**NOW, THEREFORE**, in consideration of the premises contained herein and for other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, the partieshereto agree as follows:ARTICLE I.Definitions and ReferencesSECTION 1.1 Definitions.(a) The following terms which are defined in the UCC are used herein as so defined (and ifdefined in more than one Article of the UCC, such terms shall have the meanings given in Article 9thereof): Account, As-Extracted Collateral, Certificated Security, Chattel Paper, Commercial TortClaim, Commodity Account, Commodity Contract, Commodity Intermediary, Deposit Account, Document,Electronic Chattel Paper, Equipment, Farm Products, Financial Asset, Fixtures, General Intangibles,Goods, Instrument, Inventory, Investment Property, Letter of Credit, Letter-of-Credit Right, Money,Payment Intangibles, Proceeds, Records, Registered Organization, Security, Securities Account,Security Certificate, Security Entitlement, Securities Intermediary, Software, SupportingObligation, Transmitting Utility, Uncertificated Security and Tangible Chattel Paper. The partiesintend that the terms used herein which are defined in the UCC have, at all times, the broadest andmost inclusive meanings possible. Accordingly, if the UCC shall in the future be amended or heldby a court to define any term used herein more broadly or inclusively than the UCC in effect on thedate hereof, then such term, as used herein, shall be given such broadened meaning. If the UCCshall in the future be amended or held by a court to define any term used herein more narrowly, orless inclusively, than the UCC in effect on the date hereof, such amendment or holding shall bedisregarded in defining terms used herein.(b) As used herein, the following terms shall have the following meanings:“Additional Grantor” has the meaning given to such term in Section 5.2.“Agreement” has the meaning set forth in the introductory paragraph of this Agreement.“Collateral” has the meaning given to such term in Section 2.1.“Collateral Agent” has the meaning set forth in the introductory paragraph of thisAgreement.“Contracts” means all contracts and agreements between any Grantor and any otherPerson (in each case, whether written or oral, or third party or intercompany), including (a) allrights of any Grantor to receive moneys due and to become due to it thereunder or in connectiontherewith, (b) all rights of any Grantor to receive proceeds of any insurance, indemnity, warrantyor guaranty with respect thereto, (c) all rights of any Grantor to damages arising thereunder and(d) all rights of any Grantor to terminate and to perform and compel performance of, such contractsand agreements, and to exercise all remedies thereunder.“Copyright License” means any license or other agreement, whether now or hereafter inexistence, under which is granted or authorized any right to use, copy, reproduce, distribute,prepare derivative works, display or publish any records or other materials on which a Copyright isin existence or may come into existence, including the agreements identified in Schedule3.1(c).“Copyrights” means all the following: (a) all copyrights under the laws of the UnitedStates or any other country (whether or not the underlying works of authorship have beenpublished), all registrations and recordings thereof, all intellectual property rights to works ofauthorship (whether or not published), and all application for copyrights under the laws of theUnited States or any other country, including registrations, recordings and applications inthe United States Copyright Office or in any similar office or agency of the United States, anyState thereof or other country, or any political subdivision thereof, including those described inSchedule 3.1(c), (b) all reissues, renewals and extensions thereof, (c) all claims for, andrights to sue for, past or future infringements of any of the foregoing, and (d) all income,royalties, damages and payments now or hereafter due or payable with respect to any of theforegoing, including damages and payments for past or future infringements thereof.
 
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“Copyright Security Agreement” means a Copyright Security Agreement executed anddelivered by any Grantor in favor of the Collateral Agent for the benefit of the Secured Parties,substantially in the form of Exhibit B.“Excluded Collateral” means: (a) any lease, license, permit, contract, propertyrights, agreement or instrument to which any Grantor is a party or in which such Grantor has ainterest, in each case, only to the extent and for so long as the terms of such lease, license,permit, contract, property rights, agreement or instrument or any law applicable thereto, prohibitthe creation by such Grantor of a security interest in therein in favor of the Collateral Agent, oronly to the extent and for so long as the grant of such security interest would constitute adefault or breach thereunder or result in the termination thereof (other than to the extent thatany such term would be rendered ineffective pursuant to Section 9-406, 9-408 or 9-409 of the UCC orany other applicable law (including, without limitation, Title 11 of the United States Code) orprinciples of equity); and (b) any Equipment owned by any Grantor on the date hereof or hereafteracquired by a Grantor that is subject to a Lien securing a purchase money obligation or CapitalizedLease Obligation permitted to be incurred pursuant to the provisions of the Note PurchaseAgreement, only to the extent and for so long as the contract or other agreement in which such Lienis granted (or the documentation providing for such purchase money obligation or Capitalized LeaseObligation) prohibits the creation of any other Lien on such Equipment, or only to the extent andfor so long as the grant of such security interest would constitute a default or breach under suchcontract or agreement or result in the termination thereof; provided, that immediately uponthe ineffectiveness, lapse or termination of any such provision, the foregoing property shall ceaseto be Excluded Collateral, and the applicable Grantor shall be deemed to have granted a securityinterest in all such rights and interests as if such provision had never been in effect.“Grantors” has the meaning set forth in the introductory paragraph of this Agreement.“Guaranty Agreement” means that certain Guaranty Agreement, entered into by each ofthe Subsidiary Grantors and each other Person who shall become a party thereto, dated as of thedate hereof, pursuant to which such Subsidiary Grantors have guaranteed the full and prompt paymentand performance of the Obligations (as defined in the Guaranty Agreement).“Intellectual Property” means any and all Copyrights, Copyright Licenses, Patents,Patent Licenses, Trademarks and Trademark Licenses.“Intellectual Property Filings” means, with respect to any Intellectual Property, thefiling of the applicable Intellectual Property Security Agreement with the United StatesPatent and Trademark Office or the United States Copyright Office, as applicable, and anyother governmental authorities necessary to perfect the security interest hereunder in suchIntellectual Property, together with an appropriately completed recordation form, in each casesufficient to record the security interest granted to the Collateral Agent hereunder in suchIntellectual Property.
 
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“Intellectual Property Security Agreement” means a Copyright Security Agreement, aPatent Security Agreement or a Trademark Security Agreement.“Off-Site Collateral” means: (a) Collateral being transported in the ordinary courseof business and (b) Collateral which in the ordinary course of business is located at an off-sitelocation for repair, storage, maintenance, or further processing or manufacturing.“Other Liable Party” means any Person, other than Grantors, who may now or may at anytime hereafter be primarily or secondarily liable for any of the Secured Obligations or who may nowor may at any time hereafter have granted to the Collateral Agent or any other Secured Party a Lienupon any property as security for the Secured Obligations.“Patent License” means any license or other agreement, whether now or hereafter inexistence, under which is granted or authorized any right with respect to any Patent or anyinvention now or hereafter in existence, whether patentable or not, whether a patent or applicationfor patent is in existence on such invention or not, and whether a patent or application for patenton such invention may come into existence, including the agreements identified in Schedule3.1(c).“Patents” means all the following: (a) all letters patent and design letters patentof the United States or any other country and all applications for letters patent and designletters patent of the United States or any other country, including applications in the UnitedStates Patent and Trademark Office or in any similar office or agency of the United States, anyState thereof or other country, or any political subdivision thereof, including those described inSchedule 3.1(c), (b) all reissues, divisions, continuations, continuations-in-part,renewals and extensions thereof, (c) all claims for, and rights to sue for, past or futureinfringements of any of the foregoing, and (d) all income, royalties, damages and payments now orhereafter due or payable with respect to any of the foregoing, including damages and payments forpast or future infringements thereof.“Patent Security Agreement” means the Patent Security Agreement executed and deliveredby any Grantor in favor of the Collateral Agent for the benefit of the Secured Parties,substantially in the form of Exhibit A.“Perfection Certificate” means the Perfection Certificate dated as of even dateherewith, executed by Borrower in favor of the Secured Parties.“Permitted Liens” means Liens permitted under Paragraph 6C(1) of the Note PurchaseAgreement.“Real Property Interests” means all property of any Grantor to the extent that it istreated as real property under applicable law.
 
