Exhibit 10.12

EXECUTION COPY

AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as the same may be
amended, restated, supplemented or otherwise modified from time to time, this
“Security Agreement”) is entered into as of July 22, 2011 by and among YRC
Worldwide Inc., a Delaware corporation (the “Borrower”), the Subsidiaries of the
Borrower listed on the signature pages hereto (together with the Borrower, the
“Initial Grantors,” and together with any additional Subsidiaries, whether now
existing or hereafter acquired or formed, which become parties to this Security
Agreement by executing a Security Agreement Supplement hereto in substantially
the form of Annex I, the “Grantors”), and JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, a national banking association, in its capacity as administrative
agent (the “Administrative Agent”) and as collateral agent (the “Collateral
Agent”) for itself and for the Holders of Secured Obligations.

PRELIMINARY STATEMENT

WHEREAS, the Borrower, the financial institutions party thereto (collectively,
the “Lenders”), and the Administrative Agent have entered into that certain
Credit Agreement dated as of August 17, 2007 (as amended, restated, amended and
restated, supplemented or otherwise modified prior to the date hereof, the
“Existing Credit Agreement”);

WHEREAS, in connection with the Existing Credit Agreement, the Grantors have
entered into that certain Pledge and Security Agreement, dated as of August 6,
2008 among the Grantors and the Collateral Agent (as amended, restated, amended
and restated, supplemented or otherwise modified prior to the date hereof, the
“Existing Pledge and Security Agreement”) to secure their obligations to the
Holders of Secured Obligations pursuant to the terms of the Existing Pledge and
Security Agreement;

WHEREAS, the Grantors, other than the Borrower, have guaranteed the repayment of
the Secured Obligations pursuant to that certain Amended and Restated Subsidiary
Guarantee Agreement dated as of February 12, 2009 (as the same may be amended,
restated, amended and restated, supplemented, renewed, replaced, extended,
restructured or otherwise modified from time to time, the “Guaranty”);

WHEREAS, the Borrower, the Lenders and the Administrative Agent have agreed to
amend and restate the Existing Credit Agreement pursuant to the certain Amended
and Restated Credit Agreement dated as of the date hereof (as the same may be
amended, restated, amended and restated, supplemented, renewed, replaced,
extended, restructured or otherwise modified from time to time, the “Credit
Agreement”);

WHEREAS, the parties hereto wish to amend and restate the Existing Pledge and
Security Agreement in its entirety;

WHEREAS, each Grantor has agreed to grant and, to the extent applicable,
reaffirm its prior grant of, a security interest in all or substantially all of
its personal property and to pledge and, to the extent applicable, reaffirm its
prior pledge of, its capital stock, membership interests or partnership
interests in certain of its Subsidiaries to the Collateral Agent, for the
benefit of the Holders of Secured Obligations, as security for the Secured
Obligations and the “Guaranteed Obligations” (as defined in the Guaranty); and

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WHEREAS, the Administrative Agent and the Lenders have required, as a condition,
among others, to the effectiveness of the Credit Agreement and the other Loan
Documents, that each Grantor execute and deliver this Security Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantors and the Collateral Agent on behalf of the Holders of
Secured Obligations, hereby agree as follows:

ARTICLE I

DEFINITIONS; AMENDMENT AND RESTATEMENT; REAFFIRMATION

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

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

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

“ABL Documents” has the meaning given such term in the Intercreditor Agreement.

“ABL Representative” has the meaning given to such term in the Intercreditor
Agreement.

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

“Administrative Agent” means JPMorgan Chase Bank, National Association in its
capacity as administrative agent under the Credit Agreement.

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

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

“Collateral” means all Accounts, Chattel Paper, Commercial Tort Claims,
Copyrights, Deposit Accounts, Documents, Equipment (including, without
limitation, all Tractor Trailers), Farm Products, Fixtures, General Intangibles,
Goods, Instruments, Inventory, Investment Property, letters of credit,
Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Receivables,
Supporting Obligations, Trademarks and Other Collateral, wherever located, in
which any Grantor now has or hereafter acquires any right or interest, and the
proceeds (including Stock Rights), insurance proceeds and products thereof,
together with all books and records, customer lists, credit files, computer
files, programs, printouts and other computer materials and records related
thereto; provided, that, Collateral shall exclude Identified Collateral until
the Collateral Agent delivers to the Borrower written notice that Collateral
shall include Identified Collateral, and, following delivery of such notice,
Identified Collateral shall be, and shall be deemed to be, Collateral for all
purposes of this Security Agreement; provided, further, that, notwithstanding
the foregoing, Collateral shall exclude the Excluded Property.

 

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“Commercial Tort Claims” means commercial tort claims, as defined in the UCC of
any Grantor, including each commercial tort claim specifically described in
Exhibit “F”; provided, that, notwithstanding the foregoing, Commercial Tort
Claims shall exclude the Excluded Property.

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

“Convertible Note Documents” has the meaning given such term in the
Intercreditor Agreement.

“Convertible Note Representative” has the meaning given such term in the
Intercreditor Agreement.

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

“Default” means an event described in Section 5.1(a) hereof.

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

“Deposit Account Control Agreement” means an agreement among any Grantor, a
banking institution holding such Grantor’s funds, the Collateral Agent, the
Convertible Note Representative, if any, and the ABL Representative, if any and
to the extent applicable, with respect to collection and Control of all deposits
and balances held in all deposit accounts maintained by such Grantor with such
banking institution (other than deposit accounts constituting Excluded
Property).

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

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

“Event of Default” means an event described in Section 5.1(b) hereof.

“Excluded Property” shall have the meaning assigned to such term in the Credit
Agreement.

“Exhibit” refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced, and each reference herein to an
Exhibit, as it relates to a Grantor, shall mean, as of the relevant date of
reference, the portion of such Exhibit or, after the date hereof, modifications
thereto, as the case may be, as shall be set forth in the relevant and current
information relating to such Grantor as such information is provided by such
Grantor or the Borrower to the Collateral Agent, (a) upon such Grantor becoming
a party hereto, and (b) following changes, additions and other revisions thereto
to the extent required and within such time period as required pursuant to the
terms hereof.

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

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

 

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“General Intangibles” shall have the meaning set forth in Article 9 of the UCC
and, in any event, includes payment intangibles, contract rights, rights to
payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill (including the goodwill associated with any
Trademark), Patents, Trademarks, Copyrights, URLs and domain names, Industrial
Designs, other industrial or Intellectual Property or rights therein or
applications therefor, whether under license or otherwise, programs, programming
materials, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, including Intellectual Property
Licenses, infringement claims, computer programs, information contained on
computer disks or tapes, software, literature, reports, catalogs, pension plan
refunds, pension plan refund claims, insurance premium rebates, tax refunds, and
tax refund claims, interests in a partnership or limited liability company which
do not constitute a security under Article 8 of the Code, and any other personal
property other than Commercial Tort Claims, money, Accounts, Chattel Paper,
Deposit Accounts, Goods, Investment Property, Documents, Instruments,
Letter-of-Credit Rights, letters of credit, and oil, gas, or other minerals
before extraction.

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

“Identified Collateral” means any issued and outstanding Equity Interests of any
Foreign Subsidiary (other than up to 65% of the issued and outstanding Equity
Interests of any First Tier Foreign Subsidiary) to the extent directly owned by
a Grantor).

“Industrial Designs” means (a) registered industrial designs and industrial
design applications, and also includes registered industrial designs and
industrial design applications listed in Exhibit “B”, (b) all renewals,
divisions and any industrial design registrations issuing thereon and any and
all foreign applications corresponding thereto, (c) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past or future infringements thereof,
(d) the right to sue for past, present and future infringements thereof, and
(e) all of each Grantor’s rights corresponding thereto throughout the world;
provided, that, notwithstanding the foregoing, Industrial Designs shall exclude
the Excluded Property.

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

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

“Intercreditor Agreement” means the Amended and Restated Intercreditor
Agreement, dated as of July 22, 2011, among the Convertible Note Representative,
the ABL Representative, the Pension Fund Representative (as defined therein),
the Collateral Agent and the Borrower and certain of its Subsidiaries, as the
same may be amended, restated, amended and restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof.

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

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

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

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

 

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“Other Collateral” means any property of the Grantors, not included within the
defined terms Accounts, Chattel Paper, Commercial Tort Claims, Copyrights,
Deposit Accounts, Documents, Equipment, Fixtures, Farm Products, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Licenses, Patents, Pledged Deposits, Receivables,
Supporting Obligations and Trademarks, including, without limitation, all cash
on hand, letters of credit, Stock Rights or any other deposits (general or
special, time or demand, provisional or final) with any bank or other financial
institution, it being intended that the Other Collateral (and the Collateral)
include all real and personal property of the Grantors; provided, that,
notwithstanding the foregoing, Other Collateral shall exclude the Excluded
Property.

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

“Pension Fund Documents” has the meaning given such term in the Intercreditor
Agreement.

“Pledged Deposits” means all time deposits of money (other than Deposit Accounts
and Instruments), whether or not evidenced by certificates, which a Grantor may
from time to time designate as pledged to the Collateral Agent or to any Holder
of Secured Obligations as security for any Secured Obligations, and all rights
to receive interest on said deposits; provided, that, notwithstanding the
foregoing, Pledged Deposits shall exclude the Excluded Property.

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

“Rolling Stock” means any railroad car, locomotive, stacktrain or other rolling
stock, or accessories used on such railroad cars, locomotives or other rolling
stock (including superstructures and racks); provided that, Rolling Stock shall
exclude Tractor Trailers.

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

“Secured Obligations” shall have the meaning assigned to such term in the Credit
Agreement.

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

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

“Securities Account Control Agreement” means an agreement among any Grantor, a
securities intermediary with which any Grantor maintains a Securities Account,
the Collateral Agent and the Convertible Note Representative, if any, and to the
extent applicable, with respect to collection and Control of all assets held in
such Securities Account maintained by such Grantor with such securities
intermediary.

