a) to the Perfection Certificate, together with
any and all (i) registrations and applications for the foregoing, (ii) rights
and privileges arising under applicable law with respect to the use of any of
the foregoing, (iii) reissues, continuations, extensions, renewals and divisions
thereof and amendments thereto, (v) income, fees, royalties, damages and
payments now and hereafter due and/or payable thereunder and with respect
thereto, including, without limitation, damages, claims and payments for past,
present or future infringements or other violations thereof, (vi) rights
corresponding thereto throughout the world and (vii) rights to sue for past,
present and future infringements and other violations thereof.
          “Trademarks” shall mean, collectively, all trademarks (including
service marks and certification marks), slogans, logos, certification marks,
trade dress, Internet Domain Names, corporate names and trade names, whether
registered or unregistered (whether statutory or common law and
 

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whether established or registered in the United States or any other country or
any political subdivision thereof), together with any and all (i) registrations
and applications for any of the foregoing, (ii) goodwill connected with the use
thereof and symbolized thereby, (iii) rights and privileges arising under
applicable law with respect to the use of any of the foregoing, (iv) reissues,
continuations, extensions and renewals thereof and amendments thereto,
(v) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements, dilutions or other
violations thereof, (vi) rights corresponding thereto throughout the world and
(vii) rights to sue for past, present and future infringements, dilutions or
other violations thereof.
          “Trademark Security Agreement” shall mean an agreement substantially
in the form of Exhibit 6 hereto.
          “UCC” shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, however, that, at any time, if by
reason of mandatory provisions of law, any or all of the perfection or priority
of the Collateral Agent’s security interest in any item or portion of the
Pledged Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect, at such time, in such other jurisdiction
for purposes of the provisions hereof relating to such perfection or priority
and for purposes of definitions relating to such provisions.
          “U.S. Borrower” shall have the meaning assigned to such term in the
Preamble hereof.
          SECTION 1.2. Interpretation. The rules of interpretation specified in
the Credit Agreement shall be applicable to this Agreement.
          SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
          SECTION 1.4. Perfection Certificate. The Collateral Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
          SECTION 2.1. Grant of Security Interest. As collateral security for
the payment and performance in full of all the Secured Obligations, each Pledgor
hereby pledges and grants to the Collateral Agent for the benefit of the Secured
Parties, a lien on and security interest in all of the right, title and interest
of such Pledgor in, to and under the following property, wherever located, and
whether now existing or hereafter arising or acquired from time to time
(collectively, the “Pledged Collateral”):
 

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  (i)   all Accounts;     (ii)   all Equipment, Goods, Inventory and Fixtures;  
  (iii)   all Documents, Instruments and Chattel Paper;     (iv)   all Letters
of Credit and Letter-of-Credit Rights;     (v)   all Securities Collateral;    
(vi)   all Investment Property;     (vii)   all Patents, Trademarks, Copyrights,
Intellectual Property Licenses and Trade Secrets and Other Proprietary Rights;  
  (viii)   the Commercial Tort Claims described on Schedule 13 to the Perfection
Certificate;     (ix)   all General Intangibles;     (x)   all Money and all
Deposit Accounts;     (xi)   all Supporting Obligations;     (xii)   all books
and records relating to the Pledged Collateral; and     (xiii)   to the extent
not covered by clauses (i) through (xii) of this sentence, all other personal
property of such Pledgor, whether tangible or intangible, and all Proceeds and
products of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of, each of the foregoing, any
and all Proceeds of any insurance, indemnity, warranty or guaranty payable to
such Pledgor from time to time with respect to any of the foregoing.

          Notwithstanding anything to the contrary contained in clauses
(i) through (xiii) above, the security interest created by this Agreement shall
not extend to, and the term “Pledged Collateral” shall not include, any Excluded
Property and (x) the Pledgors shall, concurrently with any delivery of financial
statements under Section 5.01(a) of the Credit Agreement and upon the request of
the Collateral Agent at any time an Event of Default has occurred and is
continuing, give written notice to the Collateral Agent identifying in
reasonable detail the Excluded Property and shall provide to the Collateral
Agent such information regarding the Excluded Property as the Collateral Agent
may reasonably request (including written notice identifying in reasonable
detail the Excluded Property) and (y) from and after the Closing Date, no
Pledgor shall permit to become effective in any document creating, governing or
providing for any permit, license or agreement a provision that would prohibit
the creation of a Lien on such permit, license or agreement in favor of the
Collateral Agent unless such prohibition is permitted under Section 6.19 of the
Credit Agreement.
          SECTION 2.2. Filings. (a) Each Pledgor hereby irrevocably authorizes
the Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any financing
 

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statements (including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial Code of each
applicable jurisdiction for the filing of any financing statement or amendment
relating to the Pledged Collateral, including (i) whether such Pledgor is an
organization, the type of organization and any organizational identification
number issued to such Pledgor, (ii) any financing or continuation statements or
other documents without the signature of such Pledgor where permitted by law,
including the filing of a financing statement describing the Pledged Collateral
as “all assets now owned or hereafter acquired by the debtor or in which debtor
otherwise has rights” or a similar description and (iii) in the case of a
financing statement filed as a fixture filing, a sufficient description of the
real property to which such Pledged Collateral relates. Each Pledgor agrees to
provide all information described in the immediately preceding sentence to the
Collateral Agent promptly upon request by the Collateral Agent.
          (a) Each Pledgor hereby ratifies its authorization for the Collateral
Agent to file in any relevant jurisdiction any financing statements relating to
the Pledged Collateral if filed prior to the date hereof.
          (b) Each Pledgor hereby further authorizes the Collateral Agent to
execute and/or submit filings with the United States Patent and Trademark Office
or United States Copyright Office (or any successor office or any similar office
in any other country), as applicable, including this Agreement, the Copyright
Security Agreement, the Patent Security Agreement and the Trademark Security
Agreement, or other documents and to take such other actions as may be required
under applicable law for the purpose of perfecting, recording, confirming,
continuing, enforcing or protecting the security interest granted by such
Pledgor hereunder, without the signature of such Pledgor, and naming such
Pledgor, as debtor, and the Collateral Agent, as secured party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
          SECTION 3.1. Delivery of Certificated Securities Collateral. Each
Pledgor represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral (other than Excluded
Property and any certificates, agreements or instruments representing or
evidencing Equity Interests in an Excluded Collateral Subsidiary which is not a
Loan Party) in existence on the date hereof have been delivered to the
Collateral Agent in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank and that the
Collateral Agent has a perfected First Priority security interest therein. Each
Pledgor hereby agrees that all certificates, agreements or instruments
representing or evidencing Securities Collateral acquired by such Pledgor after
the date hereof shall promptly (but in any event within thirty days after
receipt thereof by such Pledgor or such longer period as may be determined by
the Collateral Agent in its sole discretion) be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto (provided that notwithstanding
the foregoing, no such certificates, agreements or instruments representing or
evidencing Securities Collateral shall be required to be so delivered to the
extent such Securities Collateral constitutes Excluded Property or any
certificates, agreements or instruments representing or evidencing Equity
Interests in an Excluded Collateral Subsidiary which is not a Loan Party, but
shall be so delivered promptly (but in any event within thirty days) following
the date such Securities Collateral
 

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ceases to constitute Excluded Property or such Subsidiary ceases to qualify as
an Excluded Collateral Subsidiary or otherwise becomes, or is required to
become, a Loan Party pursuant to the terms of the Credit Agreement). All
certificated Securities Collateral shall be in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to register in the name of the Collateral
Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral. In addition, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the right at
any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.
          SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each
Pledgor represents and warrants that the Collateral Agent has a perfected First
Priority security interest in all uncertificated Pledged Securities (other than
uncertificated Pledged Securities in which a security interest cannot be
perfected by taking all applicable actions under the UCC and such other actions
(including, without limitation, the delivery or filing of financing, statements,
agreements instruments or other documents) as may have been reasonably requested
by the Collateral Agent in order to perfect such security interest under the
local laws of the jurisdiction of the issuer of such Pledged Securities) pledged
by it hereunder that are in existence on the date hereof. Each Pledgor hereby
agrees that if any of the Pledged Securities are at any time not evidenced by
certificates of ownership, then each applicable Pledgor shall, to the extent
permitted by applicable law, (i) cause (or in the case of Pledged Securities
issued by an issuer that is not a Wholly Owned Subsidiary, use commercially
reasonable efforts to cause) the issuer to execute and deliver to the Collateral
Agent an acknowledgment of the pledge of such Pledged Securities substantially
in the form of Exhibit 1 hereto or such other form that is reasonably
satisfactory to the Collateral Agent, (ii) if necessary or desirable to perfect
a security interest in such Pledged Securities, cause (or in the case of Pledged
Securities issued by an issuer that is not a Wholly Owned Subsidiary, use
commercially reasonable efforts to cause) the issuer of such uncertificated
Pledged Securities to enter into a control agreement with the Collateral Agent
and such Pledgor reasonably satisfactory to the Collateral Agent pursuant to
which such issuer shall agree to comply with instructions originated by the
Collateral Agent without further consent by such Pledgor, and cause (or in the
case of Pledged Securities issued by an issuer that is not a Wholly Owned
Subsidiary, use commercially reasonable efforts to cause) such pledge to be
recorded on the equityholder register or the books of the issuer, execute any
customary pledge forms or other documents necessary or appropriate to complete
the pledge and give the Collateral Agent the right to transfer such Pledged
Securities under the terms hereof, (iii) upon request by the Collateral Agent,
provide to the Collateral Agent an opinion of counsel, in form and substance
reasonably satisfactory to the Collateral Agent, confirming such pledge and
perfection thereof, and (iv) after the occurrence and during the continuance of
any Event of Default, upon request by the Collateral Agent, (A) cause (or in the
case of Pledged Securities issued by an issuer that is not a Wholly Owned
Subsidiary, use commercially reasonable efforts to cause) the Organizational
Documents of each such issuer that is a Subsidiary of a Pledgor to be amended to
provide that such Pledged Securities shall be treated as “securities” for
purposes of the UCC and (B) cause (or in the case of Pledged Securities issued
by an issuer that is not a Wholly Owned Subsidiary, use commercially reasonable
efforts to cause) such Pledged Securities to become certificated and delivered
to the Collateral Agent in accordance with the provisions of Section 3.1.
          SECTION 3.3. Financing Statements and Other Filings; Maintenance of
Perfected Security Interest. Each Pledgor represents and warrants that all
financing statements, agreements, instruments and other documents necessary to
perfect the security interest granted by it to the Collateral
 