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“Receivables” means (a) all Accounts and all other rights to payment for goods orother personal property which have been (or are to be) sold, leased, or exchanged or for serviceswhich have been (or are to be) rendered, regardless of whether such Accounts or other rights topayment have been earned by performance and regardless of whether such Accounts or other rights topayment are evidenced by or characterized as accounts receivable, contract rights, book debts,notes, drafts or other obligations of indebtedness, (b) all Documents, Instruments, Chattel Paper,Letters of Credit and Letter-of-Credit Rights of any kind relating to such Accounts or other rightsto payment or otherwise arising out of or in connection with the sale, lease or exchange of goodsor other personal property or the rendering of services, (c) all rights in, to, or under allsecurity agreements, leases and other contracts securing or otherwise relating to any suchAccounts, rights to payment, Documents, Instruments, Chattel Paper, Letters of Credit orLetter-of-Credit Rights, (d) all rights in, to and under any purchase orders, service contracts, orother contracts out of which such Accounts and other rights to payment arose (or will arise onperformance), and (e) all rights in or pertaining to any goods arising out of or in connection withany such purchase orders, service contracts, or other contracts, including rights in returned orrepossessed goods and rights of replevin, repossession, and reclamation.“Receiver” has the meaning set forth in Section 4.2(h).“Secured Obligations” means all amounts, obligations, liabilities, agreements,undertakings, provisions, covenants and duties of every type and description owing by the Issuerand the other Grantors to the holders of Notes pursuant to or in connection with the Note PurchaseAgreement, the Guaranty Agreement, or any other Note Document, including without limitation, allprincipal, interest (including any interest accruing after the filing of any petition in bankruptcyor the commencement of any insolvency, reorganization or like proceeding relating to such Grantor,whether or not a claim for post-filing or post-petition interest is allowed in such proceeding),all Yield-Maintenance Amounts, fees, expenses, indemnification and reimbursement payments, costsand expenses (including all fees and expenses of counsel to the holders of Notes incurred pursuantto this Agreement or any other Note Document), whether direct or indirect, absolute or contingent,liquidated or unliquidated, now existing or hereafter arising hereunder or thereunder, and allobligations and liabilities incurred in connection with collecting and enforcing the foregoing,together with all renewals, extensions, modifications or refinancings thereof.“Security Agreement Supplement” has the meaning set forth in Section 5.2.“Trademark License” means any license or agreement, whether now or hereafter inexistence, under which is granted or authorized any right to use any Trademark, including theagreements identified on Schedule 3.1(c).“Trademarks” means all of the following: (a) all trademarks, trade names, corporatenames, company names, business names, fictitious business names, trade styles, service marks,logos, brand names, trade dress, prints and labels on which any of the foregoing have appeared orappear, package and other designs, and any other source or business identifiers, and the rights inany of the foregoing which arise under applicable law, (b) the goodwill of the business symbolizedthereby or associated with each of them, (c) all registrations and applications in connectiontherewith, including registrations and applications in the United StatesPatent and Trademark Office or in any similar office or agency of the United States, any Statethereof or other country, or any political subdivision thereof, including those described inSchedule 3.1(c), (d) all reissues, extensions and renewals thereof, (e) all claims for, andrights to sue for, past or future infringements of any of the foregoing, and (f) all income,royalties, damages and payments now or hereafter due or payable with respect to any of theforegoing, including damages and payments for past or future infringements thereof.
 
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“Trademark Security Agreement” means the Trademark Security Agreement executed anddelivered by any Grantor in favor of the Collateral Agent for the benefit of the Secured Parties,substantially in the form of Exhibit C.“UCC” means the Uniform Commercial Code in effect in the State of New York.SECTION 1.2 Other Definitions. Reference is hereby made to the Note PurchaseAgreement for a statement of the terms thereof. All capitalized terms used in this Agreement whichare defined in the Note Purchase Agreement or the Securities Purchase Agreement (as defined in theNote Purchase Agreement) and not otherwise defined herein shall have the same meanings herein asset forth therein.SECTION 1.3 Attachments. All exhibits or schedules which may be attached to thisAgreement are a part hereof for all purposes.SECTION 1.4 Other Interpretive Provisions. Unless otherwise specified herein:(a) The definitions of terms herein shall apply equally to the singular and plural forms ofthe terms defined. Whenever the context may require, any pronoun shall include the correspondingmasculine, feminine and neuter forms. The word “or” is not exclusive, and the words “include,”“includes” and “including” shall be deemed to be followed by the phrase “without limitation.” Theword “will” shall be construed to have the same meaning and effect as the word “shall.” Unless thecontext requires otherwise, (i) any definition of or reference to any agreement, instrument orother document shall be construed as referring to such agreement, instrument or other document asfrom time to time amended, supplemented or otherwise modified (subject to any restrictions on suchamendments, supplements or modifications set forth herein or in any other Note Document), (ii) anyreference herein to any Person shall be construed to include such Person’s successors and assigns,(iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used herein,shall be construed to refer this Agreement in its entirety and not to any particular provisionthereof, (iv) all references herein to Articles, Sections, Exhibits and Schedules shall beconstrued to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (v)any reference to any law shall include all statutory and regulatory provisions consolidating,amending, replacing or interpreting such law and any reference to any law or regulation shall,unless otherwise specified, refer to such law or regulation as amended, modified or supplementedfrom time to time, and (vi) the words “asset” and “property” shall be construed to have the samemeaning and effect and to refer to any and all tangible and intangible assets and properties,including cash, securities, accounts and contract rights.
 
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(b) In the computation of periods of time from a specified date to a later specified date, theword “from” means “from and including;” the words “to” and “until” each mean “to but excluding;”and the word “through” means “to and including.”(c) Section headings herein are included for convenience of reference only and shall notaffect the interpretation of this Agreement.ARTICLE II.Security InterestSECTION 2.1 Grant of Security Interest. Each Grantor hereby pledges and assigns tothe Collateral Agent for the benefit of the Secured Parties, and grants to the Collateral Agent acontinuing security interest, for the benefit of the Secured Parties, in and to all of suchGrantor’s right, title and interest in and to all of the following property, whether now owned orexisting or hereafter acquired or arising and regardless of where located, as collateral securityfor the prompt and complete payment and performance when due (whether at the stated maturity, byacceleration or otherwise) of the Secured Obligations, whether now existing or hereafter incurredor arising (the “Collateral”):(a) all Accounts;(b) all As-Extracted Collateral;(c) all Chattel Paper (including, without limitation, Electronic Chattel Paper);(d) all Commercial Tort Claims described on Schedule 2.1(d) (as such schedule may beupdated from time to time in accordance with Section 3.1(e));(e) all Commodity Accounts;(f) all Commodity Contracts;(g) all Contracts;(h) all Deposit Accounts;(i) all Documents;(j) all Financial Assets;(k) all Fixtures;(l) all General Intangibles;(m) all Goods (including, without limitation, all Equipment and Inventory);(n) all Instruments;
 
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(o) all Intellectual Property;(p) all Investment Property;(q) all Letters of Credit;(r) all Letter-of-Credit Rights;(s) all Money;(t) all Payment Intangibles;(u) all Receivables, to the extent not otherwise described above;(v) all Securities (including Certificated Securities and Uncertificated Securities);(w) all Securities Accounts;(x) all Securities Entitlements;(y) all Software;(z) all Supporting Obligations;(aa) all books and Records pertaining to the other property described in this Section2.1; and(bb) to the extent not otherwise described in this Section 2.1, all Proceeds,products, accessions, rents and profits of or in respect of any and all of the foregoing and allcollateral security and guarantees given by any Person to or in favor of any Grantor with respectto any of the foregoing;provided, notwithstanding anything to the contrary contained in clauses (a) through (bb)above, the security interest created by this Agreement shall not extend to, and the term“Collateral” shall not include, any Excluded Collateral.In each case, the foregoing property shall be covered by this Agreement, whether such Grantor’sownership or other rights therein are presently held or hereafter acquired and howsoever suchGrantor’s interests therein may arise or appear (whether by ownership, security interest, claim orotherwise).Each Grantor hereby acknowledges that the Secured Obligations are owed to the Secured Parties andthat the Collateral Agent, as agent for the Secured Parties, is entitled to the benefits of theLiens given under this Agreement.
 