 

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“Stock Rights” means any securities, dividends, instruments or other
distributions and any other right or property which any Grantor shall receive or
shall become entitled to receive for any reason whatsoever with respect to, in
substitution for or in exchange for any securities or other ownership interests
in a corporation, partnership, joint venture or limited liability company
constituting Collateral and any securities, any right to receive securities and
any right to receive earnings, in which any Grantor now has or hereafter
acquires any right, issued by an issuer of such securities; provided, that,
notwithstanding the foregoing, Stock Rights shall exclude the Excluded Property.

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

“Tractor Trailers” shall mean any vehicle, truck, tractor, trailer, tank trailer
or other trailer, or similar vehicle or trailer.

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

“Vehicle Title Custodian Agreement” has the meaning given such term in the
Credit Agreement.

Unless the context otherwise requires (a) words in the singular include the
plural, and words in the plural include the singular, (b) “or” is not exclusive,
(c) “including” means including, without limitation, and (d) the words “herein,”
“hereof” and “hereunder” refer to this Security Agreement as a whole and not to
any particular article or section hereof.

1.4. Amendment and Restatement. Each of the undersigned, by its signature below,
hereby (i) agrees that this Security Agreement and the transactions contemplated
hereby shall not limit or diminish the obligations of such Person arising under
or pursuant to the Existing Pledge and Security Agreement, except to the extent
limited or diminished herein, (ii) reaffirms all of its obligations under the
Existing Pledge and Security Agreement, except to the extent such obligations
have been limited, diminished or otherwise modified herein, (iii) reaffirms all
Liens on the Collateral which have been granted by it in favor of the Collateral
Agent (for itself and the other Holders of Secured Obligations) pursuant to the
Existing Pledge and Security Agreement as more specifically described in
Section 2 below, and (iv) acknowledges and agrees that, subject to the
amendments and other modifications herein, the Existing Pledge and Security
Agreement and the instruments, documents and agreements executed or delivered in
connection therewith remain in full force and effect and is hereby reaffirmed,
ratified and confirmed.

1.5. Reaffirmation of Loan Documents. Each of the undersigned, by its signature
below, hereby (a) acknowledges and consents to the execution and delivery of
each of the instruments, documents and agreements required in connection with
the Credit Agreement, (b) agrees that the Credit Agreement and the transactions
contemplated thereby shall not limit or diminish the obligations of such Person
arising under or pursuant to the Collateral Documents and the other Loan
Documents to which it is a party except to the extent limited or diminished in
any amendments or amendments and restatements thereto, (c) reaffirms all of its
obligations under the Loan Documents to which it is a party, except to the
extent such obligations have been limited, diminished or otherwise modified
therein, (d) reaffirms all Liens on any collateral (including the Collateral)
which have been granted by it in favor of the

 

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Administrative Agent pursuant to any of the Loan Documents, and (e) acknowledges
and agrees that, , subject to the amendments and other modifications thereto,
each Loan Document executed by it remains in full force and effect and is hereby
reaffirmed, ratified and confirmed.

ARTICLE II

GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, collaterally assigns and grants to the Collateral
Agent, on behalf of and for the benefit of the Holders of Secured Obligations, a
security interest in all of such Grantor’s right, title and interest, whether
now owned or hereafter acquired, in and to the Collateral to secure the prompt
and complete payment and performance when due of the Secured Obligations. For
the avoidance of doubt, the grant of a security interest herein shall not be
deemed to be an assignment of intellectual property rights owned by the
Grantors.

Without limiting the foregoing, each of the Grantors hereby regrants, confirms,
ratifies and reaffirms the Liens granted to Collateral Agent, for the benefit of
the Holders of Secured Obligations, pursuant to the Existing Pledge and Security
Agreement in all of its right, title, and interest in all then existing and
thereafter acquired or arising Collateral in order to secure the prompt payment,
performance and observance of the Secured Obligations, and confirms, ratifies
and reaffirms that such Liens are continuing and are and shall remain unimpaired
and continue to constitute fully perfected Liens in favor of Collateral Agent,
for the benefit of the Holders of Secured Obligations, with the same force,
effect and priority in effect both immediately prior to and after entering into
this Security Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each of the Initial Grantors represents and warrants to the Collateral Agent,
and each Grantor that becomes a party to this Security Agreement pursuant to the
execution of a Security Agreement Supplement in substantially the form of Annex
I (a “Security Agreement Supplement”) represents and warrants (after giving
effect to supplements to each of the Exhibits hereto with respect to such
subsequent Grantor as attached to such Security Agreement Supplement and as
otherwise necessitated or required), that, with respect to such Grantor:

3.1. Title, Authorization, Validity and Enforceability. Such Grantor has good
and valid title to or rights in or the power to transfer the Collateral material
to its business with respect to which it has purported to grant a security
interest hereunder, free and clear of all Liens except for Liens permitted under
Section 4.1.6 hereof, and has the corporate or equivalent power and authority to
execute and deliver this Security Agreement, to perform its obligations
hereunder and to grant to the Collateral Agent the security interest in such
Collateral pursuant hereto. The execution and delivery by such Grantor of this
Security Agreement and the performance of its obligations hereunder have been
duly authorized by proper corporate, partnership, limited partnership or limited
liability company proceedings, and this Security Agreement constitutes a legal,
valid and binding obligation of such Grantor and creates a security interest
which is enforceable against such Grantor in all of such Grantor’s Collateral,
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
the enforcement of creditors’ rights generally and subject to general principles
of equity regardless of whether considered in a proceeding in equity or at law.
When appropriate financing statements designating such Grantor as “debtor”
therein and Collateral Agent as “secured party” therein have been properly
completed and filed in the appropriate governmental offices designated for such
Grantor in Exhibit “E”, the Collateral Agent will have a valid and perfected

 

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first priority security interest in such Grantor’s Collateral in which a
security interest may be perfected by filing of a financing statement under the
UCC, in each case subject only to Liens permitted under Section 4.1.6 hereof.

3.2. Conflicting Laws and Contracts. None of the execution and delivery by such
Grantor of this Security Agreement, the creation and perfection of the security
interest in such Grantor’s Collateral granted hereunder, nor the consummation of
the transactions herein contemplated, nor compliance with the provisions hereof
will (i) violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on such Grantor or any of its subsidiaries or
(ii) violate such Grantor’s articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, or (iii) violate the provisions of or result in a default under any
indenture, material instrument or material agreement binding upon such Grantor
or any of its subsidiaries or its assets, or give rise to a right thereunder to
require any Material Indebtedness to be paid by the Borrower or any of its
Subsidiaries, or (iv) result in, or require, the creation or imposition of any
Lien in, of or on the property of such Grantor or a subsidiary thereof pursuant
to the terms of any such indenture, material instrument or material agreement
(other than any Lien of the Collateral Agent on behalf of the Holders of Secured
Obligations or other liens permitted by Section 6.02 of the Credit Agreement),
except in the case of clause (i) at any time after the Effective Date, to the
extent such violations could not reasonably be expected to have a Material
Adverse Effect. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by such
Grantor or any of its subsidiaries, is required to be obtained by it or any of
its subsidiaries in connection with the execution and delivery of this Security
Agreement or the performance by it of its obligations hereunder or the legality,
validity, binding effect or enforceability of this Security Agreement, except
(i) filings, recordings or registrations with the appropriate governmental
authorities required to perfect the security interests granted hereunder and
(ii) to the extent failure to do so could not reasonably be expected to have a
Material Adverse Effect.

3.3. Principal Location. As of the date such Person becomes a Grantor hereunder,
such Grantor’s mailing address and the location of its place of business (if it
has only one) or its chief executive office (if it has more than one place of
business), is disclosed in Exhibit “A”.

3.4. Property Locations.

3.4.1 As of the Effective Date (and upon the date of delivery by the Borrower of
each update of Exhibit “A” pursuant to the terms of this Security Agreement
including, without limitation, Section 4.14 hereof), the Inventory and Equipment
of each Grantor included in the Collateral (other than any such Collateral with
a net book value in an aggregate amount not to exceed $500,000 or any of same
which is in transit, subject to being repaired or in use in the ordinary course
of business) are located solely at (a) the locations owned by such Grantor
described in Part A of Exhibit “A”, (b) the locations leased by such Grantor as
lessee and designated in Part B of Exhibit “A”, or (c) in respect of such
Inventory, a public warehouse or otherwise held by a bailee or on consignment by
such Grantor as designated in Part C of Exhibit “A”, with respect to which such
Inventory such Grantor has delivered bailment agreements, warehouse receipts,
financing statements or other documents necessary to protect the Collateral
Agent’s security interest in such Inventory.

3.4.2 As of the Effective Date (and upon the date of delivery by the Borrower of
each update of Exhibit “A” pursuant to the terms of this Security Agreement
including, without limitation, Section 4.14 hereof), the Fixtures of each
Grantor included in the Collateral (other

 

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than any such Collateral with a net book value in an aggregate amount not to
exceed $500,000 or any of same otherwise covered by other Collateral Documents)
are located solely at (a) the locations owned by such Grantor described in
Part A of Exhibit “A” and (b) the locations leased by such Grantor as lessee and
designated in Part B of Exhibit “A”.

3.4.3 Part D of Exhibit “A” sets forth all real property owned or leased by
Grantors as of the date hereof. As of the date hereof, the applicable Grantor
has delivered to the Collateral Agent a Mortgage (as defined in the Credit
Agreement) with respect to each owned real property set forth in Part D of
Exhibit “A”. With respect to each Mortgage executed and delivered to the
Collateral Agent on or before the date hereof, the applicable Grantor has also
delivered to the Collateral Agent (a) title insurance and (b) an opinion of
counsel reasonably acceptable to the Collateral Agent, including, without
limitation, enforceability thereof and perfection of the Collateral Agent’s Lien
on the real property Collateral specified therein.