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Agent in respect of the Pledged Collateral (other than uncertificated Pledged
Securities in which a security interest cannot be perfected by taking all
applicable actions under the UCC and such other actions (including, without
limitation, the delivery or filing of financing, statements, agreements
instruments or other documents) as may have been reasonably requested by the
Collateral Agent in order to perfect such security interest under the local laws
of the jurisdiction of the issuer of such Pledged Securities) have been
delivered to the Collateral Agent in completed and, to the extent necessary or
appropriate, duly executed form for filing in each governmental, municipal or
other office specified in Schedule 7 to the Perfection Certificate. Each Pledgor
agrees that at the sole cost and expense of the Pledgors, such Pledgor will
maintain the security interest created by this Agreement in the Pledged
Collateral (other than uncertificated Pledged Securities in which a security
interest cannot be perfected by taking all applicable actions under the UCC and
such other actions (including, without limitation, the delivery or filing of
financing, statements, agreements instruments or other documents) as may have
been reasonably requested by the Collateral Agent in order to perfect such
security interest under the local laws of the jurisdiction of the issuer of such
Pledged Securities) as a perfected First Priority security interest subject only
to Permitted Collateral Liens.
          SECTION 3.4. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent’s security interest in the Pledged Collateral, each Pledgor
represents and warrants (as to itself) as follows and agrees, in each case at
such Pledgor’s own expense, to take the following actions with respect to the
following Pledged Collateral:
     (a) Instruments and Tangible Chattel Paper. As of the date hereof, no
amounts payable under or in connection with any of the Pledged Collateral are
evidenced by any Instrument or Tangible Chattel Paper other than such
Instruments and Tangible Chattel Paper listed in Schedule 11 to the Perfection
Certificate. Each Instrument and each item of Tangible Chattel Paper listed in
Schedule 11 to the Perfection Certificate has been properly endorsed, assigned
and delivered to the Collateral Agent, accompanied by instruments of transfer or
assignment duly executed in blank. If any amount then payable under or in
connection with any of the Pledged Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, and such amount, together with all amounts
payable evidenced by any Instrument or Tangible Chattel Paper not previously
delivered to the Collateral Agent exceeds $1,000,000 in the aggregate for all
Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel Paper shall
promptly (but in any event within thirty days after receipt thereof) endorse,
assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Collateral
Agent may from time to time specify.
     (b) Deposit Accounts. As of the date hereof, no Pledgor has any Deposit
Accounts other than the accounts listed in Schedule 14 to the Perfection
Certificate. The Collateral Agent has a First Priority security interest in each
such Deposit Account (other than Excluded Deposit Accounts), which security
interest is (or, with respect to any such Deposit Accounts identified on
Schedule 5.16 to the Credit Agreement, after completion of the actions with
respect to such Deposit Accounts specified on such Schedule, will be) perfected
by Control. No Pledgor shall hereafter establish and maintain any Deposit
Account unless (1) it shall have given the Collateral Agent 30 days’ (or such
shorter period as may be determined by the Collateral Agent in its sole
discretion) prior written notice of its intention to establish such new Deposit
Account with a Bank, (2) such Bank shall be reasonably acceptable to the
Collateral Agent and (3) such Bank and such Pledgor shall have duly executed and
delivered to the Collateral Agent a Deposit Account Control Agreement with
respect to such Deposit Account (other than Excluded Deposit
 

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Accounts). The Collateral Agent agrees with each Pledgor that the Collateral
Agent shall not give any instructions directing the disposition of funds from
time to time credited to any Deposit Account or withhold any withdrawal rights
from such Pledgor with respect to funds from time to time credited to any
Deposit Account unless an Event of Default has occurred and is continuing. The
two immediately preceding sentences shall not apply to any other Deposit
Accounts for which the Collateral Agent is the Bank. No Pledgor shall grant
Control of any Deposit Account to any person other than the Collateral Agent
and, subject to the terms of the Intercreditor Agreement, Revolving Credit
Agents.
     (c) Securities Accounts and Commodity Accounts. (i) As of the date hereof,
no Pledgor has any Securities Accounts or Commodity Accounts other than those
listed in Schedule 14 to the Perfection Certificate. The Collateral Agent has a
First Priority security interest in each such Securities Account and Commodity
Account (other than Excluded Securities Accounts and Excluded Commodities
Accounts), which security interest is perfected by Control. No Pledgor shall
hereafter establish and maintain any Securities Account or Commodity Account
with any Securities Intermediary or Commodity Intermediary unless (1) it shall
have given the Collateral Agent 30 days’ (or such shorter period as may be
determined by the Collateral Agent in its sole discretion) prior written notice
of its intention to establish such new Securities Account or Commodity Account
with such Securities Intermediary or Commodity Intermediary, (2) such Securities
Intermediary or Commodity Intermediary shall be reasonably acceptable to the
Collateral Agent and (3) such Securities Intermediary or Commodity Intermediary,
as the case may be, and such Pledgor shall have duly executed and delivered a
Control Agreement with respect to such Securities Account or Commodity Account
(other than Excluded Securities Accounts and Excluded Commodities Accounts), as
the case may be. Each Pledgor shall accept any cash and Investment Property in
trust for the benefit of the Collateral Agent and within five days of actual
receipt thereof, deposit any and all cash and Investment Property received by it
into a Deposit Account or Securities Account. The Collateral Agent agrees with
each Pledgor that the Collateral Agent shall not give any Entitlement Orders or
instructions or directions to any issuer of uncertificated securities,
Securities Intermediary or Commodity Intermediary, and shall not withhold its
consent to the exercise of any withdrawal or dealing rights by such Pledgor,
unless an Event of Default has occurred and is continuing or, after giving
effect to any such investment and withdrawal rights, would occur. The two
immediately preceding sentences shall not apply to any Financial Assets credited
to a Securities Account for which the Collateral Agent is the Securities
Intermediary. No Pledgor shall grant Control over any Investment Property to any
person other than the Collateral Agent and, subject to the terms of the
Intercreditor Agreement, Revolving Credit Agents.
     (i) As between the Collateral Agent and the Pledgors, the Pledgors shall
bear the investment risk with respect to the Investment Property and Pledged
Securities, and the risk of loss of, damage to, or the destruction of the
Investment Property and Pledged Securities, whether in the possession of, or
maintained as a Security Entitlement or deposit by, or subject to the Control
of, the Collateral Agent, a Securities Intermediary, a Commodity Intermediary,
any Pledgor or any other person.
     (d) Electronic Chattel Paper and Transferable Records. As of the date
hereof, no amount under or in connection with any of the Pledged Collateral is
evidenced by any Electronic Chattel Paper or any “transferable record” (as that
term is defined in Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction) other than such
Electronic
 

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Chattel Paper and transferable records listed in Schedule 11(a) to the
Perfection Certificate. If any amount payable under or in connection with any of
the Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel Paper or
transferable record shall promptly notify the Collateral Agent thereof and shall
take such action as the Collateral Agent may reasonably request to vest in the
Collateral Agent control of such Electronic Chattel Paper under Section 9-105 of
the UCC or control under Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The requirement in the preceding sentence shall not
apply to the extent that such amount, together with all amounts payable
evidenced by Electronic Chattel Paper or any transferable record in which the
Collateral Agent has not been vested control within the meaning of the statutes
described in the immediately preceding sentence, does not exceed $1,000,000 in
the aggregate for all Pledgors. The Collateral Agent agrees with such Pledgor
that the Collateral Agent will arrange, pursuant to procedures satisfactory to
the Collateral Agent and so long as such procedures will not result in the
Collateral Agent’s loss of control, for the Pledgor to make alterations to the
Electronic Chattel Paper or transferable record permitted under Section 9-105 of
the UCC or, as the case may be, Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of control, unless
an Event of Default has occurred and is continuing or would occur after taking
into account any action by such Pledgor with respect to such Electronic Chattel
Paper or transferable record.
     (e) Letter-of-Credit Rights. If any Pledgor is at any time a beneficiary
under a Letter of Credit now or hereafter issued, such Pledgor shall promptly
notify the Collateral Agent thereof and such Pledgor shall, at the request of
the Collateral Agent, pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either use commercially reasonable efforts
to (i) arrange for the issuer and any confirmer of such Letter of Credit to
consent to an assignment to the Collateral Agent of the proceeds of any drawing
under the Letter of Credit or (ii) arrange for the Collateral Agent to become
the transferee beneficiary of such Letter of Credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the Letter of
Credit are to be applied as provided in the Credit Agreement. The actions in the
preceding sentence shall not be required to the extent that the amount of any
such Letter of Credit, together with the aggregate amount of all other Letters
of Credit for which the actions described above in clause (i) and (ii) have not
been taken, does not exceed $1,000,000 in the aggregate for all Pledgors.
     (f) Commercial Tort Claims. As of the date hereof, each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims other than those
listed in Schedule 13 to the Perfection Certificate. If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim, such Pledgor shall promptly notify
the Collateral Agent in writing signed by such Pledgor of the brief details
thereof and grant to the Collateral Agent in such writing a security interest
therein and in the Proceeds thereof, all upon the terms of this Agreement, with
such writing to be in form and substance reasonably satisfactory to the
Collateral Agent. The requirement in the preceding sentence shall not apply to
the extent that the amount of such Commercial Tort Claim, together with the
amount of all other Commercial Tort Claims held by any Pledgor in which the
Collateral Agent does not have a security interest, does not exceed $1,000,000
in the aggregate for all Pledgors.
 

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     (g) Landlord’s Access Agreements/Bailee Letters. If and to the extent
reasonably requested by the Collateral Agent, each Pledgor shall use its
commercially reasonable efforts to obtain as soon as practicable after such
request with respect to each location where such Pledgor maintains Pledged
Collateral, a Bailee Letter and/or Landlord Access Agreement, as applicable, and
use commercially reasonable efforts to obtain a Bailee Letter, Landlord Access
Agreement and/or landlord’s lien waiver, as applicable, from all such bailees
and landlords, as applicable, who from time to time have possession of any
Pledged Collateral. A waiver of bailee’s lien shall not be required if the value
of the Pledged Collateral held by such bailee is less than $100,000, provided
that the aggregate value of the Pledged Collateral held by all bailees who have
not delivered a Bailee Letter is less than $1,000,000 in the aggregate.
          SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall
cause each Subsidiary of Holdings which, from time to time, after the date
hereof shall be required to become a party to this Agreement or to otherwise
pledge any assets to the Collateral Agent for the benefit of the Secured Parties
pursuant to the provisions of the Credit Agreement, (a) to execute and deliver
to the Collateral Agent (i) a Joinder Agreement substantially in the form of
Exhibit 3 hereto within thirty days (or such longer period as may be determined
by the Collateral Agent in its sole discretion) of the date on which it became a
Subsidiary, ceased to be an Excluded Collateral Subsidiary or was required to
become a Loan Party by operation of the provisions of Section 5.11(d) of the
Credit Agreement, as the case may be, and (ii) a Perfection Certificate, in each
case, within thirty days (or such longer period as may be determined by the
Collateral Agent in its sole discretion) of the date on which it became a
Subsidiary, ceased to be an Excluded Collateral Subsidiary or was required to
become a Loan Party by operation of the provisions of Section 5.11(d) of the
Credit Agreement, as the case may be, and (b) in the case of a Subsidiary
organized outside of the United States, to execute and deliver to the Collateral
Agent such additional documentation as the Collateral Agent shall reasonably
request and, in each case with respect to clauses (a) and (b) above, upon such
execution and delivery, such Subsidiary shall constitute a “Guarantor” and a
“Pledgor” for all purposes hereunder with the same force and effect as if
originally named as a Guarantor and Pledgor herein. The execution and delivery
of such Joinder Agreement shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in
full force and effect notwithstanding the addition of any new Guarantor and
Pledgor as a party to this Agreement.
          SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take
such further actions, and execute and/or deliver to the Collateral Agent such
additional financing statements, amendments, assignments, agreements,
supplements, powers and instruments, as the Collateral Agent may in its
reasonable judgment deem necessary or appropriate in order to create, perfect,
preserve and protect the security interest in the Pledged Collateral as provided
herein and the rights and interests granted to the Collateral Agent hereunder,
to carry into effect the purposes hereof or better to assure and confirm the
validity, enforceability and priority of the Collateral Agent’s security
interest in the Pledged Collateral or permit the Collateral Agent to exercise
and enforce its rights, powers and remedies hereunder with respect to any
Pledged Collateral, including the filing of financing statements, continuation
statements and other documents (including this Agreement) under the Uniform
Commercial Code (or other similar laws) in effect in any jurisdiction with
respect to the security interest created hereby and the execution and delivery
of Control Agreements, all in form and substance reasonably satisfactory to the
Collateral Agent and in such offices (including the United States Patent and
Trademark Office and the United States Copyright Office) wherever required by
law to perfect, continue and maintain the validity, enforceability and priority
of the security interest in the Pledged Collateral as provided herein and to
preserve the other rights and interests granted to the Collateral Agent
hereunder, as against third parties, with respect to the Pledged Collateral.
Without limiting the generality of the foregoing, each Pledgor shall make,
execute, endorse, acknowledge, file or refile and/or deliver to the
 