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SECTION 2.2 Grantors Remain Liable. Notwithstanding anything to the contrarycontained herein, (i) each Grantor shall remain liable for all obligations under and in respect ofthe Collateral and nothing contained herein is intended or shall be a delegation ofduties to the Collateral Agent or any other Secured Party, (ii) each Grantor shall remainliable under each of the agreements included in the Collateral, including any Receivables, toperform all of the obligations undertaken by it thereunder all in accordance with and pursuant tothe terms and provisions thereof and neither the Collateral Agent nor any other Secured Party shallhave any obligation or liability under any of such agreements by reason of or arising out of thisAgreement or any other document related hereto nor shall the Collateral Agent nor any other SecuredParty have any obligation to make any inquiry as to the nature or sufficiency of any paymentreceived by it or have any obligation to take any action to collect or enforce any rights under anyagreement included in the Collateral, including any agreements relating to any Receivables, and(iii) the exercise by the Collateral Agent of any of its rights hereunder shall not release anyGrantor from any of its duties or obligations under the contracts and agreements included in theCollateral, including any agreements relating to any Receivables.SECTION 2.3 Action by the Collateral Agent. In each and every case the CollateralAgent is required to act or refrain from acting hereunder it shall be at the written direction ofthe Required Holders in accordance with the terms and conditions of the Collateral AgencyAgreement. Any and all such actions or inaction hereunder by the Collateral Agent shall be coveredby all of the rights and indemnities set forth in the Collateral Agency Agreement as if they werefully set forth herein.ARTICLE III.Representations, Warranties and CovenantsSECTION 3.1 Representations and Warranties. Each Grantor hereby represents andwarrants that each of the representations and warranties made in the Note Purchase Agreement istrue and correct insofar as it refers to such Grantor, except to the extent that suchrepresentations and warranties related to an earlier date (in which case such representations andwarranties are true as of such earlier date) and, in addition, each Grantor hereby represents andwarrants to the Collateral Agent and each other Secured Party as follows:(a) Security Interest. Such Grantor has and will have at all times full right, powerand authority to grant a security interest in the Collateral to the Collateral Agent for thebenefit of the Secured Parties as provided herein, free and clear of any Lien other than PermittedLiens. This Agreement creates a valid and binding security interest in favor of the CollateralAgent for the benefit of the Secured Parties in the Collateral, which security interest secures allof the Secured Obligations. Any and all references made in this Agreement to Permitted Liens (orto the Liens created hereunder as being subject to any Permitted Liens, or subject to the rights ofany Person holding any such Lien) are made for the purpose of limiting certain warranties andcovenants made by each Grantor herein and such reference is not intended to affect the descriptionherein of the Collateral nor to subordinate the Liens and security interests hereunder to anyPermitted Liens.
 
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(b) Perfection. The taking of possession by the Collateral Agent of all Instruments,Chattel Paper, Letters of Credit and Money, if any, constituting Collateral from time to time willperfect, and establish the first priority of, the security interest created hereunder in favor ofthe Collateral Agent for the benefit of the Secured Parties in such Collateral. TheCollateral Agent’s control (within the meaning of the UCC) of all Investment Property,Electronic Chattel Paper, and Letter-of-Credit Rights constituting Collateral from time to timewill perfect, and establish the first priority (subject only to Permitted Liens) of, the securityinterest created hereunder in such Collateral. To the extent that the filing of a financingstatement can be effective under the UCC to perfect the security interest created hereunder in anyCollateral, the filing of a financing statement with the secretary of state (or equivalentgovernmental official) of the state in which such Grantor is organized which sufficiently indicatesall such Collateral (other than Real Property Interests) will perfect, and establish the firstpriority (subject only to Permitted Liens) of, the security interest created hereunder in suchCollateral. The filing of a financing statement in the office designated for the filing orrecording of a mortgage on the real property where Collateral consisting of As-Extracted Collateralis located, which sufficiently indicates the As-Extracted Collateral and contains the necessaryreal property description, will perfect and establish the first priority (subject only to PermittedLiens) of, the security interest created hereunder in such As-Extracted Collateral. No further orsubsequent filing, recording, registration, other public notice or other action is necessary toperfect or otherwise continue, preserve or protect such security interest except (i) forcontinuation statements described in Section 9-515(d) of the UCC or (ii) for filings required to befiled in the event of a change in the name, identity, or organizational structure of such Grantor.It is the sole responsibility of the Grantors to file any and all UCC financing statements,continuation statements, amendments and any and all other filings necessary to maintain theperfection of the liens granted by this Agreement, notwithstanding the foregoing, each of theCollateral Agent and/or any holder of a Note shall be permitted (but not required) to make anyfiling permitted hereunder.(c) Intellectual Property. As of the date hereof, each registration and applicationfor registration for Patents, Copyrights and Trademarks that is part of Intellectual Propertyincluded within the Collateral is listed on Schedule 3.1(c).(d) Ownership Free of Liens. Except as set forth on Schedule 3.1(d), noeffective financing statement or other registration or instrument similar in effect covering all orany part of the Collateral is on file in any recording office except (i) any which have been filedin favor of the Collateral Agent relating to the Security Documents and any which have been filedto perfect or protect any Permitted Lien, and (ii) any such financing statement or other instrumentfor which a termination statement that such Grantor is authorized to file has been delivered to theCollateral Agent. None of the tangible Collateral is in the possession of any Person other thanthe Grantors or the Collateral Agent, except for (A) Off-Site Collateral and (B) Collateral inpossession of any Person other than the Grantors or the Collateral Agent, in an aggregate amountnot to exceed $700,000.(e) Miscellaneous. No Grantor owns any interest in any Farm Products or timber to becut. No Grantor is a Transmitting Utility. Schedule 2.1(d) specifically describes eachCommercial Tort Claim as to which any Grantor has any right, title or interest. Each Grantor is aRegistered Organization, and each Grantor’s sole jurisdiction of organization is as set forth inthe Perfection Certificate (or in such other jurisdiction as to which such Grantor has given theCollateral Agent prior written notice in accordance with Section 3.2(a)). As of the datehereof, all of the information set forth in the Perfection Certificate is true and correct insofaras it relates to such Grantor.
 
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SECTION 3.2 General Covenants Applicable to Collateral. Unless the Collateral Agentshall otherwise consent in writing at the direction of the Required Holders, each Grantor will atall times comply with the covenants contained in the Note Purchase Agreement that are applicable tosuch Grantor for so long as any part of the Secured Obligations or the Notes is outstanding and, inaddition, each Grantor hereby covenants to the Collateral Agent and each other Secured Party asfollows:(a) Change of Name, Location, or Structure; Additional Filings. Each Grantorrecognizes that financing statements pertaining to the Collateral have been or may be filed withthe secretary of state (or equivalent governmental official) of the state in which such Grantor isorganized. Without limitation of any other covenant herein, no Grantor will cause or permit anychange to be made in its name or organizational structure, or any change to be made to itsjurisdiction of organization, unless such Grantor shall have first (i) notified the CollateralAgent of such change at least thirty (30) days prior to the effective date of such change and (ii)taken all action reasonably requested by the Collateral Agent, as directed by the Required Holders(under the following subsection (b) or otherwise) for the purpose of further confirming andprotecting the Collateral Agent’s security interests and rights under this Agreement and theperfection and priority thereof. In any notice furnished pursuant to this subsection, each Grantorwill expressly state that the notice is required by this Agreement and contains facts that mayrequire additional filings of financing statements or other notices for the purposes of continuingperfection of the Collateral Agent’s security interest in the Collateral.(b) Further Assurances. No Grantor will take or fail to take any action which wouldin any manner impair the value or enforceability of the Collateral Agent’s security interest in anyCollateral (subject to the rights of any Person holding a Permitted Lien). Each Grantor will, atits expense as from time to time reasonably requested by the Collateral Agent at the direction ofthe Required Holders, promptly execute and deliver all further instruments, agreements, filings andregistrations, and take all further action, in order: (i) to confirm and validate this Agreementand the Collateral Agent’s rights and remedies hereunder, (ii) to correct any errors or omissionsin the descriptions herein of the Secured Obligations or the Collateral or in any other provisionshereof, (iii) to perfect, register and protect the security interests and rights created orpurported to be created hereby or to maintain or upgrade in rank the priority of such securityinterests and rights, (iv) to enable the Collateral Agent to exercise and enforce its rights andremedies hereunder in respect of the Collateral, or (v) to otherwise give the Collateral Agent thefull benefits of the rights and remedies described in or granted under this Agreement. As part ofthe foregoing, each Grantor will, whenever reasonably requested by the Collateral Agent at thedirection of the Required Holders, (i) authenticate (as defined in the UCC) and file any financingstatements, continuation statements, and other filings or registrations relating to the CollateralAgent’s security interests and rights hereunder, and any amendments thereto, and (ii) mark itsbooks and records relating to any Collateral to reflect that such Collateral is subject to thisAgreement and the security interests hereunder. To the extent reasonably requested by theCollateral Agent at the direction of the Required Holders from time to time, each Grantor will usecommercially reasonable efforts to obtain from any material account debtor or other obligor on theCollateral the acknowledgment of such account debtor or obligor that such Collateral is subject tothis Agreement.
 
