Exhibit 10.1

EXECUTION VERSION

 

 

 

SECURITY AGREEMENT

Dated as of March 22, 2010

among

INTERNATIONAL COAL GROUP, INC.

as Issuer

and

THE GUARANTORS PARTY HERETO

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Collateral Agent for the Holders of International Coal Group, Inc.’s

9.125% Senior Secured Second-Priority Notes due 2018

 

 

 

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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.

 

OTHER INTERPRETIVE PROVISIONS.

   16

SECTION 1.3.

 

ACCOUNTING TERMS AND PRINCIPLES.

   17

SECTION 1.4.

 

RESOLUTION OF DRAFTING AMBIGUITIES.

   17

SECTION 1.5.

 

PERFECTION CERTIFICATE

   17

 

ARTICLE II

 

GRANT OF SECURITY AND SECURED OBLIGATIONS

 

SECTION 2.1.

 

GRANT OF SECURITY INTEREST.

   17

SECTION 2.2.

 

FILINGS

   19 ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL

 

SECTION 3.1.

 

DELIVERY OF CERTIFICATED SECURITIES COLLATERAL.

   20

SECTION 3.2.

 

PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL.

   20

SECTION 3.3.

 

FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY
INTEREST.

   21

SECTION 3.4.

 

OTHER ACTIONS.

   21

SECTION 3.5.

 

SECURITY INTERESTS; FURTHER ASSURANCES.

   25

SECTION 3.6.

 

ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS.

   26

 

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         Page ARTICLE IV

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

SECTION 4.1.

 

TITLE.

   26

SECTION 4.2.

 

VALIDITY OF SECURITY INTEREST.

   26

SECTION 4.3.

 

DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED COLLATERAL.

   27

SECTION 4.4.

 

OTHER FINANCING STATEMENTS.

   28

SECTION 4.5.

 

CHANGE OF NAME; JURISDICTION OF ORGANIZATION.

   28

SECTION 4.6.

 

LOCATION OF INVENTORY AND EQUIPMENT.

   29

SECTION 4.7.

 

DUE AUTHORIZATION AND ISSUANCE.

   29

SECTION 4.8.

 

CONSENTS, ETC.

   29

SECTION 4.9.

 

PLEDGED COLLATERAL.

   29

SECTION 4.10.

 

INSURANCE.

   30

SECTION 4.11.

 

PAYMENT OF TAXES; COMPLIANCE WITH LAWS; CONTESTING LIENS; CLAIMS.

   30

SECTION 4.12.

 

ACCESS TO PLEDGED COLLATERAL, BOOKS AND RECORDS; OTHER INFORMATION.

   30

 

ARTICLE V

 

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 

SECTION 5.1.

 

PLEDGE OF ADDITIONAL SECURITIES COLLATERAL.

   31

SECTION 5.2.

 

VOTING RIGHTS; DISTRIBUTIONS; ETC.

   31

SECTION 5.3.

 

DEFAULTS, ETC.

   32

SECTION 5.4.

 

CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS.

   32

 

ARTICLE VI

 

CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL

 

SECTION 6.1.

 

GRANT OF LICENSE.

   33

SECTION 6.2.

 

PROTECTION OF COLLATERAL AGENT’S SECURITY.

   33

SECTION 6.3.

 

AFTER-ACQUIRED PROPERTY.

   34

SECTION 6.4.

 

LITIGATION.

   34

 

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         Page ARTICLE VII

 

CERTAIN PROVISIONS CONCERNING ACCOUNTS

 

SECTION 7.1.

 

MAINTENANCE OF RECORDS.

   35

SECTION 7.2.

 

LEGEND.

   35

SECTION 7.3.

 

MODIFICATION OF TERMS, ETC.

   36

SECTION 7.4.

 

COLLECTION.

   36

 

ARTICLE VIII

 

TRANSFERS

 

SECTION 8.1.

 

TRANSFERS OF PLEDGED COLLATERAL.

   36

 

ARTICLE IX

 

REMEDIES

 

SECTION 9.1.

 

REMEDIES.

   36

SECTION 9.2.

 

NOTICE OF SALE.

   38

SECTION 9.3.

 

WAIVER OF NOTICE AND CLAIMS.

   38

SECTION 9.4.

 

CERTAIN SALES OF PLEDGED COLLATERAL.

   39

SECTION 9.5.

 

NO WAIVER; CUMULATIVE REMEDIES.

   40

SECTION 9.6.

 

CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY.

   40

 

ARTICLE X

 

PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;

APPLICATION OF PROCEEDS

 

SECTION 10.1.

 

PROCEEDS OF ASSET SALES

   41

SECTION 10.2.

 

APPLICATION OF PROCEEDS

   41

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.1.

 

CONCERNING COLLATERAL AGENT.

   41

SECTION 11.2.

 

COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT.

   42

SECTION 11.3.

 

CONTINUING SECURITY INTEREST; ASSIGNMENT.

   42

SECTION 11.4.

 

TERMINATION; RELEASE.

   43

 

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         Page

SECTION 11.5.

 

COSTS AND EXPENSES.

   43

SECTION 11.6.

 

MODIFICATION IN WRITING.

   44

SECTION 11.7.

 

NOTICES.

   44

SECTION 11.8.

 

GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL.

   44

SECTION 11.9.

 

SEVERABILITY OF PROVISIONS.

   45

SECTION 11.10.

 

EXECUTION IN COUNTERPARTS.

   45

SECTION 11.11.

 

BUSINESS DAYS.

   45

SECTION 11.12.

 

WAIVER OF STAY.

   45

SECTION 11.13.

 

NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION.

   46

SECTION 11.14.

 

NO CLAIMS AGAINST COLLATERAL AGENT.

   46

SECTION 11.15.

 

NO RELEASE.

   46

SECTION 11.16.

 

OBLIGATIONS ABSOLUTE.

   46

SECTION 11.17.

 

INTERCREDITOR AGREEMENT.

   47

SIGNATURES

     S-1

EXHIBIT 1

 

Form of Issuer’s Acknowledgment

  

EXHIBIT 2

 

Form Pledge Amendment

  

EXHIBIT 3

 

Form of Joinder Agreement

  

EXHIBIT 4

 

Form of Control Agreement Concerning Securities Accounts

  

EXHIBIT 5

 

Form of Control Agreement Concerning Deposit Accounts

  

EXHIBIT 6

 

Form of Copyright Security Agreement

  

EXHIBIT 7

 

Form of Patent Security Agreement

  

EXHIBIT 8

 

Form of Trademark Security Agreement

  

 

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SECURITY AGREEMENT

This SECURITY AGREEMENT, dated as of March 22, 2010 (as it may be amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, this “Agreement”), among INTERNATIONAL
COAL GROUP, INC., a Delaware corporation (the “Issuer”) and THE GUARANTORS
LISTED ON THE SIGNATURE PAGES HERETO (the “Original Guarantors”) OR FROM TIME TO
TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the “Additional
Guarantors,” and together with the Original Guarantors, the “Guarantors”), as
pledgors, assignors and debtors (the Issuer, together with the Guarantors, in
such capacities and together with any successors in such capacities, the
“Pledgors,” and each individually, a “Pledgor”), in favor of THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., in its capacity as collateral agent (the
“Collateral Agent”) pursuant to the Indenture (such term and each other
capitalized term used but not defined herein having the meaning given to it in
Article I), as pledgee, assignee and secured party.

R E C I T A L S :

A. Issuer, the Original Guarantors and The Bank of New York Mellon Trust
Company, N.A., as trustee (the “Trustee”), have, in connection with the
execution and delivery of this Agreement, entered into (i) that certain
Indenture, dated as of March 16, 2010 (as it may be amended, amended and
restated, supplemented or otherwise modified from time to time, the “Base
Indenture”) and (ii) that certain Second Supplemental Indenture, dated as of
March 22, 2010 (as it may be amended, amended and restated, supplemented or
otherwise modified from time to time, the “Supplemental Indenture,” and together
with the Base Indenture, the “Indenture”).

B. Each Original Guarantor has, pursuant to the Indenture, unconditionally
guaranteed the Obligations.

C. Issuer and each Original Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Indenture and
the other Transaction Documents and each is, therefore, willing to enter into
this Agreement.

D. Each Pledgor is or, as to Pledged Collateral acquired by such Pledgor after
the date hereof will be, the legal and/or beneficial owner of the Pledged
Collateral pledged by it hereunder.

E. This Agreement is given by each Pledgor in favor of Collateral Agent for the
benefit of the Secured Parties to secure the payment and performance of all of
the Obligations.

[Signature page to Security Agreement]

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A G R E E M E N T :

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Collateral Agent and each Pledgor hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1. Definitions. The following terms shall have the following meanings:

“Accounts” shall mean all “accounts,” as such term is defined in the UCC.

“Account Debtor” shall mean any person who may become obligated to another
Person under, with respect to or on account of, an Account.

“Additional Guarantors” shall have the meaning assigned to such term in the
Preamble hereof.

“Additional Pledged Interests” shall mean, collectively, with respect to each
Pledgor, all of its right, title and interest in (i) all options, warrants,
rights, agreements, additional membership, partnership or other equity interests
of whatever class of any issuer of Initial Pledged Interests or any other equity
interest in any such issuer, 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 any such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other
equity interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such membership, partnership
or other equity interests from time to time acquired by such Pledgor in any
manner and (ii) all membership, partnership or other equity interests, as
applicable, of each limited liability company, partnership or other entity
(other than a corporation) hereafter acquired or formed by such Pledgor and all
options, warrants, rights, agreements, additional membership, partnership or
other equity interests of whatever class of such limited liability company,
partnership or other entity, 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 membership, partnership or other equity
interests and any and all interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such membership, partnership or
other equity interests, from time to time acquired by such Pledgor in any
manner.

“Additional Pledged Shares” shall mean, collectively, with respect to each
Pledgor, all of its right, title and interest in (i) all options, warrants,
rights, agreements, additional

 

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shares of capital stock of whatever class of any issuer of the Initial Pledged
Shares or any other equity interest in any such issuer, together with all
rights, privileges, authority and powers of such Pledgor relating to such equity
interests issued by any such issuer 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 (ii) all the issued and
outstanding shares of capital stock of each corporation hereafter acquired or
formed by such Pledgor and all options, warrants, rights, agreements or
additional shares of capital stock of whatever class of such corporation,
together with all rights, privileges, authority and powers of such Pledgor
relating to such shares or under any Organizational Document of such
corporation, and the certificates, instruments and agreements representing such
shares and any and all interest of such Pledgor in the entries on the books of
any financial intermediary pertaining to such shares, from time to time acquired
by such Pledgor in any manner.

“Affiliate” shall mean, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
or more of the Stock (either directly or through ownership of Stock Equivalents)
of a Person shall for the purposes of this Agreement, be deemed to control the
other Person. Notwithstanding the foregoing, Collateral Agent shall not be
deemed an “Affiliate” of any Pledgor.

“Agreement” shall have the meaning assigned to such term in the Preamble hereof.

“As-Extracted Collateral” shall mean all “as-extracted collateral,” as such term
is defined in the UCC.

“Asset Sale” shall have the meaning assigned to such term in the Indenture.

“Attorney Costs” shall mean and include all reasonable fees and disbursements of
any law firm or other external counsel.

“Bank” shall mean a “bank”, as such term is defined in the UCC.

