Exhibit 10.3

SECURITY AGREEMENT

Dated January 22, 2013

From

The Grantors referred to herein

as Grantors

to

MORGAN STANLEY SENIOR FUNDING, INC.

as Collateral Agent

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

T A B L E O F C O N T E N T S

 

Section    Page  

Section 1. Grant of Security

     2   

Section 2. Security for Obligations; Excluded Property

     6   

Section 3. Grantors Remain Liable

     8   

Section 4. Delivery and Control of Security Collateral

     8   

Section 5. Maintaining the Account Collateral

     9   

Section 6. Representations and Warranties

     10   

Section 7. Further Assurances

     15   

Section 8. As to Equipment and Inventory

     16   

Section 9. Insurance

     16   

Section 10. Post-Closing Changes; Collections on Assigned Agreements,
Receivables and Related Contracts

     16   

Section 11. As to Intellectual Property Collateral

     17   

Section 12. Voting Rights; Dividends; Etc.

     19   

Section 13. As to the Assigned Agreements

     20   

Section 14. As to Letter-of-Credit Rights

     20   

Section 15. Commercial Tort Claims

     20   

Section 16. Transfers and Other Liens; Additional Shares

     21   

Section 17. Collateral Agent Appointed Attorney in Fact

     21   

Section 18. Collateral Agent May Perform

     21   

Section 19. The Collateral Agent’s Duties

     21   

Section 20. Remedies

     22   

Section 21. Indemnity and Expenses

     24   

Section 22. Amendments; Waivers; Additional Grantors; Etc.

     24   

Section 23. Notices, Etc.

     25   

Section 24. Continuing Security Interest; Assignments under the Credit Agreement

     25   

 

i

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

Section 25. Release; Termination

     26   

Section 26. Execution in Counterparts

     26   

Section 27. Governing Law

     26   

 

Schedules           Schedule I    -    Investment Property Schedule II    -   
Deposit Accounts Schedule III    -    Securities Accounts Schedule IV    -   
Intellectual Property Schedule V    -    Commercial Tort Claims Schedule VI    -
  

Location, Chief Executive Office, Type of Organization, Jurisdiction of

Organization and Organizational Identification Number

Schedule VII    -    Changes in Name, Location, Etc. Schedule VIII    -   
Locations of Equipment and Inventory Schedule IX    -    Letters of Credit
Exhibits       Exhibit A    -    Form of Security Agreement Supplement Exhibit B
   -    Form of Intellectual Property Security Agreement Exhibit C    -    Form
of Intellectual Property Security Agreement Supplement

 

ii

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

SECURITY AGREEMENT

SECURITY AGREEMENT dated January 22, 2013 (as amended, amended and restated,
supplemented or otherwise modified from time to time, this “Agreement”), made by
NEUSTAR, INC., a Delaware corporation (the “Borrower”) and the other Persons
listed on the signature pages hereof (the Borrower and the Persons so listed
being, collectively, the “Grantors”), to MORGAN STANLEY SENIOR FUNDING, INC., as
collateral agent (in such capacity, together with any successor collateral agent
appointed pursuant to Article VIII of the Credit Agreement (as hereinafter
defined), the “Collateral Agent”) for the Secured Parties (as defined in the
Credit Agreement).

PRELIMINARY STATEMENTS.

(1) The Borrower has entered into a Credit Agreement dated as of January 22,
2013 (said Agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the “Credit
Agreement”) with the Lender Parties and the Agents (each as defined therein).

(2) Each Grantor is the owner of the shares of stock or other Equity Interests
(the “Initial Pledged Equity”) set forth opposite such Grantor’s name on and as
otherwise described in Part I of Schedule I hereto and issued by the Persons
named therein and of the indebtedness (the “Initial Pledged Debt”) set forth
opposite such Grantor’s name on and as otherwise described in Part II of
Schedule I hereto and issued by the obligors named therein.

(3) As of the date hereof, each Grantor is the owner of the deposit accounts
that are Material Accounts (together with all other deposit accounts of the
Grantors that are Material Accounts from time to time, but excluding, for the
avoidance of doubt, any Excluded Account (as defined below), the “Deposit
Accounts”) set forth opposite such Grantor’s name on Schedule II hereto.

(4) As of the date hereof, each Grantor is the owner of the securities accounts
that are Material Accounts (together with all other securities accounts of the
Grantors that are Material Accounts from time to time, but excluding, for the
avoidance of doubt, any Excluded Accounts, the “Securities Accounts”) set forth
opposite such Grantor’s name on Schedule III hereto.

(5) After the date hereof, the Borrower will open or designate an account
maintained with a Lender Party or an Affiliate thereof reasonably acceptable to
the Collateral Agent (the “L/C Cash Collateral Account” and, together with any
other collateral account of any Grantor maintained under the dominion and
control of the Collateral Agent for the benefits of the Secured Parties pursuant
to the Loan Documents (but excluding, for the avoidance of doubt, any Excluded
Account), the “Collateral Accounts”).

(6) It is a condition precedent to the making of Advances and the issuance of
Letters of Credit by the Lender Parties under the Credit Agreement and the entry
into Secured Hedge Agreements by the Hedge Banks and Secured Cash Management
Agreements by the Cash Management Banks from time to time that the Grantors
shall have granted the security interest contemplated by this Agreement.

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

(7) Each Grantor will derive substantial direct and indirect benefit from the
transactions contemplated by the Loan Documents.

(8) Unless a contrary intention appears, terms defined in the Credit Agreement
and not otherwise defined in this Agreement are used in this Agreement as
defined in the Credit Agreement. Further, unless otherwise defined in this
Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC
(as defined below) or in the Federal Book Entry Regulations (as defined below)
are used in this Agreement as such terms are defined in such Article 8 or 9
and/or the Federal Book Entry Regulations. “UCC” means the Uniform Commercial
Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non perfection or the priority of the
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, “UCC” means the
Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non perfection or priority. The term “Federal Book Entry
Regulations” means (a) the federal regulations contained Subpart B
(“Treasury/Reserve Automate Debt Entry System (TRADES)”) governing book-entry
securities consisting of U.S. Treasury bills, notes and bonds and Subpart D
(“Additional Provisions”) of 31 C.F.R. Part 357, 31 C.F.R. § 357.2, § 357.10
through § 357.15 and § 357.40 through § 357.45 and (b) to the extent
substantially identical to the federal regulations referred to in clause
(a) above (as in effect from time to time), the federal regulations governing
other book entry securities.

NOW, THEREFORE, in consideration of the premises and in order to induce the
Lender Parties to make Advances and issue Letters of Credit under the Credit
Agreement and to induce the Hedge Banks to enter into Secured Hedge Agreements
and the Cash Management Banks to enter into Secured Cash Management Agreements
from time to time, each Grantor hereby agrees with the Collateral Agent for the
ratable benefit of the Secured Parties as follows:

Section 1. Grant of Security. Each Grantor hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in
such Grantor’s right, title and interest in and to the following, in each case,
as to each type of property described below, whether now owned or hereafter
acquired by such Grantor, wherever located, and whether now or hereafter
existing or arising, but excluding any Excluded Property (as defined below)
(collectively, the “Collateral”):

(a) all equipment in all of its forms, including, without limitation, all
machinery, tools, furniture and fixtures, and all parts thereof and all
accessions thereto, including, without limitation, computer programs and
supporting information that constitute equipment within the meaning of the UCC
(any and all such property being the “Equipment”);

(b) all inventory in all of its forms, including, without limitation, (i) all
raw materials, work in process, finished goods and materials used or consumed in
the manufacture, production, preparation or shipping thereof, (ii) goods in
which such Grantor has an interest in mass or a joint or other interest or right
of any kind (including, without limitation, goods in which such Grantor has an
interest or right as consignee) and (iii) goods that are returned to or
repossessed or stopped in transit by such Grantor), and all accessions thereto
and products thereof and documents therefor, including, without limitation,
computer programs and supporting information that constitute inventory within
the meaning of the UCC (any and all such property being the “Inventory”);

 

2

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

(c) all accounts (including, without limitation, health-care-insurance
receivables), chattel paper (including, without limitation, tangible chattel
paper and electronic chattel paper), documents, instruments (including, without
limitation, promissory notes), deposit accounts, letter-of-credit rights,
general intangibles (including, without limitation, payment intangibles) and
other obligations of any kind, whether or not arising out of or in connection
with the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all
supporting obligations and in and to all security agreements, mortgages, Liens,
leases, letters of credit and other contracts securing or otherwise relating to
the foregoing property (any and all of such accounts, chattel paper,
instruments, deposit accounts, letter-of-credit rights, general intangibles and
other obligations, to the extent not referred to in clause (d), (e) or
(f) below, being the “Receivables,” and any and all such supporting obligations,
security agreements, mortgages, Liens, leases, letters of credit and other
contracts being the “Related Contracts”);

(d) the following (excluding any securities accounts that are not Material
Accounts and excluding, for the avoidance of doubt, any Excluded Accounts, the
“Security Collateral”):

(i) the Initial Pledged Equity and the certificates, if any, representing the
Initial Pledged Equity, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all warrants, rights or options issued thereon or with
respect thereto;

(ii) the Initial Pledged Debt and the instruments, if any, evidencing the
Initial Pledged Debt, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Initial Pledged Debt;

(iii) all additional shares of stock and other Equity Interests from time to
time acquired by such Grantor in any manner (such shares and other Equity
Interests, together with the Initial Pledged Equity, being the “Pledged
Equity”), and the certificates, if any, representing such additional shares or
other Equity Interests, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all warrants, rights or options issued thereon or
with respect thereto;