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(c) Information. Subject to the terms and conditions of the Note Purchase Agreement,upon the reasonable request from time to time by the Collateral Agent as directed by the RequiredHolders, each Grantor will furnish to the Collateral Agent (i) any information concerning anycovenant, provision or representation contained herein or any other matter in connection with itsCollateral or such Grantor’s business, properties, or financial condition, and (ii) statements andschedules identifying and describing its Collateral and other reports and information requested inconnection with its Collateral, all in reasonable detail.(d) Ownership, Liens, Possession and Transfers. Each Grantor will maintain goodtitle to all of its Collateral, free and clear of all Liens, except for the security interestcreated by this Agreement and any Permitted Liens. No Grantor will grant or allow to remain ineffect, and each Grantor will cause to be terminated, any financing statement or other registrationor instrument similar in effect covering all or any part of the Collateral, except any which havebeen filed in favor of the Collateral Agent relating to this Agreement or the other SecurityDocuments and any which have been filed to perfect or protect any Permitted Lien. Each Grantorwill defend the Collateral Agent’s Lien in and to such Grantor’s Collateral against the claims ofany Person (subject only to Permitted Liens). Except as expressly permitted under the NotePurchase Agreement, each Grantor (i) will insure that all of its tangible Collateral, whetherGoods, Documents, Instruments, Chattel Paper, Letters of Credit or otherwise, is and remains in thepossession of such Grantor or the Collateral Agent (or a bailee selected by the Collateral Agentwho is holding such Collateral for the benefit of the Collateral Agent), except for Off-SiteCollateral or Collateral in possession of any Person other than the Grantors or the CollateralAgent, in an aggregate amount not to exceed $700,000, and (ii) will not sell, assign (by operationof law or otherwise), transfer, exchange, lease or otherwise dispose of any of its Collateral,except for Dispositions permitted by Paragraph 6D of the Note Purchase Agreement, subject tocompliance with all terms and conditions of the Note Purchase Agreement.(e) Intellectual Property.(i) Each Grantor will maintain and protect the validity and enforceability of allIntellectual Property owned by such Grantor included within the Collateral. Each Grantorwill use commercially reasonable efforts to defend and protect such Intellectual Propertyand its rights thereunder against any infringement, dilution, or misappropriation and willuse commercially reasonable efforts to defend any claim or administrative or arbitralproceedings which challenge the validity or enforceability of such Intellectual Property,such Grantor’s purported rights therein and thereunder, or such Grantor’s rights to registeror patent the same or to use and practice the same in its business. Each Grantor will givethe Collateral Agent written notice of any proceeding in which such defense is being carriedon. Each Grantor will diligently prosecute and maintain all applications and registrationsfor any such Intellectual Property (except that such Grantor shall have the right todetermine, in its ordinary course of business, not to pursue any such applications orregistrations for any such Intellectual Property), and such Grantor will notify theCollateral Agent whenever it learns that any application or registration relating to anysuch Intellectual Property has been (or is alleged to have been) abandoned, dedicated orotherwise terminated.
 
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(ii) Within thirty days after filing any application for registration (or any similarrequest) of any Intellectual Property with the United States Copyright Office, the UnitedStates Patent and Trademark Office, or any similar office or agency of the United States,any State thereof or other country, or any political subdivision thereof, each Grantor willgive the Collateral Agent written notice of such filing and will, upon the CollateralAgent’s request, execute, deliver and file any agreements, instruments, registrations andfilings which the Collateral Agent may reasonably request to confirm the Collateral Agent’ssecurity interest therein and to put such security interest of record in such office.(iii) On the date of this Agreement (or, with respect to any Additional Grantor, thedate of such Additional Grantor’s Security Agreement Supplement), each Grantor will sign anddeliver to the Collateral Agent Intellectual Property Security Agreements with respect toall of its Intellectual Property. Within 30 days after each March 31 and September 30thereafter, such Grantor will sign and deliver to the Collateral Agent an applicableIntellectual Property Security Agreement for all of its Intellectual Property as of suchMarch 31 or September 30 that is not covered by any previous Intellectual Property SecurityAgreement so signed and delivered by it. In each case, if requested by the CollateralAgent, such Grantor will promptly make all Intellectual Property Filings necessary to recordthe security interests granted to the Collateral Agent hereunder in such IntellectualProperty. All such documentation shall be reasonably satisfactory to the Required Holders(f) Investment Property. If any Grantor shall at any time hold or acquire anySecurity Certificate, such Grantor shall promptly endorse, assign, and deliver the same to theCollateral Agent, accompanied by such instruments of transfer or assignment duly executed in blankas the Collateral Agent as directed by the Required Holders may from time to time specify. If anySecurity now or hereafter acquired by any Grantor is uncertificated and is issued to any Grantor orits nominee directly by the issuer thereof, such Grantor shall promptly notify the Collateral Agentof such issuance and, at the Collateral Agent’s request and option, as directed by the RequiredHolders, pursuant to an agreement in form and substance reasonably satisfactory to the RequiredHolders, either (i) cause the issuer thereof to agree to comply with instructions from theCollateral Agent as directed by the Required Holders as to such Security, without further consentof such Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registeredowner of such Security. If any Securities, whether certificated or uncertificated, or otherInvestment Property now or hereafter acquired by any Grantor, are held by such Grantor or itsnominee through a Securities Intermediary or Commodity Intermediary, such Grantor shall promptlynotify in writing the Collateral Agent thereof, and, at the Collateral Agent’s request and optionas directed by the Required Holders, pursuant to an agreement in form and substance reasonablysatisfactory to the Required Holders, either (i) cause such Securities Intermediary or CommodityIntermediary, (as the case may be) to agree to comply with entitlement orders or other instructionsfrom the Collateral Agent as directed by the Required Holders to such Securities Intermediary as tosuch Securities or other Investment Property, or (as the case may be) to apply any valuedistributed on account of any Commodity Contract as directed by the Collateral Agent to suchCommodity Intermediary, in each case without further consent of such Grantor or such nominee, or(ii) in the case of Financial Assets or other Investment Property held through a SecuritiesIntermediary, arrange for the CollateralAgent to become the entitlement holder with respect to such Investment Property, with suchGrantor being permitted, only with the consent of the Collateral Agent as directed by the RequiredHolders, to exercise rights to withdraw or otherwise deal with such Investment Property. TheCollateral Agent and the holders of the Notes agree with each Grantor that the Collateral Agentshall not give any such entitlement orders or instructions or directions to any issuer, SecuritiesIntermediary, or Commodity Intermediary, and shall not withhold its consent to the exercise of anywithdrawal or dealing rights by such Grantor, unless an Event of Default has occurred and iscontinuing.
 