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

3.6. RESERVED.

3.7. Accounts and Chattel Paper. The names of the obligors, amounts owing, due
dates and other information with respect to the Accounts and Chattel Paper owned
by such Grantor which are included in the Collateral are correctly stated in all
material respects in all applicable records of such Grantor relating thereto and
in all invoices and reports with respect thereto furnished to the Collateral
Agent by such Grantor from time to time. As of the time when each such Account
or each item of such Chattel Paper arises, such Grantor shall be deemed to have
represented and warranted that such Account or Chattel Paper, as the case may
be, and all such records relating thereto, are genuine and in all material
respects what they purport to be.

3.8. Filing Requirements.

3.8.1 As of the Effective Date (and upon the date of delivery by the Borrower of
each update of Exhibit “B” pursuant to the terms of this Security Agreement
including, without limitation, Section 4.14 hereof), none of the Equipment
(including, without limitation, all Tractor Trailers) owned by such Grantor,
which is included in the Collateral, is covered by any certificate of title,
except for the vehicles described in Part A of Exhibit “B” and none of the
Collateral owned by such Grantor is of a type for which security interests or
liens may be perfected by filing under any federal statute except for (a) the
aircraft/engines, ships, vessels, railcars and other vehicles and other similar
equipment (including, without limitation, all Rolling Stock) described in Part B
of Exhibit “B”, (b) Patents, Trademarks and Copyrights held by such Grantor
which are included in the Collateral and described in Part C of Exhibit “B” and
(c) the other property included in the Collateral which is described in Part D
of Exhibit “B”.

3.8.2 As of the Effective Date (and upon the date of delivery by the Borrower of
each update of Exhibit “C” pursuant to the terms of this Security Agreement
including, without limitation, Section 4.14 hereof), the legal description,
county and street address of the property on which any Fixtures owned by such
Grantor, which are included in the Collateral and not otherwise covered by
another Collateral Document, are located are set forth in Exhibit “C”, together
with the name and address of the record owner of each such property.

 

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3.9. No Financing Statements; Security Agreements; Mortgages. No financing
statement, security agreement or mortgage describing all or any portion of the
Collateral which has not lapsed or been terminated naming such Grantor as debtor
has been filed or is of record in any jurisdiction except financing statements,
security agreements and mortgages (a) naming the Collateral Agent on behalf of
the Holders of Secured Obligations as the secured party or (b) in respect of
Liens specifically permitted by Section 6.02 of the Credit Agreement; provided,
that nothing herein shall be deemed to constitute an agreement to subordinate
any of the Liens of the Collateral Agent under the Loan Documents to any Liens
otherwise specifically permitted under Section 6.02 of the Credit Agreement.

3.10. Federal Employer Identification Number; State Organization Number;
Jurisdiction of Organization. As of the date such Person becomes a Grantor
hereunder, such Grantor’s federal employer identification number is, and if such
Grantor is a registered organization, such Grantor’s State of organization, type
of organization and State of organization identification number are listed in
Exhibit “G”.

3.11. Pledged Securities and Other Investment Property. Exhibit “D” that
initially is delivered in connection with the original execution and delivery of
this Security Agreement (as well as each update of Exhibit “D” pursuant to the
terms of this Security Agreement including, without limitation, Section 4.14
hereof) sets forth a complete and accurate list of the Instruments, Securities
and other Investment Property constituting Collateral which were delivered to
the Collateral Agent as of the date hereof. Each Grantor is the direct and
beneficial owner of each Instrument, Security and other type of Investment
Property listed in Exhibit “D” as being owned by it, free and clear of any
Liens, except for the security interest granted to the Collateral Agent
hereunder or as specifically permitted by Section 6.02 of the Credit Agreement.
Each Grantor further represents and warrants that (a) all such Instruments,
Securities or other types of Investment Property owned by it which are shares of
stock in a corporation or ownership interests in a partnership or limited
liability company and which are included in the Collateral have been (to the
extent such concepts are relevant with respect to such Instrument, Security or
other type of Investment Property) duly authorized and validly issued, are fully
paid and, to the extent applicable, non-assessable and constitute, as of the
date hereof, the percentage of the issued and outstanding shares of stock (or
other Equity Interests) of the respective issuers thereof indicated in Exhibit
“D” hereto and (b) with respect to any certificates delivered to the Collateral
Agent representing an ownership interest in a partnership or limited liability
company, such certificates are Securities as defined in Article 8 of the UCC of
the applicable jurisdiction as a result of actions by the issuer or otherwise,
or, if such certificates are not Securities, such Grantor has so informed the
Collateral Agent so that the Collateral Agent may (but has no obligation to)
take steps to perfect its security interest therein as a General Intangible and
(iii) promptly following the reasonable request of the Administrative Agent, all
such Instruments, Securities or other types of Investment Property owned by it
which are shares of stock in a corporation or ownership interests in a
partnership or limited liability company and which are included in the
Collateral held by a securities intermediary is covered by a Securities Account
Control Agreement pursuant to which the Collateral Agent has Control.

3.12. Intellectual Property. As of the Effective Date (and upon the date of
delivery by the Borrower of each update of Exhibit “B” pursuant to the terms of
this Security Agreement including, without limitation, Section 4.14 hereof):

3.12.1 Part C of Exhibit “B” contains a complete and accurate listing of all
Intellectual Property for which a registration has issued to, an application for
registration has been filed by, a patent has issued to, or an application for
patent has been filed by, such Grantor and which are

 

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included in the Collateral, including to the extent applicable, but not limited
to the following: (a) state, U.S. and foreign trademark registrations and
applications for trademark registration owned by such Grantor, (b) U.S. and
foreign patents and patents applications, together with all reissuances,
continuations, continuations in part, revisions, extensions, and reexaminations
thereof owned by such Grantor, (c) U.S. and foreign copyright registrations and
applications for registration made by such Grantor, (d) foreign industrial
design registrations and industrial design applications owned by such Grantor,
(e) domain names owned by such Grantor, (f) proprietary computer software of
such Grantor, (g) all forms of Intellectual Property described in clauses
(a)-(c) above, to the extent (i) such Grantor has actual knowledge of
information and other relevant facts necessary to make a determination of
whether such Intellectual Property is of a form described by any of such clauses
and (ii) such Grantor is not restricted in disclosing such information, that are
owned by a third party and licensed to a Grantor, and (i) the name of any Person
who has been granted rights in respect thereof outside of the ordinary course of
business to any of the Intellectual Property referred to in clauses
(a)-(g) above, to the extent that the disclosure of such name is not restricted.
All of such U.S. registrations, applications for registration or applications
for issuance of the Intellectual Property of a Grantor are valid and subsisting,
in good standing and are recorded or are in the process of being recorded in the
name of the applicable Grantor to the extent material to the business of such
Grantor.

3.12.2 Intellectual Property owned by such Grantor and included in the
Collateral is valid, subsisting, unexpired (where registered) and enforceable
and has not been abandoned or adjudged invalid or unenforceable, in whole or in
part, except as could not be reasonably expected to result in a Material Adverse
Effect.

3.12.3 Except as otherwise permitted by the Credit Agreement, no Person other
than such Grantor has any right or interest of any kind or nature in or to the
Intellectual Property owned by such Grantor and included in the Collateral,
including any right to sell, license, lease, transfer, distribute, use or
otherwise exploit such Intellectual Property or any portion thereof outside of
the ordinary course of the respective Grantor’s business. Such Grantor has good
and indefeasible title to, and the valid and enforceable power and right to
sell, license, transfer, distribute, use and otherwise exploit, Intellectual
Property owned by such Grantor and included in the Collateral, except where such
failure could not reasonably be expected to have a Material Adverse Effect.

3.12.4 Such Grantor has taken or caused to be taken steps so that none of the
Intellectual Property owned by such Grantor and included in the Collateral, the
value of which to such Grantor is contingent upon maintenance of the
confidentiality thereof, has been disclosed by such Grantor to any Person other
than employees, contractors, customers, representatives and agents of the
Grantors who are parties to customary confidentiality and nondisclosure
agreements with such Grantor, except where such disclosures, individually or in
the aggregate, could not be reasonably expected to result in a Material Adverse
Effect.

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

3.12.6 No settlement or consents, covenants not to sue, nonassertion assurances,
or releases have been entered into by such Grantor or to which such Grantor is
bound that adversely

 

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affects its rights to own or use any Intellectual Property owned by such Grantor
and included in the Collateral, except as could not be reasonably expected to
result in a Material Adverse Effect, in each case individually or in the
aggregate.

3.12.7 Such Grantor has not received any written notice that remains outstanding
challenging the validity, enforceability, or ownership of any Intellectual
Property owned by such Grantor and included in the Collateral, except where
those challenges could not reasonably be expected to result in a Material
Adverse Effect, and to such Grantor’s knowledge as of the date of delivery of
Part C of Exhibit “B” or the date thereafter that such Person becomes a Grantor
hereunder, whichever shall later occur, there are no facts upon which such a
challenge could be made.

3.12.8 Such Grantor owns directly or is entitled to use, by license or
otherwise, all Intellectual Property necessary for the conduct of such Grantor’s
business, and the consummation of the transactions contemplated by this Security
Agreement will not result in the termination or material impairment of any such
Intellectual Property owned by such Grantor and included in the Collateral.

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

3.12.10 The consummation of the transactions contemplated by Loan Documents will
not result in the termination or impairment of any of the Intellectual Property
in any material respect.

3.13. Commercial Tort Claims. As of the Effective Date (and upon the date of
delivery by the Borrower of each update of Exhibit “F” pursuant to the terms of
this Security Agreement including, without limitation, Section 4.14 hereof),
except as set forth in Exhibit “F”, such Grantor owns no Commercial Tort Claims
of a value greater than $1,000,000 which have arisen in the course of such
Grantor’s business.