(iv) all additional indebtedness from time to time owed to such Grantor (such
indebtedness, together with the Initial Pledged Debt, being the “Pledged Debt”)
and the instruments, if any, evidencing such indebtedness, and all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness;

 

3

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

(v) the Securities Accounts, the Collateral Accounts, all security entitlements
with respect to all financial assets from time to time credited to any of the
Securities Accounts or the Collateral Accounts, and all financial assets, and
all dividends, distributions, return of capital, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such security entitlements or
financial assets and all warrants, rights or options issued thereon or with
respect thereto; and

(vi) all other investment property (including, without limitation, all
(A) securities, whether certificated or uncertificated, (B) security
entitlements, (C) securities accounts, (D) commodity contracts and (E) commodity
accounts) in which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the certificates or
instruments, if any, representing or evidencing such investment property, and
all dividends, distributions, return of capital, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such investment property and all
warrants, rights or options issued thereon or with respect thereto;

(e) each Contractor Services Agreement and each Swap Contract to which such
Grantor is now or may hereafter become a party, in each case as such agreements
may be amended, amended and restated, supplemented or otherwise modified from
time to time (collectively, the “Assigned Agreements”), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become
due under or pursuant to the Assigned Agreements, (ii) all rights of such
Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Assigned Agreements, (iii) claims of such Grantor for
damages arising out of or for breach of or default under the Assigned Agreements
and (iv) the right of such Grantor to terminate the Assigned Agreements, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder; provided that, with respect to each Contractor Services Agreement,
the provisions hereof and the grant or provision with respect to enforcement of
a security interest therein shall not impose upon the relevant Grantor any
obligations in addition to or different than those set forth in the Contractor
Services Agreement, or preclude such Grantor from dealing solely and directly
with the parties thereto in all matters pertaining to such Contractor Services
Agreement, including the negotiation of amendments and the settlement of
disputed invoices and provided further, that the enforcement of any security
interest in any Contractor Services Agreement hereunder, to the extent such
enforcement involves the assignment or subcontracting of any duties or
obligations of any party to such Contractor Services Agreement, shall require
the prior written consent of the other parties thereto (other than Grantor,
which consent is hereby provided) (all such Collateral being the “Agreement
Collateral”);

 

4

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

(f) the following (excluding any deposit accounts that are not Material Accounts
and excluding, for the avoidance of doubt, any Excluded Accounts, collectively,
the “Account Collateral”):

(i) the Deposit Accounts, the Collateral Accounts and all funds and financial
assets from time to time credited thereto (including, without limitation, all
such Liquid Assets), and all certificates and instruments, if any, from time to
time representing or evidencing any of the Deposit Accounts or the Collateral
Accounts;

(ii) all promissory notes, certificates of deposit, checks and other instruments
from time to time delivered to or otherwise possessed by the Collateral Agent
for or on behalf of such Grantor in substitution for or in addition to any or
all of the then existing Account Collateral; and

(iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Account
Collateral; and

(g) the following (collectively, the “Intellectual Property Collateral”):

(i) all patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);

(ii) all trademarks, service marks, domain names, trade dress, logos, designs,
slogans, trade names, business names, corporate names and other source
identifiers, whether registered or unregistered (provided that no security
interest shall be granted in United States intent-to-use trademark applications
to the extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law), together, in
each case, with the goodwill symbolized thereby (“Trademarks”);

(iii) all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);

(iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data
files), firmware and documentation and materials relating thereto, together with
any and all maintenance rights, service rights, programming rights, hosting
rights, test rights, improvement rights, renewal rights and indemnification
rights and any substitutions, replacements, improvements, error corrections,
updates and new versions of any of the foregoing (“Computer Software”);

 

5

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

(v) all confidential and proprietary information, including, without limitation,
know-how, trade secrets, manufacturing and production processes and techniques,
inventions, research and development information, databases and data, including,
without limitation, technical data, financial, marketing and business data,
pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade Secrets”), and all other
intellectual, industrial and intangible property of any type, including, without
limitation, industrial designs and mask works;

(vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications
for registration set forth in Schedule IV hereto, together with all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations thereof;

(vii) all tangible embodiments of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto;

(viii) any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages;

(h) all agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any of the Intellectual Property
Collateral to which such Grantor, now or hereafter, is a party or a beneficiary
(“IP Agreements”);

(i) the commercial tort claims described in Schedule V hereto (together with any
commercial tort claims as to which the Grantors have complied with the
requirements of Section 15, the “Commercial Tort Claims Collateral”);

(j) all books and records (including, without limitation, customer lists, credit
files, printouts and other computer output materials and records) of such
Grantor pertaining to any of the Collateral; and

(k) all proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in clauses (a) through (i) of this Section 1) and, to the extent not
otherwise included, all (A) payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral, and (B) cash.

Section 2. Security for Obligations; Excluded Property. (a) This Agreement
secures, in the case of each Grantor, the payment of all Obligations of such
Grantor now or hereafter existing under the Loan Documents, the Secured Hedge
Agreements and the Secured Cash Management Agreements, whether direct or
indirect, absolute or contingent, and whether

 

6

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

for principal, reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise (all
such Obligations being the “Secured Obligations”). Without limiting the
generality of the foregoing, this Agreement secures, as to each Grantor, the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by such Grantor to any Secured Party under the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving a Loan Party.

(b) In no event shall the Collateral include, and no Grantor shall be deemed to
have granted a security interest in, any of such Grantor’s right, title or
interest in the following (collectively, the “Excluded Property”):

(i) any Equity Interests in any CFC or US Holdco to the extent resulting in more
than 65% of the total combined voting power of all classes of stock in a CFC or
US Holdco entitled to vote (within the meaning of Treasury Regulation
Section 1.956-2(c)(2) promulgated under the Code) (the “Voting Stock”) (on a
fully diluted basis) being pledged to the Collateral Agent, on behalf of the
Secured Parties, under this Agreement (it being understood that all of the
Equity Interests in any first-tier Subsidiary of any Grantor that is a CFC or US
Holdco not entitled to vote (within the meaning of Treasury Regulation
Section 1.956-2(c)(2) promulgated under the Code) (the “Non-Voting Stock”) shall
be Collateral pledged by such Grantor);

(ii) any Equity Interests in Neustar Technologies Limited (“NTL”) to the extent
resulting in more than 65% of the Voting Stock of NTL being pledged to the
Collateral Agent, on behalf of the Secured Parties, under this Agreement (it
being understood that all of Non-Voting Stock of NTL held by a Grantor shall be
Collateral pledged hereunder; provided that so long as in connection with any
corporate restructuring of NTL (or its direct parent), that could not reasonably
be expected to have a Material Adverse Effect, and as a result of which (1) NTL
is no longer a first-tier Foreign Subsidiary of any Grantor and NTL’s Equity
Interests are transferred to and held by another first-tier Foreign Subsidiary
of a Grantor and (2) no portion of NTL’s Equity Interests can be pledged without
violating the “deemed dividend” rule of Section 956 of the Code, the security
interests granted hereunder in the Equity Interests of NTL shall be released
upon the prior and reasonably detailed written request of the Borrower in
connection therewith, but, if and only if, (x) NTL remains an indirect
wholly-owned Subsidiary of the Borrower and (y) none of the Borrower, Neustar
NGM Services, LLC, NTL and any Person that owns any Equity Interest of NTL have
pledged any Equity Interest of NTL to any Person);

(iii) (x) any contract, license, agreement, instrument or other document with
any Person or (y) any property subject to purchase-money security interests, in
each case of clauses (x) and (y), to the extent and for so long as the grant of
a Lien thereon to secure the Secured Obligations constitutes a breach of or a
default under, creates a right of termination in favor of any party (other than
any Grantor or any Subsidiary of a Grantor) to or results in a termination of,
or requires any

 

7

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

consent not obtained under, such contract, license, agreement, instrument or
other document (but only to the extent any of the foregoing is not rendered
ineffective by, or is otherwise unenforceable under, the UCC or any applicable
Law), provided that notwithstanding any provision herein or in any other Loan
Document to the contrary, to the extent that any provision hereof or of any
other Loan Document, including any grant or provision with respect to
enforcement of a security interest in, or with respect to, or assignment of
rights under, any Contractor Services Agreement, or any remedies provision with
respect thereto, would result in a violation of the provisions of any Contractor
Services Agreement as in effect on the Closing Date, such provision shall be
null and void solely with respect to such Contractor Services Agreement;

(iv) any license, permit, or other governmental approval that, under the terms
and conditions of such governmental approval or under applicable Laws, cannot be
subjected to a Lien without the consent of the relevant Governmental Authority,
which consent has not been obtained;

(v) any Patents, Trademarks, Computer Software, Trade Secrets or other
intellectual property that would otherwise fall within the definition of
Intellectual Property Collateral that is subject to a license, an option to
license or an option to purchase, pursuant or related to any Contractor Services
Agreement;

(vi) any Excluded Account in respect of which the Borrower is in compliance with
Sections 5(d)(i) and (ii) hereof; and

(vii) motor vehicles, vessels and aircraft.

(c) Without limiting the foregoing and notwithstanding any other provision of
the Loan Documents, no Collateral of a Guarantor that is not an Eligible
Guarantor will be used (i) directly or indirectly by any Agent to pay any
Excluded Swap Obligations or (ii) to serve as Collateral securing any Excluded
Swap Obligations.

Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of the rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

Section 4. Delivery and Control of Security Collateral. (a) All certificates or
instruments representing or evidencing Security Collateral (other than the De
Minimis Minority Interests (as defined on Schedule I)) shall be delivered to and
held by or on behalf of the Collateral Agent pursuant hereto and 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
reasonably satisfactory to the Collateral Agent.