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(g) Commercial Tort Claims. If any Grantor shall at any time hold or acquire aCommercial Tort Claim, such Grantor shall promptly notify the Collateral Agent in writing of thedetails thereof and grant to the Collateral Agent in such writing a security interest therein andin the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form andsubstance reasonably acceptable to the Required Holders. Upon receipt of such notice, theCollateral Agent is hereby authorized to (i) amend Schedule 2.1(d) to include the detailsof such Commercial Tort Claim and (ii) file any financing statements and other filings orregistrations relating to the Collateral Agent’s security interests and rights in such CommercialTort Claim.(h) Insurance. Each Grantor covenants that it will maintain, with responsibleinsurers, insurance with respect to its properties and business against such casualties andcontingencies and in such amounts as is customary in the case of similarly situated corporationsengaged in the same or similar businesses including (i) property insurance on the Inventory and theEquipment in an amount not less than the full insurable value thereof, against loss or damage bytheft, fire, lightning and other hazards ordinarily included under uniform broad form standardextended coverage policies, limited only as may be provided in the standard broad form of extendedcoverage endorsement at the time in use in the states in which the Collateral is located; (ii)comprehensive general liability insurance against claims for bodily injury, death or propertydamage occurring with or about such Collateral (such coverage to include provisions waivingsubrogation against the Secured Parties), with the Collateral Agent and the Secured Parties asadditional insureds thereunder, in amounts as shall be reasonably satisfactory to the RequiredHolders; (iii) liability insurance with respect to the operation of its facilities under theworkers’ compensation laws of the states in which such Collateral is located, in amounts as shallbe reasonably satisfactory to the Required Holders; and (iv) business interruption insurance inamounts as shall be reasonably satisfactory to the Required Holders.All casualty and property insurance policies required hereby and by the Note Purchase Agreementshall contain clauses providing that the proceeds thereof shall be payable to the Collateral Agentas its interests may appear. All insurance policies required hereby and by the Note PurchaseAgreement or the certificates issued by the applicable insurers of such policies, shall containclauses providing that the Collateral Agent for benefit of the Secured Parties is an additionalinsured or loss payee thereunder and providing that such policies may not be cancelled, reduced orotherwise negatively affected without at least thirty (30) days prior written notice to theCollateral Agent. Upon request by the Collateral Agent as directed by the Required Holders, eachGrantor shall deliver to the Collateral Agent true and correct copies of the original policies,evidence of payment of premiums, certificates evidencing renewals, and such other informationregarding such insurance as the Collateral Agent, as directed by the Required Holders, mayreasonably request. In the event of any loss under any insurance policies so carriedby any Grantor, the Collateral Agent, as directed by the Required Holders, shall, after they havedetermined in the sole judgment of the Required Holders that such Grantor has failed to commence ordiligently pursue efforts to collect the same, have the right (but not the obligation) to makeproof of loss and collect the same. In the preceding instances and during the continuance of anEvent of Default, the Collateral Agent is hereby authorized but not obligated to enforce in itsname or in the name of any Grantor payment of any or all of said policies or settle or compromiseany claim in respect thereof, and to collect and make receipts for the proceeds thereof and, in andduring the continuance of an Event of Default, the Collateral Agent is hereby appointed eachGrantor’s agent and attorney-in-fact to endorse any check or draft payable to such Grantor in orderto collect the proceeds of insurance. In the event of the sale of any Collateral pursuant to theCollateral Agent’s exercise of any remedies hereunder, or other transfer of title to the Collateralin extinguishment in whole or in part of the Secured Obligations, all right, title and interest ofany Grantor in and to such policies then in force concerning the Collateral and all proceedspayable thereunder shall thereupon vest in the purchaser at such sale or other transferee in theevent of such other transfer of title.
 
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Notwithstanding anything contained in this Section 3.2(h), the Collateral Agent will haveno responsibilities, obligations or liabilities as to the form, adequacy or substance of anyinsurance policy or certificate required under this Agreement or the Note Purchase Agreement, norshall the Collateral Agent have any responsibility or obligation whatsoever to decide, judge ormake any determination with respect to any such insurance policy or certificate including withoutlimitation whether any such insurance policy meets the requirements of this Agreement or thisSection 3.2(h) or the requirements of the Note Purchase Agreement.(i) Documents, Instruments, etc. Each Grantor will cause all of its Instruments andChattel Paper included within the Collateral to have only one original counterpart. Each Grantorwill promptly deliver to the Collateral Agent all originals of its Documents, Instruments andChattel Paper which are included within the Collateral. Upon request by the Collateral Agent, eachGrantor will mark each of its Tangible Chattel Paper which is included within the Collateral with alegend indicating that such Tangible Chattel Paper is subject to the security interest granted bythis Agreement. If any of the Collateral is or shall become Electronic Chattel Paper, such Grantorshall ensure that (1) a single authoritative copy exists which is unique, identifiable, unalterable(except as provided in clauses (3), (4) and (5) of this paragraph), (2) such authoritative copyidentifies the Collateral Agent as the assignee and is communicated to and maintained by theCollateral Agent or its designee, (3) copies or revisions that add or change the assignee of theauthoritative copy can only be made with the participation of the Collateral Agent, (4) each copyof the authoritative copy and any copy of a copy is readily identifiable as a copy and not theauthoritative copy and (5) any revision of the authoritative copy is readily identifiable as anauthorized or unauthorized revision.(j) Letters of Credit. With respect to any Letters of Credit that are by their termstransferable, each Grantor will, upon receipt of a written request from the Collateral Agent, asdirected by the Required Holders, use commercially reasonable efforts to cause all issuers andnominated persons under Letters of Credit in which a Grantor is the beneficiary or assignee toconsent to the assignment of such Letter of Credit to the Collateral Agent and, upon receipt ofwritten notice from the Collateral Agent that an Event of Default has occurred, and so long as suchEvent of Default is continuing, it shall cause all payments thereunder to be made to theCollateral Agent. With respect to any Letters of Credit that are not transferable, eachGrantor shall, upon receipt of a written request from the Collateral Agent, as directed by theRequired Holders, use commercially reasonable efforts to obtain the consent of the issuer thereofand any nominated person thereon to the assignment of the proceeds of such Letter of Credit to theCollateral Agent in accordance with Section 5-114(c) of the UCC. The Collateral Agent shall haveno responsibilities, obligations or liabilities as to the form, substance or adequacy of suchLetters of Credit or the assignment thereof.
 
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ARTICLE IV.Remedies, Powers and AuthorizationsSECTION 4.1 Provisions Concerning the Collateral.(a) Authorization to file Financing Statements. Each Grantor hereby irrevocablyauthorizes the Collateral Agent, at the direction of the Required Holders, at any time and fromtime to time to file, without the signature of such Grantor, in any jurisdiction any amendments toexisting financing statements and any initial financing statements and amendments thereto that (i)indicate the Collateral (1) as “all assets of such debtor” or words of similar effect, regardlessof whether any particular asset comprised in the Collateral falls within the scope of Article 9 ofthe UCC, or (2) as being of an equal or lesser scope or with greater detail; (ii) contain any otherinformation required by Article 9 of the UCC for the sufficiency or filing office acceptance of anyfinancing statement or amendment, including the address of such Grantor, whether such Grantor is anorganization, the type of organization and any organization identification number issued to suchGrantor; and (iii) are necessary to properly effectuate the transactions described in the NoteDocuments, as determined by the Collateral Agent as directed by the Required Holders, if theGrantors fail to do so. Each Grantor agrees to furnish any such information to the CollateralAgent promptly upon request. Each Grantor hereby further authorizes the Collateral Agent, asdirected by the Required Holders, to file one or more continuation statements to such financingstatements. Each Grantor further agrees that, where permitted by applicable law, a carbon,photographic or other reproduction of this Agreement or any financing statement describing anyCollateral is sufficient as a financing statement and may be filed in any jurisdiction by theCollateral Agent.(b) Power of Attorney. Each Grantor hereby irrevocably appoints the Collateral Agentas such Grantor’s attorney-in-fact and proxy, with full authority in the place and stead of suchGrantor and in the name of such Grantor or otherwise at any time that an Event of Default shallhave occurred and is continuing, as directed by the Required Holders to take any action, and toexecute or endorse any instrument, certificate or notice, which the Collateral Agent, as directedby the Required Holders, may deem necessary or advisable to accomplish the purposes of thisAgreement, including any action or instrument: (i) to obtain and adjust any insurance required tobe maintained by Grantors hereunder or paid to the Collateral Agent pursuant hereto; (ii) to ask,demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneysdue and to become due under or in respect of any of the Collateral; (iii) to receive, indorse andcollect any drafts or other Instruments, Documents or other Collateral; (iv) to enforce anyobligations included among the Collateral; and (v) to file any claims or take any action orinstitute any proceedings which the Collateral Agent, as directed bythe Required Holders, may deem reasonably necessary for the collection of any of theCollateral or otherwise to enforce, perfect, or establish the priority of the rights of suchGrantor or the Collateral Agent with respect to any of the Collateral. Each Grantor herebyacknowledges that such power of attorney and proxy are coupled with an interest, are irrevocable,except by termination of this Agreement, and are to be used by the Collateral Agent for the solebenefit of the Secured Parties.
 