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Collateral Agent from time to time upon reasonable request by the Collateral
Agent such lists, schedules, descriptions and designations of the Pledged
Collateral, copies of warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional security agreements,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments as the Collateral
Agent shall reasonably request. If an Event of Default has occurred and is
continuing, the Collateral Agent may institute and maintain, in its own name or
in the name of any Pledgor, such suits and proceedings as the Collateral Agent
may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the Pledged
Collateral. All of the foregoing shall be at the sole cost and expense of the
Pledgors.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
          Each Pledgor represents, warrants and covenants as follows:
          SECTION 4.1. Title. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns and has rights and, as to
Pledged Collateral acquired by it from time to time after the date hereof, will
own and have rights in each item of Pledged Collateral pledged by it hereunder,
free and clear of any and all Liens or claims of others. In addition, no Liens
or claims exist on the Securities Collateral, other than Permitted Liens that
are permitted to attach to Securities Collateral pursuant to the provisions of
Section 6.02 of the Credit Agreement.
          SECTION 4.2. Validity of Security Interest. The security interest in
and Lien on the Pledged Collateral granted to the Collateral Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Pledged Collateral securing the payment and
performance of the Secured Obligations, and (b) subject to the filings and other
actions described in Schedule 6 to the Perfection Certificate (to the extent
required to be listed on the schedules to the Perfection Certificate as of the
date this representation is made or deemed made), a perfected security interest
in all the Pledged Collateral. The security interest and Lien granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Pledged Collateral will at all times constitute a
perfected, continuing First Priority security interest therein.
          SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral.
Except to the extent otherwise permitted by Section 5.05 of the Credit
Agreement, each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Collateral Agent and the priority thereof against
all claims and demands of all persons, at its own cost and expense, at any time
claiming any interest therein adverse to the Collateral Agent or any other
Secured Party other than Permitted Encumbrances. Except as permitted by the
Credit Agreement, there is no agreement, order, judgment or decree, and no
Pledgor shall enter into any agreement or take any other action, that would
restrict the transferability of any of the Pledged Collateral or otherwise
impair or conflict with such Pledgor’s obligations or the rights of the
Collateral Agent hereunder.
 

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          SECTION 4.4. Other Financing Statements. It has not filed, nor
authorized any third party to file, any valid or effective financing statement
(or similar statement, instrument of registration or public notice under the law
of any jurisdiction) covering or purporting to cover any interest of any kind in
the Pledged Collateral, except such as have been filed in favor of the
Collateral Agent pursuant to this Agreement or in favor of any holder of a
Permitted Encumbrance with respect to such Permitted Encumbrance or financing
statements or public notices relating to the termination statements listed on
Schedule 7 to the Perfection Certificate. No Pledgor shall execute, authorize or
permit to be filed in any public office any financing statement (or similar
statement, instrument of registration or public notice under the law of any
jurisdiction) relating to any Pledged Collateral, except financing statements
and other statements and instruments filed or to be filed in respect of and
covering the security interests granted by such Pledgor to the holders of the
Permitted Encumbrances.
          SECTION 4.5. Inventory and Equipment.
          (a) Except as expressly permitted by Section 5.13 of the Credit
Agreement, it shall not move any Equipment or Inventory (other than Inventory in
transit from a supplier or vendor to a permitted location or between permitted
locations or Inventory in transit to a customer, and Inventory having Dollar
Equivalent fair market value not in excess of $10,000,000 (in the aggregate for
all Loan Parties) located at locations not identified on the relevant Schedules
to the Perfection Certificate) to any location, other than any location that is
listed in the relevant Schedules to the Perfection Certificate, unless (i) it
shall have given the Collateral Agent not less than 30 days’ (or such shorter
period as may be determined by the Collateral Agent in its sole discretion)
prior written notice (in the form of an Officers’ Certificate) of its intention
so to do, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may request and
(ii) to the extent applicable with respect to such new location, such Pledgor
shall have complied with Section 3.4(g); provided that notwithstanding the
foregoing, in no event shall Equipment or Inventory be moved to any location
outside of the continental United States except in connection with an Asset Sale
expressly permitted by the Credit Agreement.
          (b) With respect to any Inventory scheduled or listed on the most
recent Collateral Report, except as disclosed therein: (i) no Inventory (other
than Inventory in transit) is now, or shall at any time or times hereafter be
stored at any other location not set forth in the Perfection Certificate except
as permitted by Section 4.5(a), (ii) the Pledgors have good, indefeasible and
merchantable title to such Inventory and such Inventory is not subject to any
Lien or security interest or document whatsoever except for the Lien granted to
the Collateral Agent, for the benefit of the Secured Parties, and except for
other Liens permitted under Section 6.02 of the Credit Agreement, (iii) such
Inventory is not subject to any Intellectual Property Licenses with any third
parties that would, upon sale or other disposition of such Inventory by the
Collateral Agent in accordance with the terms hereof, infringe or otherwise
violate the Intellectual Property of such third-party licensor, violate any
Contracts with such third-party licensor, or cause the Collateral Agent to incur
any liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current Intellectual Property
Licenses related thereto, (iv) such Inventory has been produced in accordance
with the Federal Fair Labor Standards Act of 1938, as amended, and all rules,
regulations and orders thereunder and (v) the completion of manufacture, sale or
other disposition of such Inventory by the Collateral Agent upon the occurrence
and during the continuance of any Event of Default shall not require the consent
of any person and shall not constitute a breach or default under any contract or
agreement to which any Pledgor is a party or to which such Inventory is subject.
 

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          SECTION 4.6. Due Authorization and Issuance. All of the Pledged
Securities existing on the date hereof have been, and to the extent any Pledged
Securities are hereafter issued, such Pledged Securities will be, upon such
issuance, duly authorized, validly issued and fully paid and non-assessable to
the extent applicable. There is no amount or other obligation owing by any
Pledgor to any issuer of the Pledged Securities in exchange for or in connection
with the issuance of the Pledged Securities or any Pledgor’s status as a partner
or a member of any issuer of the Pledged Securities.
          SECTION 4.7. Consents, etc. In the event that the Collateral Agent
desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.
          SECTION 4.8. Pledged Collateral. All information set forth herein,
including the schedules hereto, and all information contained in any documents,
schedules and lists heretofore delivered to any Secured Party, including the
Perfection Certificate and the schedules thereto, in connection with this
Agreement, in each case, relating to the Pledged Collateral, is accurate and
complete in all material respects. The Pledged Collateral described on the
schedules to the Perfection Certificate constitutes all of the property of such
type of Pledged Collateral owned or held by the Pledgors (other than Immaterial
Intellectual Property Collateral).
          SECTION 4.9. Insurance. In the event that the proceeds of any
insurance claim are paid to any Pledgor after the Collateral Agent has exercised
its right to foreclose after an Event of Default, such Net Cash Proceeds shall
be held in trust for the benefit of the Collateral Agent and immediately after
receipt thereof shall be paid to the Collateral Agent for application in
accordance with the Credit Agreement.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
          SECTION 5.1. Pledge of Additional Securities Collateral. Each Pledgor
shall, upon obtaining any Pledged Securities or Intercompany Notes of any
person, accept the same in trust for the benefit of the Collateral Agent and
promptly (but in any event within thirty days (or such longer period as may be
determined by the Collateral Agent in its sole discretion) after receipt
thereof) deliver to the Collateral Agent a pledge amendment, duly executed by
such Pledgor, in substantially the form of Exhibit 2 hereto (each, a “Pledge
Amendment”), and to the extent required thereunder, the certificates and other
documents required under Section 3.1 and Section 3.2 hereof in respect of the
additional Pledged Securities or Intercompany Notes which are to be pledged
pursuant to this Agreement, and confirming the attachment of the Lien hereby
created on and in respect of such additional Pledged Securities or Intercompany
Notes. Each Pledgor hereby authorizes the Collateral Agent to attach each Pledge
Amendment to this Agreement and agrees that all Pledged Securities or
Intercompany Notes listed on any Pledge Amendment delivered to the Collateral
Agent shall for all purposes hereunder be considered Pledged Collateral.
 

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          SECTION 5.2. Voting Rights; Distributions; etc.
          (a) So long as no Event of Default shall have occurred and be
continuing:
     (i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Securities Collateral or any part thereof
for any purpose not inconsistent with the terms or purposes hereof, the Credit
Agreement or any other document evidencing the Secured Obligations; provided,
however, that no Pledgor shall in any event exercise such rights in any manner
which could reasonably be expected to have a Material Adverse Effect.
     (ii) Each Pledgor shall be entitled to receive and retain, and to utilize
free and clear of the Lien hereof, any and all Distributions, but only if and to
the extent not prohibited by the Credit Agreement; provided, however, that any
and all such Distributions consisting of rights or interests in the form of
securities shall be forthwith delivered to the Collateral Agent to hold as
Pledged Collateral and shall, if received by any Pledgor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other property
or funds of such Pledgor and be promptly (but in any event within five days (or
such longer period as may be determined by the Collateral Agent in its sole
discretion) after receipt thereof) delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsement).
          (b) So long as no Event of Default shall have occurred and be
continuing, the Collateral Agent shall be deemed without further action or
formality to have granted to each Pledgor all necessary consents relating to
voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights which it is entitled to exercise
pursuant to Section 5.2(a)(i) hereof and to receive the Distributions which it
is authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof.
          (c) Upon the occurrence and during the continuance of any Event of
Default and notice by the Collateral Agent:
     (i) All rights of each Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i)
hereof shall immediately cease, and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole right to
exercise such voting and other consensual rights.
     (ii) All rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii)
hereof shall immediately cease and all such rights shall thereupon become vested
in the Collateral Agent, which shall thereupon have the sole right to receive
and hold as Pledged Collateral such Distributions.
          (d) Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may request in order to permit the Collateral Agent to exercise
the voting and other rights which it may be entitled to exercise pursuant to
Section 5.2(c)(i) hereof and to receive all Distributions which it may be
entitled to receive under Section 5.2(c)(ii) hereof.
 

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          (e) All Distributions which are received by any Pledgor contrary to
the provisions of Section 5.2(c)(ii) hereof shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such
Pledgor and shall immediately be paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsement).
          SECTION 5.3. Defaults, etc. Such Pledgor is not in default in the
payment of any portion of any mandatory capital contribution, if any, required
to be made under any agreement to which such Pledgor is a party relating to the
Pledged Securities pledged by it, and such Pledgor is not in violation in any
material respect of any other provisions of any such agreement to which such
Pledgor is a party, or otherwise in default or violation in any material respect
thereunder. No Securities Collateral pledged by such Pledgor is subject to any
defense, offset or counterclaim, nor have any of the foregoing been asserted or
alleged against such Pledgor by any person with respect thereto, and as of the
date hereof, there are no certificates, instruments, documents or other writings
(other than the Organizational Documents and certificates representing such
Pledged Securities that have been delivered to the Collateral Agent) which
evidence any Pledged Securities of such Pledgor.
          SECTION 5.4. Organizational Documents. Each Pledgor has delivered to
the Collateral Agent true, correct and complete copies of its Organizational
Documents. The Organizational Documents of each Pledgor are in full force and
effect, have not as of the date hereof been amended or modified except as
disclosed to the Collateral Agent, and there is no existing default by any party
thereunder or any event which, with the giving of notice or passage of time or
both, would constitute a default by any party thereunder. Each Pledgor shall
deliver to the Collateral Agent a copy of any notice of default given or
received by it under any Organizational Document within ten days after such
Pledgor gives or receives such notice. No Pledgor will terminate or agree to
terminate any Organizational Document or make any amendment or modification to
any Organizational Document except as expressly permitted by the terms of the
Credit Agreement.
          SECTION 5.5. Certain Agreements of Pledgors As Issuers and Holders of
Equity Interests.
          (a) In the case of each Pledgor which is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.
          (b) In the case of each Pledgor which is a partner, shareholder or
member, as the case may be, in a partnership, limited liability company or other
entity, such Pledgor hereby consents to the extent required by the applicable
Organizational Document to the pledge by each other Pledgor, pursuant to the
terms hereof, of the Pledged Securities in such partnership, limited liability
company or other entity and, upon the occurrence and during the continuance of
an Event of Default, to the transfer of such Pledged Securities to the
Collateral Agent or its nominee and to the substitution of the Collateral Agent
or its nominee as a substituted partner, shareholder or member in such
partnership, limited liability company or other entity with all the rights,
powers and duties of a general partner, limited partner, shareholder or member,
as the case may be.
 