“Base Indenture” shall have the meaning assigned to such term in Recital A
hereof.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

“Capital Lease” shall mean any leasing or similar arrangement that, in
accordance with GAAP, is classified as a capital lease.

 

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“Capital Lease Obligations” shall mean all monetary obligations of any Pledgor
under any Capital Leases.

“Chattel Paper” shall mean all “chattel paper,” as such term is defined in the
UCC.

“Claims” shall mean any and all property and other taxes, assessments and
special assessments, levies, fees and all 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.

“Collateral Agent” shall have the meaning assigned to such term in the Preamble
hereof.

“Commercial Tort Claims” shall mean all “commercial tort claims,” as such term
is defined in the UCC.

“Commodity Accounts” shall mean all “commodity accounts,” as such term is
defined in the UCC.

“Commodity Account Control Agreement” shall mean an agreement establishing
Control over all commodity contracts credited to a commodities account in a form
that is reasonably satisfactory to Collateral Agent.

“Commodity Intermediary” shall mean any “commodity intermediary” as such term is
defined in the UCC.

“Contracts” shall mean, collectively, with respect to each Pledgor, all sale,
service, performance, equipment or property lease contracts, agreements or
instruments and all other contracts, agreements or instruments (in each case,
whether written, electronic or oral, or third party or intercompany), between
such Pledgor and any other person, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications
thereof, and all rights of Pledgor thereunder.

“Contractual Obligations” shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its Property is bound.

“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(d) of the UCC
and (iii) in the case of any Commodity Contract, “control,” as such term is
defined in Section 9-106(b) of the UCC.

 

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“Control Agreements” shall mean, collectively, any Deposit Account Control
Agreements, any Securities Account Control Agreements and any Commodity Account
Control Agreements.

“Controlled Account” shall mean a Deposit Account, Securities Account or
Commodity Account over which Collateral Agent has Control.

“Copyrights” shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or registered
in the United States or any other country or group of countries or any political
subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor’s use of such
copyrights, (ii) reissues, renewals, continuations and extensions thereof,
(iii) 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 thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future
infringements thereof.

“Copyright Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit 6.

“Deposit Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 5 or such other form that is reasonably
satisfactory to Collateral Agent.

“Deposit Accounts” shall mean, collectively, with respect to each Pledgor,
(i) all “deposit accounts” as such term is defined in the UCC 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.

“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.

“Documents” shall mean all “documents,” as such term is defined in the UCC.

“Electronic Chattel Paper” shall mean all “electronic chattel paper,” as such
term is defined in the UCC.

“Equipment” shall mean all “equipment,” as such term is defined in the UCC.

 

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“Equity Interests” means Stock and all warrants, options or other rights to
acquire Stock (but excluding any debt security that is convertible into, or
exchangeable for, Stock).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

“Event of Default” shall have the meaning assigned to such term in Section 6.01
of the Supplemental Indenture.

“Excluded Account” shall mean any Deposit Account that has less than $25,000 of
cash on deposit therein so long as the aggregate amount of all such Deposit
Accounts with less than $25,000 on deposit therein that constitute Excluded
Accounts is less than $100,000.

“Exchange Act” shall mean the Securities Exchange Act of 1934.

“Excluded Property” shall mean:

(a) Equity Interests of any Guarantor to the extent necessary so that Rule 3-16
of Regulation S-X (or any successor rule) under the Securities Act of 1933 would
not require the filing with the Securities and Exchange Commission of separate
financial statements of such Guarantor due to the fact that such Guarantor’s
Equity Interests secure the notes, which Equity Interests shall automatically be
deemed released and to not be and to not have been part of the Pledged
Collateral but only to the extent necessary to not be subject to such
requirement; and

(b) Special Property other than any proceeds, substitutions or replacements of
any Special Property (unless such proceeds, substitutions or replacements would
constitute Special Property).

“Financial Officer” of any Person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such Person, or any
officer with an equivalent position performing duties normally attributable to
any of the foregoing.

“First Lien Agent” shall have the meaning assigned to such term in the
Intercreditor Agreement.

“First Lien Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement.

“First Lien Loan Agreement” shall mean that certain Third Amended and Restated
Credit Agreement, dated as of February 22, 2010, among, ICG, LLC, Issuer, the
guarantors party thereto, the lenders party thereto, General Electric Capital
Corporation, as administrative agent and a collateral agent, and UBS AG,
Stamford Branch, as a collateral agent, PNC Bank, National Association, as a
documentation agent and the other parties thereto, together with any related
documents (including any security documents and guarantee agreements), as such
agreement may be amended, restated, substituted, modified, supplemented,
extended, renewed, refunded, replaced (whether upon or after termination or
otherwise) or refinanced (including by means of sales of debt securities to
investors) in whole or in part from time to time.

 

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“First Lien Termination Date” shall have the meaning assigned to such term in
the Intercreditor Agreement.

“Fixtures” shall mean all “fixtures,” as such term is defined in the UCC.

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis.

“General Intangibles” shall mean, collectively, with respect to each Pledgor,
all “general intangibles,” as such term is defined in the UCC, and, in any
event, shall include (i) all of such Pledgor’s right, title and interest in, to
and under all insurance policies and Contracts, (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 (other than any of the foregoing constituting
Accounts, Documents, Chattel Paper, Instruments, Letter of Credit Rights,
Investment Property or other types of Pledged Collateral) 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 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, (vi) all licenses,
consents, permits, variances, certifications, authorizations and approvals,
however characterized, of any Governmental Authority (or any person acting on
behalf of a Governmental Authority) now or hereafter acquired or held by such
Pledgor pertaining to operations now or hereafter conducted by such Pledgor or
any of the Pledged Collateral or any of the Mortgaged Property including
building permits, certificates of occupancy, environmental certificates,
industrial permits or licenses and certificates of operation and (vii) all
rights to reserves, deferred payments, deposits, refunds, indemnification of
claims to the extent the foregoing relate to any Pledged Collateral or Mortgaged
Property and claims for tax or other refunds against any Governmental Authority
relating to any Pledged Collateral or any of the Mortgaged Property.

“Goods” shall mean all “goods,” as such term is defined in the UCC.

 

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“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including (i) all goodwill connected with
the use of and symbolized by any Trademark or Trademark License in which such
Pledgor has any interest, (ii) all know-how, trade secrets, customer and
supplier lists, proprietary information, inventions, methods, procedures,
formulae, descriptions, compositions, technical data, drawings, specifications,
name plates, catalogs, confidential information and the right to limit the use
or disclosure thereof by any person, pricing and cost information, business and
marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill and (iii) all product lines of
such Pledgor’s business.

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.

“Indenture” shall have the meaning assigned to such term in Recital A hereof.

“Initial Pledged Interests” shall mean, with respect to each Pledgor, all of its
right, title and interest in all membership, partnership or other equity
interests (other than in a corporation), as applicable, of each issuer described
in Schedule 9 annexed to the Perfection Certificate, together with all rights,
privileges, authority and powers of such Pledgor in and to each such issuer or
under any Organizational Document of each such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other
equity interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such membership, partnership
or other equity interests.

“Initial Pledged Shares” shall mean, collectively, with respect to each Pledgor,
all of its right, title and interest in the issued and outstanding shares of
capital stock of each issuer that is a corporation described in Schedule 9
annexed to the Perfection Certificate together with all rights, privileges,
authority and powers of such Pledgor relating to such shares of capital stock
interests in each such issuer or under any Organizational Document of each such
issuer, and the certificates, instruments and agreements representing such
shares of capital stock and any and all interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to the Initial Pledged
Shares.

“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” means all rights, title and interests in or relating to
intellectual property and industrial property arising under any Requirements of
Law and all IP Ancillary Rights relating thereto, including all Copyrights,
Patents, Trademarks, Internet domain names, Trade Secrets and IP Licenses,
proprietary information, know-how and processes necessary for the conduct of the
business of a Person as currently conducted.

 

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“Intellectual Property Collateral” shall mean, collectively, the Patents,
Trademarks, Copyrights, Licenses, Goodwill and all other items of Intellectual
Property of any Pledgor, whether now owned or hereafter created or acquired by
or assigned to such Pledgor.

“Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany
notes described in Schedule 10 annexed to the Perfection Certificate and all
other notes hereafter acquired by such Pledgor from Issuer or any of its
Subsidiaries and all certificates, instruments or agreements evidencing such
notes payable by Issuer or any of its Subsidiaries to such Pledgor, 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 the Intercreditor Agreement dated as of the
Issue Date among Collateral Agent, General Electric Capital Corporation, as
administrative agent and a collateral agent under the First Lien Loan Agreement,
UBS AG, Stamford Branch, as a collateral agent under the First Lien Loan
Agreement, Issuer, ICG, LLC, as borrower under the First Lien Loan Agreement,
and each other Guarantor party thereto from time to time.

“IP Ancillary Rights” means, with respect to any Intellectual Property, as
applicable, all foreign counterparts to, and all divisionals, reversions,
continuations, continuations in part, reissues, reexaminations, renewals and
extensions of, such Intellectual Property and all income, royalties, proceeds
and liabilities at any time due or payable or asserted under or with respect to
any of the foregoing or otherwise with respect to such Intellectual Property,
including all rights to sue or recover at law or in equity for any past, present
or future infringement, misappropriation, dilution, violation or other
impairment thereof, and, in each case, all rights to obtain any other IP
Ancillary Right.

“IP License” means all Contractual Obligations (and all related IP Ancillary
Rights), whether written or oral, granting any right, title and interest in or
relating to any Intellectual Property.

“Issue Date” shall mean the date on which the Notes are originally issued under
the Indenture.

“Issuer” shall have the meaning assigned to such term in the Preamble hereof.

“Inventory” shall mean all “inventory,” as such term is defined in the UCC.

“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 annexed
hereto as Exhibit 3.

 

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“Letters of Credit” shall mean all “letters of credit,” as such term is defined
in the UCC.

“Letter-of-Credit Rights” shall mean all “letter-of-credit rights,” as such term
is defined in the UCC.

“Licenses” shall mean, collectively, with respect to each Pledgor, all license
and distribution agreements with, and covenants not to sue, any other party with
respect to any Patent, Trademark or Copyright or any other patent, trademark or
copyright, whether such Pledgor is a licensor or licensee, distributor or
distributee under any such license or distribution agreement, together with any
and all (i) 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 or violations
thereof and (iv) other rights to use, exploit or practice any or all of the
Patents, Trademarks or Copyrights or any other patent, trademark or copyright.

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
otherwise) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law) and any contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under a lease that is not a Capital Lease.

“Material Adverse Effect” shall mean: (a) a material adverse change in, or a
material adverse effect upon, the operations, business, Properties, or condition
(financial or otherwise) of the Pledgors taken as a whole; (b) a material
impairment of the ability of the Pledgors to perform in any material respect
their obligations under any Transaction Document; (c) a material adverse effect
upon (i) the legality, validity, binding effect or enforceability of any
Transaction Document, or (ii) the perfection or priority of any Lien granted to
Collateral Agent under any of the Security Documents; or (d) a material
impairment on the ability of Collateral Agent to enforce its rights and remedies
under the Transaction Documents.

“Money” shall mean all “money,” as such term is defined or used in the UCC.

“Mortgaged Property” shall mean each Real Property subject to a Security
Document.

“Net Proceeds” shall have the meaning assigned to such term in the Indenture.

“Noteholder” shall mean a registered holder of Notes.