3.14. Deposit Accounts and Securities Accounts. As of the Effective Date (and
upon the date of delivery of each update to Exhibit “H” pursuant to the terms of
this Security Agreement including, without limitation, Section 4.14 hereof), all
of such Grantor’s Deposit Accounts, Securities Accounts and the respective
approximate account balances are listed on Exhibit “H”.

3.15. Recourse. This Security Agreement is made with full recourse to each
Grantor and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of such Grantor contained herein and in the other
Loan Documents.

3.16. Rolling Stock. As of the Effective Date, neither the Borrower nor any
Subsidiary owns any Rolling Stock.

 

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ARTICLE IV

COVENANTS

From the date of this Security Agreement and thereafter until this Security
Agreement is terminated in whole or in part as to any Grantor, each of the
Initial Grantors agrees, and from and after the effective date of any Security
Agreement Supplement applicable to any Grantor (and after giving effect to
supplements to each of the Exhibits hereto with respect to such subsequent
Grantor as attached to such Security Agreement Supplement or otherwise hereto),
each such subsequent Grantor agrees, with respect to itself:

4.1. General.

4.1.1 Inspection. Such Grantor will permit the Collateral Agent, by its
representatives and agents, upon reasonable prior notice, (i) to inspect the
Collateral, (ii) to examine and make copies of the records of such Grantor
relating to the Collateral and (iii) to discuss the Collateral and the related
records of such Grantor with, and to be advised as to the same by, such
Grantor’s officers and employees (and, in the case of any Receivable included in
the Collateral and upon prior notice to the Borrower, with any Person which is
or may be obligated thereon), all at such reasonable times and as often as
reasonably requested, and, without duplication as to the related provisions set
forth in Section 5.06 of the Credit Agreement, all such examinations and
inspections, other than the first such examination or inspection or examination
occurring during any calendar year (including any such examination or inspection
occurring pursuant to Section 5.06 of the Credit Agreement) or any examination
or inspection occurring during the continuance of an Event of Default, shall be
at the Collateral Agent’s expense, and all other such examinations and
inspections shall be at such Grantor’s reasonable expense; provided, however,
such permission shall be subject to confidentiality restrictions imposed on such
Grantor by Persons other than Grantor or its Affiliates and safety requirements
and restrictions attendant to the respective Collateral.

4.1.2 Taxes. Such Grantor will pay when due all taxes, assessments and
governmental charges and levies upon the Collateral owned by such Grantor that,
if not paid, could result in a Material Adverse Effect before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) such Grantor
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

4.1.3 Records and Reports. Each Grantor shall keep and maintain complete,
accurate and proper books and records in all material respects with respect to
the Collateral owned by such Grantor, and furnish to the Collateral Agent, with
sufficient copies for each of the Holders of Secured Obligations, such reports
relating to the Collateral as the Collateral Agent shall from time to time
reasonably request.

4.1.4 Financing Statements and Other Actions; Defense of Title. Each Grantor
hereby authorizes the Collateral Agent to file, and if requested will execute
and deliver to the Collateral Agent, all financing statements describing the
Collateral owned by such Grantor and other documents and take such other actions
as may be required and from time to time reasonably be requested by the
Collateral Agent in order to maintain a first priority, perfected security
interest in and, if applicable, Control of, the Collateral owned by such
Grantor, subject to Liens specifically permitted under Section 6.02 of the
Credit Agreement, provided that nothing herein shall be

 

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deemed to constitute an agreement to subordinate any of the Liens of the
Collateral Agent under the Loan Documents to any Liens otherwise specifically
permitted under Section 6.02 of the Credit Agreement. Such financing statements
may describe the Collateral in the same manner as described herein or may
contain an indication or description of collateral that describes such property
in any other manner as reasonably necessary to ensure that the perfection of the
security interest in the Collateral granted to the Collateral Agent herein,
including, without limitation, describing such property as “all assets” or “all
personal property and other assets, whether now owned or existing or hereafter
acquired or arising, together with all products and proceeds thereof,
substitutions and replacements therefor, and additions and accessions thereto.”
Each Grantor agrees to execute all documentation reasonably required to effect
such recordations and to cause the filing of relevant certificates of title with
the appropriate state governmental agency. Each Grantor will, at its own
expense, promptly make, execute, endorse, acknowledge, file and/or deliver to
the Collateral Agent from time to time such lists, descriptions and designations
of its then owned Tractor Trailers (including certificate of title numbers and
jurisdictions of registration of each such Tractor Trailer), documents of title,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps and actions relating to such Tractor
Trailers and other property or rights covered by the security interest hereby
granted necessary to perfect, preserve or protect its security interest in such
Tractor Trailers and other property or rights. Each Grantor will take any and
all actions necessary to defend, in all material respects, title to the
Collateral owned by such Grantor against all Persons and to defend the security
interest of the Collateral Agent in such Collateral and the priority thereof
against any Lien not expressly permitted hereunder.

4.1.5 Disposition of Collateral. No Grantor will make an Asset Sale with respect
to Collateral owned by such Grantor except (a) Asset Sales specifically
permitted (or not prohibited) pursuant to Section 6.03, 6.05 and 6.06 of the
Credit Agreement, (b) subject to the terms, conditions and provisions of the
Intercreditor Agreement, until such time following the occurrence of an Event of
Default as such Grantor receives a written notice from the Collateral Agent
instructing such Grantor to cease such transactions, and so long thereafter as
such Event of Default shall remain uncured or unwaived, sales or leases of
Inventory or Equipment, which are included in the Collateral, in the ordinary
course of business, and (c) subject to the terms, conditions and provisions of
the Intercreditor Agreement, until such time as such Grantor receives a notice
from the Collateral Agent pursuant to Article VII, and so long thereafter as
such notice shall remain in effect, proceeds of Inventory and Accounts, which
are included in the Collateral, collected in the ordinary course of business
other than payment of its obligations in the ordinary course of its business.

4.1.6 Liens. No Grantor will create, incur, or permit to exist any Lien on the
Collateral owned by such Grantor except Liens specifically permitted pursuant to
Section 6.02 of the Credit Agreement, provided, that, nothing herein shall be
deemed to constitute an agreement to subordinate any of the Liens of the
Collateral Agent under the Loan Documents to any Liens otherwise specifically
permitted under Section 6.02 of the Credit Agreement.

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

 

  (i) except as permitted by Section 6.03 of the Credit Agreement, preserve its
existence and corporate structure as in effect on the Effective Date;

 

  (ii) not change its jurisdiction of organization;

 

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

 

  (iv) not (a) have any Inventory or Equipment or proceeds or products thereof
(other than any such Collateral with a net book value in an aggregate amount not
to exceed $500,000 or any of the same disposed of as permitted by Section 4.1.5)
at a location other than a location specified in Exhibit “A” (as Exhibit “A” may
be updated from time to time), except as any of same may be in transit, subject
to being repaired or in use in the ordinary course of business, (b) have any
Fixtures or proceeds or products thereof (other than any immaterial quantity or
value thereof or any of same otherwise covered by other Collateral Documents) at
a location other than a location specified in Exhibit “A”, (c) change its name
or taxpayer identification number or (d) change its mailing address,

unless, in each such case, such Grantor shall have given the Collateral Agent
not less than ten (10) days’ prior written notice of such event or occurrence
and the Collateral Agent shall have either (x) reasonably determined that, under
the circumstances and, as applicable, after giving consideration to reasonable
steps or actions taken, or that can be timely taken, by the Collateral Agent or
such Grantor, such event or occurrence will not adversely affect the validity,
perfection or priority of the Collateral Agent’s security interest in the
Collateral, or (y) taken such steps (with the cooperation of such Grantor to the
extent necessary or advisable) as are necessary or advisable to properly
maintain the validity, perfection and priority of the Collateral Agent’s
security interest in the Collateral owned by such Grantor.

4.1.8 Other Financing Statements. No Grantor will permit to exist or authorize
the filing of any financing statement naming it as debtor covering all or any
portion of the Collateral owned by such Grantor, except any financing statement
authorized or permitted under Section 4.1.4 hereof and any financing statement
filed to perfect a Lien specifically permitted under Section 6.02 of the Credit
Agreement; provided, that, nothing herein shall be deemed to constitute an
agreement to subordinate any of the Liens of the Collateral Agent under the Loan
Documents to any Liens otherwise specifically permitted under Section 6.02 of
the Credit Agreement.

4.1.9 Restriction Regarding Tractor Trailers. After the Effective Date, no
Grantor shall title any Tractor Trailers in the States of Minnesota, Utah,
Oklahoma, Nevada, Hawaii or Alaska; provided, however, that the applicable
Grantor(s) shall not be subject to the restriction in this Section 4.1.9 as to
one or more of the foregoing States provided that all Vehicle Collateral (as
defined in the Security and Collateral Agency Agreement) with respect to such
State or States shall become “Vehicle Collateral” subject to the Security and
Collateral Agency Agreement and the security interest granted in such additional
Vehicle Collateral under such Security and Collateral Agency Agreement shall be
a first priority perfected security interest and; provided further, that the
applicable Grantors shall execute and deliver such amendments, supplements,
agreements and other documents, file such financing statements and take such
other action as shall be required under both the applicable Loan Documents and
the Convertible Note Documents to effect the foregoing.

4.2. Receivables.

4.2.1 Certain Agreements on Receivables. Until such time following the
occurrence of an Event of Default and so long thereafter that such Event of
Default remains uncured or unwaived, no Grantor will make or agree to make any
discount, credit, rebate or other reduction in the original amount owing on a
Receivable included in the Collateral or accept in satisfaction

 

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of a Receivable included in the Collateral less than the original amount
thereof, other than in accordance or consistent with the existing customer
agreements entered into in the ordinary course of business and consistent with
past business practice of such Grantor. Until such time following the occurrence
and continuation of an Event of Default, such Grantor may reduce or otherwise
adjust the amount of Accounts arising from the sale of Inventory included in the
Collateral or the rendering of services in accordance with its present policies
and in the ordinary course of business and as otherwise not prohibited under the
Credit Agreement.