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ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
          SECTION 6.1. Grant of Intellectual Property License. For the purpose
of enabling the Collateral Agent, during the continuance of an Event of Default,
to exercise rights and remedies under Article IX hereof at such time as the
Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Pledgor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license and, to the extent permitted under
Intellectual Property Licenses granting such Pledgor rights in Intellectual
Property, sublicense (in each case, exercisable without payment of royalties or
other compensation to such Pledgor) to use, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, wherever the same may be located; provided that the quality of any
products in connection with which the Trademarks are used will not be materially
inferior to the quality of such products prior to such Event of Default. Such
license shall include access to all media in which any of the licensed items may
be recorded or stored and to all computer programs used for the compilation or
printout hereof.
          SECTION 6.2. Protection and Maintenance of Intellectual Property
Collateral. On a continuing basis, each Pledgor shall, at its sole cost and
expense, (i) promptly following its becoming aware thereof, notify the
Collateral Agent of any adverse determination in any proceeding (not including
office or other matters in the ordinary course of prosecution before the United
States Patent and Trademark Office or the United States Copyright Office or any
foreign counterpart) or the institution of any proceeding in any federal, state
or local court or administrative body or in the United States Patent and
Trademark Office or the United States Copyright Office regarding any Material
Intellectual Property Collateral, such Pledgor’s right to register such Material
Intellectual Property Collateral or its right to keep and maintain such Material
Intellectual Property Collateral in full force and effect, (ii) maintain all
Material Intellectual Property Collateral as presently used and operated, except
as shall be consistent with commercially reasonable business judgment, (iii) not
permit to lapse or become abandoned any Material Intellectual Property
Collateral, (iv) take action to prosecute infringers and violators of Material
Intellectual Property Collateral, and not settle or compromise any pending or
future litigation or administrative proceeding with respect to any Material
Intellectual Property Collateral, in each case, except as shall be consistent
with commercially reasonable business judgment, (v) upon such Pledgor obtaining
knowledge thereof, promptly notify the Collateral Agent in writing of any event
which may be reasonably expected to materially and adversely affect the value or
utility of any Material Intellectual Property Collateral, or the value or
utility of the Intellectual Property of the Pledgors, taken as a whole, or the
rights and remedies of the Collateral Agent in relation thereto including a levy
or threat of levy or any legal process against any Material Intellectual
Property Collateral, (vi) not license any Intellectual Property Collateral other
than licenses entered into by such Pledgor in, or incidental to, the ordinary
course of business, or amend or permit the amendment of any of the licenses in a
manner that materially and adversely affects the right to receive payments
thereunder, or in any manner that would materially impair the value of any
Intellectual Property Collateral or the Lien on and security interest in the
Intellectual Property Collateral created therein hereby, without the consent of
the Collateral Agent, (vii) diligently keep adequate records respecting all
Intellectual Property Collateral, (viii) without limiting the Collateral Agent’s
rights and each Pledgor’s obligations under Section 6.3 below, furnish to the
Collateral Agent from time to time upon the Collateral Agent’s request therefor
reasonably detailed statements and amended schedules further identifying and
describing the Intellectual Property Collateral and such other materials
evidencing or reports pertaining to any Intellectual Property Collateral as the
 

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Collateral Agent may from time to time request, (ix) use statutory notice of
registration in connection with its use of registered Trademarks, prior marking
practices in connection with the use of Patents, and appropriate notice of
Copyright in connection with the publication of material subject to Copyrights
and (x) maintain the level of quality of products sold and services rendered
under any Trademarks owned by such Pledgor at a level at least consistent with
the quality of such products and services as of the date hereof, and adequately
control the quality of goods an services offered by any licensees of its
Trademarks to maintain such standards.
          SECTION 6.3. After-Acquired Property. If any Pledgor shall at any time
after the date hereof (i) obtain any ownership or other rights in and/or to any
additional Intellectual Property (including trademark applications for which
evidence of the use of such trademarks in interstate commerce has been submitted
to and accepted by the United States Patent and Trademark Office pursuant to 15
U.S.C. Section 1060(a) (or a successor provision)) or (ii) become entitled to
the benefit of any additional Intellectual Property or any renewal or extension
thereof, including any reissue, division, continuation, or continuation-in-part
of any Intellectual Property Collateral, or any improvement on any Intellectual
Property Collateral, the provisions of this Agreement shall automatically apply
thereto and any such item described in the preceding clause (i) or (ii) (other
than any Excluded Property) shall automatically constitute Intellectual Property
Collateral as if such would have constituted Intellectual Property Collateral at
the time of execution hereof and such Intellectual Property (other than any
Excluded Property) shall be subject to the Lien and security interest created by
this Agreement without further action by any party. Each Pledgor shall promptly
provide to the Collateral Agent written notice of any of the foregoing
Intellectual Property owned by such Pledgor which is the subject of a
registration or application and confirm the attachment of the Lien and security
interest created by this Agreement to any rights described in clauses (i) and
(ii) above by execution and delivery, within 90 days (or, in the case of
Copyrights, 30 day, or, in each case, such longer period as may be determined by
the Collateral Agent in its sole discretion) of the acquisition by such Pledgor
of such Intellectual Property, of an instrument in form and substance reasonably
acceptable to the Collateral Agent and the filing of any instruments or
statements as shall be reasonably necessary to create, record, preserve, protect
or perfect the Collateral Agent’s lien and security interest in such
Intellectual Property. Further, each Pledgor authorizes the Collateral Agent to
modify this Agreement by amending Schedules 12(a) and 12(b) to the Perfection
Certificate to include any Intellectual Property Collateral of such Pledgor
acquired or arising after the date hereof.
          SECTION 6.4. Litigation. Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right to commence and
prosecute in its own name, as the party in interest, for its own benefit and at
the sole cost and expense of the Pledgors, such applications for protection of
the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent or
the Secured Parties to enforce the Intellectual Property Collateral and any
license thereunder. In the event of such suit, each Pledgor shall, at the
reasonable request of the Collateral Agent, do any and all lawful acts and
execute any and all documents requested by the Collateral Agent in aid of such
enforcement and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent for all costs and expenses incurred by the Collateral Agent in
the exercise of its rights under this Section 6.4 in accordance with
Section 11.03 of the Credit Agreement. In the event that the Collateral Agent
shall elect not to bring suit to enforce the Intellectual Property Collateral,
each Pledgor agrees, at the reasonable request of the Collateral Agent, to take
all commercially reasonable actions
 

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necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
of or other damage to any of the Intellectual Property Collateral by any person.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING RECEIVABLES
          SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and
maintain at its own cost and expense complete records of each Receivable, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Pledgor shall, at such Pledgor’s sole
cost and expense, upon the Collateral Agent’s demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Receivables, including all documents evidencing Receivables
and any books and records relating thereto to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Pledgor). Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may transfer a full and complete copy of any
Pledgor’s books, records, credit information, reports, memoranda and all other
writings relating to the Receivables to and for the use by any person that has
acquired or is contemplating acquisition of an interest in the Receivables or
the Collateral Agent’s security interest therein without the consent of any
Pledgor.
          SECTION 7.2. Modification of Terms, etc. No Pledgor shall rescind or
cancel any obligations evidenced by any Receivable or modify any term thereof or
make any adjustment, discount, credit, rebate or reduction with respect thereto
except in the ordinary course of business consistent with prudent business
practice, or extend or renew any such obligations except in the ordinary course
of business consistent with prudent business practice or compromise or settle
any dispute, claim, suit or legal proceeding relating thereto or sell any
Receivable or interest therein except in the ordinary course of business
consistent with prudent business practice without the prior written consent of
the Collateral Agent. Each Pledgor shall timely fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables except as may
be otherwise consistent with the exercise of reasonable business judgment in the
ordinary course of business. If (i) any material adjustment, discount, credit or
agreement to make a rebate or to otherwise reduce the amount owing on a material
Receivable exists or (ii) if, to the knowledge of any Pledgor, any material
dispute, setoff, claim, counterclaim or defense exists or has been asserted or
threatened with respect to a material Receivable, the Pledgors will promptly
disclose such fact to the Collateral Agent in writing.
          SECTION 7.3. Collection. Each Pledgor shall cause to be collected from
the Account Debtor of each of the Receivables, as and when due in the ordinary
course of business and consistent with prudent business practice (including
Receivables that are delinquent, such Receivables to be collected in accordance
with generally accepted commercial collection procedures), any and all amounts
owing under or on account of such Receivable, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable, except that any Pledgor may, with respect to a Receivable, allow in
the ordinary course of business (i) a refund or credit due as a result of
returned or damaged or defective merchandise and (ii) such extensions of time to
pay amounts due in respect of Receivables and such other modifications of
payment terms or settlements in respect of
 