 

8

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

(b) With respect to any Security Collateral that constitutes an uncertificated
security, the relevant Grantor will cause the issuer thereof either (i) to
register the Collateral Agent as the registered owner of such security, (ii) to
agree with such Grantor and the Collateral Agent that such issuer will comply
with instructions with respect to such security originated by the Collateral
Agent without further consent of such Grantor, such agreement to be in form and
substance reasonably satisfactory to the Collateral Agent (such agreement being
an “Uncertificated Security Control Agreement”) or (iii) to maintain such
Security Collateral in a Securities Account subject to a Securities Account
Control Agreement.

(c) With respect to each Securities Account and Collateral Account (to the
extent it is a Securities Account) and any Security Collateral that constitutes
a security entitlement as to which the financial institution acting as
Collateral Agent hereunder is not the securities intermediary, the relevant
Grantor will cause the securities intermediary with respect to such securities
account either (i) to identify in its records the Collateral Agent as the
entitlement holder of such security entitlement or (ii) to agree in an
authenticated record with such Grantor and the Collateral Agent that such
securities intermediary will comply with entitlement orders originated by the
Collateral Agent without further consent of such Grantor, such authenticated
record to be in form and substance reasonably satisfactory to the Collateral
Agent (such agreement being a “Securities Account Control Agreement”).

(d) Upon the occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the right, at any time in its discretion and without
notice to any Grantor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Security Collateral,
subject to all applicable federal, state and foreign securities laws.

(e) Upon the request of the Collateral Agent following the occurrence and during
the continuance of any Event of Default, each Grantor will notify each issuer of
Security Collateral granted by it hereunder that such Security Collateral is
subject to the security interest granted hereunder.

Section 5. Maintaining the Account Collateral. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding, any Secured Hedge Agreement or
Secured Cash Management Agreement shall be in effect or any Lender Party shall
have any Commitment:

(a) Except with respect to accounts that are not Material Accounts and, for the
avoidance of doubt, except with respect to accounts that are Excluded Accounts,
each Grantor will maintain each Deposit Account and Collateral Account (to the
extent it is a deposit account) only with the financial institution acting as
Collateral Agent hereunder or with a bank (each, a “Pledged Account Bank”) that
has agreed, in a record authenticated by the Grantor, the Collateral Agent and
such Pledged Account Bank, to comply with instructions originated by the
Collateral Agent directing the disposition of funds in each such deposit account
without the further consent of such Grantor (which instructions shall only be
given upon the occurrence and during the continuance of an Event of Default),
which authenticated record shall be in form and substance reasonably
satisfactory to the Collateral Agent (each, an “Account Control Agreement”).

 

9

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

(b) Except with respect to deposit accounts that are not Material Accounts and,
for the avoidance of doubt, except with respect to deposit accounts that are
Excluded Accounts, each Grantor agrees that it will not add any bank that
maintains a deposit account for such Grantor or open any new deposit account
with any then existing Pledged Account Bank unless the Collateral Agent shall
have received, (A) if the bank maintaining any such deposit account is neither a
Pledged Account Bank nor the financial institution acting as Collateral Agent
hereunder, an Account Control Agreement authenticated by such bank and such
Grantor, or (B) if any such deposit account is maintained at a Pledged Account
Bank, a supplement to an existing Account Control Agreement with such then
existing Pledged Account Bank, covering such new deposit account (and, upon the
receipt by the Collateral Agent of such Account Control Agreement or supplement,
Schedule II hereto shall be automatically amended to include such Deposit
Account).

(c) Each Grantor shall not terminate any bank as a Pledged Account Bank or
terminate any Deposit Account that is a Material Account and, for the avoidance
of doubt, is not an Excluded Account, unless such Grantor shall, prior to such
termination, (i) transfer all funds and property held therein to another Deposit
Account and (ii) notify all obligors that were making payments thereto to make
all future payments to, or otherwise automatically transfer all funds to,
another Deposit Account that is maintained in compliance with this Section 5 so
that the Collateral Agent shall have a continuously perfected security interest
in such Account Collateral, funds and property.

(d) The Borrower may from time to time designate in writing any deposit account
or securities account to be an “Excluded Account” hereunder (an “Excluded
Account”). The Borrower covenants and agrees that any Excluded Account (i) will
contain only cash or Liquid Assets and (ii) will be used solely for the purpose
of collateralizing any obligations under any Material Contract or Indebtedness
permitted under Section 6.03(s) of the Credit Agreement in respect of or
relating to one or more Material Contracts.

(e) The Collateral Agent may, if an Event of Default shall have occurred and be
continuing, at any time and without notice to, or consent from, the Grantor,
transfer, or direct the transfer of, funds from the Account Collateral to
satisfy the Grantor’s obligations under the Loan Documents.

Section 6. Representations and Warranties. Each Grantor represents and warrants
as follows:

(a) As of the Closing Date, such Grantor’s exact legal name, the locations of
Collateral (other than goods (including Equipment and Inventory) in transit or
out for maintenance or repair and Collateral with a value not to exceed
$15,000,000 in the aggregate), chief executive office, type of organization,
jurisdiction of organization and organizational identification number is set
forth in Schedule VI hereto. As of the Closing

 

10

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

Date, such Grantor has no trade names other than as listed on Schedule IV
hereto. Within the five years preceding the date hereof, such Grantor has not
changed its name, chief executive office, type of organization, jurisdiction of
organization or organizational identification number from those set forth in
Schedule VI hereto except as set forth in Schedule VII hereto.

(b) Such Grantor is the legal and beneficial owner of the Collateral granted or
purported to be granted by it free and clear of any Lien, except for the
security interest created under this Agreement or permitted under the Credit
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral or listing such Grantor or
any trade name of such Grantor as debtor is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent relating to
the Loan Documents or as otherwise permitted under the Credit Agreement.

(c) All of the Equipment and Inventory of such Grantor (other than goods
(including Equipment and Inventory) in transit or out for maintenance or repair
and Collateral with a value not to exceed $15,000,000 in the aggregate) are
located at the places specified therefor in Schedule VIII hereto or at another
location as to which such Grantor has complied with the requirements of
Section 10(a). Such Grantor has exclusive possession and control of its
Equipment and Inventory (other than goods (including Equipment and Inventory) in
transit or out for maintenance or repair and Collateral with a value not to
exceed $15,000,000 in the aggregate), other than Collateral stored at any leased
premises or warehouse for which Grantor has used or is using commercially
reasonable efforts to deliver a landlord’s or warehouseman’s agreement, in form
and substance reasonably satisfactory to the Collateral Agent.

(d) None of the Receivables in excess of $3,000,000 individually or $7,500,000
in the aggregate for all Grantors is evidenced by a promissory note or other
instrument that has not been delivered to the Collateral Agent.

(e) If such Grantor is an issuer of Security Collateral, such Grantor confirms
that it has received notice of the security interest granted hereunder.

(f) As of the Closing Date, other than with respect to the De Minimis Minority
Interests, the Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule I hereto. As of the Closing Date, the Initial Pledged Debt
constitutes all of the outstanding indebtedness owed to such Grantor by the
issuers thereof and is outstanding in the principal amount indicated on Schedule
I hereto.

(g) As of the Closing Date, such Grantor has no investment property, other than
the investment property listed on Schedule I hereto, additional investment
property as to which such Grantor has complied with the requirements of
Section 4 and other investment property having an aggregate value for all
Grantors of no more than $7,500,000.

 

11

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

(h) As of the Closing Date, the Borrower has delivered to the Collateral Agent,
a copy of that certain Agreement for Number Portability Administration
Center/Service Management System between Neustar, Inc., as successor to Lockheed
Martin IMS and North American Portability Management, LLC, as successor to
Northeast Carrier Acquisition Company, L.L.C. dated as of November 7, 1997 (such
agreement, as amended, supplemented or otherwise modified from time to time, the
“Northeast Contractor Services Agreement”) and the amendments thereto which,
collectively, represent the material terms of the Northeast Contractor Services
Agreement as in effect on the Closing Date. The terms of the Northeast
Contractor Services Agreement are identical to the terms of the other Contractor
Services Agreements, except with respect to choice of law and for differences
that are not material. Upon the occurrence and during the continuance of any
Event of Default, at the request of the Collateral Agent each Grantor party to
the Assigned Agreements shall use commercially reasonable efforts to cause each
other party to the Assigned Agreements to promptly execute and deliver to the
Collateral Agent a consent, in form and substance satisfactory to the Collateral
Agent, to the grant of a security interest in such Assigned Agreement to the
Collateral Agent pursuant to this Agreement.

(i) Such Grantor has no deposit accounts that are Material Accounts, other than
the Deposit Accounts listed on Schedule II hereto, any deposit accounts that are
Excluded Accounts and additional Deposit Accounts as to which such Grantor has
complied with the applicable requirements of Section 5.

(j) Except for letters of credit the aggregate face amounts of which do not
exceed $7,500,000 for all Grantors, such Grantor is not a beneficiary or
assignee under any letter of credit, other than the letters of credit described
in Schedule IX hereto and additional letters of credit as to which such Grantor
has complied with the requirements of Section 16.