 

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“Notes” shall mean the Issuer’s 9.125% Senior Secured Second-Priority Notes due
2018.

“Obligations” shall mean any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the Transaction Documents, as each may be amended, restated, supplemented or
otherwise modified from time to time.

“Ordinary Course of Business” shall mean, in respect of any transaction
involving any Pledgor, the ordinary course of such Person’s business, as
conducted by any such Person in accordance with past practice and undertaken by
such Person in good faith and not for purposes of evading any covenant or
restriction in any Transaction Document.

“Organizational Documents” shall mean, with respect to any Person, (i) in the
case of any corporation, the certificate or articles of incorporation, the
by-laws, any certificate of determination or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder rights agreement
(or similar documents) of such Person, (ii) in the case of any limited liability
company, the certificate or articles of formation and the operating agreement
(or similar documents) of such Person, (iii) in the case of any limited
partnership, the certificate of formation and limited partnership agreement (or
similar documents) of such Person, (iv) in the case of any general partnership,
the partnership agreement (or similar document) of such Person and (v) in any
other case, any other document setting forth the manner of election or duties of
the officers, directors, managers or other similar Persons, or the designation,
amount or relative rights, limitations and preference of the Stock of a Person
or the functional equivalent of any of the foregoing.

“Original Guarantors” shall have the meaning assigned to such term in the
Preamble hereof.

“Patents” shall mean, collectively, with respect to each Pledgor, all patents
issued or assigned to and all patent applications and registrations made by such
Pledgor (whether established or registered or recorded in the United States or
any other country or group of countries or any political subdivision thereof),
together with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor’s use of any patents, (ii) inventions and
improvements described and claimed therein, (iii) reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof,
(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 thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to sue for past,
present or future infringements thereof.

“Patent Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit 7.

“Perfection Certificate” shall mean, with respect to any Pledgor on the date
hereof, that certain perfection certificate dated as of March 22, 2010, executed
and delivered by such Pledgor in favor of Collateral Agent for the benefit of
the Secured Parties, or, with respect

 

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to any Pledgor executing a Joinder Agreement after the date hereof, the
Perfection Certificate (which shall be in form and substance reasonably
acceptable to Collateral Agent) executed and delivered by such Pledgor, in favor
of Collateral Agent for the benefit of the Secured Parties contemporaneously
with the execution and delivery by such Pledgor of its Joinder Agreement
executed in accordance with Section 3.6 hereof, in each case, as such
certificate may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with this Agreement.

“Permitted Collateral Liens” shall mean Permitted Liens (as such term is defined
in Section 2.01 of the Supplemental Indenture).

“Person” shall mean an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

“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 Interests” shall mean, collectively, the Initial Pledged Interests and
the Additional Pledged Interests.

“Pledged Securities” shall mean, collectively, the Pledged Interests, the
Pledged Shares and the Successor Interests.

“Pledged Shares” shall mean, collectively, the Initial Pledged Shares and the
Additional Pledged Shares.

“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

“Proceeds” shall mean all “proceeds,” as such term is defined in the UCC.

“Property” shall mean any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.

“Purchase Money Obligation” shall mean, for any person, the obligations of such
person in respect of Indebtedness (including Capital Lease Obligations) incurred
for the purpose of financing all or any part of the purchase price of any
property (including Stock or Stock Equivalents of any Person) or the cost of
installation, construction or improvement of any property and any refinancing
thereof.

“Real Property” means, collectively, all right, title and interest (including
any leasehold estate) in and to any and all parcels of or interests in real
property owned, leased or operated by any person, whether by lease, license or
other means, together with, in each case, all easements, hereditaments,
appurtenances, improvements and fixtures relating thereto.

 

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“Related Persons” shall mean, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor and other consultants and agents of or to such Person or any of
its Affiliates.

“Requirements of Law” shall mean, as to any Person, any law (statutory or
common), ordinance, treaty, rule, regulation, order, policy, other legal
requirement or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.

“Secured Parties” shall mean Collateral Agent, Trustee and the Noteholders.

“Securities Accounts” shall mean all “securities accounts,” as such term is
defined in the UCC.

“Securities Account Control Agreement” shall mean an agreement substantially in
the form annexed hereto as Exhibit 4 or such other form that is reasonably
satisfactory to Collateral Agent.

“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.

“Securities Intermediary” shall mean any “securities intermediary,” as such term
is defined in the UCC.

“Security Documents” shall mean the Security Agreements (as such term is defined
in Section 2.01 of the Supplemental Indenture).

“Security Entitlement” shall mean any “security entitlement,” as such term is
defined in the UCC.

“Special Property” shall mean:

(a) any permit, lease, sublease, contract, license, sublicense or other general
intangible, in each case pertaining to real or personal property, held by any
Pledgor that validly prohibits the creation by such Pledgor of a Lien thereon
(for the avoidance of doubt, “Special Property” shall not include Goods,
Inventory, As-Extracted Collateral or any Pledged Collateral set forth in clause
(xv) of Section 2.1 of this Agreement);

(b) any permit, lease, sublease, contract, license, sublicense or other general
intangible, in each case pertaining to real or personal property, held by any
Pledgor to the extent that any Requirement of Law applicable thereto prohibits
the creation of a Lien thereon (for the

 

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avoidance of doubt, “Special Property” shall not include Goods, Inventory,
As-Extracted Collateral or any Pledged Collateral set forth in clause (xv) of
Section 2.1 of this Agreement); and

(c) Equipment 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 to be incurred pursuant to the Indenture 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 Equipment;

provided, however, that in each case described in clauses (a), (b) and (c) of
this definition, such property shall constitute “Special Property” only to the
extent and for so long as such permit, lease, sublease, contract, license,
sublicense or other general intangible, in each case pertaining to real or
personal property, or Requirement of Law applicable thereto validly prohibits
the creation of a Lien on such property in favor of Collateral Agent and, upon
the termination of such prohibition (howsoever occurring), such property shall
cease to constitute “Special Property.” For the avoidance of doubt, no permit,
lease, sublease, contract, license, sublicense or other general intangible, in
each case pertaining to real or personal property (or any right under any of the
foregoing), shall constitute Special Property to the extent that any such
prohibition or Requirement of Law would be ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC in any applicable jurisdiction or under
any other applicable law or principle of equity to (x) impair the creation,
attachment or perfection of the security interest of Collateral Agent in any
such permit, lease, sublease, contract, license, sublicense or other general
intangible, in each case pertaining to real or personal property (or in any
right under any of the foregoing) and (y) provide that the creation , attachment
or perfection of the Lien may give rise to a default, breach, right of
recoupment, claim, defense, termination, right of termination or remedy under
such permit, lease, sublease, contract, license, sublicense or other general
intangible, in each case pertaining to real or personal property (or in any
right under any of the foregoing).

“Stock” shall mean any and all shares of capital stock (whether denominated as
common stock or preferred stock), equity interests, beneficial, partnership
(whether general or limited) or membership interests, joint venture interests,
participations or other ownership or profit interests in or equivalents
(regardless of how designated) of or in a Person (other than an individual),
whether voting or non voting, and any other equity interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of property of, such partnership, whether outstanding on
the Issue Date or issued after the Issue Date.

“Stock Equivalents” shall mean all securities convertible into or exchangeable
for Stock or any other Stock Equivalent and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Stock or any other
Stock Equivalent, whether or not presently convertible, exchangeable or
exercisable.

 

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“Subsidiary” of a Person shall mean any corporation, association, limited
liability company, partnership, joint venture or other business entity of which
more than fifty percent (50%) of the voting Stock (in the case of Persons other
than corporations), is owned or controlled directly or indirectly by the Person,
or one or more of the Subsidiaries of the Person, or a combination thereof.

“Successor Interests” shall mean, collectively, with respect to each Pledgor,
all shares of each class of the capital stock of the successor corporation or
equity interests (and any certificates evidencing such equity interests) of the
successor limited liability company, partnership or other entity owned by such
Pledgor (unless such successor is such Pledgor itself) formed by or resulting
from any consolidation or merger in which any person listed in Schedule 1(a)
annexed to the Perfection Certificate is not the surviving entity.

“Supplemental Indenture” shall have the meaning assigned to such term in Recital
A hereof.

“Supporting Obligations” shall mean all “supporting obligations,” as such term
is defined in the UCC.

“Tangible Chattel Paper” shall mean all “tangible chattel paper,” as such term
is defined in the UCC.

“Tax” means all present or future taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto (and without deduction for
any of them) other than for (i) taxes measured by net income (including branch
profits taxes) and franchise taxes imposed in lieu of net income taxes, in each
case imposed on any Secured Party as a result of a present or former connection
between such Secured Party and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than such connection arising solely from such Secured Party
having executed, delivered or performed its obligations or received a payment
under, or enforced, any Transaction Document) or (ii) taxes that are directly
attributable to the failure (other than as a result of a change in any
Requirements of Law) by Collateral Agent to deliver the documentation required
to be delivered pursuant to the terms of any Transaction Document.

“Trade Secrets” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirements of Law in or relating to trade
secrets.

“Trademarks” shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks, trade
dress, uniform resource locations (URL’s), domain names, corporate names and
trade names, whether registered or unregistered, owned by or assigned to such
Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or group of countries or any political subdivision
thereof), together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of any trademarks,
(ii) reissues, continuations, extensions and renewals thereof, (iii) income,
fees, royalties, damages and payments now and hereafter due and/or

 

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payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present and future infringements thereof.

“Trademark Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit 8.

“Transaction Documents” shall mean the Indenture, the Notes and the Security
Documents.

“Trustee” shall have the meaning assigned to such term in Recital A.

“UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in
the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of
Collateral Agent’s and the other Secured Parties’ 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 on the date hereof in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.

SECTION 1.2. Other Interpretive Provisions. (a) Defined Terms. Unless otherwise
specified herein or therein, all terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto. The meanings of defined terms shall be equally
applicable to the singular and plural forms of the defined terms. Terms
(including uncapitalized terms) not otherwise defined herein and that are
defined in the UCC shall have the meanings therein described.

(b) The Agreement. The words “hereof,” “herein,” “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
section, schedule and exhibit references are to this Agreement unless otherwise
specified.

(c) Certain Common Terms. The term “documents” includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced. The term “including” is not limiting and means “including
without limitation.”

(d) Performance; Time. Whenever any performance obligation hereunder shall be
stated to be due or required to be satisfied on a day other than a Business Day,
such performance shall be made or satisfied on the next succeeding Business Day.
In the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to” and “until”
each mean “to but excluding,” and the word “through” means “to and including.”
If any provision of this Agreement refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be interpreted to encompass any and all means, direct or indirect, of taking, or
not taking, such action.

 

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(e) Contracts. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments, including this Agreement, shall be
deemed to include all subsequent amendments, thereto, restatements and
substitutions thereof and other modifications and supplements thereto that are
in effect from time to time, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Transaction Document.

(f) Laws. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions related thereto or
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.

SECTION 1.3. Accounting Terms and Principles. All accounting determinations
required to be made pursuant hereto shall, unless expressly otherwise provided
herein, be made in accordance with GAAP.

SECTION 1.4. 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.,
Collateral Agent) shall not be employed in the interpretation hereof.