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Receivables as shall be commercially reasonable in the circumstances, all in
accordance with such Pledgor’s ordinary course of business consistent with its
collection practices as in effect from time to time. The costs and expenses
(including attorneys’ fees) of collection, in any case, whether incurred by any
Pledgor, the Collateral Agent or any Secured Party, shall be paid by the
Pledgors.
ARTICLE VIII
TRANSFERS
          SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral pledged by it hereunder except as not prohibited by
the Credit Agreement.
ARTICLE IX
REMEDIES
          SECTION 9.1. Remedies. Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may from time to time
(alternatively, successively or concurrently on any one or more occasions)
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies:
          (i) Personally, or by agents or attorneys, immediately take possession
of the Pledged Collateral or any part thereof, from any Pledgor or any other
person who then has possession of any part thereof with or without notice or
process of law, and for that purpose may enter upon any Pledgor’s premises where
any of the Pledged Collateral is located, remove such Pledged Collateral, remain
present at such premises to receive copies of all communications and remittances
relating to the Pledged Collateral and use in connection with such removal and
possession any and all services, supplies, aids and other facilities of any
Pledgor;
          (ii) Demand, sue for, collect or receive any money or property at any
time payable or receivable in respect of the Pledged Collateral including
instructing the obligor or obligors on any agreement, instrument or other
obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other modifications
with respect thereto; provided, however, that in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly (but
in no event later than one Business Day after receipt thereof) pay such amounts
to the Collateral Agent;
          (iii) Sell, assign, grant a license to use or otherwise liquidate, or
direct any Pledgor to sell, assign, grant a license to use or otherwise
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whole or in part with the Pledged Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment, license, liquidation or
disposition;
          (iv) Take possession of the Pledged Collateral or any part thereof, by
directing any Pledgor in writing to deliver the same to the Collateral Agent at
any place or places so designated by the Collateral Agent, in which event such
Pledgor shall at its own expense: (A) forthwith cause the same to be moved to
the place or places designated by the Collateral Agent and therewith delivered
to the Collateral Agent, (B) store and keep any Pledged Collateral so delivered
to the Collateral Agent at such place or places pending further action by the
Collateral Agent and (C) while the Pledged Collateral shall be so stored and
kept, provide such security and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good condition. Each
Pledgor’s obligation to deliver the Pledged Collateral as contemplated in this
Section 9.1(iv) is of the essence hereof. Upon application to a court of equity
having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by any Pledgor of such obligation;
          (v) Withdraw all moneys, instruments, securities and other property in
any bank, financial securities, deposit or other account of any Pledgor
constituting Pledged Collateral for application to the Secured Obligations as
provided in Article X hereof;
          (vi) Retain and apply the Distributions to the Secured Obligations as
provided in Article X hereof;
          (vii) Exercise any and all rights as beneficial and legal owner of the
Pledged Collateral, including perfecting assignment of and exercising any and
all voting, consensual and other rights and powers with respect to any Pledged
Collateral;
          (viii) In the Collateral Agent’s own name, in the name of a nominee of
the Collateral Agent, or in the name of any Pledgor communicate (by mail,
telephone, facsimile or otherwise) with the Account Debtors and other obligors
in respect of Receivables of such Pledgor and parties to contracts with such
Pledgor, to verify with such persons, to the Collateral Agent’s satisfaction,
the existence, amount, terms of, and any other matter relating to, Accounts,
Chattel Paper, Payment Intangibles, General Intangibles, Instruments and other
Receivables that are Pledged Collateral; and
          (ix) Exercise all the rights and remedies of a secured party on
default under the UCC, and the Collateral Agent may also in its sole discretion,
without notice except as specified in Section 9.2 hereof, sell, assign or grant
a license to use the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker’s board or at any of
the Collateral Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Collateral Agent or any
other Secured Party or any of their respective Affiliates may be the purchaser,
licensee, assignee or recipient of the Pledged Collateral or any part thereof at
any such sale and shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Pledged Collateral sold, assigned or licensed at such sale, to use and apply any
of the Secured Obligations owed to such person as a credit on account of the
purchase price of the Pledged Collateral or any part thereof payable by such
person at such sale. Each purchaser, assignee, licensee or recipient at any such
sale shall acquire the property sold, assigned or licensed absolutely free from
any claim or right on the part of any Pledgor, and each Pledgor hereby waives,
to the fullest extent permitted by law, all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. The Collateral Agent shall
not be obligated to make any
 

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sale of the Pledged Collateral or any part thereof regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by
law, any claims against the Collateral Agent arising by reason of the fact that
the price at which the Pledged Collateral or any part thereof may have been
sold, assigned or licensed at such a private sale was less than the price which
might have been obtained at a public sale, even if the Collateral Agent accepts
the first offer received and does not offer such Pledged Collateral to more than
one offeree.
          SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees
that, to the extent notice of sale or other disposition of the Pledged
Collateral or any part thereof shall be required by law, 10 days’ prior notice
to such Pledgor of the time and place of any public sale or of the time after
which any private sale or other intended disposition is to take place shall be
commercially reasonable notification of such matters. No notification need be
given to any Pledgor if it has signed, after the occurrence of an Event of
Default, a statement renouncing or modifying any right to notification of sale
or other intended disposition.
          SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives,
to the fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Collateral Agent’s taking possession or the Collateral
Agent’s disposition of the Pledged Collateral or any part thereof, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law:
(i) all damages occasioned by such taking of possession, (ii) all other
requirements as to the time, place and terms of sale or other requirements with
respect to the enforcement of the Collateral Agent’s rights hereunder and
(iii) all rights of redemption, appraisal, valuation, stay, extension or
moratorium now or hereafter in force under any applicable law. The Collateral
Agent shall not be liable for any incorrect or improper payment made pursuant to
this Article IX in the absence of gross negligence or willful misconduct on the
part of the Collateral Agent. Any sale of, or the grant of options to purchase,
or any other realization upon, any Pledged Collateral shall operate to divest
all right, title, interest, claim and demand, either at law or in equity, of the
applicable Pledgor therein and thereto, and shall be a perpetual bar both at law
and in equity against such Pledgor and against any and all persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.
          SECTION 9.4. Certain Sales of Pledged Collateral.
          (a) Each Pledgor recognizes that, by reason of certain prohibitions
contained in law, rules, regulations or orders of any Governmental Authority,
the Collateral Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Collateral Agent
than those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that, except
as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.
          (b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act, and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Securities Collateral and Investment Property, to limit purchasers to
persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property
 

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for their own account, for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the Collateral Agent than those obtainable
through a public sale without such restrictions (including a public offering
made pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the
Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Securities Collateral or Investment Property
for the period of time necessary to permit the issuer thereof to register it for
a form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would agree to do so.
          (c) Notwithstanding the foregoing, each Pledgor shall, upon the
occurrence and during the continuance of any Event of Default, at the reasonable
request of the Collateral Agent, for the benefit of the Collateral Agent, cause
any registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Collateral Agent to be kept advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion thereof,
shall furnish to the Collateral Agent such number of prospectuses, offering
circulars or other documents incident thereto as the Collateral Agent from time
to time may request, and shall indemnify and shall cause the issuer of the
Securities Collateral to indemnify the Collateral Agent and all others
participating in the distribution of such Securities Collateral against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading.
          (d) If the Collateral Agent determines to exercise its right to sell
any or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information as the Collateral Agent may request in
order to determine the number of securities included in the Securities
Collateral or Investment Property which may be sold by the Collateral Agent as
exempt transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.
          (e) Each Pledgor further agrees that a breach of any of the covenants
contained in this Section 9.4 will cause irreparable injury to the Collateral
Agent and the other Secured Parties, that the Collateral Agent and the other
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 9.4 shall
be specifically enforceable against such Pledgor, and such Pledgor 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 and
is continuing.
 

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          SECTION 9.5. No Waiver; Cumulative Remedies.
          (a) No failure on the part of the Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of the Collateral
Agent in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power, privilege or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power, privilege or remedy; nor
shall the Collateral Agent be required to look first to, enforce or exhaust any
other security, collateral or guaranties. All rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies provided
by law or otherwise available.
          (b) In the event that the Collateral Agent shall have instituted any
proceeding to enforce any right, power, privilege or remedy under this Agreement
or any other Loan Document by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case, the Pledgors, the Collateral Agent and each other Secured Party shall be
restored to their respective former positions and rights hereunder with respect
to the Pledged Collateral, and all rights, remedies, privileges and powers of
the Collateral Agent and the other Secured Parties shall continue as if no such
proceeding had been instituted.
          SECTION 9.6. Certain Additional Actions Regarding Intellectual
Property. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or assignments of such Pledgor’s
rights in the Intellectual Property Collateral, in recordable form with respect
to those items of the Intellectual Property Collateral consisting of registered
Patents, Trademarks and/or Copyrights (or applications therefor) and such other
documents as are necessary or appropriate to carry out the intent and purposes
hereof. Within five Business Days of written notice thereafter from the
Collateral Agent, each Pledgor shall make available to the Collateral Agent, to
the extent within such Pledgor’s power and authority, such personnel in such
Pledgor’s employ on the date of the Event of Default as the Collateral Agent may
reasonably designate to permit such Pledgor to continue, directly or indirectly,
to produce, advertise and sell the products and services sold by such Pledgor
under the registered Patents, Trademarks and/or Copyrights of such Pledgor, and
such persons shall be available to perform their prior functions on the
Collateral Agent’s behalf.
ARTICLE X
APPLICATION OF PROCEEDS
          SECTION 10.1. Application of Proceeds. Subject to the terms of the
Intercreditor Agreement, the proceeds received by the Collateral Agent in
respect of any sale of, collection from or other realization upon all or any
part of the Pledged Collateral pursuant to the exercise by the Collateral Agent
of its remedies shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, in accordance with the Credit
Agreement.
 

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ARTICLE XI
MISCELLANEOUS
          SECTION 11.1. Concerning Collateral Agent.
          (a) The Collateral Agent has been appointed as collateral agent
pursuant to the Credit Agreement. The actions of the Collateral Agent hereunder
are subject to the provisions of the Credit Agreement. The Collateral Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including the release or substitution of the Pledged Collateral), in accordance
with this Agreement and the Credit Agreement. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith. The Collateral Agent may resign and a successor Collateral
Agent may be appointed in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as the Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under this Agreement.
After any retiring Collateral Agent’s resignation, the provisions hereof shall
inure to its benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was the Collateral Agent.
          (b) The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if such Pledged Collateral is accorded treatment substantially equivalent to
that which the Collateral Agent, in its individual capacity, accords its own
property consisting of similar instruments or interests, it being understood
that neither the Collateral Agent nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Securities Collateral, whether or not the Collateral Agent or any other Secured
Party has or is deemed to have knowledge of such matters or (ii) taking any
necessary steps to preserve rights against any person with respect to any
Pledged Collateral.
          (c) The Collateral Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.
          (d) Except as otherwise provided in Sections 11.17 and 11.18 hereof,
if any item of Pledged Collateral also constitutes collateral granted to the
Collateral Agent under any other deed of trust, mortgage, security agreement,
pledge or instrument of any type, in the event of any conflict between the
provisions hereof and the provisions of such other deed of trust, mortgage,
security agreement, pledge or instrument of any type in respect of such
collateral, the Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.
          (e) The Collateral Agent may rely on advice of counsel as to whether
any or all UCC financing statements of the Pledgors need to be amended as a
result of any of the changes described in Section 5.13 of the Credit Agreement.
If any Pledgor fails to provide information to the Collateral Agent about such
changes on a timely basis, the Collateral Agent shall not be liable or
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for any failure to maintain a perfected security interest in such Pledgor’s
property constituting Pledged Collateral, for which the Collateral Agent needed
to have information relating to such changes. The Collateral Agent shall have no
duty to inquire about such changes if any Pledgor does not inform the Collateral
Agent of such changes, the parties acknowledging and agreeing that it would not
be feasible or practical for the Collateral Agent to search for information on
such changes if such information is not provided by any Pledgor.
          SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
in this Agreement (including such Pledgor’s covenants to (i) pay the premiums in
respect of all required insurance policies hereunder, (ii) pay and discharge any
taxes, assessments and special assessments, levies, fees and governmental
charges imposed upon or assessed against, and landlords’, carriers’, mechanics’,
workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral, (iii) make repairs, (iv) discharge Liens or (v) pay
or perform any obligations of such Pledgor under any Pledged Collateral) or if
any representation or warranty on the part of any Pledgor contained herein shall
be breached, the Collateral Agent may (but shall not be obligated to) do the
same or cause it to be done or remedy any such breach, and may expend funds for
such purpose; provided, however, that the Collateral Agent shall in no event be
bound to inquire into the validity of any tax, Lien, imposition or other
obligation which such Pledgor fails to pay or perform as and when required
hereby and which such Pledgor does not contest in accordance with the provisions
of the Credit Agreement. Any and all amounts so expended by the Collateral Agent
shall be paid by the Pledgors in accordance with the provisions of Section 11.03
of the Credit Agreement. Neither the provisions of this Section 11.2 nor any
action taken by the Collateral Agent pursuant to the provisions of this
Section 11.2 shall prevent any such failure to observe any covenant contained in
this Agreement nor any breach of representation or warranty from constituting an
Event of Default. Each Pledgor hereby appoints the Collateral Agent its
attorney-in-fact, with full power and authority in the place and stead of such
Pledgor and in the name of such Pledgor, or otherwise, from time to time in the
Collateral Agent’s discretion to take any action and to execute any instrument
consistent with the terms of the Credit Agreement, this Agreement and the other
Security Documents which the Collateral Agent may deem necessary or advisable to
accomplish the purposes hereof (but the Collateral Agent shall not be obligated
to and shall have no liability to such Pledgor or any third party for failure to
so do or take action). The foregoing grant of authority is a power of attorney
coupled with an interest and such appointment shall be irrevocable for the term
hereof. Each Pledgor hereby ratifies all that such attorney shall lawfully do or
cause to be done by virtue hereof.
          SECTION 11.3. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) be binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent and the other Secured Parties
and each of their respective successors, transferees and assigns. No other
persons (including any other creditor of any Pledgor) shall have any interest
herein or any right or benefit with respect hereto. Without limiting the
generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement and, in the case of a
Secured Party that is a party to a Hedging Agreement, such Hedging Agreement.
Each of the Pledgors agrees that its obligations hereunder and the security
interest created hereunder shall continue to be effective or be reinstated, as
applicable, if at any time payment, or any part thereof, of all or any part of
the Secured
 