4.2.2 Collection of Receivables. Except as otherwise provided in this Security
Agreement, such Grantor will collect and enforce, at such Grantor’s sole
expense, all amounts due or hereafter due to such Grantor under the Receivables
included in the Collateral which are owned by such Grantor.

4.2.3 Delivery of Invoices. Such Grantor will deliver to the Collateral Agent
promptly following receipt of its request during the continuance of an Event of
Default, duplicate invoices with respect to each Account included in the
Collateral which is owned by such Grantor bearing such language of collateral
assignment as the Collateral Agent shall reasonably specify, which language
shall be effective only during the pendency of such Event of Default.

4.2.4 Disclosure of Counterclaims on Receivables. If (a) any discount, credit or
agreement to make a rebate or to otherwise reduce the amount owing on a
Receivable included in the Collateral which is owned by such Grantor is made
other than in the ordinary course of business of such Grantor or (b) if, to the
knowledge of such Grantor, any dispute, setoff, claim, counterclaim or defense
exists or has been asserted or threatened with respect to such Receivable, and
in either case, the amount of such Receivable exceeds $500,000, then such
Grantor will disclose such fact to the Collateral Agent in writing during
inspection by the Collateral Agent of any record of such Grantor relating to
such Receivable and, without duplication, in connection with any invoice or
report furnished by such Grantor to the Collateral Agent relating to such
Receivable.

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

4.4. Instruments, Securities, Chattel Paper, Documents and Pledged Deposits.
Such Grantor will: (i) deliver to the Collateral Agent immediately upon
execution of this Security Agreement the originals of all Chattel Paper,
Securities (to the extent certificated) and Instruments constituting Collateral
(if any then exist), (ii) hold in trust for the Collateral Agent upon receipt
and immediately thereafter deliver to the Collateral Agent any Chattel Paper,
Securities and Instruments constituting Collateral, (iii) promptly upon the
designation of any Pledged Deposits (as set forth in the definition thereof),
deliver to the Collateral Agent such Pledged Deposits which are evidenced by
certificates included in the Collateral endorsed in blank, marked with such
legends and collaterally assigned as the Collateral Agent shall reasonably
specify, and (iv) upon the Collateral Agent’s request, after the occurrence and
during the continuance of an Event of Default, deliver to the Collateral Agent
(and thereafter hold in trust for the Collateral Agent upon receipt and
immediately deliver to the Collateral Agent) any Document evidencing or
constituting Collateral.

 

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4.5. Uncertificated Securities, Certain Other Investment Property and Securities
Accounts. Such Grantor will permit the Collateral Agent from time to time to
cause the appropriate issuers (and, if held with a securities intermediary, such
securities intermediary) of uncertificated securities or other types of
Investment Property not represented by certificates which are Collateral owned
by such Grantor to mark their books and records with the numbers and face
amounts of all such uncertificated securities or other types of Investment
Property not represented by certificates and all rollovers and replacements
therefor to reflect the Lien of the Collateral Agent granted pursuant to this
Security Agreement. Such Grantor will use all commercially reasonable efforts,
with respect to Investment Property included in the Collateral owned by such
Grantor held with a financial intermediary, to cause such financial intermediary
to enter into a Securities Account Control Agreement. On or before the Effective
Date, each Grantor shall execute and deliver a Securities Account Control
Agreement for each Securities Account listed on Exhibit H (other than any
Securities Account with a balance not exceeding $20,000 but subject to the cap
on aggregate balances set forth in Section 4.7 hereof). Subject to the exception
set forth in the preceding sentence and the cap in Section 4.7, all Securities
Accounts of any Grantor established and maintained with a securities
intermediary will be subject to a Securities Account Control Agreement with the
Collateral Agent in order to establish Control of such Securities Account.

4.6. Stock and Other Ownership Interests.

4.6.1 Changes in Capital Structure of Issuers. No Grantor will (a), except as
permitted in the Credit Agreement, permit or suffer any issuer of privately held
corporate securities or other ownership interests in a corporation, partnership,
joint venture or limited liability company which in each case is included in the
Collateral and owned by such Grantor to dissolve, liquidate, retire any of its
capital stock or other Instruments or Securities included in the Collateral and
evidencing ownership, reduce its capital or merge or consolidate with any other
entity, or (b) vote any of such Instruments, Securities or other Investment
Property included in the Collateral in favor of any of the foregoing.

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

4.6.3 Exercise of Rights in Pledged Securities and other Investment Property.
Such Grantor will permit the Collateral Agent or its nominee at any time after
the occurrence and during the continuance of an Event of Default, with prior
notice to such Grantor, to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to Investment Property that is
included in the Collateral and owned by such Grantor or any part thereof, and to
receive all dividends and interest in respect of such Collateral.

4.7. Deposit Accounts. Other than cash and Cash Equivalents held in Deposit
Accounts constituting Excluded Property or any Deposit Account or Securities
Account with a balance not exceeding $20,000 (provided that the aggregate
balances in all such Deposit Accounts and Securities Accounts shall not at any
time exceed $600,000 except as permitted in the next succeeding sentence), the
Borrower and other Grantors shall hold all cash and Cash Equivalents in Deposit
Accounts subject to Deposit Account Control Agreements or in Securities Accounts
subject to Securities Account Control Agreements. Within thirty (30) days after
the Effective Date (or such longer period of time as the Collateral Agent may
approve), the applicable Grantors shall cause all deposit accounts with Wells
Fargo Bank, National Association and The Royal Bank of Canada (and/or any of
their affiliates) representing aggregate balances in excess of the $600,000 cap
referred to above to be either (i) subject to Deposit

 

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Account Control Agreements or (ii) closed. Before opening or replacing any
Deposit Account (other than Excluded Property and as otherwise permitted in this
Section 4.7), each Grantor shall cause the applicable bank or financial
institution to enter into a Deposit Account Control Agreement with the
Collateral Agent in order to establish Control of such Deposit Account. Such
Grantor will promptly cause each bank or other financial institution in which it
maintains other deposits (general or special, time or demand, provisional or
final) to be notified of the security interest granted to the Collateral Agent
hereunder and cause each such bank or other financial institution to acknowledge
such notification in writing and upon the Collateral Agent’s written request
after the occurrence and during the continuance of an Event of Default, deliver
to each such bank or other financial institution a letter, in form and substance
acceptable to the Collateral Agent, transferring dominion and control over each
such other deposit to the Collateral Agent until such time as such Event of
Default no longer exists. In the case of deposits maintained with Lenders, the
terms of such letter shall be subject to the provisions of the Credit Agreement
regarding setoffs. Notwithstanding the foregoing, the provisions of this
Section 4.7 shall not apply to any Deposit Account, other deposit or any other
property that constitutes “Excluded Property”, including, without limitation,
the deposit accounts referred to in clause (d) of such definition.

4.8. Letter-of-Credit Rights. Such Grantor will, promptly following receipt of
the Collateral Agent’s written request, instruct each issuer of an outstanding
letter of credit that is solely for the benefit of such Grantor to consent to
the assignment of proceeds of such letter of credit in order to give the
Collateral Agent Control of the letter-of-credit rights to such letter of credit
solely for the purpose of perfection, priority and enforcement of its security
interest therein, except to the extent the provisions in or with respect to such
letter of credit prohibit or otherwise restrict such action.

4.9. Federal, State or Municipal Claims. Such Grantor will notify the Collateral
Agent, as part of each compliance certificate provided to the Collateral Agent
pursuant to the Credit Agreement, of any Collateral owned by such Grantor which
constitutes a claim against the United States government or any state or local
government or any instrumentality or agency thereof, the assignment of which
claim is restricted by federal, state or municipal law.

4.10. Intellectual Property.

4.10.1 If any Grantor obtains rights to, including, but not limited to filing
and acceptance of a statement of use or an amendment to allege use with the U.S.
Patent and Trademark Office, or applies for or seeks registration of, any new
patentable invention, Trademark or Copyright in addition to the Patents,
Trademarks and Copyrights described in Part C of Exhibit “B”, which in each case
is not Excluded Property, then such Grantor shall give the Collateral Agent
notice thereof, as part of each compliance certificate provided to the
Collateral Agent pursuant to the Credit Agreement. Such Grantor agrees promptly
upon request by the Collateral Agent to execute and deliver to the Collateral
Agent any supplement to this Security Agreement or any other document reasonably
necessary to evidence such security interest in a form appropriate for recording
in the applicable federal office. Such Grantor also hereby authorizes the
Collateral Agent to modify this Security Agreement unilaterally (i) by amending
Part C of Exhibit “B” to include any future Patents, Trademarks and/or
Copyrights of which the Collateral Agent receives notification from such Grantor
pursuant to this Section 4.10.1 and (ii) by recording, in addition to and not in
substitution for this Security Agreement, a duplicate original of this Security
Agreement containing in Part C of Exhibit “B” a description of such future
Patents, Trademarks and/or Copyrights.

4.10.2 As of the date hereof, this Security Agreement is in a form sufficient to
create a valid and continuing Lien on each Grantor’s Copyrights, Intellectual
Property Licenses, Patents, Trademarks and Industrial Designs that are included
in the Collateral described in Part C of

 

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Exhibit “B”, and, based thereon, upon timely filing of this Security Agreement
(or a short-form supplemental document confirming the grant of a security
interest in (and providing a detailed schedule of) the relevant Patents,
Trademarks or Copyrights, as applicable) with the United States Copyright Office
and or the United States Patent and Trademark Office, as applicable, and the
filing of appropriate financing statements in the jurisdictions listed in
Exhibit “E” hereto, all action necessary to protect and perfect the security
interest in, to and on such Patents, Trademarks, Copyrights or Industrial
Designs of each Grantor has been taken and such perfected security interest is
enforceable as such as against any and all creditors of and purchasers from any
Grantor.