SECTION 1.5. Perfection Certificate Collateral Agent and each other Secured
Party agree that the Perfection Certificate and all descriptions of Pledged
Collateral and all schedules, and all 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 Obligations, each Pledgor hereby pledges and
grants to Collateral Agent for the benefit of the Secured Parties, a lien on and
security interest in and to all of the right, title and interest of such Pledgor
in, to and under the following property, wherever located, whether now existing
or hereafter arising or acquired from time to time (collectively, the “Pledged
Collateral”):

 

  (i) all Accounts;

 

  (ii) all As-Extracted Collateral;

 

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  (iii) all Equipment, Goods, Inventory and Fixtures;

 

  (iv) all Documents, Instruments and Chattel Paper;

 

  (v) all Letters of Credit and Letter-of-Credit Rights;

 

  (vi) all Securities Collateral;

 

  (vii) all Controlled Accounts;

 

  (viii) all Investment Property;

 

  (ix) all Intellectual Property Collateral;

 

  (x) the Commercial Tort Claims described on Schedule 13 to the Perfection
Certificate;

 

  (xi) all General Intangibles;

 

  (xii) all Deposit Accounts and Money;

 

  (xiii) all Supporting Obligations;

 

  (xiv) all books and records relating to the Pledged Collateral;

 

  (xv) to the extent not otherwise included in clause (ii) above, all coal and
other minerals severed or extracted from the ground of the Pledgor (including
all severed or extracted coal purchased, acquired or obtained from other
Persons), and all Accounts, General Intangibles and products and Proceeds
thereof or related thereto, regardless of whether any such coal or other
minerals are in raw form or processed for sale and regardless of whether or not
any Pledgor had an interest in the coal or other minerals before extraction or
severance;

 

  (xvi) to the extent not covered by clauses (i) through (xv) of this sentence,
all other personal property of such Pledgor, whether tangible or intangible; and

 

  (xvii) 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 Pledgor from time to time with respect to any of the
foregoing.

Notwithstanding anything to the contrary contained in clauses (i) through
(xvii) above, the security interest created by this Agreement shall not extend
to, and the term “Pledged Collateral” shall not include, any Excluded Property
and (i) the Pledgors shall from time to time

 

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at the reasonable request of Collateral Agent give written notice to Collateral
Agent identifying in reasonable detail any material item of Special Property
(and stating in such notice that such Special Property constitutes “Excluded
Property”) and shall provide to Collateral Agent such other information
regarding the Special Property as Collateral Agent may reasonably request and
(ii) from and after the Issue Date, no Pledgor shall permit to become effective
in any document creating, governing or providing for any permit, lease, contract
or license, a provision that would prohibit the creation or enforcement of a
Lien on such permit, lease, contract or license, or on the equity interests in
such Pledgor or any other Company, in favor of Collateral Agent; provided that
this clause (ii) shall not apply to any such document if management of such
Pledgor reasonably determines in good faith that eliminating such provision
would (x) have a material adverse effect on such document or on such Pledgor’s
relationship with the party or parties to such document, (y) require the payment
of any money or the making by such Pledgor of any material concession under such
document in exchange for not including such provision, or (z) otherwise
materially and adversely effect such Pledgor.

SECTION 2.2 Filings (a) Each Pledgor hereby irrevocably authorizes Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any
initial financing statements (including fixture filings) and amendments thereto
that contain the information required by Article 9 of the UCC 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 or required by applicable
Requirements of Law, including the filing of a financing statement describing
the Pledged Collateral as “all assets in which the Pledgor now owns or hereafter
acquires rights” and (iii) in the case of a financing statement filed as a
fixture filing or covering Pledged Collateral constituting minerals or the like
to be extracted or timber to be cut, 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
Collateral Agent promptly upon request.

(b) Each Pledgor hereby ratifies its authorization for Collateral Agent to file
in any relevant jurisdiction any initial financing statements or amendments
thereto relating to the Pledged Collateral if filed prior to the date hereof.

(c) Each Pledgor hereby further authorizes Collateral Agent to file filings
with, if applicable, the United States Patent and Trademark Office and the
United States Copyright Office (or any successor office or any similar office in
any other country or group of countries), including this Agreement, the
Copyright Security Agreement, the Patent Security Agreement and the Trademark
Security Agreement, as applicable, or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security
interest granted by such Pledgor hereunder, without the signature of such
Pledgor where allowed or required by applicable Requirements of Law, and naming
such Pledgor, as debtor, and Collateral Agent, as secured party.

 

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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 in existence on the date
hereof have been delivered to Collateral Agent in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank and that 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 5 Business
Days) upon receipt thereof by such Pledgor be delivered to and held by or on
behalf of Collateral Agent pursuant hereto. 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 Collateral Agent. 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 Collateral Agent or any of its nominees or endorse for
negotiation any or all of the Securities Collateral, without any indication that
such Securities Collateral is subject to the security interest hereunder. In
addition, upon the occurrence and during the continuance of an Event of Default,
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 Collateral Agent has a perfected, first-priority
security interest in all uncertificated 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 (other than Pledged Securities held as
securities entitlements) are at any time not evidenced by certificates of
ownership, then each applicable Pledgor shall, to the extent permitted by
applicable law (i) if necessary or desirable to perfect a security interest in
such Pledged Securities or establish the priority thereof, cause such pledge to
be recorded on the equityholder register or the books of the issuer, cause the
issuer to execute and deliver to Collateral Agent an acknowledgment of the
pledge of such Pledged Securities substantially in the form of Exhibit 1 annexed
hereto, execute any customary pledge forms or other documents necessary or
appropriate to complete the pledge and give Collateral Agent the right to
transfer such Pledged Securities under the terms hereof and, upon request,
provide to Collateral Agent an opinion of counsel, in form and substance
reasonably satisfactory to Collateral Agent, confirming such pledge and
perfection thereof and (ii) use its commercially reasonable efforts to cause
such Pledged Securities to become certificated and delivered to Collateral Agent
in accordance with the provisions of Section 3.1.

 

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SECTION 3.3 Financing Statements and Other Filings; Maintenance of Perfected
Security Interest. Each Pledgor represents and warrants that all filings
necessary to perfect the security interest granted hereunder by it to Collateral
Agent in respect of the Pledged Collateral (including, without limitation,
As-Extracted Collateral) (other than Pledged Collateral in which a security
interest cannot be perfected under the UCC) have been previously filed or
delivered to 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 6 annexed to the Perfection Certificate. Each
Pledgor agrees that at the sole cost and expense of the Pledgors, (i) such
Pledgor, except as otherwise expressly permitted by the Indenture or other
provisions hereof, will maintain the security interest created by this Agreement
in the Pledged Collateral as a perfected, first-priority security interest and
shall defend such security interest against the claims and demands of all
persons except Permitted Collateral Liens, (ii) such Pledgor shall furnish to
Collateral Agent from time to time statements and schedules further identifying
and describing the Pledged Collateral and such other reports in connection with
the Pledged Collateral as Collateral Agent may reasonably request, all in
reasonable detail and (iii) at any time and from time to time, upon the written
request of Collateral Agent, such Pledgor shall promptly and duly execute and
deliver, and file and have recorded, such further instruments and documents and
take such further action as Collateral Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and the
rights and powers herein granted, including the filing of any financing
statements, continuation statements and other documents (including this
Agreement) under the UCC (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 reasonably satisfactory to
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 a valid, enforceable, first-priority
security interest in the Pledged Collateral as provided herein and to preserve
the other rights and interests granted to Collateral Agent hereunder, as against
third parties, with respect to the Pledged Collateral subject to Permitted
Collateral Liens.

SECTION 3.4 Other Actions. In order to further insure the attachment, perfection
and priority of, and the ability of Collateral Agent to enforce, the security
interests 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, (i) no
amounts individually or in the aggregate in excess of $500,000 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 10 annexed to the Perfection Certificate and instruments
received for deposit or presentation for collection in the Ordinary Course of
Business and (ii) each Instrument and each item of Tangible Chattel Paper listed
in Schedule 10 annexed to the Perfection Certificate has been properly endorsed,
assigned and delivered to 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

 

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(other than instruments received for deposit or presentation for collection in
the Ordinary Course of Business), and such amount, together with all amounts
payable evidenced by any Instrument or Tangible Chattel Paper not previously
delivered to Collateral Agent, exceeds $500,000 in the aggregate for all
Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel Paper shall
promptly and in any event within 5 Business Days endorse, assign and deliver the
same to Collateral Agent, in each case accompanied by instruments of transfer or
assignment duly executed in blank.

(b) Deposit Accounts. (i) As of the date hereof, it has neither opened nor
maintains any Deposit Accounts other than the accounts listed in Schedule 14
annexed to the Perfection Certificate and (ii) Collateral Agent has a perfected,
first-priority security interest in each Deposit Account listed in Schedule 14
annexed to the Perfection Certificate by Control, other than any Excluded
Account. No Pledgor shall hereafter establish and maintain any Deposit Account
other than any Excluded Account unless (1) the applicable Pledgor shall have
given Collateral Agent 5 Business Days’ prior written notice of its intention to
establish such new Deposit Account with a Bank, (2) such Bank shall be
reasonably acceptable to Collateral Agent and (3) such Bank and such Pledgor
shall have duly executed and delivered to Collateral Agent a Deposit Account
Control Agreement with respect to such Deposit Account. Collateral Agent agrees
with each Pledgor that 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.

(c) Investment Property. (i) As of the date hereof, it (1) has no Securities
Accounts or Commodity Accounts other than those listed in Schedule 14 annexed to
the Perfection Certificate and Collateral Agent has a perfected first priority
security interest in such Securities Accounts and Commodity Accounts and
(2) does not hold, own or have any interest in any certificated securities or
uncertificated securities other than those constituting Pledged Securities and
those maintained in Securities Accounts or Commodity Accounts listed in Schedule
14 annexed to the Perfection Certificate.

(d) If any Pledgor shall at any time hold or acquire any certificated securities
constituting Investment Property, such Pledgor shall promptly (A) endorse,
assign and deliver the same to Collateral Agent, accompanied by such instruments
of transfer or assignment duly executed in blank, all in form and substance
reasonably satisfactory to Collateral Agent or (B) deliver such securities into
a Securities Account with respect to which a Control Agreement is in effect in
favor of Collateral Agent. If any securities now or hereafter acquired by any
Pledgor constituting Investment Property are uncertificated and are issued to
such Pledgor or its nominee directly by the issuer thereof, such Pledgor shall
promptly notify Collateral Agent and pursuant to an agreement in form and
substance satisfactory to Collateral Agent, either (x) cause the issuer to agree
to comply with instructions from Collateral Agent as to such securities, without
further consent of any Pledgor or such nominee, (y) cause a Security Entitlement
with respect to such uncertificated security to be held in a Securities Account
with respect to which Collateral Agent has Control or (z) arrange for Collateral
Agent to become the registered owner of the securities. Except as expressly
permitted under the Indenture, no

 

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Pledgor shall hereafter establish and, other than with respect to Securities
Account number 192A1 maintained by ICG, LLC at Invesco Aim and further described
on Schedule 14 annexed to the Perfection Certificate, maintain any Securities
Account or Commodity Account with any Securities Intermediary or Commodity
Intermediary or enter into any Commodity Contract unless (1) the applicable
Pledgor shall have given Collateral Agent 5 Business Days’ prior written notice
of its intention to establish such new Securities Account or Commodity Account
with such Securities Intermediary or Commodity Intermediary or to enter into
such Commodity Contract, (2) in the case of a Securities Account or Commodities
Account, such Securities Intermediary or Commodity Intermediary shall be
reasonably acceptable to 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, as the case may be, or in the case of a Commodity
Contract, shall have caused such Commodity Contract to be credited to a
Commodity Account satisfying the requirements of this Section 3.4(c). Each
Pledgor shall accept any cash and Investment Property that are proceeds of the
pledged Investment Property in trust for the benefit of Collateral Agent and
within 5 Business Days of actual receipt thereof, deposit any cash or Investment
Property and any new securities, instruments, documents or other property by
reason of ownership of the Investment Property (other than payments of a kind
described in Section 7.4 hereof) received by it into a Controlled Account.
Collateral Agent agrees with each Pledgor that 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 investment or
withdrawal rights by such Pledgor, unless an Event of Default has occurred and
is continuing, or, in the case of withholding consent to investment or
withdrawal rights after giving effect to any such investment and withdrawal
rights would occur.