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Obligations is rescinded or must otherwise be restored by the Secured Party upon
the bankruptcy or reorganization of any Pledgor or otherwise.
          SECTION 11.4. Termination; Release. When all the Secured Obligations
have been paid in full and the Commitments of the Lenders to make any Loan under
the Credit Agreement shall have expired or been sooner terminated in accordance
with the provisions of the Credit Agreement, this Agreement shall terminate.
Upon termination of this Agreement the Pledged Collateral shall be released from
the Lien of this Agreement. Upon such release or any release of Pledged
Collateral or any part thereof in accordance with the provisions of the Credit
Agreement, the Collateral Agent shall, upon the request and at the sole cost and
expense of the Pledgors, assign, transfer and deliver to the relevant Pledgor,
against receipt and without recourse to or warranty by the Collateral Agent
except as to the fact that the Collateral Agent has not encumbered the released
assets, such of the Pledged Collateral or any part thereof to be released (in
the case of a release) as may be in possession of the Collateral Agent and as
shall not have been sold or otherwise applied pursuant to the terms hereof, and,
with respect to any other Pledged Collateral, proper documents and instruments
(including any necessary UCC-3 termination financing statements or releases)
acknowledging the termination hereof or the release of such Pledged Collateral,
as the case may be.
          SECTION 11.5. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement and unless in
writing and signed by the Collateral Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof in each case shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any other document evidencing the Secured
Obligations, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other
circumstances.
          SECTION 11.6. Notices. Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Administrative Borrower set forth in the Credit Agreement and as to the
Collateral Agent, addressed to it at the address set forth in the Credit
Agreement, or in each case at such other address as shall be designated by such
party in a written notice to the other party complying as to delivery with the
terms of this Section 11.6.
          SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of
Process; Waiver of Jury Trial. Sections 11.09 and 11.10 of the Credit Agreement
are incorporated herein, mutatis mutandis, as if a part hereof.
          SECTION 11.8. Severability of Provisions. Any provision hereof which
is invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity, legality or enforceability of such provision in any
other jurisdiction.
          SECTION 11.9. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
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be an original, but all such counterparts together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page of this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
          SECTION 11.10. Business Days. In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.
          SECTION 11.11. No Credit for Payment of Taxes or Imposition. Such
Pledgor shall not be entitled to any credit against the principal, premium, if
any, or interest payable under the Credit Agreement, and such Pledgor shall not
be entitled to any credit against any other sums which may become payable under
the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.
          SECTION 11.12. No Claims Against Collateral Agent. Nothing contained
in this Agreement shall constitute any consent or request by the Collateral
Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or any part thereof, nor as giving any Pledgor any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Collateral Agent in respect thereof
or any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.
          SECTION 11.13. No Release. Nothing set forth in this Agreement or any
other Loan Document, nor the exercise by the Collateral Agent of any of the
rights or remedies hereunder, shall relieve any Pledgor from the performance of
any term, covenant, condition or agreement on such Pledgor’s part to be
performed or observed under or in respect of any of the Pledged Collateral or
from any liability to any person under or in respect of any of the Pledged
Collateral or shall impose any obligation on the Collateral Agent or any other
Secured Party to perform or observe any such term, covenant, condition or
agreement on such Pledgor’s part to be so performed or observed or shall impose
any liability on the Collateral Agent or any other Secured Party for any act or
omission on the part of such Pledgor relating thereto or for any breach of any
representation or warranty on the part of such Pledgor contained in this
Agreement, the Credit Agreement or the other Loan Documents, or under or in
respect of the Pledged Collateral or made in connection herewith or therewith.
Anything herein to the contrary notwithstanding, neither the Collateral Agent
nor any other Secured Party shall have any obligation or liability under any
contracts, agreements and other documents included in the Pledged Collateral by
reason of this Agreement, nor shall the Collateral Agent or any other Secured
Party be obligated to perform any of the obligations or duties of any Pledgor
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Pledged Collateral hereunder. The
obligations of each Pledgor contained in this Section 11.13 shall survive the
termination hereof and the discharge of such Pledgor’s other obligations under
this Agreement, the Credit Agreement and the other Loan Documents.
          SECTION 11.14. Obligations Absolute. All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
     (i) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any other Pledgor;
 

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     (ii) any lack of validity or enforceability of the Credit Agreement, any
Hedging Agreement or any other Loan Document, or any other agreement or
instrument relating thereto;
     (iii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any Hedging
Agreement or any other Loan Document or any other agreement or instrument
relating thereto;
     (iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Secured Obligations;
     (v) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement, any Hedging
Agreement or any other Loan Document; or
     (vi) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
          SECTION 11.15. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE
COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS
AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND
THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN
THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE PROVISIONS
OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.
          SECTION 11.16. Delivery of Collateral. Prior to the Discharge of
Revolving Credit Obligations, to the extent any Pledgor is required hereunder to
deliver Pledged Collateral that is Revolving Credit Priority Collateral to the
Collateral Agent for purposes of possession and control and is unable to do so
as a result of having previously delivered such Pledged Collateral to any of the
Revolving Credit Agents in accordance with the terms of the Revolving Credit
Security Documents, such Pledgor’s obligations hereunder with respect to such
delivery shall be deemed satisfied by the delivery to such Revolving Credit
Agents, acting as a gratuitous bailee and/or sub-agent of the Collateral Agent
in accordance with the terms of the Intercreditor Agreement.
          SECTION 11.17. Mortgages. In the case of a conflict between this
Agreement and the Mortgages with respect to Pledged Collateral that is real
property (including Fixtures), the Mortgages shall govern. In all other
conflicts between this Agreement and the Mortgages, this Agreement shall govern.
          SECTION 11.18. Conflicts.
          (a) In the case of any conflict between this Agreement and the Credit
Agreement, the provisions of the Credit Agreement shall govern.
 

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          (b) In the case of a conflict between this Agreement and the Canadian
Security Agreement, solely with respect to the Canadian Borrower, the provisions
of the Canadian Security Agreement shall govern.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
 

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S-1

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

            NOVELIS INC., as a Pledgor
      By:   /s/ Orville Lunking     Name:   Orville Lunking       Title:   Vice
President and Treasurer       NOVELIS CORPORATION, as a Pledgor
      By:   /s/ Orville Lunking       Name:   Orville Lunking     Title:  
Authorized Signatory       NOVELIS PAE CORPORATION, as a Pledgor
      By:   /s/ Orville Lunking       Name:   Orville Lunking       Title:  
Authorized Signatory       NOVELIS FINANCES USA LLC, as a Pledgor
      By:   /s/ Orville Lunking       Name:   Orville Lunking       Title:  
Authorized Signatory       NOVELIS SOUTH AMERICA HOLDINGS LLC, as a Pledgor
      By:   /s/ Orville Lunking       Name:   Orville Lunking       Title:  
Vice President and Treasurer  

 

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S-2

         

            ALUMINUM UPSTREAM HOLDINGS LLC, as a Pledgor
      By:   /s/ Orville Lunking       Name:   Orville Lunking       Title:  
Vice President and Treasurer  

 

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S-3

         

            UBS AG, STAMFORD BRANCH,
as Collateral Agent
      By:   /s/ Mary E. Evans       Name:   Mary E. Evans       Title:  
Associate Director             By:   /s/ David Julie       Name:   David B.
Julie       Title:   Associate Director  

 

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EXHIBIT 1
ISSUER’S ACKNOWLEDGMENT
          The undersigned hereby (i) acknowledges as of this             day of
                     , 20   , receipt of the Security Agreement (as amended, am
ended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement;” capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), dated
as of July 6, 2007, made by NOVELIS INC., a corporation formed under the Canada
Business Corporations Act, NOVELIS CORPORATION, a Texas corporation, and the
Guarantors party thereto, in favor of UBS AG, STAMFORD BRANCH, as collateral
agent (in such capacity and together with any successors in such capacity, the
“Collateral Agent”), (ii) agrees promptly to note on its books the security
interests granted to the Collateral Agent and confirmed under the Security
Agreement, (iii) agrees that it will comply with instructions of the Collateral
Agent with respect to the applicable Securities Collateral without further
consent by the applicable Pledgor, (iv) agrees to notify the Collateral Agent
upon obtaining knowledge of any interest in favor of any person in the
applicable Securities Collateral that is adverse to the interest of the
Collateral Agent therein and (v) waives any right or requirement at any time
hereafter to receive a copy of the Security Agreement in connection with the
registration of any Securities Collateral thereunder in the name of the
Collateral Agent or its nominee or the exercise of voting rights by the
Collateral Agent or its nominee.

            [                                                       ]
      By:           Name:           Title:      

 

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EXHIBIT 2
SECURITIES PLEDGE AMENDMENT
          This Securities Pledge Amendment, dated as of
[                          ] (“Securities Pledge Amendment”), is delivered by
[                              ] (the “Pledgor”), in favor of UBS AG, STAMFORD
BRANCH, as collateral agent (in such capacity and together with any successors
in such capacity, the “Collateral Agent”), pursuant to Section 5.1 of the
Security Agreement (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of July 6, 2007, made by NOVELIS INC., a
corporation formed under the Canada Business Corporations Act, NOVELIS
CORPORATION, a Texas corporation, and the Guarantors party thereto, in favor of
UBS AG, STAMFORD BRANCH, as collateral agent (in such capacity and together with
any successors in such capacity, the “Collateral Agent”).
          As collateral security for the payment and performance in full of all
the Secured Obligations, the Pledgor hereby pledges and grants to the Collateral
Agent for the benefit of the Secured Parties, a lien on and security interest in
all of the right, title and interest of the Pledgor in, to and under the Pledged
Securities and Intercompany Notes listed on this Securities Pledge Amendment and
all Proceeds of any and all of the foregoing (other than Excluded Property).
          The Pledgor hereby agrees that this Securities Pledge Amendment may be
attached to the Security Agreement and that the Pledged Securities and/or
Intercompany Notes listed on this Securities Pledge Amendment shall be deemed to
be and shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
          NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY
INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, PURSUANT TO THIS SECURITIES PLEDGE AMENDMENT AND THE EXERCISE OF ANY
RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER
ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF
ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT AND THIS SECURITIES PLEDGE AMENDMENT, THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.
PLEDGED SECURITIES

                                                                             
PERCENTAGE OF       CLASS                     NUMBER OF     ALL ISSUED CAPITAL  
    OF STOCK     PAR     CERTIFICATE     SHARES OR     OR OTHER EQUITY   ISSUER
  OR INTERESTS     VALUE     NO(S).     INTERESTS     INTERESTS OF ISSUER  
 
                                       

 

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-2-

INTERCOMPANY NOTES

                                      PRINCIPAL     DATE OF     INTEREST    
MATURITY   ISSUER   AMOUNT     ISSUANCE     RATE     DATE  
 
                               