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(c) Performance by the Collateral Agent. If any Grantor fails to perform promptly anyagreement or obligation contained herein, the Collateral Agent may, as directed by the RequiredHolders, itself perform, or cause performance of, such agreement or obligation, and the reasonableexpenses of the Collateral Agent incurred in connection therewith shall be payable by such Grantorunder Section 4.5; provided, however, that unless an Event of Default hasoccurred and is continuing or time is of the essence, the Collateral Agent shall not exercise thispower without first making demand on the applicable Grantor and such Grantor failing to complypromptly therewith.(d) Bailees. If any Collateral of any Grantor is at any time in the possession orcontrol of any warehouseman, bailee or any of such Grantor’s agents or processors, such Grantorshall, upon the request of the Collateral Agent, as directed by the Required Holders, notify suchwarehouseman, bailee, agent or processor of the Collateral Agent’s rights hereunder and instructsuch Person to hold all such Collateral for the Collateral Agent’s account subject to theCollateral Agent’s instructions. No such request by the Collateral Agent shall be deemed a waiverof any provision hereof which was otherwise violated by such Collateral being held by such Personprior to such instructions by such Grantor.(e) Collection. The Collateral Agent, as directed by the Required Holders, shall havethe right at any time, upon the occurrence and during the continuance of an Event of Default, tonotify, or to require any Grantor to notify, any and all obligors under any Receivables, GeneralIntangibles, Instruments, Chattel Paper, or other rights to payment included among the Collateralof the assignment thereof to the Collateral Agent under this Agreement and to direct such obligorsto make payment of all amounts due or to become due to such Grantor thereunder directly to theCollateral Agent and, upon such written notification and at the expense of such Grantor and to theextent permitted by law, to enforce collection of any such Receivables, General Intangibles,Instruments, Chattel Paper, or other rights to payment and to adjust, settle or compromise theamount or payment thereof, in the same manner and to the same extent as such Grantor could havedone. After any Grantor receives notice that the Collateral Agent has given, or after theCollateral Agent has required any Grantor to give, any notice referred to above in this subsection,and so long as any Event of Default shall be continuing:(i) all amounts and proceeds (including instruments and writings) received by suchGrantor in respect of such Receivables, General Intangibles, Instruments, Chattel Paper, orother rights to payment shall be received in trust for the benefit of the Collateral Agenthereunder, shall be segregated from other funds of such Grantor and shall be forthwith paidover to the Collateral Agent in the same form as so received (with any necessaryendorsement) to be, at the Collateral Agent’s discretion, either (A) held as cash collateraland released to such Grantor upon the remedy of allDefaults and Events of Default, or (B) while any Event of Default is continuing,applied as specified in Section 4.3, and
 
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(ii) such Grantor will not adjust, settle or compromise the amount or payment of anysuch Receivable, General Intangible, Instrument, Chattel Paper, or other right to payment orrelease wholly or partly any account debtor or obligor thereof or allow any credit ordiscount thereon.SECTION 4.2 Event of Default Remedies. If an Event of Default shall have occurred andbe continuing, the Collateral Agent, as directed by the Required Holders, may from time to time,without limitation and without notice except as expressly provided below:(a) exercise in respect of the Collateral, in addition to any other rights and remediesprovided for herein, under the other Note Documents or otherwise available to it at law, in equityor under any statute or other agreement, all the rights and remedies of a secured party on defaultunder the UCC (whether or not the UCC applies to the affected Collateral);(b) require each Grantor to, and each Grantor hereby agrees that it will at its expense andupon request of the Collateral Agent, as directed by the Required Holders, forthwith, assemble allor part of the Collateral as directed by the Collateral Agent, as directed by the Required Holders,and make it (together with all books, records and information of such Grantor relating thereto)available to the Collateral Agent at a place to be designated by the Collateral Agent;(c) prior to the disposition of any Collateral, (i) to the extent permitted by applicable law,enter, with or without process of law and without breach of the peace, any premises where any ofthe Collateral is or may be located, and without charge or liability to the Collateral Agent, asdirected by the Required Holders, seize and remove such Collateral from such premises, (ii) haveaccess to and use the relevant Grantor’s books, records, and information relating to theCollateral, and (iii) store or transfer any of the Collateral without charge in or by means of anystorage or transportation facility owned or leased by the relevant Grantor, process, repair orrecondition any of the Collateral or otherwise prepare it for disposition in any manner and to theextent the Collateral Agent, as directed by the Required Holders, deems appropriate and, solely asreasonably necessary for such preparation and disposition, use without charge any copyright,trademark, trade name, patent or technical process used by such Grantor;(d) reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, thesecurity interest created hereby by any available judicial procedure;(e) dispose of, at its office, on the premises of the respective Grantor or elsewhere, all orany part of the Collateral, as a unit or in parcels, by public or private proceedings, and by wayof one or more contracts (it being agreed that the sale of any part of the Collateral shall notexhaust the Collateral Agent’s power of sale, but sales may be made from time to time, and at anytime, until all of the Collateral has been sold or until the Secured Obligations have been paid andperformed in full), and at any such sale it shall not be necessary to exhibit any of theCollateral;
 
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(f) buy (or allow one or more of the Secured Parties to buy) the Collateral, or any partthereof, at any public sale;(g) buy (or allow one or more of the Secured Parties to buy) the Collateral, or any partthereof, at any private sale if the Collateral is of a type customarily sold in a recognized marketor is of a type which is the subject of widely distributed standard price quotations;(h) appoint by instrument in writing one or more receivers, managers or receiver/manager forthe Collateral or the business and undertaking of any Grantor pertaining to the Collateral (a“Receiver”). Any such Receiver will have, in addition to any other rights, remedies andpowers which a Receiver may have at law, in equity or by statute, the rights and powers set outelsewhere in this Section 4.2. In exercising such rights and powers, any Receiver will actas and for all purposes will be deemed to be the agent of the Grantors and neither the CollateralAgent nor any other Secured Party will be responsible for any act or default of any Receiver. TheCollateral Agent or any other Secured Party may remove any Receiver and appoint another from timeto time. No Receiver appointed by the Collateral Agent or any other Secured Party need beappointed by, nor need its appointment be ratified by, or its actions in any way supervised by, acourt; and(i) apply by appropriate judicial proceedings for appointment of a receiver for theCollateral, or any part thereof, and each Grantor hereby consents to any such appointment.Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten (10)days’ notice to such Grantor of the time and place of any public sale or the time after which anyprivate sale is to be made shall constitute reasonable notification. The Collateral Agent shallnot be obligated to make any sale of Collateral regardless of notice of sale having been given.The Collateral Agent may adjourn any public or private sale from time to time by announcement atthe time and place fixed therefor, and such sale may, without further notice, be made at the timeand place to which it was so adjourned.In addition to the foregoing, if any Event of Default has occurred and is continuing:(j) the Collateral Agent may license, or sublicense, whether general, special or otherwise,and whether on an exclusive or non-exclusive basis, any Copyrights, Patents or Trademarks includedin the Collateral throughout the world for such term or terms, on such conditions and in suchmanner as the Collateral Agent shall in its sole discretion determine;(k) the Collateral Agent may (without assuming any obligations or liability thereunder), atany time and from time to time, in its sole discretion, enforce (and shall have the exclusive rightto enforce) against any licensee or sublicensee all rights and remedies of the Grantor in, to andunder any Copyright Licenses, Patent Licenses or Trademark Licenses and take or refrain from takingany action under any thereof; and(l) upon request by the Collateral Agent, each Grantor will execute and deliver to theCollateral Agent a power of attorney, in form and substance satisfactory to the Collateral Agent,for the implementation of any lease, assignment, license, sublicense, grant of option, sale orother disposition of a Copyright, Patent or Trademark or any action related thereto. In the eventof any such disposition pursuant to this Section, each Grantor shall usecommercially reasonable efforts to supply its know-how and expertise relating to themanufacture and sale of the products bearing Trademarks or the products or services made orrendered in connection with Patents, and its customer lists and other records relating to suchPatents or Trademarks and to the distribution of said products, to the Collateral Agent.
 
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Provided, however, that the Collateral Agent will not be deemed to have knowledgeor notice of a Default or an Event of Default unless and until it receives written notice of suchDefault or Event of Default.SECTION 4.3 Application of Proceeds. If any Event of Default shall have occurred andbe continuing, the Collateral Agent may, at the direction of the Required Holders, apply any cashheld by the Collateral Agent as Collateral, and any cash proceeds received by the Collateral Agentin respect of any sale of, collection from, or other realization upon all or any part of theCollateral, first to the expenses (including all reasonable fees and expenses of counsel) ofretaking, holding, storing, processing and preparing for sale, selling, collecting, liquidating andthe Collateral and then to the satisfaction of all Secured Obligations; provided,however, that the Collateral Agent will not be deemed to have knowledge or notice of aDefault or an Event of Default unless and until it receives written notice of such Default or Eventof Default.SECTION 4.4 Deficiency. In the event that the proceeds of any sale, collection orrealization of or upon Collateral by the Collateral Agent are insufficient to pay all SecuredObligations and any other amounts to which the Collateral Agent is legally entitled, all Grantorsshall be jointly and severally liable for the deficiency, together with interest thereon asprovided in the governing Note Documents, as applicable, or (if no interest is so provided) at suchother rate as shall be fixed by applicable law, together with the costs of collection and the feesof any legal counsel employed by the Collateral Agent or any other Secured Party to collect suchdeficiency.SECTION 4.5 Indemnity and Expenses. In addition to, but not in qualification orlimitation of, any similar obligations under the other Note Documents:(a) each Grantor will indemnify the Collateral Agent and each other Secured Party and theirrespective successors and assigns (each such Person being called an “Indemnitee”), from andagainst any and all claims, losses and liabilities arising out of or resulting from this Agreement(including enforcement of this Agreement), whether based on contract, tort or any other theory,whether brought by a third party or by such Grantor or any other Issuer or Grantor, and regardlessof whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, inwhole or in part, out of the negligence of any Indemnitee; provided that such indemnityshall not, as to any Indemnitee, be available to the extent that such losses, claims, damages,liabilities or related expenses are determined by a court of competent jurisdiction by final andnonappealable judgment to have resulted from the gross negligence or willful misconduct of suchIndemnitee.(b) each Grantor will upon demand pay to the Collateral Agent the amount of any and allreasonable costs and expenses, including the fees and disbursements of the Collateral Agent’scounsel and of any experts and agents, which the Collateral Agent may incur inconnection with (i) the preparation of this Agreement and the perfection and preservation ofthe security interests created under this Agreement, (ii) the administration of this Agreement,(iii) the custody, preservation, use or operation of, or the sale of, collection from, or otherrealization upon, any Collateral, (iv) the exercise or enforcement of any of the rights of theCollateral Agent hereunder and (v) the failure by any Grantor to perform or observe any of theprovisions hereof.
 
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SECTION 4.6 Non-Judicial Remedies. In granting to the Collateral Agent the power toenforce its rights hereunder without prior judicial process or judicial hearing, each Grantorexpressly waives, renounces and knowingly relinquishes any legal right which might otherwiserequire the Collateral Agent to enforce its rights by judicial process. In so providing fornon-judicial remedies, each Grantor recognizes and concedes that such remedies are consistent withthe usage of trade, are responsive to commercial necessity, and are the result of a bargain atarm’s length. Nothing herein is intended, however, to prevent the Collateral Agent from resortingto judicial process at its option.SECTION 4.7 Other Recourse. Each Grantor waives any right to require the CollateralAgent or any other Secured Party to proceed against any other Person, to exhaust any Collateral orother security for the Secured Obligations, to have any other Grantor joined with such Grantor inany suit arising out of the Secured Obligations or this Agreement, or to pursue any other remedy inthe Collateral Agent’s or such Secured Party’s power. Each Grantor further waives any and allnotice of acceptance of this Agreement and of the creation, modification, rearrangement, renewal orextension for any period of any of the Secured Obligations of any other Grantor from time to time.Each Grantor further waives any defense arising by reason of any disability or other defense of anyother Grantor or by reason of the cessation from any cause whatsoever of the liability of any otherGrantor. This Agreement shall continue as to each Grantor irrespective of the fact that theliability of any other Grantor may have ceased and irrespective of the validity or enforceabilityof any other Note Document to which any Grantor may be a party, and notwithstanding any death,incapacity, reorganization, or bankruptcy of any Grantor or any other event or proceeding affectingany Grantor. Until all of the Secured Obligations shall have been paid in full, no Grantor shallhave any right to subrogation and each Grantor waives the right to enforce any remedy which theCollateral Agent or any other Secured Party has or may hereafter have against any other Grantor,and waives any benefit of and any right to participate in any other security whatsoever now orhereafter held by the Collateral Agent. Each Grantor authorizes the Collateral Agent and eachother Secured Party, without notice or demand, without any reservation of rights against suchGrantor, and without in any way affecting such Grantor’s liability hereunder or on the SecuredObligations, from time to time to (a) take or hold any other property of any type from any otherPerson as security for the Secured Obligations, and exchange, enforce, waive and release any or allof such other property, (b) apply the Collateral or such other property and direct the order ormanner of sale thereof as the Collateral Agent or such Secured Party may in its reasonablediscretion determine, (c) renew, extend for any period, accelerate, modify, compromise, settle orrelease any of the obligations of any other Grantor in respect of any or all of the SecuredObligations or other security for the Secured Obligations, (d) waive, enforce, modify, amend,restate or supplement any of the provisions of any Note Document with any Person other than suchGrantor and (e) release or substitute any Grantor.
 