(e) Subject to Section 11.1(ii), as between 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, Collateral Agent, a Securities Intermediary, Commodity
Intermediary, any Pledgor or any other person; provided, however, that nothing
contained in this Section 3.4(c) shall release or relieve any Securities
Intermediary or Commodity Intermediary of its duties and obligations to the
Pledgors or any other person under any Control Agreement or under applicable
law. Each Pledgor shall promptly pay all Claims and fees of whatever kind or
nature with respect to the Investment Property and Pledged Securities pledged by
it under this Agreement except as otherwise expressly permitted under the
Indenture. In the event any Pledgor shall fail to make such payment contemplated
in the immediately preceding sentence, Collateral Agent may do so for the
account of such Pledgor and the Pledgors shall promptly reimburse and indemnify
Collateral Agent from all costs and expenses incurred by Collateral Agent under
this Section 3.4(c) in accordance with Section 11.5 of this Agreement.

(f) Electronic Chattel Paper and Transferable Records. As of the date hereof, no
amount individually or in the aggregate in excess of $10,000 payable under or in
connection

 

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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 Chattel Paper and transferable
records listed in Schedule 10 annexed to the Perfection Certificate. If any
amount individually or in the aggregate in excess of $10,000 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 Collateral
Agent thereof and shall take such action as Collateral Agent may reasonably
request to vest in Collateral Agent control under UCC Section 9-105 of such
Electronic Chattel Paper 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 apply to the extent that such amount, together with all amounts
payable evidenced by Electronic Chattel Paper or any transferable record in
which Collateral Agent has not been vested control within the meaning of the
statutes described in this sentence exceeds $500,000 in the aggregate for all
Pledgors. Collateral Agent agrees with such Pledgor that Collateral Agent will
arrange, pursuant to procedures satisfactory to Collateral Agent and so long as
such procedures will not result in Collateral Agent’s loss of control, for the
Pledgor to make alterations to the Electronic Chattel Paper or transferable
record permitted under UCC Section 9-105 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.

(g) Letter-of-Credit Rights. If any Pledgor is at any time a beneficiary under a
letter of credit now or hereafter issued in favor of such Pledgor, other than a
letter of credit issued pursuant to the First Lien Loan Agreement and other than
letter of credit rights constituting Supporting Obligations for which the face
amount is less than $25,000, such Pledgor shall promptly notify Collateral Agent
thereof and such Pledgor shall, at the request of Collateral Agent, pursuant to
an agreement in form and substance reasonably satisfactory to Collateral Agent,
either (i) arrange for the issuer and any confirmer of such letter of credit to
consent to an assignment to Collateral Agent of the proceeds of any drawing
under the letter of credit or (ii) arrange for Collateral Agent to become the
transferee beneficiary of such letter of credit, with 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 Indenture. The actions in the preceding sentence
shall be taken to the extent that the amount under such letter of credit,
together with all amounts under letters of credit for which the actions
described above in clause (i) and (ii) have not been taken, exceeds $500,000 in
the aggregate for all Pledgors.

(h) 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 annexed to the Perfection Certificate. If any Pledgor
shall at any time hold or

 

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acquire a Commercial Tort Claim having, together with all other Commercial Tort
Claims of all Pledgors in which Collateral Agent does not have a security
interest with an aggregate value in excess of $1,000,000, such Pledgor shall
promptly (and in any event within 5 Business Days) notify Collateral Agent in a
writing signed by such Pledgor of the brief details thereof and grant to
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 Collateral Agent.

(i) Motor Vehicles. Upon the reasonable request of Collateral Agent, each
Pledgor shall deliver to Collateral Agent originals of the certificates of title
or ownership for the motor vehicles (and any other Equipment covered by
Certificates of Title or ownership) owned by it with Collateral Agent listed as
lienholder therein. Such requirement only shall apply to the Pledgors if any
such motor vehicle (or any such other Equipment) is valued at over $75,000, and
the value of all such motor vehicles (and such Equipment) as to which any
Pledgor has not delivered a Certificate of Title or ownership is over $500,000.

(j) As-Extracted Collateral. If any Pledgor shall acquire any interest in any
active mine or well or any preparation plant (in each case to the extent that
such interests constitutes personal property) or any As-Extracted Collateral,
then such Pledgor shall promptly take all such actions as are reasonably
required to ensure the validity, perfection or priority of Collateral Agent’s
security interest therein.

SECTION 3.5. Security Interests; Further Assurances. Pledgors shall promptly,
upon the reasonable request of Collateral Agent, at Issuer’s expense, execute,
acknowledge and deliver, or cause the execution, acknowledgment and delivery of,
and thereafter register, file or record, or cause to be registered, filed or
recorded, in an appropriate governmental office, any document or instrument
supplemental to or confirmatory of the Security Documents or otherwise deemed by
Collateral Agent reasonably necessary for the continued validity, perfection and
priority of the Liens on the Pledged Collateral covered thereby subject to no
other Liens except Permitted Collateral Liens, or obtain any consents or waivers
as may be necessary or appropriate in connection therewith; provided, however,
that no Pledgor will be required to request any such consent or waiver if
management of Issuer reasonably determines in good faith that such a request
would (i) have a material adverse effect on the agreement that is the subject of
such consent or waiver or on such Pledgor’s relationship with the party or
parties to such agreement, (ii) require the payment of any money or the making
by such Pledgor of any material concession under such agreement in exchange for
such consent or waiver, or (iii) otherwise materially and adversely affect any
Pledgor. Upon the exercise by Collateral Agent of any power, right, privilege or
remedy pursuant to any Transaction Document that requires any consent, approval,
registration, qualification or authorization of any Governmental Authority, each
Pledgor shall execute and deliver all applications, certifications, instruments
and other documents and papers that Collateral Agent may reasonably require.
Notwithstanding any of the foregoing or any other provision of this Agreement or
any other Transaction Document to the contrary, the Obligations shall not be
secured by any Excluded Property.

 

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SECTION 3.6. Additional Collateral; Additional Guarantors.

As soon as reasonably practicable after (i) any acquired or created Subsidiary,
or a Subsidiary guaranteeing other Indebtedness of the Issuer, becomes a
Guarantor (as defined in the Supplemental Indenture) pursuant to the provisions
of Section 4.09 of the Supplemental Indenture, such Guarantor shall become a
Pledgor hereunder and execute a Joinder Agreement or (ii) any Pledgor acquires
any material property (other than Excluded Property) that is not automatically
subject to a perfected security interest under the Security Documents, such
Pledgor shall notify Collateral Agent thereof and, in each case at the sole cost
and expense of such Pledgor, execute and deliver to Collateral Agent such
mortgages, supplements to the relevant Security Documents and other
documentation (in form and scope, and covering such Collateral (or, in the case
of clause (i), all assets of such Guarantor other than Excluded Property) on
such terms, in each case consistent with this Agreement and the other Security
Documents in effect on the date hereof but subject to any local law requirements
applicable thereto), and take such additional actions (including any of the
actions described in Section 4.14 of the Supplemental Indenture), as necessary
or as Collateral Agent may deem reasonably appropriate or advisable to create
and fully perfect in favor of the Secured Parties a valid and enforceable
security interest in (and in the case of real property, mortgage lien on) such
Collateral (including in the case of Stock or intercompany notes, delivery of
such stock certificates or such instruments to the Collateral Agent, together
with undated stock powers or other appropriate instruments of transfer executed
and delivered in blank by a duly authorized officer of the holder(s) of such
Stock or notes), which shall be free of any other Liens except for Liens in
favor of the First Lien Agent and Permitted Liens. Any security interest
provided pursuant to this Section 3.6 shall be accompanied with such opinions of
counsel to the Issuer as customarily given by Issuer’s counsel in the relevant
jurisdiction, in form and substance customary for such jurisdiction. In
addition, the Issuer shall deliver an officers’ certificate to Collateral Agent
certifying that the necessary measures have been taken to perfect the security
interest in such property.

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 Collateral Agent
for the ratable benefit of the Secured Parties pursuant to this Agreement, such
Pledgor owns and, as to Pledged Collateral acquired by it from time to time
after the date hereof, will own the rights in each item of Pledged Collateral
pledged by it hereunder free and clear of any and all Liens or claims of others
other than Permitted Collateral Liens. No person other than Collateral Agent has
control or possession of all or any part of the Pledged Collateral, except as
permitted hereunder or under the Indenture.

SECTION 4.2. Validity of Security Interest. (a) This Agreement is effective to
create in favor of Collateral Agent for the benefit of the Secured Parties,
legal, valid and

 

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enforceable Liens on, and security interests in, the Pledged Collateral and,
when (i) financing statements and other filings in appropriate form are filed in
the offices specified on the applicable schedule annexed to the Perfection
Certificate and (ii) upon the taking of possession or control by Collateral
Agent of the Pledged Collateral with respect to which a security interest may be
perfected only by possession or control (which possession or control shall be
given to such Collateral Agent to the extent possession or control by such
Collateral Agent is required by this Agreement), the Liens created by this
Agreement shall constitute fully perfected Liens on, and security interests in,
all right, title and interest of the Pledgors in the Pledged Collateral (other
than (A) the Intellectual Property Collateral and (B) such Collateral in which a
security interest cannot be perfected under the UCC as in effect at the relevant
time in the relevant jurisdiction), in each case subject to no Liens other than
Permitted Collateral Liens.

(b) When this Agreement or a short form thereof is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the Liens
created by this Agreement shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Pledgors in the
material Intellectual Property Collateral, in each case subject to no Liens
other than Permitted Collateral Liens.

(c) Each Security Document delivered pursuant to Sections 3.5 and 3.6 will, upon
execution and delivery thereof, be effective to create in favor of Collateral
Agent, for the benefit of the Secured Parties, legal, valid and enforceable
Liens on, and security interests in, all of the Pledgors’ right, title and
interest in and to the Pledged Collateral thereunder, and when (i) financing
statement and other filings in appropriate form are filed in the appropriate
offices and (ii) upon the taking of possession or control by Collateral Agent of
the Pledged Collateral with respect to which a security interest may be
perfected only by possession or control (which possession or control shall be
given to such Collateral Agent to the extent possession or control by such
Collateral Agent is required by such Security Document), the Liens created by
such Security Document shall constitute fully perfected Liens on, and security
interests in, all right, title and interest of the Pledgors thereunder in such
Pledged Collateral (other than (A) the Intellectual Property Collateral and
(B) such Pledged Collateral in which a security interest cannot be perfected
under the UCC as in effect at the relevant time in the relevant jurisdiction),
in each case subject to no Liens other than Permitted Collateral Liens.

(d) The security interest and Lien granted to 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 security
interest therein, subject only to Permitted Collateral Liens.

SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral. 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 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 Collateral Agent or any other Secured Party
other than Permitted Collateral Liens. There is no agreement, and no Pledgor
(subject to clause (ii) of the last sentence of Section 2.1) 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 Collateral Agent hereunder.

 

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SECTION 4.4. Other Financing Statements. No Pledgor has filed, nor authorized
any third party to file any (nor will there be any) valid or effective financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Pledged Collateral other than financing statements and other statements and
instruments relating to Permitted Collateral Liens. Until the maturity of the
Notes, no Pledgor shall execute, authorize or permit to be filed in any public
office any financing statement (or similar statement or instrument of
registration 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 holder of the Permitted Collateral Liens.

SECTION 4.5. Change of Name; Jurisdiction of Organization. (a) It shall not
effect any change (i) in any Pledgor’s legal name, (ii) in the location of any
Pledgor’s chief executive office, (iii) in any Pledgor’s identity or
organizational structure, (iv) in any Pledgor’s Federal Taxpayer Identification
Number or organizational identification number, if any, or (v) in any Pledgor’s
jurisdiction of organization (in each case, including by merging with or into
any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), in each case if doing so would result in
the failure of Collateral Agent to maintain the perfection and priority of the
security interest of Collateral Agent for the benefit of the Secured Parties in
the Pledged Collateral, until (A) it shall have given Collateral Agent not less
than 30 days’ prior written notice (in the form of an officers’ certificate), or
such lesser notice period agreed to in writing by Collateral Agent, of their
intention so to do, clearly describing such change and providing such other
information in connection therewith as Collateral Agent may reasonably request
and (B) it shall have taken all action reasonably satisfactory to Collateral
Agent to maintain the perfection and priority of the security interest of a
Collateral Agent, for the benefit of the Secured Parties in the Pledged
Collateral. Each Pledgor agrees to promptly provide Collateral Agent with
certified Organizational Documents reflecting any of the changes described in
the preceding sentence, as applicable. Each Pledgor also agrees to promptly
notify Collateral Agent of any change in the location of any office in which it
maintains books or records relating to Pledged Collateral owned by it or any
office or facility at which Pledged Collateral is located (including the
establishment of any such new office or facility). Concurrently with the
delivery of Exchange Act reports pursuant to Section 4.12 of the Supplemental
Indenture, deliver to Collateral Agent a supplement to the Perfection
Certificate and a certificate of a Financial Officer and the chief legal officer
of Issuer certifying that all UCC financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Pledged Collateral have been filed of record in
each governmental, municipal or other appropriate office in each jurisdiction
necessary to protect and perfect the security interests and Liens under the
Security Documents for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period).

 

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(b) Collateral Agent may rely on opinions 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 4.5(a) above. If any Pledgor fails to
provide information to Collateral Agent about such changes on a timely basis,
such Collateral Agent shall not be liable or responsible to any party for any
failure to maintain a perfected security interest in such Pledgor’s property
constituting Pledged Collateral, for which such Collateral Agent needed to have
information relating to such changes. Collateral Agent shall not have any duty
to inquire about such changes if any Pledgor does not inform Collateral Agent of
such changes, the parties acknowledging and agreeing that it would not be
feasible or practical for Collateral Agent to search for information on such
changes if such information is not provided by any Pledgor.

SECTION 4.6. Location of Inventory and Equipment. Other than as necessary in
connection with routine maintenance and repair in the Ordinary Course of
Business, it shall not move any Equipment or Inventory with an aggregate value
in excess of $100,000 to any location other than one within the continental
United States and with respect to any such new location where the aggregate
value of Pledged Collateral exceeds $100,000, such Pledgor shall have taken all
action reasonably satisfactory to Collateral Agent to maintain the perfection
and priority of the security interest of Collateral Agent for the benefit of the
Secured Parties in the Pledged Collateral intended to be granted hereby. Such
Pledgor agrees to provide Collateral Agent with prompt notice following the
movement of any Equipment or Inventory to any location other than one that is
listed in the relevant Schedules to the Perfection Certificate.

SECTION 4.7. Due Authorization and Issuance. All of the Initial Pledged Shares
have been, and to the extent any Pledged Shares are hereafter issued, such
Pledged Shares will be, upon such issuance, duly authorized, validly issued and
fully paid and non-assessable. All of the Initial Pledged Interests have been
fully paid for, and there is no amount or other obligation owing by any Pledgor
to any issuer of the Initial Pledged Interests in exchange for or in connection
with the issuance of the Initial Pledged Interests or any Pledgor’s status as a
partner or a member of any issuer of the Initial Pledged Interests.

SECTION 4.8. Consents, etc. In the event that Collateral Agent desires to
exercise any remedies, voting or consensual rights or attorney-in-fact powers
set forth in this Agreement in accordance with the terms hereof and determines
in its reasonable judgment that it is necessary to obtain any approvals or
consents of any Governmental Authority or any other person therefor, then, upon
the reasonable request of Collateral Agent, such Pledgor agrees to use its
commercially reasonable efforts to assist and aid Collateral Agent to obtain as
soon as practicable any necessary approvals or consents for the exercise of any
such remedies, rights and powers.

SECTION 4.9. Pledged Collateral. All information set forth herein, including the
schedules annexed 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 annexed to the Perfection Certificate constitutes all of the property
of such type of Pledged Collateral owned or held by the Pledgors as of the date
of delivery of such schedules.

 

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SECTION 4.10. Insurance. In the event that the proceeds of any insurance claim
are paid after Collateral Agent has exercised its right to foreclosure after an
Event of Default, such Net Proceeds shall be applied in accordance with
Section 4.07(c) of the Supplemental Indenture.

SECTION 4.11. Payment of Taxes; Compliance with Laws; Contesting Liens; Claims.
Each Pledgor represents and warrants that all Claims imposed upon or assessed
against the Pledged Collateral have been paid and discharged except to the
extent such Claims are secured by Permitted Collateral Liens. Each Pledgor shall
comply with all Requirements of Law applicable to the Pledged Collateral the
failure to comply with which would, individually or in the aggregate, have a
Material Adverse Effect. Each Pledgor may at its own expense contest the
validity, amount or applicability of any Claims so long as the contest thereof
shall be conducted in accordance with, and permitted pursuant to the provisions
of, the Indenture; provided that such contest would not result in a Lien that is
not permitted pursuant to the Indenture. Notwithstanding the foregoing
provisions of this Section 4.11, (i) no contest of any such obligation may be
pursued by such Pledgor if such contest would expose Collateral Agent or any
other Secured Party to (A) any possible criminal liability or (B) any additional
civil liability for failure to comply with such obligations unless such Pledgor
shall have furnished a bond or other security therefor satisfactory to such
Collateral Agent or such Secured Party, as the case may be, and (ii) any such
contest shall be permitted pursuant to the Indenture.

SECTION 4.12. Access to Pledged Collateral, Books and Records; Other
Information. Upon reasonable request to each Pledgor, Collateral Agent, its
agents, accountants and attorneys shall have full and free access to visit and
inspect, as applicable, during normal business hours and such other reasonable
times as may be reasonably requested by Collateral Agent (unless an Event of
Default shall have occurred and be continuing, in which event no notice shall be
required and Collateral Agent shall have access at any and all times during the
continuance thereof) all of the Pledged Collateral and Mortgaged Property
including all of the books, correspondence and records of such Pledgor relating
thereto. Collateral Agent and its representatives may examine the same, take
extracts therefrom and make photocopies thereof, and such Pledgor agrees to
render to Collateral Agent, at such Pledgor’s cost and expense (provided the
Pledgors shall not be responsible for costs and expenses more than two times per
year unless an Event of Default has occurred and is continuing), such clerical
and other assistance as may be reasonably requested by Collateral Agent with
regard thereto. Such Pledgor shall, at any and all times, within a reasonable
time after written request by Collateral Agent, furnish or cause to be furnished
to Collateral Agent, in such manner and in such detail as may be reasonably
requested by Collateral Agent, additional information with respect to the
Pledged Collateral.

 

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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 required to be
pledged hereunder, accept the same in trust for the benefit of Collateral Agent
and promptly and in any event within 5 Business Days deliver to Collateral Agent
a pledge amendment, duly executed by such Pledgor, in substantially the form of
Exhibit 2 annexed hereto (each, a “Pledge Amendment”), and 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 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 Collateral Agent
shall for all purposes hereunder be considered Pledged Collateral.

SECTION 5.2. Voting Rights; Distributions; etc.

(i) So long as no Event of Default shall have occurred and be continuing:

(A) 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
Indenture or any other document evidencing the Obligations; provided, however,
that no Pledgor shall in any event exercise such rights in any manner which
would reasonably be expected to have a Material Adverse Effect.

(B) Each Pledgor shall be entitled to receive and retain, and to utilize free
and clear of the Lien created hereby, any and all Distributions, but only if and
to the extent made in accordance with the provisions of the Indenture; provided,
however, that any and all such Distributions consisting of rights or interests
in the form of securities shall be promptly and in any event within 5 Business
Days delivered to Collateral Agent to hold as Pledged Collateral and shall, if
received by any Pledgor, be received in trust for the benefit of Collateral
Agent, be segregated from the other property or funds of such Pledgor and be
promptly and in any event within 5 Business Days delivered to Collateral Agent
as Pledged Collateral in the same form as so received (with any necessary
endorsement).

(ii) 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(i)(A) hereof and to receive the Distributions which it is authorized
to receive and retain pursuant to Section 5.2(i)(B) hereof.

 

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(iii) Upon the occurrence and during the continuance of any Event of Default:

(A) 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(i)(A)
hereof shall cease, and all such rights shall thereupon become vested in
Collateral Agent, which shall thereupon have the sole right to exercise such
voting and other consensual rights.

(B) All rights of each Pledgor to receive Distributions which it would otherwise
be authorized to receive and retain pursuant to Section 5.2(i)(B) hereof shall
cease and all such rights shall thereupon become vested in Collateral Agent,
which shall thereupon have the sole right to receive and hold as Pledged
Collateral such Distributions.

(iv) Each Pledgor shall, at its sole cost and expense, from time to time execute
and deliver to Collateral Agent appropriate instruments as Collateral Agent may
request in order to permit Collateral Agent to exercise the voting and other
rights which they may be entitled to exercise pursuant to Section 5.2(i)(A)
hereof and to receive all Distributions which they may be entitled to receive
under Section 5.2(i)(B) hereof.

(v) All Distributions which are received by any Pledgor contrary to the
provisions of Section 5.2(i)(B) hereof shall be received in trust for the
benefit of Collateral Agent (on behalf of the Secured Parties), shall be
segregated from other funds of such Pledgor and shall promptly, but in no event
more than 3 Business Days after receipt, be paid over to 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 material default or violation 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, if any, delivered to Collateral
Agent) which evidence any Pledged Securities of such Pledgor.

SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of Equity
Interests. 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. In the case of each Pledgor
which is a partner 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 Interests in such

 

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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 Interests to Collateral Agent or its nominee and to the substitution of
Collateral Agent or its nominee as a substituted partner or member in such
partnership, limited liability company or other entity with all the rights,
powers and duties of a general partner or a limited partner or member, as the
case may be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

SECTION 6.1. Grant of License. For the purpose of enabling Collateral Agent,
during the continuance of an Event of Default, to exercise rights and remedies
under Article IX hereof at such time as Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, and for no other purpose, each
Pledgor hereby grants to Collateral Agent, to the extent assignable, an
irrevocable, non-exclusive license to use, assign, license or sublicense any of
the Intellectual Property Collateral subject, in the case of Trademarks, to
sufficient rights to quality control and inspection in favor of the Pledgor to
avoid the invalidation of such Trademarks, now owned or hereafter acquired by
such Pledgor, wherever the same may be located. 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 of Collateral Agent’s Security. On a continuing basis,
each Pledgor shall, at its sole cost and expense, (i) promptly following its
becoming aware thereof, notify Collateral Agent of (A) any materially adverse
determination in any proceeding in the United States Patent and Trademark Office
or the United States Copyright Office with respect to any material Patent,
Trademark or Copyright or (B) the institution of any proceeding or any adverse
determination in any federal, state or local court or administrative body
regarding such Pledgor’s claim of ownership in or right to use any of the
Intellectual Property Collateral material to the operation of such Pledgor’s
business in the ordinary course, its right to register such Intellectual
Property Collateral or its right to keep and maintain such registration in full
force and effect, (ii) maintain and protect the Intellectual Property Collateral
material to the operation of such Pledgor’s business in the ordinary course as
presently conducted and as contemplated hereunder and under the Indenture,
(iii) not permit to lapse or become abandoned any Intellectual Property
Collateral material to the operation of such Pledgor’s business in the ordinary
course as presently conducted and as contemplated hereunder and under the
Indenture, and not settle or compromise any pending or future litigation or
administrative proceeding with respect to such Intellectual Property Collateral,
in each case except as shall be consistent with commercially reasonable business
judgment, (iv) upon such Pledgor obtaining knowledge thereof, promptly notify
Collateral Agent in writing of any event which would reasonably be expected to
materially and adversely affect the value or utility of the Intellectual
Property Collateral or any portion thereof material to the ability of such
Pledgor or Collateral Agent to dispose of the Intellectual Property Collateral
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Collateral Agent in relation thereto including a levy or threat of levy or any
legal process against the Intellectual Property Collateral or any portion
thereof, (v) not license the 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 the Intellectual
Property Collateral or the Lien on and security interest in the Intellectual
Property Collateral intended to be granted to Collateral Agent for the benefit
of the Secured Parties, without the consent of Collateral Agent, (vi) diligently
keep adequate records respecting the Intellectual Property Collateral and
(vii) furnish to Collateral Agent from time to time upon Collateral Agent’s
reasonable 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 the Intellectual Property
Collateral as Collateral Agent may from time to time reasonable request.
Notwithstanding the foregoing nothing herein shall prevent any Pledgor from
selling, disposing of or otherwise using any Intellectual Property Collateral as
expressly permitted by the Indenture.

SECTION 6.3. After-Acquired Property. If any Pledgor shall, at any time before
the payment in full of the Obligations (i) obtain any rights to any additional
material Intellectual Property Collateral or (ii) become entitled to the benefit
of any additional material Intellectual Property Collateral or any renewal or
extension thereof, including any reissue, division, continuation, or
continuation-in-part of such Intellectual Property Collateral, or any
improvement on such Intellectual Property Collateral, the provisions hereof
shall automatically apply thereto and any such item enumerated in clause (i) or
(ii) of this Section 6.3 with respect to such Pledgor shall (other than in the
case of any Intellectual Property Collateral that constitutes Excluded Property)
automatically constitute Intellectual Property Collateral if such would have
constituted Intellectual Property Collateral at the time of execution hereof and
be subject to the Lien and security interest created by this Agreement without
further action by any party. Each Pledgor shall promptly (i) provide to
Collateral Agent written notice of any of the foregoing and (ii) confirm the
attachment of the Lien and security interest created by this Agreement to any
rights described in clauses (i) and (ii) of the immediately preceding sentence
of this Section 6.3 by execution of an instrument in form reasonably acceptable
to Collateral Agent and the filing of any instruments or statements as shall be
reasonably necessary to preserve, protect or perfect Collateral Agent’s security
interest in such Intellectual Property Collateral. Further, each Pledgor
authorizes Collateral Agent to modify this Agreement by amending Schedules 12(c)
and 12(d) annexed to the Perfection Certificate to include any Intellectual
Property Collateral acquired or arising after the date hereof of such Pledgor.

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
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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, 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 Collateral Agent, do any and all
lawful acts and execute any and all documents requested by Collateral Agent in
aid of such enforcement and the Pledgors shall promptly reimburse and indemnify
Collateral Agent for all costs and expenses incurred by Collateral Agent in the
exercise of its rights under this Section 6.4 in accordance with Section 11.5.
In the event that Collateral Agent shall elect not to bring suit to enforce the
Intellectual Property Collateral, each Pledgor agrees, at the reasonable request
of Collateral Agent, to take all commercially reasonable actions 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 others and for that
purpose agrees to diligently maintain any suit, proceeding or other action
against any person so infringing necessary to prevent such infringement to the
extent commercially reasonable.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING ACCOUNTS

SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and maintain at its
own cost and expense complete records of each Account, 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 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
Accounts, including all documents evidencing Accounts and any books and records
relating thereto to 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, 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 Accounts
to and for the use by any person that has acquired or is contemplating
acquisition of an interest in the Accounts or Collateral Agent’s security
interest therein without the consent of any Pledgor.

SECTION 7.2. Legend. Each Pledgor shall legend, at the request of Collateral
Agent, upon the occurrence and during the continuation of an Event of Default,
and in form and manner reasonably satisfactory to Collateral Agent, the Accounts
and the other books, records and documents of such Pledgor evidencing or
pertaining to the Accounts with an appropriate reference to the fact that the
Accounts have been assigned to Collateral Agent for the benefit of the Secured
Parties and that Collateral Agent has a security interest therein.

 

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SECTION 7.3. Modification of Terms, etc. No Pledgor shall rescind or cancel any
obligations evidenced by any Account or modify any term thereof or make any
adjustment 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 Account or interest therein except in
the Ordinary Course of Business consistent with prudent business practice
without the prior written consent of Collateral Agent. Each Pledgor shall timely
fulfill all obligations on its part to be fulfilled under or in connection with
the Accounts in accordance with present business practices.

SECTION 7.4. Collection. Each Pledgor shall cause to be collected from the
Account Debtor of each of the Accounts, as and when due in the Ordinary Course
of Business and consistent with prudent business practice (including Accounts
that are delinquent, such Accounts to be collected in accordance with generally
accepted commercial collection procedures), any and all amounts owing under or
on account of such Account, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Account, except
that any Pledgor may, with respect to an Account, 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 Accounts and such other modifications of payment terms or settlements
in respect of Accounts 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, 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 permitted by the Indenture.

ARTICLE IX

REMEDIES

SECTION 9.1. Remedies. Upon the occurrence and during the continuance of any
Event of Default, Collateral Agent may from time to time exercise in respect of
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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 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 Collateral Agent and shall promptly (but in no event later than one
Business Day after receipt thereof) pay such amounts to 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 liquidate, any and
all investments made in whole or in part with the Pledged Collateral or any part
thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation;

(iv) Take possession of the Pledged Collateral or any part thereof, by directing
any Pledgor in writing to deliver the same to Collateral Agent at any place or
places so designated by Collateral Agent, in which event such Pledgor shall at
its own expense: (A) promptly and in any event within 3 Business Days cause the
same to be moved to the place or places designated by Collateral Agent and
therewith delivered to Collateral Agent, (B) store and keep any Pledged
Collateral so delivered to Collateral Agent at such place or places pending
further action by 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, 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 Obligations as provided in Article X
hereof;

 

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(vi) Retain and apply the Distributions to the Obligations as provided in
Article X hereof;

(vii) Exercise any and all rights as beneficial and legal owner of the Pledged
Collateral, including perfecting the assignment of, and exercising any and all
voting, consensual and other rights and powers with respect to, any Pledged
Collateral; and

(viii) Exercise all the rights and remedies of a secured party on default under
the UCC, and 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 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 Collateral Agent may deem
commercially reasonable. Collateral Agent or any other Secured Party or any of
their respective Affiliates may be the purchaser, licensee, assignee or
recipient of any or all of the Pledged Collateral 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 Obligations owed to such
person as a credit on account of the purchase price of any Pledged Collateral
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.
Collateral Agent shall not be obligated to make any sale of Pledged Collateral
regardless of notice of sale having been given. 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 Collateral Agent arising by
reason of the fact that the price at which any Pledged Collateral 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 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 Pledged Collateral shall be
required by law, ten (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 Collateral Agent’s taking possession or Collateral Agent’s
disposition of any of the Pledged Collateral, including any and all prior notice
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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 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.
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. To the fullest extent permitted by law, any sale of, or 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, 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 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, 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, 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 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 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
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) If 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 Collateral Agent all such
information as Collateral Agent may

 

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request in order to determine the number of securities included in the
Securities Collateral or Investment Property which may be sold by 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.

(d) Each Pledgor further agrees that a breach of any of the covenants contained
in this Section 9.4 will cause irreparable injury to Collateral Agent and the
other Secured Parties, that 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.

SECTION 9.5. No Waiver; Cumulative Remedies.

(i) No failure on the part of Collateral Agent to exercise, no course of dealing
with respect to, and no delay on the part of 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 or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy; nor shall Collateral Agent be required to look first to,
enforce or exhaust any other security, collateral or guaranties. The remedies
herein provided are cumulative and are not exclusive of any remedies provided by
law.

(ii) To the fullest extent permitted by applicable Requirements of Law, in the
event that Collateral Agent shall have instituted any proceeding to enforce any
right, power or remedy under this Agreement 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 Collateral Agent, then and in
every such case, the Pledgors, 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 and powers of
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 Collateral Agent, each Pledgor shall execute and deliver to Collateral Agent
an assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and Goodwill and such other documents as are necessary or appropriate
to carry out the intent and purposes hereof. Within 5 Business Days of written
notice thereafter from Collateral Agent, each Pledgor shall make available to
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
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,
and such persons shall be available to perform their prior functions on
Collateral Agent’s behalf.

 

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ARTICLE X

PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;

APPLICATION OF PROCEEDS

SECTION 10.1. Proceeds of Asset Sales. The Pledgors shall take all actions
required by Section 4.07(c) of the Supplemental Indenture with respect to any
Net Proceeds from any Asset Sale.

SECTION 10.2. Application of Proceeds. The proceeds received by 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 Collateral Agent of
its remedies shall be applied, together with any other sums then held by
Collateral Agent pursuant to this Agreement, in accordance with and as set forth
in Section 4.07(c) of the Supplemental Indenture.

ARTICLE XI

MISCELLANEOUS

SECTION 11.1. Concerning Collateral Agent. (i) Collateral Agent has been
appointed as collateral agent pursuant to the Indenture. The actions of
Collateral Agent hereunder are subject to the provisions of the Indenture.
Except to the extent that any such rights are limited to Collateral Agent,
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 Indenture. 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. Collateral Agent may resign and
a successor Collateral Agent may be appointed in the manner provided in the
Indenture. Upon the acceptance of any appointment as 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 Collateral Agent.

(ii) Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession from time
to time if such Pledged Collateral is accorded treatment substantially
equivalent to that which Collateral Agent, in its individual capacity, accords
its own property consisting of similar instruments or interests, it being
understood that neither Collateral Agent nor any of the other Secured Parties
shall have responsibility for (i) ascertaining or taking action with respect to
calls, conversions, exchanges,

 

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maturities, tenders or other matters relating to any Securities Collateral,
whether or not 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.

(iii) Collateral Agent shall be entitled to rely upon any written notice,
statement, certificate, order or other document or any telephone message
reasonably 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.

(iv) If any item of Pledged Collateral also constitutes collateral granted to
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, Collateral Agent, in its sole discretion, shall select which
provision or provisions shall control.

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 Claims,
(iii) make repairs, (iv) discharge Liens or (v) pay or perform any obligations
of such Pledgor under any Pledged Collateral, in each case to the extent
required hereunder) or if any representation or warranty on the part of any
Pledgor contained herein shall be breached in any material respect, 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 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 Section 4.11 hereof. Any and
all amounts so expended by Collateral Agent shall be paid by the Pledgors in
accordance with the provisions of Section 11.5. Neither the provisions of this
Section 11.2 nor any action taken by 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 Collateral Agent
its attorney-in-fact, with full authority in the place and stead of such Pledgor
and in the name of such Pledgor, or otherwise, from time to time in Collateral
Agent’s discretion to take any action and to execute any instrument consistent
with the terms of the Indenture, this Agreement and the other Security Documents
which Collateral Agent may deem necessary or advisable to accomplish the
purposes hereof. 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

 

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the Pledgors and their respective successors and assigns and (ii) inure,
together with the rights and remedies of Collateral Agent hereunder, to the
benefit of Collateral Agent and the other Secured Parties and each of their
respective permitted successors, transferees and assigns under the Indenture. 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 Indenture.

SECTION 11.4. Termination; Release. The Pledged Collateral shall be released
from the Lien created by this Agreement upon the payment in full of the
Obligations. Upon termination hereof or any release of Pledged Collateral in
accordance with the provisions of the Indenture, Collateral Agent shall, upon
the request and at the sole cost and expense of the Pledgors, assign, transfer
and deliver to the Pledgors, against receipt and without recourse to or warranty
by Collateral Agent except as to the fact that Collateral Agent has not
encumbered the released assets, such of the Pledged Collateral to be released
(in the case of a release) as may be in possession of 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 UCC termination statements or releases) acknowledging the termination
hereof or the release of such Pledged Collateral, as the case may be.

SECTION 11.5. Costs and Expenses. Any action taken by any Pledgor under or with
respect to any Transaction Document, even if required under any Transaction
Document or at the request of Collateral Agent, shall be at the expense of such
Pledgor, and neither Collateral Agent nor any Secured Party shall be required
under any Transaction Document to reimburse any Pledgor therefor except as
expressly provided therein. In addition, Issuer agrees to pay or reimburse upon
demand (a) Collateral Agent for all reasonable out of pocket costs and expenses
incurred by each of them or any Related Persons of the foregoing, in connection
with the investigation, development, preparation, negotiation, syndication,
execution, interpretation or administration of, any modification of any term of
or termination of, any Transaction Document, any commitment or proposal letter
therefor, any other document prepared in connection therewith or the
consummation and administration of any transaction contemplated therein, in each
case including Attorney Costs to Collateral Agent, (b) Collateral Agent for all
reasonable costs and expenses incurred by them or any Related Persons of the
foregoing in connection with internal audit reviews, field examinations and
examinations of Pledged Collateral (which shall be reimbursed, in addition to
the out of pocket costs and expenses of such examiners, at the per diem rate per
individual charged by Collateral Agent for its examiners) and (c) Collateral
Agent and each Related Person thereof for all costs and expenses incurred in
connection with (i) any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a “work out,” (ii) the enforcement or
preservation of any right or remedy under any Transaction Document, any
Obligation, with respect to the Pledged Collateral or any other related right or
remedy or (iii) the commencement, defense, conduct of, intervention in, or the
taking of any other action with respect to, any proceeding (including any
bankruptcy or insolvency proceeding) related to any Pledgor, Transaction
Document, or Obligation (or the response to and preparation for any subpoena or
request for document production relating thereto), including Attorney Costs.

 

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SECTION 11.6. 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 Indenture and unless in writing and
signed by 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 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 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 11.7. Notices. Unless otherwise provided herein or in the Indenture, 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 Indenture, as to
any Pledgor, addressed to it at the address of Issuer set forth in the Indenture
and as to Collateral Agent, addressed to it at the address set forth in the
Indenture, 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 11.7.

SECTION 11.8. Governing Law, Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial.

(i) This 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.

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

(iii) Each Pledgor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to

 

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the laying of venue of any suit, action or proceeding arising out of or relating
to this Agreement or any other Transaction Document in any court referred to in
paragraph (ii) of this Section 11.8. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(iv) Each Pledgor hereby irrevocably consents to service of process in any
action or proceeding arising out of or relating to any Transaction Document in
the manner provided for notices in Section 12.02 of the Base Indenture. Nothing
in this Agreement or any other Transaction Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by
applicable law.

(v) Each Pledgor hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in any legal proceeding
directly or indirectly arising out of or relating to this Agreement, any other
Transaction Document or the transactions contemplated hereby (whether based on
contract, tort or any other theory). Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section 11.8.

SECTION 11.9. Severability of Provisions. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

SECTION 11.10. 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, 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 signature page of this Agreement via facsimile or electronic
transmission (including a .pdf delivered via electronic mail) shall be as
effective as delivery of a manually executed counterpart hereof.

SECTION 11.11. 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 11.12. Waiver of Stay. Each Pledgor covenants (to the extent it may
lawfully do so) that in the event that such Pledgor or any property or assets of
such Pledgor shall hereafter become the subject of a voluntary or involuntary
proceeding under the Code or such Pledgor shall otherwise be a party to any
federal or state bankruptcy, insolvency, moratorium or

 

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similar proceeding to which the provisions relating to the automatic stay under
Section 362 of the Code or any similar provision in any such law is applicable,
then, in any such case, whether or not Collateral Agent has commenced
foreclosure proceedings under this Agreement, such Pledgor shall not, and each
Pledgor hereby expressly waives its right to (to the extent it may lawfully do
so) at any time insist upon, plead or in any whatsoever, claim or take the
benefit or advantage of any such automatic stay or such similar provision as it
relates to the exercise of any of the rights and remedies (including any
foreclosure proceedings) available to Collateral Agent as provided in this
Agreement, in any other Security Document or any other document evidencing the
Obligations. Each Pledgor further covenants (to the extent it may lawfully do
so) that it will not hinder, delay or impede the execution of any power granted
herein to Collateral Agent, but will suffer and permit the execution of every
such power as though no law relating to any stay or similar provision had been
enacted.

SECTION 11.13. No Credit for Payment of Taxes or Imposition. No Pledgor shall be
entitled to any credit against the principal, premium, if any, or interest
payable under the Indenture, 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 11.14. No Claims Against Collateral Agent. Nothing contained in this
Agreement shall constitute any consent or request by 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 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, except as expressly
permitted by the Indenture.

SECTION 11.15. No Release. Nothing set forth in this Agreement 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 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 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 Indenture or the other Transaction Documents, or under or
in respect of the Pledged Collateral or made in connection herewith or
therewith. The obligations of each Pledgor contained in this Section 11.15 shall
survive the termination hereof and the discharge of such Pledgor’s other
obligations under this Agreement, the Indenture and the other Transaction
Documents.

SECTION 11.16. 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 Pledgor;

 

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(ii) any lack of validity or enforceability of the Indenture or any other
Transaction 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 Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture or any other Transaction
Document or any other Transaction 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 Obligations;

(v) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Indenture or any other Transaction
Document except as specifically set forth in a waiver granted pursuant to the
provisions of Section 11.5 hereof; or

(vi) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.

SECTION 11.17. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, all Liens granted to Collateral Agent pursuant to this Agreement or
any other Transaction Document and the exercise of any right or remedy by
Collateral Agent in respect of the Pledged Collateral hereunder or under any
other Transaction Document are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement, this Agreement and any other Transaction Document, the terms of the
Intercreditor Agreement shall govern and control in all respects, including,
without limitation, with respect to any right or remedy. Without limiting the
generality of the foregoing, and notwithstanding anything herein to the
contrary, until the First Lien Termination Date, (i) any reference to “first
priority” in relation to the Liens granted to the Collateral Agent and all
representations and warranties made in connection with such reference are
subject to the Liens having priority thereto under the Intercreditor Agreement,
(ii) any obligation of the Issuer and any Guarantor hereunder or under any other
Transaction Document with respect to the delivery or control of any Pledged
Collateral, the notation of any lien on any certificate of title, bill of lading
or other document, the giving of any notice to any bailee or other Person, the
provision of voting rights or the obtaining of any consent of any Person and all
representations and warranties made in connection with the foregoing shall be
deemed to be satisfied or true and correct, as applicable, if the Issuer or such
Guarantor, as applicable, complies with the requirements of the similar
provision of the First Lien Documents and (iii) the delivery of any Pledged
Collateral to the First Lien Agent pursuant to the First Lien Documents shall
satisfy any delivery requirement hereunder or under any other Transaction
Document and all representations and warranties made regarding such delivery
shall be deemed to be true and correct if such requirement is satisfied.

 

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

 

ICG, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Senior Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary

INTERNATIONAL COAL GROUP, INC.,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Senior Vice President, Chief Financial
Officer and Treasurer

HUNTER RIDGE HOLDINGS, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

HUNTER RIDGE, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

BRONCO MINING COMPANY, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle

Title:

  Vice President and Treasurer

[Signature page to Security Agreement]

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

COALQUEST DEVELOPMENT LLC,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

HAWTHORNE COAL COMPANY, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

HUNTER RIDGE COAL COMPANY,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

ICG ADDCAR SYSTEMS, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG BECKLEY, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG EAST KENTUCKY, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

[Signature page to Security Agreement]

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

ICG EASTERN, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG EASTERN LAND, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG HAZARD, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG HAZARD LAND, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG ILLINOIS, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG, INC.,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Senior Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary

[Signature page to Security Agreement]

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

ICG KNOTT COUNTY, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG NATURAL RESOURCES, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

ICG TYGART VALLEY, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

JULIANA MINING COMPANY, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

KING KNOB COAL CO., INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

MARINE COAL SALES COMPANY,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle

Title:

  Vice President and Treasurer

[Signature page to Security Agreement]

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

MELROSE COAL COMPANY, INC., as a Pledgor By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

 

PATRIOT MINING COMPANY, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

 

POWELL MOUNTAIN ENERGY, LLC,

as a Pledgor

By:  

/s/ Bradley W. Harris

Name:   Bradley W. Harris Title:   Vice President and Treasurer

 

SIMBA GROUP, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Treasurer

 

UPSHUR PROPERTY, INC.,

as a Pledgor

By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

[Signature page to Security Agreement]

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VINDEX ENERGY CORPORATION, as a Pledgor By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer WHITE WOLF
ENERGY, INC., as a Pledgor By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer WOLF RUN MINING
COMPANY, as a Pledgor By:  

/s/ Joseph R. Beckerle

Name:   Joseph R. Beckerle Title:   Vice President and Treasurer

[Signature page to Security Agreement]

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THE BANK OF NEW YORK MELLON

TRUST COMPANY, N.A.,

as Collateral Agent By:  

/s/ Linda Garcia

Name:   Linda Garcia Title:   Vice President

[Signature page to Security Agreement]