4.11. Pledged Securities and Other Investment Property. If any Grantor obtains
any Instruments, Securities or other Investment Property, which in each case is
not Excluded Property, then such Grantor shall give the Collateral Agent notice
thereof, as part of each compliance certificate provided to the Collateral Agent
pursuant to the Credit Agreement. Such Grantor agrees promptly upon request by
the Collateral Agent to execute and deliver to the Collateral Agent any
supplement to this Security Agreement or any other document reasonably requested
by the Collateral Agent to evidence such security interest. Such Grantor also
hereby authorizes the Collateral Agent to modify this Security Agreement
unilaterally by amending Exhibit “D” to include any future Instruments,
Securities or other Investment Property of which the Collateral Agent receives
notification from such Grantor pursuant to this Section 4.11.

4.12. Commercial Tort Claims. If any Grantor identifies the existence of a
commercial tort claim belonging to such Grantor that has arisen in the course of
such Grantor’s business in addition to the commercial tort claims described in
Exhibit “F”, which, in each case is neither Excluded Property nor of a value
less than $1,000,000, then such Grantor shall give the Collateral Agent notice
thereof, as part of each compliance certificate provided to the Collateral Agent
pursuant to the Credit Agreement. Each Grantor agrees promptly upon request by
the Collateral Agent to execute and deliver to the Collateral Agent any
supplement to this Security Agreement or any other document reasonably requested
by the Collateral Agent to evidence the grant of a security interest in such
commercial tort claim in favor of the Collateral Agent.

4.13. Certain Foreign Pledges. No Grantor shall pledge any equity interests of
Roadway Express, S.A. de C.V. for so long as Roadway Express, S.A. de C.V. is a
First-Tier Foreign Subsidiary to any party other than to the Collateral Agent
pursuant to this Security Agreement (or another Collateral Document) or to the
Convertible Note Representative. If at any time after the date hereof Roadway
Express, S.A. de C.V. has assets in excess of $500,000 the relevant Grantor(s)
shall take all necessary action to pledge the equity interests in such entity
which are owned by such Grantor(s) in accordance with the terms of Section 5.10
of the Credit Agreement.

4.14. Updating of Exhibits to Security Agreement.

4.14.1 The Borrower will provide to the Collateral Agent, on the 45th day (or
the next succeeding Business Day if such day is not a Business Day) following
the end of each of the Borrower’s second and fourth fiscal quarters of the
Borrower’s fiscal year, updated versions of Exhibits “A”, “B”, “C”, “D”, “F”,
“G” and “H”.

4.14.2 In all cases set forth in this Section, if there have been no changes to
any such Exhibits since the previous updating thereof required hereby, the
Borrower shall indicate that there has been “no change” to the applicable
Exhibit(s).

 

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4.15. Notices. The Borrower shall deliver to the Collateral Agent promptly, (and
in any event within 10 Business Days) after a Financial Officer becomes aware of
the occurrence thereof, written notice of any event of default or any event
which with the giving of notice or lapse of time, or both, would become an event
of default under the Convertible Note Documents, the Pension Fund Documents or
the ABL Documents.

4.16. Further Actions and Agreements. Each Grantor will, at its own expense and
subject to the provisions of the Intercreditor Agreement, promptly make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Equipment, Contracts, Instruments, Deposit
Accounts, Investment Property, Chattel Paper, and other property or rights
covered by the security interest hereby granted, as may be required and as the
Collateral Agreement may reasonably request to perfect, preserve and protect its
security interest in the Collateral.

ARTICLE V

EVENTS OF DEFAULT

5.1. Defaults and Events of Default. (a) The occurrence of a “Default” under the
Credit Agreement shall constitute a Default under this Security Agreement.
(b) The occurrence of an “Event of Default” under the Credit Agreement shall
constitute an Event of Default under this Security Agreement.

5.2. Acceleration and Remedies. Upon the occurrence and during the continuance
of an Event of Default, the Collateral Agent may, and at the direction of the
Required Lenders shall, exercise any or all of the following rights and
remedies:

5.2.1 Those rights and remedies provided in this Security Agreement, the Credit
Agreement and/or any other Loan Document, provided that this Section 5.2.1 shall
not be understood to limit any rights or remedies available to the Collateral
Agent prior to a Default.

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

5.2.3 Without notice except as specifically provided in Section 8.1 hereof or
elsewhere herein, sell, lease, assign, grant an option or options to purchase or
otherwise dispose of the Collateral or any part thereof in one or more parcels
at public or private sale, for cash, on credit or for future delivery without
assumption of any credit risk, and, in each case, upon such other commercially
reasonable terms.

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

If, after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain outstanding, due and payable
matured Swap Obligations owing to one or more Lenders or their respective
Affiliates, then such Lenders and Affiliates may, if the Collateral Agent then
no longer intends to remain in such capacity, designate for their collective
benefit a single Person to act as replacement collateral agent for them, and
such collateral agent may, until the termination of this Security Agreement,
exercise the remedies provided in this Section 5.2 for any event which would
allow or require the termination or acceleration of any outstanding Swap
Obligations or Banking Services Obligations.

 

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5.3. Grantors’ Obligations Upon Default. Upon the request of the Collateral
Agent after the occurrence and during the continuance of an Event of Default,
each Grantor will, subject to the provisions of the Intercreditor Agreement:

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

5.3.2 Secured Party Access. Permit the Collateral Agent, by the Collateral
Agent’s representatives and agents, to enter any premises where all or any part
of the Collateral, or the books and records relating thereto, or both, are
located, to take possession of all or any part of the Collateral and to remove
all or any part of the Collateral.

5.4. License. The Collateral Agent is hereby granted a license or other right to
use, following the occurrence and during the continuance of an Event of Default,
without charge, each Grantor’s labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks, customer lists and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral, and, following the occurrence and during the continuance of an Event
of Default, such Grantor’s rights under all licenses and all franchise
agreements shall inure to the Collateral Agent’s benefit. In addition, subject
to the Intercreditor Agreement, each Grantor hereby irrevocably agrees that the
Collateral Agent may, following the occurrence and during the continuance of an
Event of Default, sell any of such Grantor’s Inventory that is included in the
Collateral directly to any Person, including without limitation Persons who have
previously purchased such Grantor’s Inventory from such Grantor and in
connection with any such sale or other enforcement of the Collateral Agent’s
rights under this Security Agreement, may sell such Inventory which bears any
trademark owned by or licensed to such Grantor and any Inventory that is covered
by any copyright owned by or licensed to such Grantor and the Collateral Agent
may (but shall have no obligation to) finish any work in process and affix any
trademark owned by or licensed to such Grantor and sell such Inventory as
provided herein.

ARTICLE VI

WAIVERS, AMENDMENTS AND REMEDIES

No delay or omission of the Collateral Agent to exercise any right or remedy
granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver or cancellation of any Default or Event of Default or
an acquiescence therein, and any single or partial exercise of any such right or
remedy shall not preclude any other or further exercise thereof or the exercise
of any other right or remedy. No waiver, amendment or other variation of the
terms, conditions or provisions of this Security Agreement whatsoever shall be
valid unless in writing signed by the Collateral Agent and each Grantor,
provided that the addition of any Subsidiary as a Grantor hereunder by execution
of a Security Agreement Supplement in the form of Annex I (with such
modifications as shall be acceptable to the Collateral Agent) shall not require
receipt of any consent from or execution of any documentation by any other
Grantor party hereto. All rights and remedies contained in this Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Collateral Agent until this Security Agreement is terminated as provided
herein or in the Credit Agreement.

 

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ARTICLE VII

PROCEEDS; COLLECTION OF RECEIVABLES

7.1. Lockboxes. Subject to the Intercreditor Agreement, upon written request of
the Collateral Agent after the occurrence and during the continuance of an Event
of Default, each Grantor shall execute and deliver to the Collateral Agent
irrevocable lockbox agreements in the form provided by or otherwise acceptable
to the Collateral Agent and in any event which shall be effective only during
the continuance of such Event of Default, which agreements shall be accompanied
by an acknowledgment by the bank where the lockbox will be located of the Lien
of the Collateral Agent granted hereunder and of irrevocable instructions to
wire all amounts collected therein to a special collateral account at the
Collateral Agent upon the Collateral Agent’s written statement that an Event of
Default has occurred and is then in existence.

7.2. Collection of Receivables. Subject to the Intercreditor Agreement, the
Collateral Agent may at any time during the continuance of an Event of Default,
by giving each Grantor written notice, elect to require that the Receivables
that are included in the Collateral and owned by such Grantor be paid directly
to the Collateral Agent during the pendency of such Event of Default. In such
event, subject to the Intercreditor Agreement, each Grantor shall, and shall
permit the Collateral Agent to, promptly notify the account debtors or obligors
under such Receivables of the Collateral Agent’s interest therein and direct
such account debtors or obligors to make payment of all amounts then or
thereafter due under such Receivables directly to the Collateral Agent during
the pendency of such Event of Default. Upon receipt of any such written notice
from the Collateral Agent, and thereafter, so long as such Event of Default
shall be continuing, each Grantor shall thereafter, subject to the Intercreditor
Agreement, hold in trust for the Collateral Agent, all amounts and proceeds
received by it with respect to such Receivables that is included in the
Collateral and owned by such Grantor and immediately and at all times thereafter
deliver to the Collateral Agent all such amounts and proceeds in the same form
as so received, whether by cash, check, draft or otherwise, with any necessary
endorsements. Subject to the Intercreditor Agreement, the Collateral Agent shall
hold and apply funds so received as provided by the terms of Sections 7.3 and
7.4 hereof.