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SECTION 4.8 Limitation on Duty of the Collateral Agent in Respect of Collateral.Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have noduty as to any Collateral in its possession or control or in the possession or control of any agentor bailee or as to the preservation of rights against prior parties or any other rights pertainingthereto. The Collateral Agent shall be deemed to have exercised reasonable care in the custody ofthe Collateral in its possession if the Collateral is accorded treatment substantially equal tothat which it accords the property of its other customers, and shall not be liable or responsiblefor any loss or damage to any of the Collateral, or for any diminution in the value thereof, byreason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or otheragent or bailee selected by the Collateral Agent in good faith.SECTION 4.9 Appointment of Collateral Agents. At any time or times, in order tocomply with any legal requirement in any jurisdiction, the Collateral Agent, at the direction ofthe Required Holders, may appoint any bank or trust company or one or more other Persons, either toact as co-agent or co-agents, jointly with the Collateral Agent, or to act as separate agent oragents on behalf of the Collateral Agent and the other Secured Parties, with such power andauthority as may be necessary for the effectual operation of the provisions hereof and may bespecified in the instrument of appointment. In so doing, the Collateral Agent may, in the name andon behalf of any Grantor, give to such co-agent or separate agent indemnities and other protectionssimilar to those provided in this Agreement for the Collateral Agent. The Collateral Agent shallnotify Grantors in writing of any such appointment promptly thereafter; provided that, nosuch notice shall be required if such appointment was made in connection with the CollateralAgent’s or any other Secured Party’s exercise of any remedies hereunder or if an Event of Defaulthas occurred and is continuing.ARTICLE V.MiscellaneousSECTION 5.1 Notices. Any notice or communication required or permitted hereundershall be given in writing as provided in Paragraph 11I of the Note Purchase Agreement and shall beaddressed (a) if to the Issuer, at the Issuer’s address indicated in the Note Purchase Agreement(b) if to any other Grantor, at the address of the Issuer indicated in the Note Purchase Agreementand (c) if to the Collateral Agent, at the address of the Collateral Agent indicated in the NotePurchase Agreement.SECTION 5.2 Amendments; Security Agreement Supplements. No amendment of any provisionof this Agreement shall be effective unless it is in writing and signed by each Grantor and theCollateral Agent, and no waiver of any provision of this Agreement, and no consent to any departureby any Grantor therefrom, shall be effective unless it is in writing and signed by the CollateralAgent, and then such waiver or consent shall be effective only in the specific instance and for thespecific purpose for which given and to the extent specified in such writing. In addition, allsuch amendments and waivers shall be effective only if given with the necessary approvals ofRequired Holders as required in the Note Purchase Agreement. Upon the execution and delivery byany Person of a security agreement supplement in substantially the form of Exhibit D (each,a “Security Agreement Supplement”): (a) such Person shall be referredto as an “Additional Grantor” and shall become and be a Grantor hereunder, and eachreference in this Agreement to a “Grantor” shall also mean and be a reference to such AdditionalGrantor, and each reference in any other Note Document to a “Grantor” or a “Credit Party” shallalso mean and be a reference to such Additional Grantor; and (b) each reference herein to “thisAgreement,” “hereunder,” “hereof” or words of like import referring to this Agreement, and eachreference in any other Note Document to the “Security Agreement,” “thereunder,” “thereof” or wordsof like import referring to this Agreement, shall mean and be a reference to this Agreement assupplemented by such Security Agreement Supplement.
 
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SECTION 5.3 Preservation of Rights. No failure on the part of the Collateral Agent orany other Secured Party to exercise, and no delay in exercising, any right hereunder or under anyother Note Document shall operate as a waiver thereof; nor shall any single or partial exercise ofany such right preclude any other or further exercise thereof or the exercise of any other right.Neither the execution nor the delivery of this Agreement shall in any manner impair or affect anyother security for the Secured Obligations. The rights and remedies of the Collateral Agentprovided herein and in the other Note Documents are cumulative and are in addition to, and notexclusive of, any rights or remedies provided by law or otherwise. The rights of the CollateralAgent under any Note Document against any party thereto are not conditional or contingent on anyattempt by the Collateral Agent to exercise any of its rights or exhaust any recourse under anyother Note Document against such party or against any other Person.SECTION 5.4 Unenforceability. Any provision of this Agreement which is prohibited orunenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or invalidity without invalidating the remaining portions hereof or thereof oraffecting the validity or enforceability of such provision in any other jurisdiction.SECTION 5.5 Survival of Agreements. All representations and warranties of eachGrantor herein and all covenants and agreements herein shall survive the execution and delivery ofthis Agreement, the execution and delivery of any other Note Document and the creation of theSecured Obligations.SECTION 5.6 Liability. Neither this Agreement nor the exercise by the CollateralAgent or any Secured Party or the failure of the Collateral Agent or any Secured Party to exerciseany right, power or remedy conferred herein or by law shall be construed as relieving any Grantorfrom liability on the Secured Obligations or any deficiency thereon.SECTION 5.7 Offset. To secure the repayment of the Secured Obligations, each Grantorhereby grants to each Secured Party, including the Collateral Agent a security interest, a Lien,and a right of offset, each of which shall be in addition to all other interests, Liens, and rightsof any Secured Party at common law, under the Note Documents, or otherwise, and each of which shallbe upon and against (a) any and all moneys, securities or other property (and the proceedstherefrom) of such Grantor, now or hereafter held or received by or in transit to any Secured Partyfrom or for the account of such Grantor, whether for safekeeping, custody, pledge, transmission,collection or otherwise, (b) any and all deposits (general or special, time or demand, provisionalor final) of such Grantor with any Secured Party and (c) any other credits and claims of suchGrantor at any time existing against any Secured Party, including claimsunder certificates of deposit. From time to time during the continuance of any Event ofDefault, each holder of Secured Party is hereby authorized to foreclose upon or to offset againstthe Secured Obligations then due and payable (in either case without notice to any Grantor), anyand all items referred to above. The remedies of foreclosure and offset are separate andcumulative, and either may be exercised independently of the other without regard to procedures orrestrictions applicable to the other.
 
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SECTION 5.8 Binding Effect and Assignment. This Agreement creates a continuingsecurity interest in the Collateral and such security interest, together with all covenants andother agreements contained in this Agreement by or on behalf of the parties hereto shall bind andinure to the benefit of the respective successors and assigns of the parties hereto (including,without limitation, any Transferee) whether so expressed or not. None of the rights or duties ofany Grantor hereunder may be assigned or otherwise transferred without the prior written consent ofthe Collateral Agent as directed by the Required Holders.SECTION 5.9 Termination. Upon receipt of written notice from each holder of Notes ofthe satisfaction in full of the Secured Obligations and the termination or expiration of the NotePurchase Agreement (other than indemnity obligations that survive the termination of this Agreementfor which no notice of claims has been received by the Grantors), the Collateral shall be releasedfrom the Liens created hereby, and this Agreement shall terminate (other than those provisionsexpressly stated to survive such termination) and all rights to the Collateral shall revert to theapplicable Grantor, all without delivery of any instrument or performance of any act by any party.The Collateral Agent will thereafter, upon any Grantor’s request and at such Grantor’s expense, (a)return to such Grantor such of the Collateral in the Collateral Agent’s possession as shall nothave been sold or otherwise disposed of or applied pursuant to the terms hereof and (b) execute anddeliver to such Grantor such documents as such Grantor shall reasonably request to evidence suchtermination. If any of the Collateral shall be sold or otherwise disposed of by any Grantor in atransaction permitted by the Note Purchase Agreement, then the Collateral Agent, at the request andsole expense of such Grantor, shall promptly execute and deliver to such Grantor all releases orother documents reasonably necessary for the release of the Liens created hereby on suchCollateral. Each Grantor acknowledges that it is not authorized to file any financing statement oramendment or termination statement with respect to any financing statement originally filed inconnection herewith without the prior written consent of the Collateral Agent, subject to suchGrantor’s rights under Sections 9-509(d)(2) and 9-518 of the New York UCC.SECTION 5.10 Governing Law; Submission to Jurisdiction. This Agreement shall beconstrued and enforced in accordance with, and the rights of the parties shall be governed by, thelaw of the State of New York. THE GRANTORS HEREBY SUBMIT TO THE JURISDICTION OF THE SUPREME COURTOF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO THE SOLE AND ABSOLUTEELECTION OF THE REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL ACTIONS ORPROCEEDINGS RELATING TO THIS AGREEMENT OR THE NOTES SHALL BE LITIGATED IN SUCH COURTS, AND THEGRANTORS WAIVE ANY OBJECTION WHICH THEY MAY HAVE BASED ON IMPROPER VENUE OR FORUMNON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURTS.
 
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SECTION 5.11 Survival of Representations and Warranties; Entire Agreement. Allrepresentations and warranties contained herein or made in writing by or on behalf of the Grantorsin connection herewith shall survive the execution and delivery of this Agreement and the Notes,the transfer of any Note or portion thereof or interest therein and the payment of any Note, andmay be relied upon by any Transferee, regardless of any investigation made at any time by or onbehalf of any Purchaser or any Transferee. Subject to the preceding sentence, this Agreement, theNotes and the other Note Documents embody the entire agreement and understanding between theholders of the Notes and the Grantors and supersede all prior agreements and understandingsrelating to the subject matter hereofSECTION 5.12 Counterparts. This Agreement may be executed in any number ofcounterparts, each of which shall be deemed an original, but all of which together shall constituteone instrument.*(Remainder of Page Intentionally Left Blank; Signature Pages Follow)*
 
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IN WITNESS WHEREOF, each Grantor has executed and delivered this Agreement as of the datefirst above written.      **GRANTORS:**