(k) This Agreement creates in favor of the Collateral Agent for the benefit of
the Secured Parties a valid security interest in the Collateral granted by such
Grantor, securing the payment of the Secured Obligations. Such security interest
is a first priority (subject to Liens permitted under Section 6.01 of the Credit
Agreement) perfected security interest, subject to the occurrence of the
following: (i) in the case of all Collateral in which a security interest may be
perfected by filing a financing statement under the UCC, the completion of the
filings and other actions required hereby (which, in the case of all filings and
other documents, have been delivered to the Collateral Agent in completed and
duly authorized form), (ii) with respect to any Deposit Account or Securities
Account, the execution of Account Control Agreements and Securities Account
Control Agreements, respectively, (iii) in the case of all Copyrights,
Trademarks and Patents for which UCC filings are insufficient, all appropriate
filings in respect of such Copyrights, Trademarks and Patents owned by any Loan
Party as of the date hereof having been made with the United States Copyright
Office or the United States Patent and Trademark Office, as applicable, which
filings have been delivered to the Collateral Agent in duly completed, executed
and authorized form, (iv) in the case of letter-of-credit rights that are not
supporting obligations of Collateral, upon consent of the issuer thereof, and
(v) in the case of electronic chattel paper, the completion of all steps
necessary to grant control to the Collateral Agent over such electronic chattel
paper.

 

12

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

(l) No authorization or approval or other action by, and no notice to or filing
with, any Governmental Authority or regulatory body or any other third party is
required for (i) the grant by such Grantor of the security interest granted
hereunder or for the execution, delivery or performance of this Agreement by
such Grantor, (ii) the perfection or maintenance of the security interest
created hereunder (including the first priority nature of such security
interest), except for the occurrence of the events described in the preceding
clause (k)(i) through (v), or (iii) the exercise by the Collateral Agent of its
voting or other rights provided for in this Agreement or the remedies in respect
of the Collateral pursuant to this Agreement, except (x) as may be required in
connection with the disposition of any portion of the Security Collateral by
laws affecting the offering and sale of securities generally and (y) as
otherwise contemplated hereby with respect to Agreement Collateral.

(m) The Inventory that has been produced or distributed by such Grantor has been
produced in compliance with all requirements of applicable law, including,
without limitation, the Fair Labor Standards Act, except as could not reasonably
be expected to have a Material Adverse Effect.

(n) As to itself and its Intellectual Property Collateral:

(i) The operation of such Grantor’s business as currently conducted or as
contemplated to be conducted and the use of the Intellectual Property Collateral
in connection therewith does not infringe, misappropriate, misuse or otherwise
violate the intellectual property rights of any third party, except as could not
reasonably be expected to have a Material Adverse Effect.

(ii) Such Grantor is the exclusive owner of all right, title and interest in and
to the Material Registered IP, and is entitled to use all Material Registered IP
subject only to the terms of the IP Agreements.

(iii) The Intellectual Property Collateral set forth on Schedule IV hereto
includes all of the patents, patent applications, trademark registrations and
applications, copyright registrations and applications, in each case that is
material to the conduct of the business of the Borrower and its Subsidiaries,
taken as a whole, owned by such Grantor as of the date hereof (together with all
domain names material to the conduct of the business of the Borrower and its
Subsidiaries, taken as a whole, owned by such Grantor as of the date hereof, the
“Material Registered IP”).

(iv) The Material Registered IP is subsisting and, to the best of such Grantor’s
knowledge, has not been adjudged invalid or unenforceable in whole or part and
is valid and enforceable. Such Grantor is not aware of any uses of any item of
Material Registered IP that could be expected to lead to such item becoming
invalid or unenforceable.

 

13

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

(v) Such Grantor has made or performed all filings, recordings and other acts
and has paid all required fees and taxes to maintain each and every item of
Material Registered IP, except for such failures as would not reasonably be
expected to have a Material Adverse Effect. Such Grantor has used proper
statutory notice in connection with its use of each patent, trademark and
copyright included in the Material Registered IP, except where the lack of such
notices would not result in a Material Adverse Effect.

(vi) No claim, action, suit, investigation, litigation or proceeding has been
asserted or is pending or threatened in writing against such Grantor (i) based
upon or challenging or seeking to deny or restrict the Grantor’s rights in or
use of any of the Intellectual Property Collateral, (ii) alleging that the
Grantor’s rights in or use of the Intellectual Property Collateral or that any
services provided by, processes used by, or products manufactured or sold by,
such Grantor infringe, misappropriate, dilute, misuse or otherwise violate any
patent, trademark, copyright or any other proprietary right of any third party,
or (iii) alleging that the Intellectual Property Collateral is being licensed or
sublicensed in violation or contravention of the terms of any license or other
agreement, in each case that could reasonably be expected to have a Material
Adverse Effect. To the best of such Grantor’s knowledge, no Person is engaging
in any activity that infringes, misappropriates, dilutes, misuses or otherwise
violates the Material Intellectual Property Collateral owned by such Grantor or
such Grantor’s rights in or use thereof that could reasonably be expected to
have a Material Adverse Effect. The consummation of the transactions
contemplated by the Transaction Documents will not result in the termination or
impairment of any of the Material Registered IP.

(vii) With respect to each IP Agreement that is material to the conduct of the
business of the Borrower and its Subsidiaries, taken as a whole: (A) such IP
Agreement is valid and binding and in full force and effect and represents the
entire agreement between the respective parties thereto with respect to the
subject matter thereof, except as may be limited by applicable Bankruptcy Laws,
laws affecting the rights of creditors generally or general principles of
equity, regardless of whether considered in a proceeding in equity or at law;
(B) such IP Agreement will not cease to be valid and binding and in full force
and effect on terms identical to those currently in effect as a result of the
rights and interest granted herein, nor will the grant of such rights and
interest constitute a breach or default under such IP Agreement or otherwise
give any party thereto a right to terminate such IP Agreement; (C) such Grantor
has not received any notice of termination or cancellation under such IP
Agreement; (D) such Grantor has not received any notice of a breach or default
under such IP Agreement, which breach or default has not been cured; (E) such
Grantor has not granted to any other third party any rights, adverse or
otherwise, under such IP Agreement; and (F) neither such Grantor nor any other
party to such IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a breach or default or permit termination, modification or
acceleration under such IP Agreement, except in each of clauses (A) through
(F) above, as could not reasonably be expected to have a Material Adverse
Effect.

 

14

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

(o) Such Grantor has not initiated proceedings with respect to any commercial
tort claims except to the extent the aggregate amount thereof do not exceed
$7,500,000 for all Grantors, other than those listed in Schedule V hereto and
additional commercial tort claims as to which such Grantor has complied with the
requirements of Section 15.

Section 7. Further Assurances. (a) Each Grantor agrees that from time to time,
at the expense of such Grantor, such Grantor will promptly execute and deliver,
or otherwise authenticate, all further instruments and documents, and take all
further action that may be necessary in order to perfect or maintain the
perfection of any pledge or security interest granted or purported to be granted
by such Grantor hereunder. Without limiting the generality of the foregoing,
each Grantor will promptly with respect to Collateral of such Grantor: (i) if
any such Collateral with a value in excess of $3,000,000 individually or
$7,500,000 in the aggregate for all Grantors shall be evidenced by a promissory
note or other instrument or chattel paper, deliver and pledge to the Collateral
Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance reasonably satisfactory to the Collateral Agent; (ii) promptly
upon the written request of the Collateral Agent, file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Collateral Agent may reasonably request,
in order to perfect and preserve the security interest granted or purported to
be granted by such Grantor hereunder; and (iii) deliver to the Collateral Agent
evidence that all other actions that the Collateral Agent may reasonably request
in order to perfect and protect the security interest granted or purported to be
granted by such Grantor under this Agreement has been taken.

(b) Each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, including, without
limitation, one or more financing statements indicating that such financing
statements cover all assets or all personal property (or words of similar
effect) of such Grantor, regardless of whether any particular asset described in
such financing statements falls within the scope of the UCC or the granting
clause of this Agreement. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement where permitted by law. Each
Grantor ratifies its authorization for the Collateral Agent to have filed such
financing statements, continuation statements or amendments filed prior to the
date hereof.

(c) Each Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of
such Grantor and such other reports in connection with such Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.

(d) Notwithstanding any other provision herein to the contrary, the Grantors
shall not be required to take any action to perfect the security interests
granted hereunder to the extent that the Collateral Agent determines, in its
reasonable discretion, that the cost of taking such action is excessive in
relation to the value of the security to be afforded thereby.

 

15

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

Section 8. As to Equipment and Inventory. In producing its Inventory, each
Grantor will comply in all material respects with all requirements of applicable
law, including, without limitation, the Fair Labor Standards Act, except as
could not reasonably be expected to have a Material Adverse Effect.

Section 9. Insurance. (a) Each property and general liability insurance policy
maintained by a Grantor in accordance with Section 5.7 of the Credit Agreement
shall (i) (A) include such Grantor and the Collateral Agent as additional
insured parties thereunder (without any representation or warranty by or
obligation upon the Collateral Agent) as their interests may appear, (B) contain
the agreement by the insurer that any loss thereunder shall be payable to the
Collateral Agent notwithstanding any action, inaction or breach of
representation or warranty by such Grantor, (C) provide that there shall be no
recourse against the Collateral Agent for payment of premiums or other amounts
with respect thereto and (D) provide that at least 10 days’ prior written notice
of cancellation or of lapse shall be given to the Collateral Agent by the
Grantor or (ii) otherwise be in form and substance reasonably satisfactory to
Collateral Agent. Each Grantor will, if so reasonably requested by the
Collateral Agent, deliver to the Collateral Agent original or duplicate policies
of such insurance and, as often as the Collateral Agent may reasonably request
(but in any event no more than twice per Fiscal Year), a report of a reputable
insurance broker with respect to such insurance. Further, each Grantor will, at
the request of the Collateral Agent, duly execute and deliver instruments of
assignment of such insurance policies to comply with the requirements of
Section 5.07 of the Credit Agreement and take commercially reasonable efforts to
cause the insurers to acknowledge notice of such assignment.

(b) Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 9 may be paid directly to the Person who shall have
incurred liability covered by such insurance.

(c) So long as no Event of Default shall have occurred and be continuing, all
insurance payments received by the Collateral Agent in connection with any loss,
damage or destruction of any Inventory or Equipment will promptly be released by
the Collateral Agent to the applicable Grantor. Upon the occurrence and during
the continuance of any Event of Default, all insurance payments in respect of
such Equipment or Inventory shall be paid to the Collateral Agent and shall, in
the Collateral Agent’s sole discretion, (i) be released to the applicable
Grantor to be applied as set forth in the first sentence of this subsection
(c) or (ii) be held as additional Collateral hereunder or applied as specified
in Section 20(b).

Section 10. Post-Closing Changes; Collections on Assigned Agreements,
Receivables and Related Contracts. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
or the location of Collateral (other than goods (including Inventory and
Equipment) in transit or out for repair or maintenance and Collateral with a
value not to exceed $15,000,000 in the aggregate) from those set forth in
Section 6(a) of this Agreement without giving written notice to the Collateral
Agent within 10 Business Days subsequent thereto (or such other longer period of
time as approved by the Collateral Agent) and shall thereafter promptly take all
action reasonably required by the Collateral Agent in writing for the purpose of
perfecting or maintaining the perfection of the security interest granted by
this Agreement. Each Grantor will hold and preserve its records relating to the
Collateral, including, without limitation, the Assigned Agreements and Related

 

16

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

Contracts, and will permit representatives of the Collateral Agent to inspect
and make abstracts from such records and other documents pursuant to and subject
to the conditions set forth in Section 5.10 of the Credit Agreement. If any
Grantor does not have an organizational identification number and later obtains
one, it will forthwith notify the Collateral Agent of such organizational
identification number.

(b) Except as otherwise provided in this subsection (b), each Grantor will
continue to collect pursuant to past practices or its reasonable commercial
judgment, at its own expense, all amounts due or to become due such Grantor
under the Assigned Agreements, Receivables and Related Contracts. In connection
with such collections, such Grantor may take such action as such Grantor may
deem necessary or advisable to enforce collection of the Assigned Agreements,
Receivables and Related Contracts; provided, however, that the Collateral Agent
shall have the right at any time, upon the occurrence and during the continuance
of an Event of Default and upon written notice to such Grantor of its intention
to do so, to notify the Obligors under any Assigned Agreements (other than any
Contractor Services Agreement), Receivables and Related Contracts of the
assignment of such Assigned Agreements, Receivables and Related Contracts to the
Collateral Agent and to direct such Obligors to make payment of all amounts due
or to become due to such Grantor thereunder directly to the Collateral Agent
and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Assigned Agreements, Receivables and Related Contracts,
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as such Grantor might have done, and to otherwise
exercise all rights with respect to such Assigned Agreements, Receivables and
Related Contracts, including, without limitation, those set forth set forth in
Section 9-607 of the UCC. After receipt by any Grantor of the notice from the
Collateral Agent referred to in the proviso to the preceding sentence and so
long as the Event of Default referred to in such notice is continuing, (i) all
amounts and proceeds (including, without limitation, instruments) received by
such Grantor in respect of the Assigned Agreements, Receivables and Related
Contracts of such Grantor shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over to the Collateral Agent in the same form as so
received (with any necessary indorsement) to be deposited in a cash collateral
account and applied as provided in Section 20(b) and (ii) such Grantor will not
adjust, settle or compromise the amount or payment of any Receivable or amount
due on any Assigned Agreement or Related Contract, release wholly or partly any
Obligor thereof or allow any credit or discount thereon.

Section 11. As to Intellectual Property Collateral. (a) With respect to any
Intellectual Property Collateral that is owned by a Grantor and is material to
the conduct of the business of the Borrower and its Subsidiaries, taken as a
whole (the “Material Owned IP”), such Grantor agrees to take, at its expense,
all necessary steps, including, without limitation, in the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other governmental
authority, to (i) maintain the validity and enforceability of such Material
Owned IP and maintain such Material Owned IP in full force and effect, and
(ii) maintain any patent, trademark, or copyright registration or application,
now or hereafter included in such Material Owned IP of such Grantor, including,
without limitation, the payment of required fees and taxes, the filing of
responses to office actions issued by the U.S. Patent and Trademark Office, the
U.S. Copyright Office or other governmental authorities, the filing of
applications for renewal or extension, the filing of affidavits under Sections 8
and 15 of the U.S. Trademark Act, the filing of divisional,

 

17

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

continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings, except, in each case, as could not reasonably be
expected to have a Material Adverse Effect. No Grantor shall, without the
written consent of the Collateral Agent, discontinue use of or otherwise abandon
any Material Owned IP, or abandon any right to file an application for patent,
trademark, or copyright, unless such Grantor shall have previously determined in
its reasonable business judgment that such use or the pursuit or maintenance of
such Intellectual Property Collateral is no longer desirable in the conduct of
such Grantor’s business under the circumstances and that the loss thereof would
not be reasonably likely to have a Material Adverse Effect. With respect to any
Material Owned IP that is owned by a Grantor but is otherwise recorded in the
name of a predecessor in interest or in the prior name of such Grantor, such
Grantor agrees to file, within one hundred and fifty (150) days following the
Closing Date (which period may be extended in the sole and absolute discretion
of the Collateral Agent) and at its expense, all necessary documents, including,
without limitation, merger certificates, formal assignments or name change
documents, with the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authority, to reflect and effect such Grantor as the
registrant of record.

(b) Each Grantor agrees promptly to notify the Collateral Agent if such Grantor
becomes aware (i) that any item of the Material Registered IP has become
abandoned, placed in the public domain, invalid or unenforceable, or of any
materially adverse determination or development regarding such Grantor’s
ownership of any of the Material Owned IP or its right to register the same or
to keep and maintain and enforce the same, or (ii) of any adverse determination
or the institution of any proceeding (including, without limitation, the
institution of any proceeding in the U.S. Patent and Trademark Office or any
court) regarding any item of the Material Registered IP.

(c) In the event that any Grantor becomes aware that any item of the Material
Owned IP is being infringed or misappropriated by a third party, such Grantor
shall notify the Collateral Agent and shall take such actions, at its expense,
as such Grantor or the Collateral Agent deems reasonable and appropriate under
the circumstances to protect or enforce such Material Owned IP.

(d) Each Grantor shall use proper statutory notice in connection with its use of
each item of its Material Registered IP, except where the lack of such notices
could not reasonably be expected to result in a Material Adverse Effect. No
Grantor shall do any act or knowingly omit to do any act whereby any of its
Material Registered IP may lapse or become invalid or unenforceable or placed in
the public domain, unless such Grantor shall have previously determined in its
reasonable business judgment that such Intellectual Property Collateral is no
longer desirable in the conduct of such Grantor’s business and that the loss
thereof would not be reasonably likely to have a Material Adverse Effect.

(e) With respect to its Material Registered IP, each Grantor agrees to execute
or otherwise authenticate an agreement in substantially the form set forth in
Exhibit B hereto or otherwise in form and substance reasonably satisfactory to
the Collateral Agent (an “Intellectual Property Security Agreement”), for
recording the security interest granted hereunder to the Collateral Agent in
such Material Registered IP with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authorities necessary to perfect the
security interest hereunder in such Material Registered IP.

 

18

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

(f) Each Grantor agrees that should it obtain an ownership interest in any item
of the type set forth in Section 1(g) that is not on the date hereof a part of
the Intellectual Property Collateral (“After-Acquired Intellectual Property”)
(i) the provisions of this Agreement shall automatically apply thereto, and
(ii) any such After-Acquired Intellectual Property and, in the case of
trademarks, the goodwill symbolized thereby, shall automatically become part of
the Intellectual Property Collateral subject to the terms and conditions of this
Agreement with respect thereto. At the end of each fiscal quarter of the
Borrower, each Grantor shall give prompt written notice to the Collateral Agent
identifying the After-Acquired Intellectual Property, in each case that is
material to the conduct of the business of the Borrower and its Subsidiaries,
taken as a whole, and that is registered or filed with the U.S. Copyright Office
or U.S. Patent and Trademark Office or equivalent foreign offices, acquired
during such fiscal quarter, and such Grantor shall execute and deliver to the
Collateral Agent with such written notice, or otherwise authenticate, an
agreement substantially in the form of Exhibit C hereto or otherwise in form and
substance satisfactory to the Collateral Agent (an “IP Security Agreement
Supplement”) covering such After-Acquired Intellectual Property, which IP
Security Agreement Supplement shall be recorded with the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other governmental
authorities necessary to perfect the security interest hereunder in such
After-Acquired Intellectual Property.

Section 12. Voting Rights; Dividends; Etc. (a) So long as no Event of Default
shall have occurred and be continuing:

(i) Each Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of such Grantor or any
part thereof for any purpose.

(ii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest and other distributions paid in respect of the Security Collateral of
such Grantor if and to the extent that the payment thereof is not otherwise
prohibited by the terms of the Loan Documents.

(iii) The Collateral Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other rights that it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.

(b) Upon the occurrence and during the continuance of an Event of Default and
upon written notice thereof to the Grantor by the Collateral Agent:

(i) All rights of each Grantor (x) to exercise or refrain from exercising the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 12(a)(i) shall, upon notice to such Grantor by the
Collateral Agent, cease and

 

19

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

(y) to receive the dividends, interest and other distributions that it would
otherwise be authorized to receive and retain pursuant to Section 12(a)(ii)
shall automatically cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall thereupon have the sole right to exercise or
refrain from exercising such voting and other consensual rights and to receive
and hold as Security Collateral such dividends, interest and other
distributions.