7.3. Special Collateral Account. Subject to the Intercreditor Agreement, during
the continuance of an Event of Default, the Collateral Agent may require all
cash proceeds of the Collateral to be deposited in a special interest bearing
cash collateral account with the Collateral Agent and held there as security for
the Secured Obligations until such Event of Default has been cured or waived, or
otherwise no longer is in effect. During such periods, no Grantor shall have any
control whatsoever over such cash collateral account. When no Event of Default
is continuing and if cash proceeds have previously been deposited in any cash
collateral account, the Collateral Agent shall deposit the collected balances
held in such cash collateral account into the applicable Grantor’s general
operating account with the Collateral Agent or as designated by the Borrower.
Subject to the Intercreditor Agreement, if any Event of Default has occurred and
is continuing, the Collateral Agent may, from time to time, apply the collected
balances in such cash collateral account to the payment of the applicable
Secured Obligations whether or not such Secured Obligations shall then be due.

7.4. Application of Proceeds. Subject to the Intercreditor Agreement,
notwithstanding any other provision contained or referred to herein to the
contrary, the proceeds of the Collateral shall be applied by the Collateral
Agent to payment of the Secured Obligations as provided under Section 2.19(f) of
the Credit Agreement.

 

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ARTICLE VIII

GENERAL PROVISIONS

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

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

8.3. Collateral Agent Performance of Grantor’s Obligations. Without having any
obligation to do so, the Collateral Agent may, during the pendency of an Event
of Default, or if no Event of Default therein exists, upon prior approval by
such applicable Grantor or the Borrower, perform or pay any obligation which any
Grantor has agreed to perform or pay in this Security Agreement, and such
Grantor shall reimburse the Collateral Agent for (a) any reasonable amounts paid
by the Collateral Agent pursuant to this Section 8.3 and, (b) without
duplication, all past due taxes, assessments, charges, fees or Liens on the
Collateral except for Liens that are permitted hereunder or any other Loan
Document. Each Grantor’s obligation to reimburse the Collateral Agent pursuant
to the preceding sentence shall be a Secured Obligation payable on demand, and
the authorization to the Collateral Agent to pay any of the same shall not
release such Grantor of its obligations under this Security Agreement or under
the Credit Agreement.

8.4. Authorization for Collateral Agent to Take Certain Action. Each Grantor
irrevocably authorizes the Collateral Agent (a) at any time and from time to
time in the sole discretion of the

 

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Collateral Agent and appoints the Collateral Agent as its attorney in fact
(i) to execute on behalf of such Grantor as debtor and to file financing
statements necessary in the Collateral Agent’s sole discretion to perfect and to
maintain the perfection and priority of the Collateral Agent’s security interest
in the Collateral, (ii) to file a carbon, photographic or other reproduction of
this Security Agreement or any financing statement with respect to the
Collateral as a financing statement and to file any other financing statement or
amendment of a financing statement (which does not add new collateral or add a
debtor) in such offices as may be necessary to perfect and to maintain the
perfection and priority of the Collateral Agent’s security interest in the
Collateral, and (iii) to contact and enter into one or more agreements with the
issuers of uncertificated securities which are Collateral owned by such Grantor
and which are Securities or with financial intermediaries holding other
Investment Property that is included in the Collateral as may be necessary or
advisable to give the Collateral Agent Control over such Securities or other
Investment Property included in the Collateral which are owned by such Grantor,
(b) after the occurrence and during the continuance of an Event of Default,
(i) to enforce payment of the Instruments, Accounts and Receivables included in
the Collateral and owned by such Grantor in the name of the Collateral Agent or
such Grantor and (ii) to sign any document which may be required by the relevant
governmental agency of any State in order to effect an absolute assignment of
all right, title and interest in each Tractor Trailer, and register the same and
upon request by Collateral Agent and each Grantor agrees to execute and deliver
any further power of attorney in respect thereof, and (c) from time to time
during the continuance of an Event of Default in the sole discretion of the
Collateral Agent, (i) to apply the proceeds of any Collateral received by the
Collateral Agent to the Secured Obligations as provided in Article VII and
(ii) to indorse and collect any cash proceeds of the Collateral.

8.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and
agrees that a breach of any of the covenants contained in Section 5.3 or in
Article VII hereof will cause irreparable injury to the Collateral Agent and the
Holders of Secured Obligations, that the Collateral Agent and the Holders of
Secured Obligations have no adequate remedy at law in respect of such breaches
and therefore agrees, without limiting the right of the Collateral Agent or the
Holders of Secured Obligations to seek and obtain specific performance of other
obligations of the Grantors contained in this Security Agreement, that the
covenants of the Grantors contained in the Sections referred to in this
Section 8.5 shall be specifically enforceable against the Grantors.

8.6. Use and Possession of Certain Premises. Upon the occurrence and during the
continuance of an Event of Default, each Grantor permits the Collateral Agent
to, subject to the Intercreditor Agreement, occupy and use any premises owned or
leased by the Grantors where any of the Collateral or any records relating to
the Collateral are located for a reasonable period and only to the extent
necessary (a) to cause the Secured Obligations to be paid or (b) to remove the
Collateral therefrom, whichever shall first occur, without any obligation to pay
any Grantor for such use or occupancy.

8.7. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1.5 hereof and
notwithstanding any course of dealing between any Grantor and the Collateral
Agent or other conduct of the Collateral Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in Section 4.1.5
hereof) shall be binding upon the Collateral Agent unless such authorization is
in writing signed by the Collateral Agent.

8.8. Benefit of Agreement. The terms and provisions of this Security Agreement
shall be binding upon and inure to the benefit of the Grantors, the Collateral
Agent and the Holders of Secured Obligations and their respective successors and
permitted assigns (including all persons who become bound as a debtor to this
Security Agreement), except that the Grantors shall not have the right to assign
their rights or delegate their obligations under this Security Agreement or any
interest herein, without the prior written consent of the Collateral Agent.

 

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

8.10. Taxes and Expenses. Any taxes payable or ruled payable by a Federal or
State authority in respect of this Security Agreement, other than Excluded
Taxes, shall be paid by the Grantors, together with interest and penalties, if
any. The Grantors shall pay (i) all reasonable out-of-pocket expenses incurred
by the Collateral Agent and its Affiliates, including the reasonable fees,
charges and disbursements of its agents, professional advisors and a single
counsel, and one additional local counsel in each applicable jurisdiction, for
the Administrative Agent and its Affiliates, in connection with this Agreement,
including the preparation, execution, delivery, performance and administration
of this Security Agreement or any amendments, modifications or waivers of the
provisions hereof and (ii) all out-of-pocket expenses incurred by the Collateral
Agent, including the fees, charges and disbursements of its agents, professional
advisors and a single counsel, and one additional local counsel in each
applicable jurisdiction, for the Collateral Agent and the Holders of Secured
Obligations (and, solely in the event of a conflict of interest, one additional
counsel to the Holders of Secured Obligations, taken as a whole), in connection
with the collection, enforcement or protection of its rights in connection with
this Security Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the expenses and charges
associated with any periodic or special audit of the Collateral). Any and all
costs and expenses incurred by the Grantors in the performance of actions
required pursuant to the terms hereof shall be borne solely by the Grantors. All
amounts due under this Section shall be payable not later than ten (10) days
after written demand therefor (together with documentation reasonably supporting
such request).

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

8.12. Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Secured
Obligations outstanding) until (i) the occurrence of the events specified in
clause (i) of Section 9.15(b) of the Credit Agreement or the events specified in
clause (iv) of Section 9.15(b) of the Credit Agreement, whichever shall first
occur (the “Termination Event”).

8.13. Entire Agreement. This Security Agreement, Security and Collateral Agency
Agreement, the Credit Agreement and the Intercreditor Agreement collectively
embody the entire agreement and understanding between the Grantors and the
Collateral Agent relating to the Collateral and supersedes all prior agreements
and understandings among the Grantors and the Collateral Agent relating to the
Collateral.

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

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

8.14.2 Each party to this Security Agreement hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Security Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard

 

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and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be binding (subject to appeal as provided by
applicable law) and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Security
Agreement shall affect any right that the Collateral Agent may otherwise have to
bring any action or proceeding relating to this Security Agreement against any
Grantor or its properties in the courts of any jurisdiction.

8.14.3 Each party to this Security Agreement hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Security
Agreement or any other Loan Document in any court referred to in Section 8.14.2.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

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

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

8.15. Indemnity. Each Grantor hereby agrees, jointly with the other Grantors and
severally, to indemnify the Collateral Agent, the Holders of Secured
Obligations, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, penalties, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, imposed on, incurred by or asserted against any Indemnitee arising
out of this Security Agreement, or the manufacture, purchase, acceptance,
rejection, ownership, delivery, lease, possession, use, operation, condition,
sale, return or other disposition of any Collateral (including, without
limitation, latent and other defects, whether or not discoverable by any
Indemnitee or any Grantor, and any claim for patent, trademark or copyright
infringement); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, penalties,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence, bad faith or willful misconduct of, or breach of the Loan Documents
by, such Indemnitee (or any of its Related Parties) or to the extent that such
losses, claims, damages, liabilities or related expenses result from any
disputes solely among the Indemnitees and not involving the Borrower or any of
its Subsidiaries.

 

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8.16. Limitation on Collateral Agent’s and other Holders of Secured Obligations’
Duty with Respect to the Collateral. Subject to any applicable laws, the
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the UCC or otherwise, shall be to deal with it in the same manner as the
Collateral Agent deals with similar property for its own account. Neither the
Collateral Agent, any Holder of Secured Obligations nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Collateral Agent and the Holders of Secured Obligations
hereunder are solely to protect the Collateral Agent and the Holders of Secured
Obligations’ interests in the Collateral and shall not impose any duty upon the
Collateral Agent or any Holders of Secured Obligation to exercise any such
powers. The Collateral Agent and the Holders of Secured Obligations shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct as
determined by a court of competent jurisdiction by final and nonappealable
judgment. Neither the Collateral Agent nor any other Holder of Secured
Obligations shall have any other duty as to any Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Collateral Agent or such other Holder of Secured Obligations, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on
the Collateral Agent to exercise remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it is commercially reasonable for the
Collateral Agent (i) to fail to incur expenses deemed significant by the
Collateral Agent to prepare Collateral for disposition or otherwise to transform
raw material or work in process into finished goods or other finished products
for disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against account debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral,
(iv) to exercise collection remedies against account debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as such Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have the reasonable capacity of doing so, or
that match buyers and sellers of assets, (ix) to dispose of assets in wholesale
rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit
enhancements to insure the Collateral Agent against risks of loss, collection or
disposition of Collateral or to provide to the Collateral Agent a guaranteed
return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by the Collateral Agent, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Collateral Agent in the collection or disposition of any of the Collateral. Each
Grantor acknowledges that the purpose of this Section 8.16 is to provide
non-exhaustive indications of what actions or omissions by the Collateral Agent
would be commercially reasonable in the Collateral Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Collateral
Agent shall not be deemed commercially unreasonable solely

 

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on account of not being indicated in this Section 8.16. Without limitation upon
the foregoing, nothing contained in this Section 8.16 shall be construed to
grant any rights to any Grantor or to impose any duties on the Collateral Agent
that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 8.16. Notwithstanding anything
herein to the contrary, in no event shall the Collateral Agent be responsible
for the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Liens on any of the
Collateral, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder, except to the extent such action or
omission constitutes bad faith, gross negligence or willful misconduct on the
part of the Collateral Agent as determined by a final, non-appealable judgment
of a court of competent jurisdiction, for the validity or sufficiency of the
Collateral or any agreement or assignment contained therein, for the sufficiency
of the form or substance of this Security Agreement, for the validity of the
title of any Grantor to the Collateral, for insuring the Collateral or for the
payment of taxes, charges, assessments or Liens upon the Collateral or otherwise
as to the maintenance of the Collateral.

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

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

8.19. Counterparts. This Security Agreement may be executed in counterparts (and
by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Security Agreement by telecopy or other electronic transmission shall be
effective as delivery of a manually executed counterpart of this Security
Agreement.

8.20. Intercreditor Agreement. Notwithstanding any other provisions herein, the
rights, powers, privileges, remedies and obligations of Collateral Agent
hereunder shall be subject to the terms and conditions of the Intercreditor
Agreement. This Section 8.20 is solely for the benefit of the Convertible Note
Representative and the ABL Representative under the Intercreditor Agreement and
does not give any rights, powers, privileges, remedies or obligations of any
kind whatsoever to any of the Grantors. In the event there is any conflict
between the Intercreditor Agreement on the one hand and this Security Agreement
or any other Loan Document (other than the Intercreditor Agreement) on the other
hand regarding the rights, remedies, privileges, protections and immunities of
the Collateral Agent, the Intercreditor Agreement shall control.

 

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ARTICLE IX

NOTICES

9.1. Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent (and deemed received) as follows: (i) if to the
Collateral Agent, in the manner set forth in Section 9.01 of the Credit
Agreement and at the address set forth below its signature hereto; and (ii) if
to any Person now or hereafter a Grantor or a Lender, in the manner and to the
respective addresses set forth in Section 9.01 of the Credit Agreement for the
Borrower or a Lender, respectively. Any notice delivered to the Borrower shall
be deemed to have been delivered to all of the Grantors, and any notice to
holder of Swap Obligations or Banking Services Obligations shall be deemed to
have been delivered to such holder if delivered to the Lender that is such
holder or to the Lender whose Affiliate is such holder.

9.2. Change in Address for Notices. Each of the Grantors and the Collateral
Agent may change the address for service of notice upon it by a notice in
writing to the other parties.

[Signature Pages Follow]

 

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

 

YRC WORLDWIDE INC., as a Grantor By:     Name: Title:

 

[OTHER GRANTORS TO COME]

By:     Name: Title:

Signature Page to

Amended and Restated Pledge and Security Agreement

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

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Collateral Agent

By:     Name: Title:

JPMorgan Chase Bank, N.A.

383 Madison Avenue, 23rd Floor

New York, New York, 10179

Attention: Bruce Borden

Fax: (212) 622-4556

Acknowledged and Agreed:

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Administrative Agent

 

By:     Name: Title:

Signature Page to

Amended and Restated Pledge and Security Agreement

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

(EXHIBIT “A”

(See Sections 3.3, 3.4, 3.5 and 4.1.7 of Security Agreement)

Prior names, jurisdiction of formation, place of business (if Grantor has only
one place of business), chief executive office (if Grantor has more than one
place of business), mergers and mailing address:

 

                   

Attention:

      

Locations of Real Property, Inventory, Equipment and Fixtures:

 

A. Owned Locations of Inventory, Equipment and Fixtures of the Grantors:

 

B. Leased Locations of Inventory, Equipment and Fixtures of by the Grantors
(Include Landlord’s Name):

 

C. Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements (include name of warehouse operator or other bailee or consignee of
Inventory and Equipment of the Grantors):

 

D. Real Property Owned and Leased (include description and location)

 

1

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EXHIBIT “B”

(See Sections 3.8 and 3.12 of Security Agreement)

A. Vehicles subject to certificates of title:

 

Description

    

Title Number and State Where Issued

B. Aircraft/engines, ships, vessels, railcars and other vehicles and similar
equipment governed by federal statute:

 

Description

    

Registration Number

C. Patents, copyrights, trademarks protected under federal law* and industrial
designs:

D. Other property

 

 

* For (i) trademarks, show the trademark itself, the registration date and the
registration number; (ii) trademark applications, show the trademark applied
for, the application filing date and the serial number of the application;
(iii) patents, show the patent number, issue date and a brief description of the
subject matter of the patent; and (iv) patent applications, show the serial
number of the application, the application filing date and a brief description
of the subject matter of the patent applied for. Any licensing agreements for
patents or trademarks should be described on a separate schedule.

 

2

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EXHIBIT “C”

(See Section 3.8 of Security Agreement)

Legal description, county and street address of property on which

Fixtures are located:

 

       Name and Address of Record Owner:                                   

 

3

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EXHIBIT “D”

List of Pledged Securities

(See Section 3.11 of Security Agreement)

A. STOCKS:

 

Issuer   Certificate Number   Number of Shares

B. BONDS:

 

Issuer

  Number   Face Amount   Coupon Rate   Maturity

C. GOVERNMENT SECURITIES:

 

Issuer

  Number   Type   Face Amount   Coupon Rate   Maturity

D. OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED):

 

Issuer

  Description of Collateral   Percentage Ownership Interest

 

4

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EXHIBIT “E”

(See Sections 3.1 and 4.10.2 of Security Agreement)

OFFICES IN WHICH FINANCING STATEMENTS HAVE BEEN/WILL BE FILED

 

5

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EXHIBIT “F”

(See Definition of “Commercial Tort Claims”)

COMMERCIAL TORT CLAIMS

[Describe parties, case number (if applicable), nature of dispute]

 

6

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EXHIBIT “G”

(See Section 3.10 of Security Agreement”)

FEDERAL EMPLOYER IDENTIFICATION NUMBER;

STATE ORGANIZATION NUMBER; JURISDICTION OF INCORPORATION

 

GRANTOR1

  

Federal Employer
Identification

Number

   Type of
Organization    State of
Organization or
Incorporation    State
Organization
Number

YRC Worldwide Inc.

   [                    ]    Corporation    Delaware    [                    ]

[Other Grantors to Come]

   [                    ]    [                    ]    [                    ]   
[                    ]

 

 

1 

Company to confirm.

 

7

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EXHIBIT “H”

(See Section 3.14 of Security Agreement)

DEPOSIT ACCOUNTS

 

Name of Grantor

  

Name of Institution

  

Account Number

  

Balance

                                                                                
                                           

SECURITIES ACCOUNTS

 

Name of Grantor

  

Name of Institution

  

Account Number

  

Balance

                                                                                
                                           

 

8

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ANNEX I

to

AMENDED AND RESTATED

PLEDGE AND SECURITY AGREEMENT

Reference is hereby made to the Amended and Restated Pledge and Security
Agreement (as amended, restated, amended and restated, supplemented, renewed,
replaced, extended, restructured or otherwise modified from time to time, the
“Agreement”), dated as of July 22, 2011, made by each of YRC Worldwide Inc., a
Delaware corporation (the “Borrower”), and the Subsidiaries of the Borrower
listed on the signature pages thereto (together with the Borrower, the “Initial
Grantors”, and together with any additional Subsidiaries, including the
undersigned, which become parties thereto by executing a Supplement in
substantially the form hereof, the “Grantors”), in favor of the Collateral
Agent. Capitalized terms used herein and not defined herein shall have the
meanings given to them in the Agreement.

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

By its execution below, the New Grantor represents and warrants as to itself
that, as of the date hereof, all of the representations and warranties contained
in the Agreement are true and correct in all material respects, that the
supplements to the Exhibits to the Agreement attached hereto are true and
correct in all material respects, and that such supplements set forth all
information required to be scheduled by it under the Agreement. New Grantor
agrees to take all steps necessary and required under the Agreement to perfect,
in favor of the Collateral Agent, a first-priority security interest in and Lien
against the New Grantor’s Collateral (which for the avoidance of doubt shall not
include Excluded Property).

IN WITNESS WHEREOF, the New Grantor has executed and delivered this Annex I
counterpart to the Agreement as of this             day of             ,
            .

 

[NAME OF NEW GRANTOR] By:     Title:    

 

1