            [                                                                 ],
as Pledgor
      By:           Name:           Title:        

          AGREED TO AND ACCEPTED:

UBS AG, STAMFORD BRANCH,
as Collateral Agent
      By:           Name:           Title:                 By:           Name:  
        Title:        

 

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EXHIBIT 3
JOINDER AGREEMENT
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
___________________________
___________________________
___________________________
___________________________
Ladies and Gentlemen:
          Reference is made to the Security Agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Security
Agreement;” capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Security Agreement), dated as of
July 6, 2007, made by NOVELIS INC., a corporation formed under the Canada
Business Corporations Act, NOVELIS CORPORATION, a Texas corporation, and the
Guarantors party thereto, in favor of UBS AG, STAMFORD BRANCH, as collateral
agent (in such capacity and together with any successors in such capacity, the
“Collateral Agent”).
          This Joinder Agreement (“Joinder Agreement”) supplements the Security
Agreement and is delivered by the undersigned, [                    ] (the “New
Pledgor”), pursuant to Section 3.5 of the Security Agreement. The New Pledgor
hereby agrees to be bound as a Guarantor and as a Pledgor party to the Security
Agreement by all of the terms, covenants and conditions set forth in the
Security Agreement to the same extent that it would have been bound if it had
been a signatory to the Security Agreement on the date of the Security
Agreement. The New Pledgor also hereby agrees to be bound as a party by all of
the terms, covenants and conditions applicable to it set forth in Articles V, VI
and VII of the Credit Agreement to the same extent that it would have been bound
if it had been a signatory to the Credit Agreement on the execution date of the
Credit Agreement. Without limiting the generality of the foregoing, the New
Pledgor hereby grants and pledges to the Collateral Agent, as collateral
security for the full, prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, a lien on and security interest in, all of its right, title and
interest in, to and under the Pledged Collateral and expressly assumes all
obligations and liabilities of a Guarantor and Pledgor thereunder. The New
Pledgor hereby makes each of the representations and warranties and agrees to
each of the covenants applicable to the Pledgors contained in the Security
Agreement and the Credit Agreement.
 

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-2-

          Annexed hereto are supplements to each of the schedules to the
Security Agreement and the Credit Agreement, as applicable, with respect to the
New Pledgor. Such supplements shall be deemed to be part of the Security
Agreement or the Credit Agreement, as applicable.
          This Joinder Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
          THIS JOINDER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
          NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY
INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, PURSUANT TO THIS JOINDER AGREEMENT AND THE EXERCISE OF ANY RIGHT OR
REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE
SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY
CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT
AND THIS JOINDER AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL
GOVERN AND CONTROL.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
 

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-3-

          IN WITNESS WHEREOF, the New Pledgor has caused this Joinder Agreement
to be executed and delivered by its duly authorized officer as of the date first
above written.

            [NEW PLEDGOR]
      By:           Name:           Title:        

          AGREED TO AND ACCEPTED:

UBS AG, STAMFORD BRANCH,
as Collateral Agent
      By:           Name:           Title:                 By:           Name:  
        Title:          

[Schedules to be attached]
 

 

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EXHIBIT 4
COPYRIGHT SECURITY AGREEMENT
          COPYRIGHT SECURITY AGREEMENT, dated as of [                    ] (
“Copyright Security Agreement”), by [                    ] and
[                    ] (individually, an “Assignor”, and, collectively, the
“Assignors”), in favor of UBS AG, STAMFORD BRANCH, a United States branch of a
Swiss bank located at 677 Washington Boulevard, Stamford, CT 06901, in its
capacity as collateral agent pursuant to the Credit Agreement (in such capacity,
the “Assignee”).
WITNESSETH:
          WHEREAS, the Assignors are party to a Security Agreement of even date
herewith (the “Security Agreement”) in favor of the Assignee pursuant to which
the Assignors are required to execute and deliver this Copyright Security
Agreement;
          NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Assignor and the Assignee hereby agree as follows:
          SECTION 1. Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Security Agreement.
For purposes of this Copyright Security Agreement, the term “Copyrights” shall
mean, collectively, all copyrights (whether statutory or common law, whether
established, registered or recorded in the United States or any other country or
any political subdivision thereof, whether registered or unregistered and
whether published or unpublished) and all mask works (as such term is defined in
17 U.S.C. Section 901, et seq.), together with any and all (i) copyright
registrations and applications, (ii) rights and privileges arising under
applicable law with respect to such copyrights, (iii) renewals and extensions
thereof and amendments thereto, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable with respect thereto, including
damages and payments for past, present or future infringements or other
violations thereof, (v) rights corresponding thereto throughout the world and
(vi) rights to sue for past, present or future infringements thereof.
          SECTION 2. Grant of Security Interest in Copyright Collateral. As
collateral security for the payment and performance in full of all the Secured
Obligations, each Assignor hereby pledges and grants to the Assignee for the
benefit of the Secured Parties, a lien on and security interest in all of the
right, title and interest of such Assignor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or
acquired from time to time (collectively, the “Pledged Copyright Collateral”):
          (a) all Copyrights of such Assignor, including, without limitation,
the registered and applied-for Copyrights of such Assignor listed on Schedule I
attached hereto; and
 

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-2-

          (b) all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, and any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Assignor from time to time with
respect to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (a) and (b) above,
the security interest created by this Copyright Security Agreement shall not
extend to any Excluded Property.
          SECTION 3. Security Agreement. The lien and security interest granted
pursuant to this Copyright Security Agreement is granted in conjunction with the
lien and security interest granted to the Assignee pursuant to the Security
Agreement and Assignors hereby acknowledge and affirm that the rights and
remedies of the Assignee with respect to the lien and security interest in the
Copyrights made and granted hereby are more fully set forth in the Security
Agreement. In the event that any provision of this Copyright Security Agreement
is deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall control unless the Assignee shall otherwise determine.
          SECTION 4. Recordation. Each Assignor hereby authorizes and requests
that the United States Copyright Office record this Copyright Security
Agreement.
          SECTION 5. Termination. When all the Secured Obligations have been
paid in full and the Commitments of the Lenders to make any Loan under the
Credit Agreement shall have expired or been sooner terminated in accordance with
the provisions of the Credit Agreement, this Copyright Security Agreement shall
terminate. Upon termination of this Copyright Security Agreement the Pledged
Copyright Collateral shall be released from the Lien of this Copyright Security
Agreement and upon the request and at the sole cost and expense of the
Assignors, the Assignee shall execute, acknowledge, and deliver to the Assignors
an instrument in writing in recordable form releasing the Pledged Copyright
Collateral from the Lien of this Copyright Security Agreement.
          SECTION 6. Counterparts. This Copyright Security Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page of this Copyright
Security Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Copyright Security Agreement.
          SECTION 7. Governing Law. This Copyright Security Agreement shall be
construed in accordance with and governed by the law of the State of New York,
without regard to conflicts of law principles that would require the application
of the laws of another jurisdiction.
          SECTION 8. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ASSIGNEE,
FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS COPYRIGHT SECURITY
AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ASSIGNEE AND THE OTHER
SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS
OF THE
 

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-3-

INTERCREDITOR AGREEMENT AND THIS COPYRIGHT SECURITY AGREEMENT, THE PROVISIONS OF
THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
 

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-4-

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

            [ASSIGNORS]1
      By:           Name:           Title:        

Accepted and Agreed:

          UBS AG, STAMFORD BRANCH,
as Assignee
      By:           Name:           Title:                 By:           Name:  
        Title:          

 

1   This document needs only to be executed by Pledgors that hold registered or
applied-for Copyrights that are subject to the Lien of the Security Agreement.

 

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-5-

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS
Copyright Registrations:

                          registration     owner   number   title of work

Copyright Applications:

          owner   title of work

 

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EXHIBIT 5
PATENT SECURITY AGREEMENT
          PATENT SECURITY AGREEMENT, dated as of [                    ] (“Patent
Security Agreement”), by [                    ] and [                    ]
(individually, an “Assignor”, and, collectively, the “Assignors”), in favor of
UBS AG, STAMFORD BRANCH, a United States branch of a Swiss bank located at 677
Washington Boulevard, Stamford, CT 06901, in its capacity as collateral agent
pursuant to the Credit Agreement (in such capacity, the “Assignee”).
WITNESSETH:
          WHEREAS, the Assignors are party to a Security Agreement of even date
herewith (the “Security Agreement”) in favor of the Assignee pursuant to which
the Assignors are required to execute and deliver this Patent Security
Agreement;
          NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Assignor and the Assignee hereby agree as follows:
          SECTION 1. Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Security Agreement.
For purposes of this Patent Security Agreement, the term “Patents” shall mean,
collectively, all patents, patent applications, certificates of inventions,
industrial designs and rights corresponding thereto throughout the world
(whether established or registered or recorded in the United States or any other
country or any political subdivision thereof), together with any and all
(i) rights and privileges arising under applicable law with respect to any of
the foregoing, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable
thereunder and with respect thereto including damages and payments for past,
present or future infringements or other violations thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for past,
present or future infringements or other violations thereof.
          SECTION 2. Grant of Security Interest in Patent Collateral. As
collateral security for the payment and performance in full of all the Secured
Obligations, each Assignor hereby pledges and grants to the Assignee for the
benefit of the Secured Parties, a lien on and security interest in all of the
right, title and interest of such Assignor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or
acquired from time to time (collectively, the “Pledged Patent Collateral”):
          (a) all Patents of such Assignor, including, without limitation, the
registered and applied-for Patents of such Assignor listed on Schedule I
attached hereto; and
 

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-2-

          (b) all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, and any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Assignor from time to time with
respect to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (a) and (b) above,
the security interest created by this Patent Security Agreement shall not extend
to any Excluded Property.
          SECTION 3. Security Agreement. The lien and security interest granted
pursuant to this Patent Security Agreement is granted in conjunction with the
lien and security interest granted to the Assignee pursuant to the Security
Agreement and Assignors hereby acknowledge and affirm that the rights and
remedies of the Assignee with respect to the lien and security interest in the
Patents made and granted hereby are more fully set forth in the Security
Agreement. In the event that any provision of this Patent Security Agreement is
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall control unless the Assignee shall otherwise determine.
          SECTION 4. Recordation. Each Assignor hereby authorizes and requests
that the Commissioner of Patents and Trademarks record this Patent and Security
Agreement.
          SECTION 5. Termination. When all the Secured Obligations have been
paid in full and the Commitments of the Lenders to make any Loan under the
Credit Agreement shall have expired or been sooner terminated in accordance with
the provisions of the Credit Agreement, this Patent Security Agreement shall
terminate. Upon termination of this Patent Security Agreement the Pledged Patent
Collateral shall be released from the Lien of this Patent Security Agreement and
upon the request and at the sole cost and expense of the Assignors, the Assignee
shall execute, acknowledge, and deliver to the Assignors an instrument in
writing in recordable form releasing the Pledged Patent Collateral from the Lien
of this Patent Security Agreement.
          SECTION 6. Counterparts. This Patent Security Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page of this Patent Security
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Patent Security Agreement.
          SECTION 7. Governing Law. This Patent Security Agreement shall be
construed in accordance with and governed by the law of the State of New York,
without regard to conflicts of law principles that would require the application
of the laws of another jurisdiction.
          SECTION 8. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ASSIGNEE,
FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS PATENT SECURITY
AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ASSIGNEE AND THE OTHER
SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS
OF THE INTERCREDITOR
 

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-3-

AGREEMENT AND THIS PATENT SECURITY AGREEMENT, THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
 

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-4-

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

            [ASSIGNORS]2
      By:           Name:           Title:        

Accepted and Agreed:

          UBS AG, STAMFORD BRANCH,
as Assignee
      By:           Name:           Title:                 By:           Name:  
        Title:          

 

2   This document needs only to be executed by Pledgors that hold registered or
applied-for Patents that are subject to the Lien of the Security Agreement.