(ii) All dividends, interest and other distributions that are received by any
Grantor contrary to the provisions of paragraph (i) of this Section 12(b) shall
be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent as Security Collateral in the same form as so received
(with any necessary indorsement).

Section 13. As to the Assigned Agreements. (a) Each Grantor will at its expense,
furnish to the Collateral Agent such information and reports regarding the
Assigned Agreements and such other Collateral of such Grantor as the Collateral
Agent may reasonably request, provided that the Grantor shall not be required to
deliver such information or reports with respect to any Contractor Services
Agreement or other Assigned Agreement to the extent the disclosure thereof is
not permitted pursuant to such Contractor Services Agreement, other Assigned
Agreement or any related confidentiality agreement or provision.

(b) Each Grantor hereby consents on its behalf and on behalf of its Subsidiaries
to the assignment and pledge to the Collateral Agent for benefit of the Secured
Parties of each Assigned Agreement to which it is a party by any other Grantor
hereunder.

Section 14. As to Letter-of-Credit Rights. (a) Each Grantor, by granting a
security interest in its Receivables consisting of letter-of-credit rights to
the Collateral Agent, intends to (and hereby does) assign to the Collateral
Agent its rights (including its contingent rights) to the proceeds of all
Related Contracts consisting of letters of credit of which it is or hereafter
becomes a beneficiary or assignee. Except for letters of credit the aggregate
face amounts of which do not exceed $7,500,000 for all Grantors, each Grantor
will use commercially reasonable efforts to promptly cause the issuer of each
letter of credit and each nominated person (if any) with respect thereto to
consent to such assignment of the proceeds thereof pursuant to a consent in form
and substance satisfactory to the Collateral Agent and deliver written evidence
of such consent to the Collateral Agent.

(b) Upon the occurrence of an Event of Default, each Grantor will, promptly upon
request by the Collateral Agent, notify (and such Grantor hereby authorizes the
Collateral Agent to notify) the issuer and each nominated person with respect to
each of the Related Contracts consisting of letters of credit that the proceeds
thereof have been assigned to the Collateral Agent hereunder.

Section 15. Commercial Tort Claims. Each Grantor will promptly give notice to
the Collateral Agent of any commercial tort claim for which the Grantor has
initiated proceedings (other than commercial tort claims the aggregate amount of
which do not exceed $7,500,000 for all Grantors) after the date hereof and will
promptly execute or otherwise authenticate a supplement to this Agreement, and
otherwise take all action reasonably requested by the Collateral Agent, to
subject such commercial tort claim to the first priority security interest
created under this Agreement.

 

20

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

Section 16. Transfers and Other Liens; Additional Shares. (a) Each Grantor
agrees that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Collateral, other than sales, assignments and
other dispositions of Collateral, and options relating to Collateral, permitted
under the terms of the Credit Agreement, or (ii) create or suffer to exist any
Lien upon or with respect to any of the Collateral of such Grantor except for
the pledge, assignment and security interest created under this Agreement and
Liens permitted under the Credit Agreement.

Section 17. Collateral Agent Appointed Attorney in Fact. Each Grantor hereby
irrevocably appoints the Collateral Agent such Grantor’s attorney in fact, with
full authority in the place and stead of such Grantor and in the name of such
Grantor or otherwise, from time to time, upon the occurrence and during the
continuance of an Event of Default, in the Collateral Agent’s discretion, to
take any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:

(a) to obtain and adjust insurance required to be paid to the Collateral Agent
pursuant to Section 9(c),

(b) to ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral,

(c) to receive, indorse and collect any drafts or other instruments, documents
and chattel paper, in connection with clause (a) or (b) above, and

(d) to file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce compliance with the terms and conditions
of any Assigned Agreement (other than any Contractor Services Agreement) or the
rights of the Collateral Agent with respect to any of the Collateral.

Section 18. Collateral Agent May Perform. If, upon the occurrence and during the
continuance of an Event of Default, any Grantor fails to perform any agreement
contained herein, the Collateral Agent may, but without any obligation to do so
and without notice, itself perform, or cause performance of, such agreement, and
the expenses of the Collateral Agent incurred in connection therewith shall be
payable by such Grantor under Section 21.

Section 19. The Collateral Agent’s Duties. (a) The powers conferred on the
Collateral Agent hereunder are solely to protect the Secured Parties’ interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not any Secured Party has or is
deemed to have knowledge of such

 

21

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

matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The Collateral
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property.

(b) Anything contained herein to the contrary notwithstanding, the Collateral
Agent may from time to time, when the Collateral Agent deems it to be necessary,
appoint one or more subagents (each a “Subagent”) for the Collateral Agent
hereunder with respect to all or any part of the Collateral. In the event that
the Collateral Agent so appoints any Subagent with respect to any Collateral,
(i) the assignment and pledge of such Collateral and the security interest
granted in such Collateral by each Grantor hereunder shall be deemed for
purposes of this Security Agreement to have been made to such Subagent, in
addition to the Collateral Agent, for the ratable benefit of the Secured
Parties, as security for the Secured Obligations of such Grantor, (ii) such
Subagent shall automatically be vested, in addition to the Collateral Agent,
with all rights, powers, privileges, interests and remedies of the Collateral
Agent hereunder with respect to such Collateral, and (iii) the term “Collateral
Agent,” when used herein in relation to any rights, powers, privileges,
interests and remedies of the Collateral Agent with respect to such Collateral,
shall include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Collateral unless and
except to the extent expressly authorized in writing by the Collateral Agent.

Section 20. Remedies. If any Event of Default shall have occurred and be
continuing:

(a) The Collateral Agent may exercise in respect of the Collateral, in addition
to other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral), provided that, with
respect to each Contractor Services Agreement, such rights and remedies under
the UCC shall not impose upon the relevant Grantor, any obligations in addition
to or different than those set forth in the Contractor Services Agreement, or
preclude such Grantor from dealing solely and directly with the parties thereto
in all matters pertaining to such Contractor Services Agreement, including the
negotiation of amendments and the settlement of disputed invoices and provided
further, that the enforcement of any such right under the UCC in any Contractor
Services Agreement, to the extent such enforcement involves the assignment or
subcontracting of any duties or obligations of any party to such Contractor
Services Agreement, shall require the prior written consent of the other parties
thereto (other than Grantor, which consent is hereby provided), and also may:
(i) require each Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Collateral Agent forthwith, assemble all or part
of the Collateral as directed by the Collateral Agent and make it available to
the Collateral Agent at a place and time to be designated by the Collateral
Agent that is reasonably convenient to both parties; (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may deem commercially reasonable; (iii) occupy any
premises owned or leased by any of the Grantors where the Collateral or any part
thereof is assembled or located for a reasonable

 

22

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

period in order to effectuate its rights and remedies hereunder or under law,
without obligation to such Grantor in respect of such occupation; and
(iv) exercise any and all rights and remedies of any of the Grantors under or in
connection with the Collateral, or otherwise in respect of the Collateral,
including, without limitation, (A) any and all rights of such Grantor to demand
or otherwise require payment of any amount under, or performance of any
provision of, the Assigned Agreements (other than any Contractor Services
Agreement), the Receivables, the Related Contracts and the other Collateral,
(B) withdraw, or cause or direct the withdrawal, of all funds with respect to
the Account Collateral and (C) exercise all other rights and remedies with
respect to the Assigned Agreements (other than any Contractor Services
Agreement), the Receivables, the Related Contracts and the other Collateral,
including, without limitation, those set forth in Section 9-607 of the UCC. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days’ notice to such Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

(b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds
received by or on behalf of the Collateral Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Collateral Agent, be held by the Collateral Agent
as collateral for, and/or then or at any time thereafter applied (after payment
of any amounts payable to the Collateral Agent pursuant to Section 21) in whole
or in part by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations, in accordance with
Section 2.12(e) of the Credit Agreement.

(c) All payments received by any Grantor under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent
in the same form as so received (with any necessary indorsement).

(d) The Collateral Agent may, without notice to any Grantor except as required
by law and at any time or from time to time, charge, set off and otherwise apply
all or any part of the Secured Obligations against any funds held with respect
to the Account Collateral or in any other deposit account.

(e) The Collateral Agent may send to each bank, securities intermediary or
issuer party to any Account Control Agreement, Securities Account Control
Agreement or Uncertificated Security Control Agreement a “Notice of Exclusive
Control” as defined in and under such Agreement.

 

23

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

(f) In the event of any sale or other disposition of any of the Intellectual
Property Collateral of any Grantor, the goodwill symbolized by any Trademarks
subject to such sale or other disposition shall be included therein, and such
Grantor shall supply to the Collateral Agent or its designee such Grantor’s
documents and things relating to any Material Registered IP subject to such sale
or other disposition, and such Grantor’s customer lists and other records and
documents relating to such Intellectual Property Collateral and to the
manufacture, distribution, advertising and sale of products and services of such
Grantor.

(g) Each Grantor recognizes that the Collateral Agent may be unable to effect a
public sale of any Security Collateral by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state or foreign
securities laws or otherwise or may determine that a public sale is
impracticable, not desirable or not commercially reasonable and, accordingly,
may resort to one or more private sales thereof to a restricted group of
purchasers that shall be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Collateral Agent shall be under no obligation to delay a
sale of any Securities Collateral for the period of time necessary to permit the
issuer thereof to register such securities for public sale under the Securities
Act of 1933 or under applicable state securities laws even if such issuer would
agree to do so.

Section 21. Indemnity and Expenses. (a) Each Grantor jointly and severally
agrees to indemnify, defend and save and hold harmless each Secured Party and
each of their Affiliates and their respective officers, directors, employees,
agents and advisors (each, an “Indemnified Party”) from and against, and shall
pay on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence, willful misconduct or material
breach of its obligations under the Loan Documents.

(b) Each Grantor will upon demand pay to the Collateral Agent the amount of any
and all reasonable and documented expenses, including, without limitation, the
reasonable and documented fees and expenses of its outside counsel and of any
experts and agents, that the Collateral Agent may incur in connection with
(i) the administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other realization upon, any of
the Collateral of such Grantor, (iii) the exercise or enforcement of any of the
rights of the Collateral Agent or the other Secured Parties hereunder or
(iv) the failure by such Grantor to perform or observe any of the provisions
hereof.

Section 22. Amendments; Waivers; Additional Grantors; Etc. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the

 

24

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

Collateral Agent and Grantors, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Collateral Agent or any other Secured Party
to exercise, and no delay in exercising any right hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.

(b) Upon the execution and delivery by any Person of a security agreement
supplement in substantially the form of Exhibit A hereto (each a “Security
Agreement Supplement”), such Person shall be referred to as an “Additional
Grantor” and shall be and become a Grantor hereunder, and each reference in this
Agreement and the other Loan Documents to “Grantor” shall also mean and be a
reference to such Additional Grantor, each reference in this Agreement and the
other Loan Documents to the “Collateral” shall also mean and be a reference to
the Collateral granted by such Additional Grantor and each reference in this
Agreement to a Schedule shall also mean and be a reference to the schedules
attached to such Security Agreement Supplement.

Section 23. Notices, Etc. All notices and other communications provided for
hereunder shall be either (i) in writing (including telegraphic, telecopier or
telex communication) and mailed, telegraphed, telecopied, telexed or otherwise
delivered or (ii) by electronic mail (if electronic mail addresses are
designated as provided below) confirmed immediately in writing, in the case of
the Borrower or the Collateral Agent, addressed to it at its address specified
in the Credit Agreement and, in the case of each Grantor other than the
Borrower, addressed to it at its address set forth opposite such Grantor’s name
on the signature pages hereto or on the signature page to the Security Agreement
Supplement pursuant to which it became a party hereto; or, as to any party, at
such other address as shall be designated by such party in a written notice to
the other parties. Notices sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier or electronic mail shall be deemed to have
been given when sent (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next business day for the recipient). Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or of
any Security Agreement Supplement or Schedule hereto shall be effective as
delivery of an original executed counterpart thereof.

Section 24. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Secured Obligations (other than
contingent indemnification obligations for which no claim has been asserted),
(ii) the earlier of (A) the termination in full of the Lenders’ commitments
under the Credit Agreement and (B) the Termination Date and (iii) the
termination or expiration of all Letters of Credit and all Secured Hedge
Agreements and Secured Cash Management Agreements (such latest date, the
“Security Termination Date”), (b) be binding upon each Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (c), any Lender Party may assign or otherwise transfer
all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the
Advances

 

25

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

owing to it and the Note or Notes, if any, held by it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender Party herein or otherwise, in each case as
provided and subject to the conditions in Section 10.07 of the Credit Agreement.

Section 25. Release; Termination. (a) Upon any sale, lease, transfer or other
disposition of any item of Collateral of any Grantor in accordance with the
terms of the Loan Documents (other than sales of Inventory in the ordinary
course of business), the Collateral Agent will, at such Grantor’s expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that
(i) such Grantor shall have delivered to the Collateral Agent, at least two
Business Days prior to the date of the proposed release, a written request for
release with details reasonably satisfactory to the Collateral Agent (including,
without limitation, the items of Collateral being released), together with a
form of release for execution by the Collateral Agent and a certificate of such
Grantor to the effect that the transaction is in compliance with the Loan
Documents and (iii) the proceeds of any such sale, lease, transfer or other
disposition required to be applied, or any payment to be made in connection
therewith, in accordance with Section 2.07 of the Credit Agreement shall, to the
extent so required, be paid or made to, or in accordance with the instructions
of, the Collateral Agent when and as required under Section 2.07 of the Credit
Agreement.

(b) Upon the Security Termination Date, the pledge and security interest granted
hereby shall automatically terminate and all rights to the Collateral shall
revert to the applicable Grantor. Upon any such termination, the Collateral
Agent will, at the applicable Grantor’s expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such
termination.

Section 26. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier, .pdf or electronic mail shall be effective as delivery
of an original executed counterpart of this Agreement.

Section 27. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

[Signature pages follow]

 

26

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

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

 

NEUSTAR, INC. By   /s/ Paul S. Lalljie Title:   Senior Vice President, Chief
Financial Officer

[Signature Page to Security Agreement]

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

Address for Notices:

21575 Ridgetop Circle

Sterling, VA 20166

    NEUSTAR IP INTELLIGENCE, INC.     By   /s/ Paul S. Lalljie      

Title: Senior Vice President, Chief

Financial Officer

     

 

Address for Notices:

21575 Ridgetop Circle

Sterling, VA 20166

    ULTRADNS CORPORATION     By   /s/ Paul S. Lalljie      

Title: Senior Vice President, Chief

Financial Officer

 

Address for Notices:

8010 Towers Crescent Drive

Suite 500

Vienna, VA 22182

    NEUSTAR INFORMATION SERVICES INC.     By   /s/ Paul S. Lalljie      

Title: Senior Vice President, Chief

Financial Officer

 

Address for Notices:

8010 Towers Crescent Drive

Suite 500

Vienna, VA 22182

    NEUSTAR DATA SERVICES, INC.     By   /s/ Paul S. Lalljie      

Title: Senior Vice President, Chief

Financial Officer

[Signature Page to Security Agreement]

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

Exhibit A to the

Security Agreement

FORM OF SECURITY AGREEMENT SUPPLEMENT

[Date of Security Agreement Supplement]

Morgan Stanley Senior Funding, Inc.,

as the Collateral Agent for

the Secured Parties referred to in the

Credit Agreement referred to below

[                    ]

Attn: [                    ]

NEUSTAR, INC.

Ladies and Gentlemen:

Reference is made to (i) the Credit Agreement dated as of January 22, 2013 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Neustar, Inc., a Delaware corporation, as
the Borrower, the Lender Parties party thereto, Morgan Stanley Senior Funding,
Inc., as collateral agent (together with any successor collateral agent
appointed pursuant to Article VIII of the Credit Agreement, the “Collateral
Agent”), and Morgan Stanley Senior Funding, Inc., as administrative agent for
the Lender Parties, and (ii) the Security Agreement dated January 22, 2013 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement”) made by the Grantors from time to time party
thereto in favor of the Collateral Agent for the Secured Parties. Terms defined
in the Credit Agreement or the Security Agreement and not otherwise defined
herein are used herein as defined in the Credit Agreement or the Security
Agreement.

SECTION 1. Grant of Security. The undersigned hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in
all of its right, title and interest in and to the following, in each case
whether now owned or hereafter acquired by the undersigned, wherever located and
whether now or hereafter existing or arising (collectively, the undersigned’s
“Collateral”): all Equipment, Inventory, Receivables, Related Contracts,
Security Collateral (including, without limitation, the shares of stock and
other Equity Interests set forth on Part I of Schedule I hereto, the
indebtedness set forth on Part II of Schedule I hereto and the deposit accounts
and securities accounts set forth on Schedules II and III hereto), Agreement
Collateral, Account Collateral, Intellectual Property Collateral (including,
without limitation, each property set forth on Schedule IV hereto), IP
Agreements, Commercial Tort Claims Collateral (including, without limitation,
the commercial tort claims described in Schedule V

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

hereto), all books and records (including, without limitation, customer lists,
credit files, printouts and other computer output materials and records) of the
undersigned pertaining to any of the undersigned’s Collateral, and all proceeds
of, collateral for, income, royalties and other payments now or hereafter due
and payable with respect to, and supporting obligations relating to, any and all
of the undersigned’s Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in this Section 1) and, to the extent not otherwise included, all
(A) payments under insurance (whether or not the Collateral Agent is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing Collateral,
and (B) cash; provided that, with respect to each Contractor Services Agreement,
the provisions hereof and the grant or provision with respect to enforcement of
a security interest therein shall not impose upon the relevant Grantor, any
obligations in addition to or different than those set forth in the Contractor
Services Agreement, or preclude such Grantor from dealing solely and directly
with the parties thereto in all matters pertaining to such Contractor Services
Agreement, including the negotiation of amendments and the settlement of
disputed invoices and provided further, that the enforcement of any security
interest in any Contractor Services Agreement hereunder, to the extent such
enforcement involves the assignment or subcontracting of any duties or
obligations of any party to such Contractor Services Agreement, shall require
the prior written consent of the other parties thereto (other than Grantor,
which consent is hereby provided).

SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral by the undersigned under this Security Agreement Supplement and the
Security Agreement secures the payment of all Obligations of the undersigned now
or hereafter existing under or in respect of the Loan Documents, Secured Hedge
Agreements and Secured Cash Management Agreements, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, premiums, penalties, fees, indemnifications, contract causes of
action, costs, expenses or otherwise. Without limiting the generality of the
foregoing, this Security Agreement Supplement and the Security Agreement secures
the payment of all amounts that constitute part of the Secured Obligations and
that would be owed by the undersigned to any Secured Party under the Loan
Documents, Secured Hedge Agreements and Secured Cash Management Agreements but
for the fact that such Secured Obligations are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving a Loan Party.

SECTION 3. Representations and Warranties. (a) As of the date hereof, the
undersigned’s exact legal name, the locations of Collateral (other than goods
(including Inventory and Equipment) in transit or out for repair or maintenance
and Collateral with a value not to exceed $15,000,000 in the aggregate), chief
executive office, type of organization, jurisdiction of organization and
organizational identification number is set forth in Schedule VI hereto. As of
the date hereof, the undersigned has no trade names other than as listed on
Schedule IV hereto. Within the five years preceding the date hereof, the
undersigned has not changed its name, chief executive office, type of
organization, jurisdiction of organization or organizational identification
number from those set forth in Schedule VI hereto except as set forth in
Schedule VII hereto.

 

2

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

(b) As of the date hereof, all of the Equipment and Inventory (other than goods
(including Inventory and Equipment) in transit or out for maintenance or repair
and Collateral with a value not to exceed $15,000,000 in the aggregate) of the
undersigned are located at the places specified therefor in Schedule VI hereto
or at another location as to which the undersigned has complied with the
requirements of Section 10(a) of the Security Agreement. The undersigned has
exclusive possession and control of its Equipment and Inventory (other than
goods (including Inventory and Equipment) in transit or out for maintenance or
repair and Collateral with a value not to exceed $15,000,000 in the aggregate),
other than Collateral stored at any leased premises or warehouse for which the
undersigned has used commercially reasonable efforts to deliver a landlord’s or
warehouseman’s agreement, in form and substance reasonably satisfactory to the
Collateral Agent.

(c) Except for letters of credit the aggregate face amounts of which do not
exceed $7,500,000 for all Grantors, the undersigned is not a beneficiary or
assignee under any letter of credit, other than the letters of credit described
in Schedule IX hereto and additional letters of credit as to which such Grantor
has complied with the requirements of Section 16 of the Security Agreement.

(d) The undersigned hereby makes each other representation and warranty set
forth in Section 8 of the Security Agreement in all material respects (except to
the extent any such representation and warranty is itself subject to a
“materiality” or “Material Adverse Effect” standard, in which case such
representation and warranty shall be true and correct) (each Schedule thereto
being supplemented with the corresponding Schedule hereto as set forth in
Section 4) with respect to itself and the Collateral granted by it; provided
that references to the Closing Date shall be deemed to be references to the date
of this Security Agreement Supplement for purposes hereof and that any
representation or warranty specifically referring to any other earlier date
shall be made in all material respects as of such date (except to the extent any
such representation and warranty is itself subject to a “materiality” or
“Material Adverse Effect” standard, in which case such representation and
warranty shall be true and correct as of such date).

SECTION 4. Obligations Under the Security Agreement. The undersigned hereby
agrees, as of the date first above written, to be bound as a Grantor by all of
the terms and provisions of the Security Agreement to the same extent as each of
the other Grantors. The undersigned further agrees, as of the date first above
written, that each reference in the Security Agreement to an “Additional
Grantor” or a “Grantor” shall also mean and be a reference to the undersigned,
that each reference to the “Collateral” or any part thereof shall also mean and
be a reference to the undersigned’s Collateral or part thereof, as the case may
be, and that each reference in the Security Agreement to a Schedule shall also
mean and be a reference to the corresponding Schedule attached hereto.

SECTION 6. Governing Law. This Security Agreement Supplement shall be governed
by, and construed in accordance with, the laws of the State of New York.

 

3

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

Very truly yours, [NAME OF ADDITIONAL GRANTOR] By    

 

Title:   Address for notices:            

 

4

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

Exhibit B to the

Security Agreement

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “IP Security
Agreement”) dated January 22, 2013, is made by the Persons listed on the
signature pages hereof (collectively, the “Grantors”) in favor of MORGAN STANLEY
SENIOR FUNDING, INC. (“MSSF”), as collateral agent (the “Collateral Agent”) for
the Secured Parties (as defined in the Credit Agreement referred to below).

WHEREAS, Neustar, Inc., a Delaware corporation, has entered into a Credit
Agreement dated as of January 22, 2013 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
with MSSF, as Administrative Agent, MSSF, as Collateral Agent, and the Lender
Parties party thereto. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein as defined in the Credit Agreement.

WHEREAS, as a condition precedent to the making of Advances and the issuance of
Letters of Credit by the Lender Parties under the Credit Agreement, the entry
into Secured Hedge Agreements by the Hedge Banks and the entry into Secured Cash
Management Agreements by the Cash Management Banks from time to time, each
Grantor has executed and delivered that certain Security Agreement dated
January 22, 2013 made by the Grantors to the Collateral Agent (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”).

WHEREAS, under the terms of the Security Agreement, the Grantors have granted to
the Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, among other property, certain intellectual property of the
Grantors, and have agreed as a condition thereof to execute this IP Security
Agreement for recording with the U.S. Patent and Trademark Office, the United
States Copyright Office and other governmental authorities.

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

SECTION 1. Grant of Security. Each Grantor hereby grants to the Collateral Agent
for the ratable benefit of the Secured Parties a security interest in all of
such Grantor’s right, title and interest in and to the following (the
“Collateral”):

(i) the patents and patent applications set forth in Schedule A hereto (the
“Patents”);

(ii) the trademark and service mark registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together with the goodwill
symbolized thereby (the “Trademarks”);

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

(iii) all copyrights, copyright registrations and applications and exclusive
copyright licenses set forth in Schedule C hereto (the “Copyrights”);

(iv) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto;

(v) any and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages; and

(vi) any and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral of or arising from any of
the foregoing.

SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral by each Grantor under this IP Security Agreement secures the payment
of all Obligations of such Grantor now or hereafter existing under or in respect
of the Loan Documents, whether direct or indirect, absolute or contingent, and
whether for principal, reimbursement obligations, interest, premiums, penalties,
fees, indemnifications, contract causes of action, costs, expenses or otherwise
(all such Obligations being the “Secured Obligations”). Without limiting the
generality of the foregoing, this IP Security Agreement secures, as to each
Grantor, the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by such Grantor to any Secured Party under
the Loan Documents but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.

SECTION 3. Recordation. Each Grantor authorizes and requests that the Register
of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.

SECTION 4. Execution in Counterparts. This IP Security Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement.

SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has been
entered into in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the security
interest hereunder to, and the rights and remedies of, the Collateral Agent with
respect to the Collateral are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated herein by reference as if
fully set forth herein.

 

2

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

SECTION 6. Governing Law. This IP Security Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

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

 

NEUSTAR, INC. By      

Name:

Title:

 

Address for Notices:

21575 Ridgetop Circle

Sterling, VA 20166

[NAME OF GRANTOR] By      

Name:

Title:

 

Address for Notices:      

 

[NAME OF GRANTOR] By      

Name:

Title:

 

Address for Notices:      

 

3

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

Exhibit C to the

Security Agreement

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT

This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this “IP Security
Agreement Supplement”) dated [            ] [    ], 20[    ], is made by the
Person listed on the signature page hereof (the “Grantor”) in favor of MORGAN
STANLEY SENIOR FUNDING, INC. (“MSSF”), as collateral agent (the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement referred to
below).

WHEREAS, Neustar, Inc, a Delaware corporation, has entered into a Credit
Agreement dated as of January 22, 2013 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
with MSSF, as Administrative Agent, MSSF, as Collateral Agent, and the Lender
Parties party thereto. Terms defined in the Credit Agreement and not otherwise
defined herein are used herein as defined in the Credit Agreement.

WHEREAS, pursuant to the Credit Agreement, the Grantor and certain other Persons
have executed and delivered that certain Security Agreement dated January 22,
2013 made by the Grantor and such other Persons to the Collateral Agent (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement”) and that certain Intellectual Property Security
Agreement dated January 22, 2013 (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “IP Security Agreement”).

WHEREAS, under the terms of the Security Agreement, the Grantor has granted to
the Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in the Additional Collateral (as defined in Section 1 below) of the
Grantor and has agreed as a condition thereof to execute this IP Security
Agreement Supplement for recording with the U.S. Patent and Trademark Office,
the United States Copyright Office and other governmental authorities.

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

SECTION 1. Grant of Security. Each Grantor hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in
all of such Grantor’s right, title and interest in and to the following (the
“Additional Collateral”):

(i) the patents and patent applications set forth in Schedule A hereto (the
“Patents”);

(ii) the trademark and service mark registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in United
States intent-to-use trademark applications to the extent that, and solely
during the period in which, the grant of a security interest therein would
impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together with the goodwill
symbolized thereby (the “Trademarks”);

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

(iii) the copyright registrations and applications and exclusive copyright
licenses set forth in Schedule C hereto (the “Copyrights”);

(iv) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto;

(v) all any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages; and

(vi) any and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the foregoing or arising from any of the
foregoing.

SECTION 2. Security for Obligations. The grant of a security interest in the
Additional Collateral by the Grantor under this IP Security Agreement Supplement
secures the payment of all Obligations of the Grantor now or hereafter existing
under or in respect of the Loan Documents, whether direct or indirect, absolute
or contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.

SECTION 3. Recordation. The Grantor authorizes and requests that the Register of
Copyrights, the Commissioner for Patents and the Commissioner for Trademarks and
any other applicable government officer to record this IP Security Agreement
Supplement.

SECTION 4. Grants, Rights and Remedies. This IP Security Agreement Supplement
has been entered into in conjunction with the provisions of the Security
Agreement. The Grantor does hereby acknowledge and confirm that the grant of the
security interest hereunder to, and the rights and remedies of, the Collateral
Agent with respect to the Additional Collateral are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated herein by
reference as if fully set forth herein.

SECTION 5. Governing Law. This IP Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the State of New
York.

 

2

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

IN WITNESS WHEREOF, the Grantor has caused this IP Security Agreement Supplement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

 

By      

    Name:

    Title:

 

Address for Notices:      

 

3