 

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-5-

SCHEDULE I
to
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS
Patent Registrations:

                          registration     owner   number   name

Patent Applications:

                          application     owner   number   name

 

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EXHIBIT 6
TRADEMARK SECURITY AGREEMENT
          TRADEMARK SECURITY AGREEMENT, dated as of [                    ] (
“Trademark Security Agreement”), by [                    ] and
[                    ] (individually, an “Assignor”, and, collectively, the
“Assignors”), in favor of UBS AG, STAMFORD BRANCH, a United States branch of a
Swiss bank located at 677 Washington Boulevard, Stamford, CT 06901, in its
capacity as collateral agent pursuant to the Credit Agreement (in such capacity,
the “Assignee”).
WITNESSETH:
          WHEREAS, the Assignors are party to a Security Agreement of even date
herewith (the “Security Agreement”) in favor of the Assignee pursuant to which
the Assignors are required to execute and deliver this Trademark Security
Agreement;
          NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Assignor and the Assignee hereby agree as follows:
          SECTION 1. Defined Terms. Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Security Agreement.
For purposes of this Trademark Security Agreement, the term “Trademarks” shall
mean, collectively, all trademarks (including service marks and certification
marks), slogans, logos, certification marks, trade dress, Internet Domain Names,
corporate names and trade names, whether registered or unregistered (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), together with
any and all (i) registrations and applications for any of the foregoing,
(ii) goodwill connected with the use thereof and symbolized thereby,
(iii) rights and privileges arising under applicable law with respect to the use
of any of the foregoing, (iv) reissues, continuations, extensions and renewals
thereof and amendments thereto, (v) income, fees, royalties, damages and
payments now and hereafter due and/or payable thereunder and with respect
thereto, including damages, claims and payments for past, present or future
infringements, dilutions or other violations thereof, (vi) rights corresponding
thereto throughout the world and (vii) rights to sue for past, present and
future infringements, dilutions or other violations thereof.
          SECTION 2. Grant of Security Interest in Trademark Collateral. As
collateral security for the payment and performance in full of all the Secured
Obligations, each Assignor hereby pledges and grants to the Assignee for the
benefit of the Secured Parties, a lien on and security interest in all of the
right, title and interest of such Assignor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or
acquired from time to time (collectively, the “Pledged Trademark Collateral”):
          (a) all Trademarks of such Assignor, including, without limitation,
the registered and applied-for Trademarks of such Assignor listed on Schedule I
attached hereto; and
 

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-2-

          (b) all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, and any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Assignor from time to time with
respect to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (a) through
(c) above, the security interest created by this Trademark Security Agreement
shall not extend to any Excluded Property.
          SECTION 3. Security Agreement. The lien and security interest granted
pursuant to this Trademark Security Agreement is granted in conjunction with the
lien and security interest granted to the Assignee pursuant to the Security
Agreement and Assignors hereby acknowledge and affirm that the rights and
remedies of the Assignee with respect to the lien and security interest in the
Trademarks made and granted hereby are more fully set forth in the Security
Agreement. In the event that any provision of this Trademark Security Agreement
is deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall control unless the Assignee shall otherwise determine.
          SECTION 4. Recordation. Each Assignor hereby authorizes and requests
that the Commissioner of Patents and Trademarks record this Trademark Security
Agreement.
          SECTION 5. Termination. When all the Secured Obligations have been
paid in full and the Commitments of the Lenders to make any Loan under the
Credit Agreement shall have expired or been sooner terminated in accordance with
the provisions of the Credit Agreement, this Trademark Security Agreement shall
terminate. Upon termination of this Trademark Security Agreement the Pledged
Trademark Collateral shall be released from the Lien of this Trademark Security
Agreement and upon the request and at the sole cost and expense of the
Assignors, the Assignee shall execute, acknowledge, and deliver to the Assignors
an instrument in writing in recordable form releasing the Pledged Trademark
Collateral from the Lien of this Trademark Security Agreement.
          SECTION 6. Counterparts. This Trademark Security Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page of this Trademark
Security Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Trademark Security Agreement.
          SECTION 7. Governing Law. This Trademark Security Agreement shall be
construed in accordance with and governed by the law of the State of New York,
without regard to conflicts of law principles that would require the application
of the laws of another jurisdiction.
          SECTION 8. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ASSIGNEE,
FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS TRADEMARK SECURITY
AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ASSIGNEE AND THE OTHER
SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT. IN THE EVENT
 

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-3-

OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT AND THIS TRADEMARK SECURITY AGREEMENT, THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
 

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-4-

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

            [ASSIGNORS]3
      By:           Name:           Title:        

Accepted and Agreed:

          UBS AG, STAMFORD BRANCH,
as Assignee
      By:           Name:           Title:                 By:           Name:  
        Title:          

 

3   This document needs only to be executed by Pledgors that hold registered or
applied-for Trademarks that are subject to the Lien of the Security Agreement.

 

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-5-

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS
Trademark Registrations:

                          REGISTRATION         OWNER   NUMBER   TRADEMARK

Trademark Applications:

                          APPLICATION     OWNER   NUMBER   TRADEMARK

 

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EXHIBIT 7
FORM OF BAILEE LETTER
UBS AG, Stamford Branch
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Chistopher Gomes
Facsimile No.: 203-719-3180
          Re: [                    ]
          [                    ] (the “Bailor”), a [                    ] and a
subsidiary of Novelis Inc. (the “Parent”), now does or hereafter may deliver to
certain premises [managed][owned] by [                    ] (the “Bailee”), a
[                    ], on behalf of the Bailor as owner and located at
[                    ] (the “Premises”), certain of its [DESCRIBE PROPERTY
SUBJECT TO BAILMENT] for [DESCRIBE PURPOSE FOR WHICH PROPERTY HAS BEEN DELIVERED
TO BAILEE].
          The Parent and certain of its Subsidiaries (collectively, the
“Borrowers”) have entered into financing arrangements with certain financial
institutions (the “Lenders”), pursuant to a Credit Agreement, dated as of
July 6, 2007 (as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”) for which UBS AG, Stamford Branch shall act as
collateral agent (the “Agent”). As a condition to the Agent’s and the Lenders’
loans and other financial accommodations to the Borrowers (as defined in the
Credit Agreement), the Agent and the Lenders require, among other things, liens
on all of the Bailor’s property located on the Premises, and the proceeds
thereof (the “Collateral”).
          To induce the Agent and the Lenders (together with their respective
agents and assigns) to enter into said financing arrangements, and for other
good and valuable consideration, the Bailee hereby acknowledges receipt of the
above notice, and hereby further agrees that:
     (i) title to the Collateral remains with the Bailor while the Collateral is
in the custody, control or possession of the Bailee, the undersigned, to the
best of its knowledge without special inquiry, does not know of any security
interest or claim with respect to such goods or proceeds, other than the
security interest which is the subject of this Agreement, and the Bailee will
not assert against the Collateral any lien, right of distraint or levy, right of
offset, claim, deduction, counterclaim, security or other interest in the
Collateral, including any of the foregoing which might arise or exist in its
favor pursuant to any agreement, common law, statute (including the Federal
Bankruptcy Code) or otherwise, all of which the undersigned hereby subordinates
in favor of the Agent;
     (ii) the Collateral shall be clearly identified or identifiable as being
owned by the Bailor and is distinguishable from the property of the Bailee and
other property in its possession;
     (iii) none of the Collateral located on the Premises shall be permitted to
become a fixture to the Premises;
 

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     (iv) the Bailee has not issued, and shall not issue, any negotiable
documents or other negotiable instruments in respect of any Collateral;
     (v) if any Borrower defaults on its obligations to the Agent and the
Lenders, subject to any grace period, and, as a result, the Agent undertakes to
enforce its security interest in the Collateral, the Bailee, upon receipt of
reasonable written confirmation of the currency and existence of a default
(a) will hold the Collateral for the Agent’s account for the benefit of the
Lenders, and release the Collateral only to the Agent or its designee, (b) will
permit the Agent to enter the Premises upon reasonable notice and during regular
business hours and without unduly interrupting the Bailee’s operations, to
inspect, assemble, take possession of, and remove all of the Collateral located
on the Premises and will reasonably cooperate with the Agent in its efforts to
do so; (c) will permit the Collateral to remain on the Premises for forty-five
(45) days after the Agent notifies the Bailee in writing of the default, or, at
the Agent’s option, to remove the Collateral from the Premises within a
reasonable time, not to exceed forty-five (45) days after the Agent notifies the
undersigned in writing of the default; (d) will not hinder the Agent’s actions
in enforcing its liens on the Collateral; and (e) after the Agent notifies the
Bailee in writing of the default, will, without further consent or agreement of
the Bailor, abide solely by Agent’s lawful instructions with respect to the
Collateral, and not those of the Bailor; and
     (vi) the Bailee hereby waives and releases, for Agent’s benefit, any and
all claims, liens, including bailee’s liens, and demands of every kind which
Bailee has or may later have against the Collateral (including any right to
include such goods in any secured financing to which Bailee may become party).
          The Bailee hereby irrevocably and unconditionally authorizes Agent (or
its designee) to file at any time prior to the payment in full of the Secured
Obligations (as defined in the Credit Agreement) in any jurisdiction and with
such filing offices as the Agent so chooses such financing statements naming the
Bailee as the debtor consignee, the Bailor as the secured party consignor, and
the Agent as assignee, describing the Collateral in a manner that Agent believes
is reasonably necessary or desirable to protect its security interest in the
Bailor’s property, and including any other information with respect to the
Bailee required under the Uniform Commercial Code for the sufficiency of such
financing statement or for it to be accepted by the filing office of any
applicable jurisdiction (and any amendments or continuations with respect
thereto); provided, however, Agent shall provide to Bailor for review copies of
any such filings to be made, sufficiently in advance of filing and once filed,
final copies of such filings.
          Any notice(s) required or desired to be given hereunder shall be
directed to the party to be notified at the address stated herein.
          The agreements contained herein shall continue in force until each
Borrower’s obligations and liabilities to the Agent and the Lenders are paid and
satisfied in full and all financing arrangements among the Agent, the Lenders
and the Borrowers have been terminated.
          The consent of the Bailor hereto constitutes its acknowledgment that
Agent may assert any of the rights set forth or referred to herein, without
objection by the Bailor, and that the Bailee may act in accordance with this
Agreement without liability to the Bailor. By its signature below, the Bailor
agrees to reimburse the Bailee for all reasonable costs and expenses incurred by
the Bailee as a direct result of compliance with this Agreement.
 

7

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          The Bailee will notify all successor owners, transferees, purchasers
and mortgagees of the Premises of the existence of this waiver. The agreements
contained herein may not be modified or terminated orally and shall be binding
upon the successors, assigns and personal representatives of the undersigned.
[Signature pages follow]
 

8

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          This Agreement may be executed in any number of counterparts and by
different parties to this Agreement on separate counterparts, each of which,
when so executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature hereto. The
undersigned hereby waives notice of acceptance of this Agreement by Agent.
          Executed and delivered this ___ day of                     , 20___.

            [__________________]
[Address]
      By:           Name:           Title:        

CONSENTED AND AGREED TO:

          [________________________]
[Address]
      By:           Title:     

ACKNOWLEDGED AND ACCEPTED:

          UBS AG, STAMFORD BRANCH, as Agent
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Christopher Gomes
Facsimile No: 203-719-3180
      By:           Name:           Title:               By:           Name:    
      Title: