EX-10.5 SECURITY AGREEMENT



 




Exhibit
10.5




EXECUTION VERSION




EXHIBIT M-1

TO CREDIT AGREEMENT




 

 








SECURITY AGREEMENT




made by




NOVELIS INC.,

as Canadian Borrower,




NOVELIS CORPORATION

NOVELIS PAE CORPORATION,

NOVELIS FINANCES USA LLC,

NOVELIS SOUTH AMERICA HOLDINGS LLC,

ALUMINUM UPSTREAM HOLDINGS LLC,

as U.S. Borrowers




and




THE GUARANTORS FROM TIME TO TIME PARTY HERETO




in favor of




LASALLE BUSINESS CREDIT, LLC,

as Collateral Agent




 






Dated as of July 6, 2007




 

 



 









 








TABLE OF CONTENTS




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

 	 	 	 	 
	SECTION 1.1.	 	DEFINITIONS
	 	 	2	 
	SECTION 1.2.	 	INTERPRETATION
	 	 	9	 
	SECTION 1.3.	 	RESOLUTION OF DRAFTING AMBIGUITIES
	 	 	9	 
	SECTION 1.4.	 	PERFECTION CERTIFICATE
	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	GRANT OF SECURITY AND SECURED OBLIGATIONS
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 2.1.	 	GRANT OF SECURITY INTEREST
	 	 	10	 
	SECTION 2.2.	 	FILINGS
	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 3.1.	 	DELIVERY OF CERTIFICATED SECURITIES COLLATERAL
	 	 	12	 
	SECTION 3.2.	 	PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL
	 	 	12	 
	SECTION 3.3.	 	FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF
PERFECTED SECURITY INTEREST
	 	 	13	 
	SECTION 3.4.	 	OTHER ACTIONS
	 	 	13	 
	SECTION 3.5.	 	JOINDER OF ADDITIONAL GUARANTORS
	 	 	16	 
	SECTION 3.6.	 	SUPPLEMENTS; FURTHER ASSURANCES
	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 4.1.	 	TITLE
	 	 	17	 
	SECTION 4.2.	 	VALIDITY OF SECURITY INTEREST
	 	 	18	 





 

 





-i-









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	SECTION 4.3.	 	DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED
COLLATERAL
	 	 	18	 
	SECTION 4.4.	 	OTHER FINANCING STATEMENTS
	 	 	18	 
	SECTION 4.5.	 	INVENTORY AND EQUIPMENT
	 	 	18	 
	SECTION 4.6.	 	DUE AUTHORIZATION AND ISSUANCE
	 	 	19	 
	SECTION 4.7.	 	CONSENTS, ETC
	 	 	19	 
	SECTION 4.8.	 	PLEDGED COLLATERAL
	 	 	19	 
	SECTION 4.9.	 	INSURANCE
	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 5.1.	 	PLEDGE OF ADDITIONAL SECURITIES COLLATERAL
	 	 	20	 
	SECTION 5.2.	 	VOTING RIGHTS; DISTRIBUTIONS; ETC.
	 	 	20	 
	SECTION 5.3.	 	DEFAULTS, ETC
	 	 	21	 
	SECTION 5.4.	 	ORGANIZATIONAL DOCUMENTS
	 	 	21	 
	SECTION 5.5.	 	CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS
OF EQUITY INTERESTS
	 	 	22	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 6.1.	 	GRANT OF INTELLECTUAL PROPERTY LICENSE
	 	 	22	 
	SECTION 6.2.	 	PROTECTION AND MAINTENANCE OF INTELLECTUAL PROPERTY
COLLATERAL
	 	 	22	 
	SECTION 6.3.	 	AFTER-ACQUIRED PROPERTY
	 	 	23	 
	SECTION 6.4.	 	LITIGATION
	 	 	24	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	CERTAIN PROVISIONS CONCERNING RECEIVABLES
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 7.1.	 	MAINTENANCE OF RECORDS
	 	 	24	 
	SECTION 7.2.	 	MODIFICATION OF TERMS, ETC
	 	 	24	 
	SECTION 7.3.	 	COLLECTION
	 	 	25	 
	SECTION 7.4.	 	LEGEND
	 	 	25	 
	SECTION 7.5.	 	SPECIAL REPRESENTATIONS AND WARRANTIES AND COVENANTS
	 	 	25	 





 

 




-ii-









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	TRANSFERS
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 8.1.	 	TRANSFERS OF PLEDGED COLLATERAL
	 	 	26	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	REMEDIES
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 9.1.	 	REMEDIES
	 	 	26	 
	SECTION 9.2.	 	NOTICE OF SALE
	 	 	28	 
	SECTION 9.3.	 	WAIVER OF NOTICE AND CLAIMS
	 	 	28	 
	SECTION 9.4.	 	CERTAIN SALES OF PLEDGED COLLATERAL
	 	 	28	 
	SECTION 9.5.	 	NO WAIVER; CUMULATIVE REMEDIES
	 	 	30	 
	SECTION 9.6.	 	CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL
PROPERTY
	 	 	30	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	APPLICATION OF PROCEEDS
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 10.1.	 	APPLICATION OF PROCEEDS
	 	 	30	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	SECTION 11.1.	 	CONCERNING COLLATERAL AGENT
	 	 	31	 
	SECTION 11.2.	 	COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT
APPOINTED ATTORNEY-IN-FACT
	 	 	32	 
	SECTION 11.3.	 	CONTINUING SECURITY INTEREST; ASSIGNMENT
	 	 	32	 
	SECTION 11.4.	 	TERMINATION; RELEASE
	 	 	33	 
	SECTION 11.5.	 	MODIFICATION IN WRITING
	 	 	33	 
	SECTION 11.6.	 	NOTICES
	 	 	33	 
	SECTION 11.7.	 	GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE
OF PROCESS; WAIVER OF JURY TRIAL
	 	 	33	 
	SECTION 11.8.	 	SEVERABILITY OF PROVISIONS
	 	 	33	 
	SECTION 11.9.	 	EXECUTION IN COUNTERPARTS
	 	 	33	 
	SECTION 11.10.	 	BUSINESS DAYS
	 	 	34	 
	SECTION 11.11.	 	NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION
	 	 	34	 
	SECTION 11.12.	 	NO CLAIMS AGAINST COLLATERAL AGENT
	 	 	34	 
	SECTION 11.13.	 	NO RELEASE
	 	 	34	 
	SECTION 11.14.	 	OBLIGATIONS ABSOLUTE
	 	 	34	 
	SECTION 11.15.	 	INTERCREDITOR AGREEMENT GOVERNS
	 	 	35	 
	SECTION 11.16.	 	DELIVERY OF COLLATERAL
	 	 	35	 





 

 




-iii-









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	SECTION 11.17.	 	MORTGAGES
	 	 	35	 
	SECTION 11.18.	 	CONFLICTS
	 	 	35	 
	 	 	 	 	 
	 	 	 	 
	SIGNATURES	 	 
	 	 	S-1	 
	 	 	 	 	 
	 	 	 	 
	EXHIBIT 1	 	Form of Issuer’s Acknowledgment
	 	 	 	 
	EXHIBIT 2	 	Form of Securities Pledge Amendment
	 	 	 	 
	EXHIBIT 3	 	Form of Joinder Agreement
	 	 	 	 
	EXHIBIT 4	 	Form of Copyright Security Agreement
	 	 	 	 
	EXHIBIT 5	 	Form of Patent Security Agreement
	 	 	 	 
	EXHIBIT 6	 	Form of Trademark Security Agreement
	 	 	 	 
	EXHIBIT 7	 	Form of Bailee Letter
	 	 	 	 





 

 





-iv-











 





SECURITY AGREEMENT




          This SECURITY AGREEMENT, dated as of July 6, 2007 (as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the provisions hereof, this
“Agreement”), made by NOVELIS INC., a corporation formed under the Canada Business
Corporations Act (the “Canadian Borrower”), NOVELIS CORPORATION, a Texas corporation,
NOVELIS PAE CORPORATION, a Delaware corporation, NOVELIS FINANCES USA LLC, a Delaware limited
liability company (“Novelis Finances”), NOVELIS SOUTH AMERICA HOLDINGS LLC, a Delaware
limited liability company (“Novelis South”), ALUMINUM UPSTREAM HOLDINGS LLC, a Delaware
limited liability company (“Aluminum Upstream” and, together with Novelis Corporation,
Novelis PAE, Novelis Finances and Novelis South, the “U.S. Borrowers”), and the Guarantors
from to time to time party hereto (the “Guarantors”), as pledgors, assignors and debtors
(the Canadian Borrower, the U.S. Borrowers, together with the Guarantors, in such capacities and
together with any successors in such capacities, the “Pledgors”, and each, a
“Pledgor”), in favor of LASALLE BUSINESS CREDIT, LLC, in its capacity as collateral agent
pursuant to the Credit Agreement (as hereinafter defined) (in such capacity and together with any
successors in such capacity, the “Collateral Agent”).




RECITALS:




          A. The U.S. Borrowers, Novelis, Inc., a corporation formed under the Canada Business
Corporations Act, Novelis UK Limited, a limited liability company incorporated under the laws of
England and Wales with registered number 00279596, Novelis AG, a stock corporation (AG) organized
under the laws of Switzerland, AV Aluminum Inc., a corporation formed under the Canada Business
Corporations Act, and the other Loan Parties from time to time party thereto, the Lenders from time
to time party thereto, ABN AMRO BANK N.V., as U.S./European Issuing Bank, U.S. Swingline Lender and
Administrative Agent, LaSalle Business Credit, LLC, as Collateral Agent and Funding Agent, ABN AMRO
BANK N.V., acting through its Canadian branch, as Canadian Issuing Bank, Canadian Funding Agent and
as Canadian Administrative Agent, and the other parties thereto have, in connection with the
execution and delivery of this Agreement, entered into that certain Credit Agreement, dated as of
July 6, 2007 (as amended, restated, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”; which term shall also include and refer to any
increase in the amount of indebtedness under the Credit Agreement and any refinancing or
replacement of the Credit Agreement (whether under a bank facility, securities offering or
otherwise) or one or more successor or replacement facilities whether or not with a different group
of agents or lenders (whether under a bank facility, securities offering or otherwise) and whether
or not with different obligors upon the Administrative Agent’s acknowledgment of the termination of
the predecessor Credit Agreement).




          B. Each Guarantor has, pursuant to the Credit Agreement, unconditionally guaranteed the
Secured Obligations.




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




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



 

 










 



-2-




          F. It is a condition to (i) the obligations of the Lenders to make the Loans and other Credit
Extensions under the Credit Agreement and (ii) the obligations of each Issuing Bank to issue
Letters of Credit that each Pledgor execute and deliver the applicable Loan Documents, including
this Agreement.




AGREEMENT:




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




ARTICLE I




DEFINITIONS AND INTERPRETATION




          SECTION 1.1. Definitions.




          (a) Unless otherwise defined herein or in the Credit Agreement, capitalized terms used herein
that are defined in the UCC shall have the meanings assigned to them in the UCC; provided
that in any event, the following terms shall have the meanings assigned to them in the UCC:




          “Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”;
“Commodity Account”; “Commodity Contract”; “Commodity Intermediary”;
“Documents”; “Electronic Chattel Paper”; “Entitlement Order”;
“Equipment”; “Financial Asset”; “Fixtures”; “Goods”,
“Inventory”; “Letter-of-Credit Rights”; “Letters of Credit”;
“Money”; “Payment Intangibles”; “Proceeds”; “ Records”;
“Securities Account”; “Securities Entitlement”; “Securities Intermediary”;
“Supporting Obligations”; and “Tangible Chattel Paper.”




          (b) Capitalized terms used but not otherwise defined herein that are defined in the Credit
Agreement shall have the meanings given to them in the Credit Agreement. Sections 1.03, 1.04 and
1.05 of the Credit Agreement shall apply herein mutatis mutandis.




          (c) The following terms shall have the following meanings:




          “Account Debtor” shall mean each person who is obligated on a Receivable or Supporting
Obligation related thereto.




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




          “Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”,
as now and hereinafter in effect, or any successor statute.




          “Bailee Letter” shall be an agreement in form substantially similar to Exhibit
7 hereto or in such other form and substance reasonably satisfactory to the Collateral Agent.




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



 

 










 



-3-




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




          “Collateral Report” means any certificate (including any Borrowing Base Certificate),
report or other document delivered by any Pledgor to any Agent with respect to the Pledged
Collateral pursuant to any Loan Document.




          “Collateral Support” shall mean all property (real or personal) assigned, hypothecated
or otherwise securing any Pledged Collateral and shall include any security agreement or other
agreement granting a lien or security interest in such real or personal property.




          “Commodity Account Control Agreement” shall mean a control agreement in a form that is
reasonably satisfactory to the Collateral Agent establishing the Collateral Agent’s Control with
respect to any Commodity Account.




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




          “Control” shall mean (i) in the case of each Deposit Account, “control”, as such term
is defined in Section 9-104 of the UCC, (ii) in the case of any Security Entitlement, “control”, as
such term is defined in Section 8-106 of the UCC, and (iii) in the case of any Commodity Contract,
“control”, as such term is defined in Section 9-106 of the UCC.




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




          “Copyrights” shall mean, collectively, all copyrights (whether statutory or common
law, whether established, registered or recorded in the United States or any other country or any
political subdivision thereof, whether registered or unregistered and whether published or
unpublished) and all mask works (as such term is defined in 17 U.S.C. Section 901, et seq.),
together with any and all (i) copyright registrations and applications, (ii) rights and privileges
arising under applicable law with respect to such copyrights, (iii) renewals and extensions thereof
and amendments thereto, (iv) income, fees, royalties, damages, claims and payments now or hereafter
due and/or payable with respect thereto, including damages and payments for past, present or future
infringements or other violations thereof, (v) rights corresponding thereto throughout the world
and (vi) rights to sue for past, present or future infringements thereof.




          “Copyright Security Agreement” shall mean an agreement substantially in the form of
Exhibit 4 hereto.




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




          “Deposit Account Control Agreement” shall mean an agreement in form and substance
reasonably satisfactory to the Collateral Agent establishing the Collateral Agent’s Control with
respect to any Deposit Account.



 

 










 



-4-




          “Deposit Accounts” shall mean, collectively, with respect to each Pledgor, (i) all
“deposit accounts” as such term is defined in the UCC and in any event shall include the LC Account
and all
accounts and sub-accounts relating to any of the foregoing accounts and (ii) all cash, funds,
checks, notes and instruments from time to time on deposit in any of the accounts or sub-accounts
described in clause (i) of this definition.




          “Discharge of Term Loan Obligations” shall have the meaning assigned to such term in
the Intercreditor Agreement.




          “Distributions” shall mean, collectively, with respect to each Pledgor, all dividends,
cash, options, warrants, rights, instruments, distributions, returns of capital or principal,
income, interest, profits and other property, interests (debt or equity) or proceeds, including as
a result of a split, revision, reclassification or other like change of the Pledged Securities,
from time to time received, receivable or otherwise distributed to such Pledgor in respect of or in
exchange for any or all of the Pledged Securities or Intercompany Notes.




          “Excluded Commodities Accounts” shall mean Commodities Accounts with Investment
Property or other property held in or credited to such Commodities Accounts with an aggregate value
of less than $1,000,000 at any time with respect to any particular Commodities Account and less
than $2,500,000 at any time in the aggregate for all such Commodities Accounts.




          “Excluded Deposit Accounts” shall mean (i) Deposit Accounts used solely to fund
payroll, payroll taxes and similar employment taxes or employee benefits in the ordinary course of
business and (ii) Deposit Accounts with an amount on deposit of less than $1,000,000 at any time
with respect to any particular Deposit Account and less than $2,500,000 at any time in the
aggregate for all such Deposit Accounts; provided that notwithstanding the foregoing, no
Deposit Account of a Borrowing Base Loan Party shall be an Excluded Deposit Account unless it is
permitted to exist outside of the Cash Management System pursuant to Section 9.01(d) of the Credit
Agreement.




          “Excluded Securities Accounts” shall mean (i) Securities Accounts with Investment
Property or other property held in or credited to such Securities Accounts with an aggregate value
of less than $10,000,000 at any time in the aggregate for all such Securities Accounts and (ii)
Securities Accounts with property held in or credited to such Securities Accounts consisting solely
of the Equity Interests of Aluminum Company of Malaysia Berhard (Malaysia).




          “Excluded Property” shall mean





     (a) any permit or license issued by a Governmental Authority to any Pledgor or any
agreement to which any Pledgor is a party, in each case, only to the extent and for so long
as the terms of such permit, license or agreement or any Requirement of Law applicable
thereto, validly prohibit the creation by such Pledgor of a security interest in such
permit, license or agreement in favor of the Collateral Agent (after giving effect to
Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or
provisions) or any other applicable law (including the Bankruptcy Code) or principles of
equity),




     (b) any “Venture Interests” as defined in the Joint Venture Agreement, dated January
18, 1985, between Arco Logan Inc. and Alcan Aluminum Corporation, as such Joint Venture
Agreement may have been amended prior to January 7, 2005, and any Equity Interest in any
other joint ventures to the extent the terms of the applicable joint venture agreement
validly prohibit the



 

 










 



-5-




creation by the applicable Pledgor of a security interest in such other
Equity Interests in favor of the Collateral Agent, but only to the extent and for so long as
(i) the terms of the applicable agreement prohibit the creation by the applicable Pledgor of
a security interest in such “Venture Interests” or other Equity Interests in favor of the Collateral Agent (after giving
effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor
provision or provisions) or any other applicable law (including the Bankruptcy Code) or
principles of equity) and (ii) such prohibition is permitted by Section 6.19 of the Credit
Agreement,




     (c) any property owned by any Pledgor on the date hereof or hereafter acquired that is
subject to a Lien securing a Purchase Money Obligation or Capital Lease Obligation permitted
to be incurred pursuant to the provisions of the Credit Agreement if the contract or other
agreement in which such Lien is granted (or the documentation providing for such Purchase
Money Obligation or Capital Lease Obligation) validly prohibits the creation of any other
Lien on such property,




     (d) any United States trademark or service mark application filed on the basis of a
Pledgor’s intent-to-use such mark, in each case, unless and until evidence of the use of
such trademark in interstate commerce is submitted to and accepted by the United States
Patent and Trademark Office, and




     (e) any Equity Interests of Novelis de Mexico, S.A. de C.V. so long as (i) such
Subsidiary is an Excluded Collateral Subsidiary and (ii) the pledge of or grant of a
security interest in the Equity Interests of such Subsidiary pursuant hereto would
constitute an investment of earnings in United States property under Section 956 (or a
successor provision) of the Code, which investment would or could reasonably be expected to
trigger an increase in the net income of a United States shareholder of such Subsidiary
pursuant to Section 951 (or a successor provision) of the Code, as reasonably determined by
the Collateral Agent; provided, however, that Excluded Property shall not
include (x) Voting Stock of such Subsidiary representing not more than 65% of the total
voting power of all outstanding Voting Stock of such Subsidiary and (y) 100% of the Equity
Interests not constituting Voting Stock of such Subsidiary, except that any such Equity
Interests constituting “stock entitled to vote” within the meaning of Treasury Regulation
Section 1.956-2(c)(2) shall be treated as Voting Stock for purposes of this clause (e);


provided, however, that Excluded Property shall not include any Proceeds,
substitutions or replacements of any Excluded Property referred to in clauses (a) through (e)
(unless such Proceeds, substitutions or replacements would constitute Excluded Property referred to
in clauses (a), (b), (c), (d) or (e)).




          “General Intangibles” shall mean, collectively, with respect to each Pledgor, all
“general intangibles”, as such term is defined in the UCC, of such Pledgor and, in any event, shall
include (i) all of such Pledgor’s rights, title and interest in, to and under all Contracts and
insurance policies (including all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for damages or other relief pursuant to or in
respect of any Contract), (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights, claims, choses-in-action and
causes of action of such Pledgor against any other person and the benefits of any and all
collateral or other security given by any other person in connection therewith, (iv) all
guarantees, endorsements and indemnifications on, or of, any of the Pledged Collateral or any of
the Mortgaged Property, (v) all intellectual property, (vi) all lists, books, records,
correspondence, ledgers, printouts, files (whether in printed form or stored electronically), tapes
and other papers or materials containing information relating to any of the Pledged Collateral or
any of the Mortgaged



 

 










 



-6-


Property, including all customer or tenant lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, appraisals, recorded knowledge,
surveys, studies, engineering reports, test reports, manuals, standards, processing standards,
performance standards, catalogs, research data, computer and automatic machinery software and
programs and the like, field repair data, accounting information
pertaining to such Pledgor’s operations or any of the Pledged Collateral or any of the
Mortgaged Property and all media in which or on which any of the information or knowledge or data
or records may be recorded or stored and all computer programs used for the compilation or printout
of such information, knowledge, records or data, (vii) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, now or hereafter acquired or
held by such Pledgor, including building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and (viii) all rights to
reserves, deferred payments, deposits, refunds, indemnification of claims and claims for tax or
other refunds against any Governmental Authority.




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




          “Immaterial Intellectual Property Collateral” shall mean Intellectual Property
Collateral that is not Material Intellectual Property Collateral.




          “Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments”, as such term is defined in Article 9, rather than Article 3, of the UCC, and shall
include all promissory notes, drafts, bills of exchange or acceptances.




          “Intellectual Property” shall mean, collectively, Patents, Trademarks, Copyrights,
Intellectual Property Licenses and Trade Secrets and Other Proprietary Rights.




          “Intellectual Property Collateral” shall mean, collectively, the Patents, Trademarks,
Copyrights, Intellectual Property Licenses and Trade Secrets and Other Proprietary Rights of the
Pledgors, in each case, other than any Excluded Property.




          “Intellectual Property Licenses” shall mean, collectively, with respect to each
Pledgor, all license agreements, distribution agreements and covenants not to sue (regardless of
whether such agreements and covenants are contained within an agreement that also covers other
matters, such as development or consulting) with respect to any Patent, Trademark, Copyright or
Trade Secrets and Other Proprietary Rights, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such agreement, together with any and all (i) amendments,
renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties, damages,
claims and payments now and hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements or violations thereof,
(iii) rights to sue for past, present and future infringements, breaches or violations thereof and
(iv) other rights to use, exploit or practice any or all Patents, Trademarks, Copyrights or Trade
Secrets and Other Proprietary Rights.




          “Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany notes
described in Schedule 11 to the Perfection Certificate and intercompany notes hereafter
acquired by such Pledgor and all certificates, instruments or agreements evidencing such
intercompany notes, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof to the extent permitted pursuant to the terms
hereof.




          “Intercreditor Agreement” shall mean that certain Intercreditor Agreement, dated as of
the date hereof, by and among the Pledgors and the other Companies party thereto, the Funding
Agent,



 

 











 



-7-


the Administrative Agent, the Collateral Agent, the Canadian Funding Agent, the Canadian
Administrative Agent, the Term Loan Agents, and certain other persons which may be or become
parties thereto or become bound thereto from time to time, as the same may be amended, restated,
amended and restated, supplemented or otherwise modified from time to time.




          “Investment Property” shall mean a security, whether certificated or uncertificated,
Security Entitlement, Securities Account, Commodity Contract or Commodity Account, excluding,
however, the Securities Collateral.




          “Joinder Agreement” shall mean an agreement substantially in the form of Exhibit
3 hereto.




          “LC Account” shall mean any account established and maintained in accordance with the
provisions of Section 2.18(i) of the Credit Agreement and all property from time to time on deposit
in such LC Account.




          “Material Intellectual Property Collateral” shall mean any Intellectual Property
Collateral that is material (i) to the use and operation of any material Pledged Collateral or
Mortgaged Property or (ii) to the business, results of operations, prospects or condition,
financial or otherwise, of any Pledgor.




          “Mortgaged Property” shall have the meaning assigned to such term in the Mortgages.




          “Patents” shall mean, collectively, all patents, patent applications, certificates of
inventions, industrial designs and rights corresponding thereto throughout the world (whether
established or registered or recorded in the United States or any other country or any political
subdivision thereof), together with any and all (i) rights and privileges arising under applicable
law with respect to any of the foregoing, (ii) inventions and improvements described and claimed
therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part
thereof and amendments thereto, (iv) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable thereunder and with respect thereto including damages and payments for
past, present or future infringements or other violations thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to sue for past, present or future infringements or other
violations thereof.




          “Patent Security Agreement” shall mean an agreement substantially in the form of
Exhibit 5 hereto.




          “Perfection Certificate” shall mean, individually and collectively, as the context may
require, each perfection certificate dated July 6, 2007, executed and delivered by each Pledgor in
favor of the Agents, and each other Perfection Certificate (which shall be in form and substance
reasonably acceptable to the Collateral Agent) executed and delivered by the applicable Pledgor in
favor of the Funding Agent and Collateral Agent for the benefit of the Secured Parties
contemporaneously with the execution and delivery of each Joinder Agreement executed in accordance
with Section 3.5 hereof, in each case, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the Credit Agreement.




          “Permitted Encumbrances” shall mean Permitted Liens of the type described in Section
6.02(a), (b), (c), (d), (f), (g), (h), (i), (j), (k) (to the extent provided in the Intercreditor
Agreement), (n), (o), (q), (r), (s) and (t) of the Credit Agreement which have priority over the
Liens granted pursuant to this Agreement (and in each case, subject to the proviso to Section 6.02
of the Credit Agreement).



 

 











 



-8-




          “person” shall mean any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.




          “Pledge Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.




          “Pledged Collateral” shall have the meaning assigned to such term in Section
2.1 hereof.




          “Pledged Securities” shall mean, collectively, with respect to each Pledgor, (i) all
issued and outstanding Equity Interests of each issuer set forth on Schedule 10 to the
Perfection Certificate as being owned by such Pledgor and all options, warrants, rights, agreements
and additional Equity Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and powers of such Pledgor
relating to such Equity Interests in each such issuer or under any Organizational Document of each
such issuer, and the certificates, instruments and agreements representing such Equity Interests
and any and all interest of such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, (ii) all Equity Interests of any issuer, which Equity
Interests are hereafter acquired by such Pledgor (including by issuance) and all options, warrants,
rights, agreements and additional Equity Interests of whatever class of any such issuer acquired by
such Pledgor (including by issuance), together with all rights, privileges, authority and powers of
such Pledgor relating to such Equity Interests or under any Organizational Document of any such
issuer, and the certificates, instruments and agreements representing such Equity Interests and any
and all interest of such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by such Pledgor in any manner, and
(iii) all Equity Interests issued in respect of the Equity Interests referred to in clause (i) or
(ii) upon any consolidation or merger of any issuer of such Equity Interests.




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




          “Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment
Intangibles, (iv) General Intangibles, (v) Instruments and (vi) all other rights to payment,
whether or not earned by performance, for goods or other property sold, leased, licensed, assigned
or otherwise disposed of, or services rendered or to be rendered, regardless of how classified
under the UCC together with all of Pledgors’ rights, if any, in any goods or other property giving
rise to such right to payment and all Collateral Support and Supporting Obligations related thereto
and all Records relating thereto.




          “Securities Account Control Agreement” shall mean an agreement in form and substance
reasonably satisfactory to the Collateral Agent establishing the Collateral Agent’s Control with
respect to any Securities Account.




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




          “Term Loan Agents” shall have the meaning assigned to such term in the Intercreditor
Agreement.




          “Term Loan Security Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement




          “Trade Secrets and Other Proprietary Rights” shall mean, collectively, all trade
secrets, proprietary information and data and databases, know-how and processes, designs,
inventions,



 

 










 



-9-


technology and software and any other intangible rights to the extent not covered by
the definitions of Patents, Trademarks and Copyrights; whether registered or unregistered, whether
statutory or common law, and whether established or registered in the United States or any other
country or any political subdivision thereof, including, without limitation, any of the foregoing
listed on Schedule 12(a) to the Perfection Certificate, together with any and all (i)
registrations and applications for the foregoing, (ii) rights and privileges arising under
applicable law with respect to the use of any of the foregoing, (iii) reissues,
continuations, extensions, renewals and divisions thereof and amendments thereto, (v) income,
fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with
respect thereto, including, without limitation, damages, claims and payments for past, present or
future infringements or other violations thereof, (vi) rights corresponding thereto throughout the
world and (vii) rights to sue for past, present and future infringements and other violations
thereof.




          “Trademarks” shall mean, collectively, all trademarks (including service marks and
certification marks), slogans, logos, certification marks, trade dress, Internet Domain Names,
corporate names and trade names, whether registered or unregistered (whether statutory or common
law and whether established or registered in the United States or any other country or any
political subdivision thereof), together with any and all (i) registrations and applications for
any of the foregoing, (ii) goodwill connected with the use thereof and symbolized thereby, (iii)
rights and privileges arising under applicable law with respect to the use of any of the foregoing,
(iv) reissues, continuations, extensions and renewals thereof and amendments thereto, (v) income,
fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with
respect thereto, including damages, claims and payments for past, present or future infringements,
dilutions or other violations thereof, (vi) rights corresponding thereto throughout the world and
(vii) rights to sue for past, present and future infringements, dilutions or other violations
thereof.




          “Trademark Security Agreement” shall mean an agreement substantially in the form of
Exhibit 6 hereto.




          “Treasury Obligations” shall mean all obligations of the Borrowers and the other Loan
Parties (including overdrafts and related liabilities) under each Treasury Services Agreement
entered into with any counterparty that is a Secured Party.




          “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York; provided, however, that, at any time, if by reason of mandatory
provisions of law, any or all of the perfection or priority of the Collateral Agent’s security
interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or priority and for purposes of definitions relating
to such provisions.




          “U.S. Borrowers” shall have the meaning assigned to such term in the Preamble hereof.




          SECTION 1.2. Interpretation. The rules of interpretation specified in the Credit
Agreement shall be applicable to this Agreement.




          SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor acknowledges and agrees
that it was represented by counsel in connection with the execution and delivery hereof, that it
and its counsel reviewed and participated in the preparation and negotiation hereof and that any
rule of



 

 










 



-10-


construction to the effect that ambiguities are to be resolved against the drafting party
(i.e., the Collateral Agent) shall not be employed in the interpretation hereof.




          SECTION 1.4. Perfection Certificate. The Collateral Agent and each Secured Party agree
that the Perfection Certificate and all descriptions of Pledged Collateral, schedules, amendments
and supplements thereto are and shall at all times remain a part of this Agreement.




ARTICLE II




GRANT OF SECURITY AND SECURED OBLIGATIONS




          SECTION 2.1. Grant of Security Interest. As collateral security for the payment and
performance in full of all the Secured Obligations, each Pledgor hereby pledges and grants to the
Collateral Agent for the benefit of the Secured Parties, a lien on and security interest in all of
the right, title and interest of such Pledgor in, to and under the following property, wherever
located, and whether now existing or hereafter arising or acquired from time to time (collectively,
the “Pledged Collateral”):





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







 

 










 



-11-


	 	 	 	foregoing, any and all Proceeds of any insurance, indemnity, warranty
or guaranty payable to such Pledgor from time to time with respect to any of
the foregoing.





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




          SECTION 2.2. Filings. (a) Each Pledgor hereby irrevocably authorizes the Collateral
Agent at any time and from time to time to file in any relevant jurisdiction any financing
statements (including fixture filings) and amendments thereto that contain the information required
by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Pledged Collateral, including (i) whether such
Pledgor is an organization, the type of organization and any organizational identification number
issued to such Pledgor, (ii) any financing or continuation statements or other documents without
the signature of such Pledgor where permitted by law, including the filing of a financing statement
describing the Pledged Collateral as “all assets now owned or hereafter acquired by the debtor or
in which debtor otherwise has rights” or a similar description and (iii) in the case of a financing
statement filed as a fixture filing, a sufficient description of the real property to which such
Pledged Collateral relates. Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon request by the Collateral
Agent.




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




          (c) Each Pledgor hereby further authorizes the Collateral Agent to execute and/or submit
filings with the United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country), as applicable, including this
Agreement, the Copyright Security Agreement, the Patent Security Agreement and the Trademark
Security Agreement, or other documents and to take such other actions as may be required under
applicable law for the purpose of perfecting, recording, confirming, continuing, enforcing or
protecting the security interest granted by such Pledgor hereunder, without the signature of such
Pledgor, and naming such Pledgor, as debtor, and the Collateral Agent, as secured party.



 

 











 



-12-




ARTICLE III




PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL




          SECTION 3.1. Delivery of Certificated Securities Collateral. Each Pledgor represents
and warrants that all certificates, agreements or instruments representing or evidencing the
Securities Collateral (other than Excluded Property and any certificates, agreements or instruments
representing or evidencing Equity Interests in an Excluded Collateral Subsidiary which is not a
Loan Party) in existence on the date hereof have been delivered to the Collateral Agent in suitable
form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment
in blank and that the Collateral Agent has a perfected First Priority security interest therein.
Each Pledgor hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor after the date hereof shall promptly (but
in any event within thirty days after receipt thereof by
such Pledgor or such longer period as may be determined by the Collateral Agent in its sole
discretion) be delivered to and held by or on behalf of the Collateral Agent pursuant hereto
(provided that notwithstanding the foregoing, no such certificates, agreements or
instruments representing or evidencing Securities Collateral shall be required to be so delivered
to the extent such Securities Collateral constitutes Excluded Property or any certificates,
agreements or instruments representing or evidencing Equity Interests in an Excluded Collateral
Subsidiary which is not a Loan Party, but shall be so delivered promptly (but in any event within
thirty days) following the date such Securities Collateral ceases to constitute Excluded Property
or such Subsidiary ceases to qualify as an Excluded Collateral Subsidiary or otherwise becomes, or
is required to become, a Loan Party pursuant to the terms of the Credit Agreement). All
certificated Securities Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall have the right, at any
time upon the occurrence and during the continuance of any Event of Default, to endorse, assign or
otherwise transfer to or to register in the name of the Collateral Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral. In addition, upon the occurrence
and during the continuance of an Event of Default, the Collateral Agent shall have the right at any
time to exchange certificates representing or evidencing Securities Collateral for certificates of
smaller or larger denominations.




          SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each Pledgor
represents and warrants that the Collateral Agent has a perfected First Priority security interest
in all uncertificated Pledged Securities (other than uncertificated Pledged Securities in which a
security interest cannot be perfected by taking all applicable actions under the UCC and such other
actions (including, without limitation, the delivery or filing of financing, statements, agreements
instruments or other documents) as may have been reasonably requested by the Collateral Agent in
order to perfect such security interest under the local laws of the jurisdiction of the issuer of
such Pledged Securities) pledged by it hereunder that are in existence on the date hereof. Each
Pledgor hereby agrees that if any of the Pledged Securities are at any time not evidenced by
certificates of ownership, then each applicable Pledgor shall, to the extent permitted by
applicable law, (i) cause (or in the case of Pledged Securities issued by an issuer that is not a
Wholly Owned Subsidiary, use commercially reasonable efforts to cause) the issuer to execute and
deliver to the Collateral Agent an acknowledgment of the pledge of such Pledged Securities
substantially in the form of Exhibit 1 hereto or such other form that is reasonably
satisfactory to the Collateral Agent, (ii) if necessary or desirable to perfect a security interest
in such Pledged Securities, cause (or in the case of Pledged Securities issued by an issuer that is
not a Wholly



 

 










 



-13-



Owned Subsidiary, use commercially reasonable efforts to cause) the issuer of such
uncertificated Pledged Securities to enter into a control agreement with the Collateral Agent and
such Pledgor reasonably satisfactory to the Collateral Agent pursuant to which such issuer shall
agree to comply with instructions originated by the Collateral Agent without further consent by
such Pledgor, and cause (or in the case of Pledged Securities issued by an issuer that is not a
Wholly Owned Subsidiary, use commercially reasonable efforts to cause) such pledge to be recorded
on the equityholder register or the books of the issuer, execute any customary pledge forms or
other documents necessary or appropriate to complete the pledge and give the Collateral Agent the
right to transfer such Pledged Securities under the terms hereof, (iii) upon request by the
Collateral Agent, provide to the Collateral Agent an opinion of counsel, in form and substance
reasonably satisfactory to the Collateral Agent, confirming such pledge and perfection thereof, and
(iv) after the occurrence and during the continuance of any Event of Default, upon request by the
Collateral Agent, (A) cause (or in the case of Pledged Securities issued by an issuer that is not a
Wholly Owned Subsidiary, use commercially reasonable efforts to cause) the Organizational Documents
of each such issuer that is a Subsidiary of a Pledgor to be amended to provide that such Pledged
Securities shall be treated as “securities” for purposes of the UCC and (B) cause (or in the case
of Pledged Securities issued by an issuer that is not a Wholly Owned Subsidiary, use commercially
reasonable efforts to cause) such Pledged Securities to become certificated and delivered to
the Collateral Agent in accordance with the provisions of Section 3.1.




          SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected Security
Interest. Each Pledgor represents and warrants that all financing statements, agreements,
instruments and other documents necessary to perfect the security interest granted by it to the
Collateral Agent in respect of the Pledged Collateral (other than uncertificated Pledged Securities
in which a security interest cannot be perfected by taking all applicable actions under the UCC and
such other actions (including, without limitation, the delivery or filing of financing, statements,
agreements instruments or other documents) as may have been reasonably requested by the Collateral
Agent in order to perfect such security interest under the local laws of the jurisdiction of the
issuer of such Pledged Securities) have been delivered to the Collateral Agent in completed and, to
the extent necessary or appropriate, duly executed form for filing in each governmental, municipal
or other office specified in Schedule 7 to the Perfection Certificate. Each Pledgor agrees
that at the sole cost and expense of the Pledgors, such Pledgor will maintain the security interest
created by this Agreement in the Pledged Collateral (other than uncertificated Pledged Securities
in which a security interest cannot be perfected by taking all applicable actions under the UCC and
such other actions (including, without limitation, the delivery or filing of financing, statements,
agreements instruments or other documents) as may have been reasonably requested by the Collateral
Agent in order to perfect such security interest under the local laws of the jurisdiction of the
issuer of such Pledged Securities) as a perfected First Priority security interest subject only to
Permitted Collateral Liens.




          SECTION 3.4. Other Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, the Collateral Agent’s security
interest in the Pledged Collateral, each Pledgor represents and warrants (as to itself) as follows
and agrees, in each case at such Pledgor’s own expense, to take the following actions with respect
to the following Pledged Collateral:





     (a) Instruments and Tangible Chattel Paper. As of the date hereof, no amounts
payable under or in connection with any of the Pledged Collateral are evidenced by any
Instrument or Tangible Chattel Paper other than such Instruments and Tangible Chattel Paper
listed in Schedule 11 to the Perfection Certificate. Each Instrument and each item
of Tangible Chattel Paper listed in Schedule 11 to the Perfection Certificate has
been properly endorsed,



 

 










 



-14-



assigned and delivered to the Collateral Agent, accompanied by
instruments of transfer or assignment duly executed in blank. If any amount then payable
under or in connection with any of the Pledged Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, and such amount, together with all amounts payable
evidenced by any Instrument or Tangible Chattel Paper not previously delivered to the
Collateral Agent exceeds $1,000,000 in the aggregate for all Pledgors, the Pledgor acquiring
such Instrument or Tangible Chattel Paper shall promptly (but in any event within thirty
days after receipt thereof) endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time specify.




     (b) Deposit Accounts. As of the date hereof, no Pledgor has any Deposit
Accounts other than the accounts listed in Schedule 14 to the Perfection
Certificate. The Collateral Agent has a First Priority security interest in each such
Deposit Account (other than Excluded Deposit Accounts), which security interest is (or, with
respect to any such Deposit Accounts identified on Schedule 5.16 to the Credit Agreement,
after completion of the actions with respect to such Deposit Accounts specified on such
Schedule, will be) perfected by Control. No Pledgor shall hereafter establish and maintain
any Deposit Account unless (1) it shall have given the Collateral
Agent 30 days’ (or such shorter period as may be determined by the Collateral Agent in
its sole discretion) prior written notice of its intention to establish such new Deposit
Account with a Bank, (2) such Bank shall be reasonably acceptable to the Collateral Agent
and (3) such Bank and such Pledgor shall have duly executed and delivered to the Collateral
Agent a Deposit Account Control Agreement with respect to such Deposit Account (other than
Excluded Deposit Accounts). The Collateral Agent agrees with each Pledgor that the
Collateral Agent shall not give any instructions directing the disposition of funds from
time to time credited to any Deposit Account or withhold any withdrawal rights from such
Pledgor with respect to funds from time to time credited to any Deposit Account unless a
Cash Dominion Trigger Event has occurred and no subsequent Cash Dominion Recovery Event has
occurred. The two immediately preceding sentences shall not apply to the LC Account or to
any other Deposit Accounts for which the Collateral Agent is the Bank. No Pledgor shall
grant Control of any Deposit Account to any person other than the Collateral Agent and,
subject to the terms of the Intercreditor Agreement, Term Loan Agents.




     (c) Securities Accounts and Commodity Accounts. (i) As of the date hereof, no
Pledgor has any Securities Accounts or Commodity Accounts other than those listed in
Schedule 14 to the Perfection Certificate. The Collateral Agent has a First Priority
security interest in each such Securities Account and Commodity Account (other than Excluded
Securities Accounts and Excluded Commodities Accounts), which security interest is perfected
by Control. No Pledgor shall hereafter establish and maintain any Securities Account or
Commodity Account with any Securities Intermediary or Commodity Intermediary unless (1) it
shall have given the Collateral Agent 30 days’ (or such shorter period as may be determined
by the Collateral Agent in its sole discretion) prior written notice of its intention to
establish such new Securities Account or Commodity Account with such Securities Intermediary
or Commodity Intermediary, (2) such Securities Intermediary or Commodity Intermediary shall
be reasonably acceptable to the Collateral Agent and (3) such Securities Intermediary or
Commodity Intermediary, as the case may be, and such Pledgor shall have duly executed and
delivered a Control Agreement with respect to such Securities Account or Commodity Account
(other than Excluded Securities Accounts and Excluded Commodities Accounts), as the case may
be. Each Pledgor shall accept any cash and Investment Property in trust for the benefit of
the Collateral Agent and within five days of actual receipt thereof, deposit any and all
cash and Investment Property received by it into a Deposit



 

 











 



-15-



Account or Securities Account.
The Collateral Agent agrees with each Pledgor that the Collateral Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of uncertificated securities,
Securities Intermediary or Commodity Intermediary, and shall not withhold its consent to the
exercise of any withdrawal or dealing rights by such Pledgor, unless a Cash Dominion Trigger
Event has occurred and no subsequent Cash Dominion Recovery Event has occurred or, after
giving effect to any such investment and withdrawal rights, a Cash Dominion Trigger Event
would occur. The two immediately preceding sentences shall not apply to any Financial Assets
credited to a Securities Account for which the Collateral Agent is the Securities
Intermediary. No Pledgor shall grant Control over any Investment Property to any person
other than the Collateral Agent and, subject to the terms of the Intercreditor Agreement,
Term Loan Agents.




     (ii) As between the Collateral Agent and the Pledgors, the Pledgors shall bear the
investment risk with respect to the Investment Property and Pledged Securities, and the risk
of loss of, damage to, or the destruction of the Investment Property and Pledged Securities,
whether in the possession of, or maintained as a Security Entitlement or deposit by, or
subject to the Control of, the Collateral Agent, a Securities Intermediary, a Commodity
Intermediary, any Pledgor or any other person.




     (d) Electronic Chattel Paper and Transferable Records. As of the date hereof,
no amount under or in connection with any of the Pledged Collateral is evidenced by any
Electronic Chattel Paper or any “transferable record” (as that term is defined in Section
201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section
16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction)
other than such Electronic Chattel Paper and transferable records listed in Schedule
11(a) to the Perfection Certificate. If any amount payable under or in connection with
any of the Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel Paper or transferable
record shall promptly notify the Collateral Agent thereof and shall take such action as the
Collateral Agent may reasonably request to vest in the Collateral Agent control of such
Electronic Chattel Paper under Section 9-105 of the UCC or control under Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record. The requirement in the preceding sentence shall not apply to
the extent that such amount, together with all amounts payable evidenced by Electronic
Chattel Paper or any transferable record in which the Collateral Agent has not been vested
control within the meaning of the statutes described in the immediately preceding sentence,
does not exceed $1,000,000 in the aggregate for all Pledgors. The Collateral Agent agrees
with such Pledgor that the Collateral Agent will arrange, pursuant to procedures
satisfactory to the Collateral Agent and so long as such procedures will not result in the
Collateral Agent’s loss of control, for the Pledgor to make alterations to the Electronic
Chattel Paper or transferable record permitted under Section 9-105 of the UCC or, as the
case may be, Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control
to allow without loss of control, unless an Event of Default has occurred and is continuing
or would occur after taking into account any action by such Pledgor with respect to such
Electronic Chattel Paper or transferable record.




     (e) Letter-of-Credit Rights. If any Pledgor is at any time a beneficiary under
a Letter of Credit now or hereafter issued, such Pledgor shall promptly notify the
Collateral Agent thereof and such Pledgor shall, at the request of the Collateral Agent,
pursuant to an agreement in form



 

 











 



-16-



and substance reasonably satisfactory to the Collateral
Agent, either use commercially reasonable efforts to (i) arrange for the issuer and any
confirmer of such Letter of Credit to consent to an assignment to the Collateral Agent of
the proceeds of any drawing under the Letter of Credit or (ii) arrange for the Collateral
Agent to become the transferee beneficiary of such Letter of Credit, with the Collateral
Agent agreeing, in each case, that the proceeds of any drawing under the Letter of Credit
are to be applied as provided in the Credit Agreement. The actions in the preceding sentence
shall not be required to the extent that the amount of any such Letter of Credit, together
with the aggregate amount of all other Letters of Credit for which the actions described
above in clause (i) and (ii) have not been taken, does not exceed $1,000,000 in the
aggregate for all Pledgors.




     (f) Commercial Tort Claims. As of the date hereof, each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims other than those listed in
Schedule 13 to the Perfection Certificate. If any Pledgor shall at any time hold or
acquire a Commercial Tort Claim, such Pledgor shall promptly notify the Collateral Agent in
writing signed by such Pledgor of the brief details thereof and grant to the Collateral
Agent in such writing a security interest therein and in the Proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent. The requirement in the preceding sentence shall not
apply to the extent that the amount of such Commercial Tort Claim, together with the amount
of all other Commercial Tort Claims held by any Pledgor in which the
Collateral Agent does not have a security interest, does not exceed $1,000,000 in the
aggregate for all Pledgors.




     (g) Landlord’s Access Agreements/Bailee Letters. If and to the extent
reasonably requested by the Collateral Agent, each Pledgor shall use its commercially
reasonable efforts to obtain as soon as practicable after such request with respect to each
location where such Pledgor maintains Pledged Collateral, a Bailee Letter and/or Landlord
Access Agreement, as applicable, and use commercially reasonable efforts to obtain a Bailee
Letter, Landlord Access Agreement and/or landlord’s lien waiver, as applicable, from all
such bailees and landlords, as applicable, who from time to time have possession of any
Pledged Collateral. A waiver of bailee’s lien shall not be required if the value of the
Pledged Collateral held by such bailee is less than $100,000, provided that the aggregate
value of the Pledged Collateral held by all bailees who have not delivered a Bailee Letter
is less than $1,000,000 in the aggregate.



          SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall cause each
Subsidiary of Holdings which, from time to time, after the date hereof shall be required to become
a party to this Agreement or to otherwise pledge any assets to the Collateral Agent for the benefit
of the Secured Parties pursuant to the provisions of the Credit Agreement, (a) to execute and
deliver to the Collateral Agent (i) a Joinder Agreement substantially in the form of Exhibit
3 hereto within thirty days (or such longer period as may be determined by the Collateral Agent
in its sole discretion) of the date on which it became a Subsidiary, ceased to be an Excluded
Collateral Subsidiary or was required to become a Loan Party by operation of the provisions of
Section 5.11(d) of the Credit Agreement, as the case may be, and (ii) a Perfection Certificate, in
each case, within thirty days (or such longer period as may be determined by the Collateral Agent
in its sole discretion) of the date on which it became a Subsidiary, ceased to be an Excluded
Collateral Subsidiary or was required to become a Loan Party by operation of the provisions of
Section 5.11(d) of the Credit Agreement, as the case may be, and (b) in the case of a Subsidiary
organized outside of the United States, to execute and deliver to the Collateral Agent such
additional documentation as the Collateral Agent shall reasonably request and, in each case with
respect to clauses (a) and (b) above, upon such execution and delivery, such Subsidiary shall
constitute a “Guarantor” and a “Pledgor”



 

 










 



-17-


for all purposes hereunder with the same force and effect
as if originally named as a Guarantor and Pledgor herein. The execution and delivery of such
Joinder Agreement shall not require the consent of any Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor and Pledgor as a party to this Agreement.




          SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take such further
actions, and execute and/or deliver to the Collateral Agent such additional financing statements,
amendments, assignments, agreements, supplements, powers and instruments, as the Collateral Agent
may in its reasonable judgment deem necessary or appropriate in order to create, perfect, preserve
and protect the security interest in the Pledged Collateral as provided herein and the rights and
interests granted to the Collateral Agent hereunder, to carry into effect the purposes hereof or
better to assure and confirm the validity, enforceability and priority of the Collateral Agent’s
security interest in the Pledged Collateral or permit the Collateral Agent to exercise and enforce
its rights, powers and remedies hereunder with respect to any Pledged Collateral, including the
filing of financing statements, continuation statements and other documents (including this
Agreement) under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interest created hereby and the execution and delivery of Control
Agreements, all in form and substance reasonably satisfactory to the Collateral Agent and in such
offices (including the United States Patent and Trademark Office and the United States Copyright
Office) wherever required by law to perfect, continue and maintain the validity, enforceability and
priority of the security interest in the Pledged Collateral as provided herein and to preserve the
other rights and interests granted to the Collateral Agent hereunder, as
against third parties, with respect to the Pledged Collateral. Without limiting the generality
of the foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or refile and/or
deliver to the Collateral Agent from time to time upon reasonable request by the Collateral Agent
such lists, schedules, descriptions and designations of the Pledged Collateral, copies of warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title,
vouchers, invoices, schedules, confirmatory assignments, supplements, additional security
agreements, conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments as the Collateral Agent shall reasonably
request. If an Event of Default has occurred and is continuing, the Collateral Agent may institute
and maintain, in its own name or in the name of any Pledgor, such suits and proceedings as the
Collateral Agent may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the Pledged Collateral. All of
the foregoing shall be at the sole cost and expense of the Pledgors.




ARTICLE IV




REPRESENTATIONS, WARRANTIES AND COVENANTS




          Each Pledgor represents, warrants and covenants as follows:




          SECTION 4.1. Title. Except for the security interest granted to the Collateral Agent for
the ratable benefit of the Secured Parties pursuant to this Agreement and Permitted Liens, such
Pledgor owns and has rights and, as to Pledged Collateral acquired by it from time to time after
the date hereof, will own and have rights in each item of Pledged Collateral pledged by it
hereunder, free and clear of any and all Liens or claims of others. In addition, no Liens or claims
exist on the Securities Collateral,



 

 










 



-18-


other than Permitted Liens that are permitted to attach to
Securities Collateral pursuant to the provisions of Section 6.02 of the Credit Agreement.




          SECTION 4.2. Validity of Security Interest. The security interest in and Lien on the
Pledged Collateral granted to the Collateral Agent for the benefit of the Secured Parties hereunder
constitutes (a) a legal and valid security interest in all the Pledged Collateral securing the
payment and performance of the Secured Obligations, and (b) subject to the filings and other
actions described in Schedule 6 to the Perfection Certificate (to the extent required to be
listed on the schedules to the Perfection Certificate as of the date this representation is made or
deemed made), a perfected security interest in all the Pledged Collateral. The security interest
and Lien granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Pledged Collateral will at all times constitute a perfected, continuing
First Priority security interest therein.




          SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral. Except to the
extent otherwise permitted by Section 5.05 of the Credit Agreement, each Pledgor shall, at its own
cost and expense, defend title to the Pledged Collateral pledged by it hereunder and the security
interest therein and Lien thereon granted to the Collateral Agent and the priority thereof against
all claims and demands of all persons, at its own cost and expense, at any time claiming any
interest therein adverse to the Collateral Agent or any other Secured Party other than Permitted
Encumbrances. Except as permitted by the Credit Agreement, there is no agreement, order, judgment
or decree, and no Pledgor shall enter into any agreement or take any other action, that would
restrict the transferability of any of the Pledged Collateral or otherwise impair or conflict with
such Pledgor’s obligations or the rights of the Collateral Agent hereunder.




          SECTION 4.4. Other Financing Statements. It has not filed, nor authorized any third
party to file, any valid or effective financing statement (or similar statement, instrument of
registration or public notice under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Pledged Collateral, except such as have been filed in favor of the
Collateral Agent pursuant to this Agreement or in favor of any holder of a Permitted Encumbrance
with respect to such Permitted Encumbrance or financing statements or public notices relating to
the termination statements listed on Schedule 7 to the Perfection Certificate. No Pledgor
shall execute, authorize or permit to be filed in any public office any financing statement (or
similar statement, instrument of registration or public notice under the law of any jurisdiction)
relating to any Pledged Collateral, except financing statements and other statements and
instruments filed or to be filed in respect of and covering the security interests granted by such
Pledgor to the holders of the Permitted Encumbrances.




          SECTION 4.5. Inventory and Equipment.




          (a) Except as expressly permitted by Section 5.13 of the Credit Agreement, it shall not move
any Equipment or Inventory to any location, other than any location that is listed in the relevant
Schedules to the Perfection Certificate, unless (i) it shall have given the Collateral Agent not
less than 30 days’ (or such shorter period as may be determined by the Collateral Agent in its sole
discretion) prior written notice (in the form of an Officers’ Certificate) of its intention so to
do, clearly describing such new location and providing such other information in connection
therewith as the Collateral Agent may request and (ii) to the extent applicable with respect to
such new location, such Pledgor shall have complied with Section 3.4(g); provided
that notwithstanding the foregoing, in no event shall Equipment or Inventory be moved to any
location outside of the continental United States except in connection with an Asset Sale expressly
permitted by the Credit Agreement.



 

 










 



-19-




          (b) With respect to any Inventory scheduled or listed on the most recent Collateral Report,
except as disclosed therein: (i) no Inventory (other than Inventory in transit) is now, or shall at
any time or times hereafter be stored at any other location not set forth in the Perfection
Certificate except as permitted by Section 4.5(a) above or Section 5.13 of the Credit
Agreement, (ii) the Pledgors have good, indefeasible and merchantable title to such Inventory and
such Inventory is not subject to any Lien or security interest or document whatsoever except for
the Lien granted to the Collateral Agent, for the benefit of the Secured Parties, and except for
other Liens permitted to attach to Inventory under Section 6.02 of the Credit Agreement, (iii) with
respect to Inventory included in any Borrowing Base Certificate, such Inventory is Eligible
Inventory, (iv) such Inventory is not subject to any Intellectual Property Licenses with any third
parties that would, upon sale or other disposition of such Inventory by the Collateral Agent in
accordance with the terms hereof, infringe or otherwise violate the Intellectual Property of such
third-party licensor, violate any Contracts with such third-party licensor, or cause the Collateral
Agent to incur any liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current Intellectual Property Licenses related
thereto, (v) such Inventory has been produced in accordance with the Federal Fair Labor Standards
Act of 1938, as amended, and all rules, regulations and orders thereunder and (vi) the completion
of manufacture, sale or other disposition of such Inventory by the Collateral Agent upon the
occurrence and during the continuance of any Event of Default shall not require the consent of any
person and shall not constitute a breach or default under any contract or agreement to which any
Pledgor is a party or to which such Inventory is subject.




          SECTION 4.6. Due Authorization and Issuance. All of the Pledged Securities existing on
the date hereof have been, and to the extent any Pledged Securities are hereafter issued, such
Pledged Securities will be, upon such issuance, duly authorized, validly issued and fully paid and
non-assessable to the extent applicable. There is no amount or other obligation owing by any
Pledgor to any
issuer of the Pledged Securities in exchange for or in connection with the issuance of the
Pledged Securities or any Pledgor’s status as a partner or a member of any issuer of the Pledged
Securities.




          SECTION 4.7. Consents, etc. In the event that the Collateral Agent desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in this Agreement and
determines it necessary to obtain any approvals or consents of any Governmental Authority or any
other person therefor, then, upon the reasonable request of the Collateral Agent, such Pledgor
agrees to use its best efforts to assist and aid the Collateral Agent to obtain as soon as
practicable any necessary approvals or consents for the exercise of any such remedies, rights and
powers.




          SECTION 4.8. Pledged Collateral. All information set forth herein, including the
schedules hereto, and all information contained in any documents, schedules and lists heretofore
delivered to any Secured Party, including the Perfection Certificate and the schedules thereto, in
connection with this Agreement, in each case, relating to the Pledged Collateral, is accurate and
complete in all material respects. The Pledged Collateral described on the schedules to the
Perfection Certificate constitutes all of the property of such type of Pledged Collateral owned or
held by the Pledgors (other than Immaterial Intellectual Property Collateral).




          SECTION 4.9. Insurance. In the event that the proceeds of any insurance claim are paid
to any Pledgor after the Collateral Agent has exercised its right to foreclose after an Event of
Default, such Net Cash Proceeds shall be held in trust for the benefit of the Collateral Agent and
immediately after receipt thereof shall be paid to the Collateral Agent for application in
accordance with the Credit Agreement.




 

 




 











 




-20-

ARTICLE V




CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL




          Section 5.1. Pledge of Additional Securities Collateral. Each Pledgor shall, upon obtaining any
Pledged Securities or Intercompany Notes of any person, accept the same in trust for the benefit of
the Collateral Agent and promptly (but in any event within thirty days (or such longer period as
may be determined by the Collateral Agent in its sole discretion) after receipt thereof) deliver to
the Collateral Agent a pledge amendment, duly executed by such Pledgor, in substantially the form
of Exhibit 2 hereto (each, a “Pledge Amendment”), and to the extent required
thereunder, the certificates and other documents required under Section 3.1 and Section
3.2 hereof in respect of the additional Pledged Securities or Intercompany Notes which are to
be pledged pursuant to this Agreement, and confirming the attachment of the Lien hereby created on
and in respect of such additional Pledged Securities or Intercompany Notes. Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and agrees that
all Pledged Securities or Intercompany Notes listed on any Pledge Amendment delivered to the
Collateral Agent shall for all purposes hereunder be considered Pledged Collateral.




          Section 5.2. Voting Rights; Distributions; etc.





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




     (i) Each Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Securities Collateral or any part thereof for any purpose not
inconsistent with the terms or purposes hereof, the Credit Agreement or any other document
evidencing the Secured Obligations; provided, however, that no Pledgor shall
in any event exercise such rights in any manner which could reasonably be expected to have a
Material Adverse Effect.




     (ii) Each Pledgor shall be entitled to receive and retain, and to utilize free and
clear of the Lien hereof, any and all Distributions, but only if and to the extent not
prohibited by the Credit Agreement; provided, however, that any and all such
Distributions consisting of rights or interests in the form of securities shall be forthwith
delivered to the Collateral Agent to hold as Pledged Collateral and shall, if received by
any Pledgor, be received in trust for the benefit of the Collateral Agent, be segregated
from the other property or funds of such Pledgor and be promptly (but in any event within
five days (or such longer period as may be determined by the Collateral Agent in its sole
discretion) after receipt thereof) delivered to the Collateral Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement).



          (b) So long as no Event of Default shall have occurred and be continuing, the Collateral Agent
shall be deemed without further action or formality to have granted to each Pledgor all necessary
consents relating to voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and deliver (or cause to be
executed and delivered) to such Pledgor all such instruments as such Pledgor may reasonably request
in order to permit such Pledgor to exercise the voting and other rights which it is entitled to
exercise pursuant to Section 5.2(a)(i) hereof and to receive the Distributions which it is
authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof.


 

 











 



-21-




          (c) Upon the occurrence and during the continuance of any Event of Default and notice by the
Collateral Agent:





     (i) All rights of each Pledgor to exercise the voting and other consensual rights it
would otherwise be entitled to exercise pursuant to Section 5.2(a)(i) hereof shall
immediately cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to exercise such voting and other
consensual rights.




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



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




          (e) All Distributions which are received by any Pledgor contrary to the provisions of
Section 5.2(c)(ii) hereof shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of such Pledgor and shall immediately be paid over to
the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary
endorsement).




          Section 5.3. Defaults, etc. Such Pledgor is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any agreement to which such
Pledgor is a party relating to the Pledged Securities pledged by it, and such Pledgor is not in
violation in any material respect of any other provisions of any such agreement to which such
Pledgor is a party, or otherwise in default or violation in any material respect thereunder. No
Securities Collateral pledged by such Pledgor is subject to any defense, offset or counterclaim,
nor have any of the foregoing been asserted or alleged against such Pledgor by any person with
respect thereto, and as of the date hereof, there are no certificates, instruments, documents or
other writings (other than the Organizational Documents and certificates representing such Pledged
Securities that have been delivered to the Collateral Agent) which evidence any Pledged Securities
of such Pledgor.




          Section 5.4. Organizational Documents. Each Pledgor has delivered to the Collateral Agent true,
correct and complete copies of its Organizational Documents. The Organizational Documents of each
Pledgor are in full force and effect, have not as of the date hereof been amended or modified
except as disclosed to the Collateral Agent, and there is no existing default by any party
thereunder or any event which, with the giving of notice or passage of time or both, would
constitute a default by any party thereunder. Each Pledgor shall deliver to the Collateral Agent a
copy of any notice of default given or received by it under any Organizational Document within ten
days after such Pledgor gives or receives such notice. No Pledgor will terminate or agree to
terminate any Organizational Document or make any amendment or modification to any Organizational
Document except as expressly permitted by the terms of the Credit Agreement.



 

 











 



-22-




          Section 5.5. Certain Agreements of Pledgors As Issuers and Holders of Equity Interests.




          (a) In the case of each Pledgor which is an issuer of Securities Collateral, such Pledgor
agrees to be bound by the terms of this Agreement relating to the Securities Collateral issued by
it and will comply with such terms insofar as such terms are applicable to it.




          (b) In the case of each Pledgor which is a partner, shareholder or member, as the case may be,
in a partnership, limited liability company or other entity, such Pledgor hereby consents to the
extent required by the applicable Organizational Document to the pledge by each other Pledgor,
pursuant to the terms hereof, of the Pledged Securities in such partnership, limited liability
company or other entity and, upon the occurrence and during the continuance of an Event of Default,
to the transfer of such Pledged Securities to the Collateral Agent or its nominee and to the
substitution of the Collateral Agent or its nominee as a substituted partner, shareholder or member
in such partnership, limited liability company or other entity with all the rights, powers and
duties of a general partner, limited partner, shareholder or member, as the case may be.




ARTICLE VI




CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL




          Section 6.1. Grant of Intellectual Property License. For the purpose of enabling the Collateral
Agent, during the continuance of an Event of Default, to exercise rights and remedies under
Article IX hereof at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, and for no other purpose, each Pledgor hereby grants to the
Collateral Agent an irrevocable, non-exclusive license and, to the extent permitted under
Intellectual Property Licenses granting such Pledgor rights in Intellectual Property, sublicense
(in each case, exercisable without payment of royalties or other compensation to such Pledgor) to
use, license or sublicense any of the Intellectual Property Collateral now owned or hereafter
acquired by such Pledgor, wherever the same may be located; provided that the quality of
any products in connection with which the Trademarks are used will not be materially inferior to
the quality of such products prior to such Event of Default. Such license shall include access to
all media in which any of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout hereof.




          Section 6.2. Protection and Maintenance of Intellectual Property Collateral. On a continuing basis,
each Pledgor shall, at its sole cost and expense, (i) promptly following its becoming aware
thereof, notify the Collateral Agent of any adverse determination in any proceeding (not including
office or other matters in the ordinary course of prosecution before the United States Patent and
Trademark Office or the United States Copyright Office or any foreign counterpart) or the
institution of any proceeding in any federal, state or local court or administrative body or in the
United States Patent and Trademark Office or the United States Copyright Office regarding any
Material Intellectual Property Collateral, such Pledgor’s right to register such Material
Intellectual Property Collateral or its right to keep and maintain such Material Intellectual
Property Collateral in full force and effect, (ii) maintain all Material Intellectual Property
Collateral as presently used and operated, except as shall be consistent with commercially
reasonable business judgment, (iii) not permit to lapse or become abandoned any Material



 

 










 



-23-



Intellectual Property Collateral, (iv) take action to prosecute infringers and violators of
Material Intellectual Property Collateral, and not settle or compromise any pending or future
litigation or administrative proceeding with respect to any Material Intellectual Property
Collateral, in each case, except as shall be consistent with commercially reasonable business
judgment, (v) upon such Pledgor obtaining knowledge thereof, promptly notify the Collateral Agent
in writing of any event which may be reasonably expected to materially and adversely affect the
value or utility of any Material Intellectual Property Collateral, or the value or utility of the
Intellectual Property of the Pledgors, taken as a whole, or the rights and remedies of the
Collateral Agent in relation thereto including a levy or threat of levy or any legal process
against any Material Intellectual Property Collateral, (vi) not license any Intellectual Property
Collateral other than licenses entered into by such Pledgor in, or incidental to, the ordinary
course of business, or amend or permit the amendment of any of the licenses in a manner that
materially and adversely affects the right to receive payments thereunder, or in any manner that
would materially impair the value of any Intellectual Property Collateral or the Lien on and
security interest in the Intellectual Property Collateral created therein hereby, without the
consent of the Collateral Agent, (vii) diligently keep adequate records respecting all Intellectual
Property Collateral, (viii) without limiting the Collateral Agent’s rights and each Pledgor’s
obligations under Section 6.3 below, furnish to the Collateral Agent from time to time upon
the Collateral Agent’s request therefor reasonably detailed statements and amended schedules
further identifying and describing the Intellectual Property Collateral and such other materials
evidencing or reports pertaining to any Intellectual Property Collateral as the Collateral Agent
may from time to time request, (ix) use statutory notice of registration in connection with its use
of registered Trademarks, prior marking practices in connection with the use of Patents, and
appropriate notice of Copyright in connection with the publication of material subject to
Copyrights and (x) maintain the level of quality of products sold and services rendered under any
Trademarks owned by such Pledgor at a level at least consistent with the quality of such products
and services as of the date hereof, and adequately control the quality of goods an services offered
by any licensees of its Trademarks to maintain such standards.




          Section 6.3. After-Acquired Property. If any Pledgor shall at any time after the date hereof (i)
obtain any ownership or other rights in and/or to any additional Intellectual Property (including
trademark applications for which evidence of the use of such trademarks in interstate commerce has
been submitted to and accepted by the United States Patent and Trademark Office pursuant to 15
U.S.C. Section 1060(a) (or a successor provision)) or (ii) become entitled to the benefit of any
additional Intellectual Property or any renewal or extension thereof, including any reissue,
division, continuation, or continuation-in-part of any Intellectual Property Collateral, or any
improvement on any Intellectual Property Collateral, the provisions of this Agreement shall
automatically apply thereto and any such item described in the preceding clause (i) or (ii) (other
than any Excluded Property) shall automatically constitute Intellectual Property Collateral as if
such would have constituted Intellectual Property Collateral at the time of execution hereof and
such Intellectual Property (other than any Excluded Property) shall be subject to the Lien and
security interest created by this Agreement without further action by any party. Each Pledgor shall
promptly provide to the Collateral Agent written notice of any of the foregoing Intellectual
Property owned by such Pledgor which is the subject of a registration or application and confirm
the attachment of the Lien and security interest created by this Agreement to any rights described
in clauses (i) and (ii) above by execution and delivery, within 90 days (or, in the case of
Copyrights, 30 day, or, in each case, such longer period as may be determined by the Collateral
Agent in its sole discretion) of the acquisition by such Pledgor of such Intellectual Property, of
an instrument in form and substance reasonably acceptable to the Collateral Agent and the filing of
any instruments or statements as shall be reasonably necessary to create, record, preserve, protect
or perfect the Collateral Agent’s lien and security interest in such Intellectual Property.
Further, each Pledgor authorizes the Collateral Agent to modify this Agreement by amending
Schedules 12(a) and 12(b) to the Perfection




 

 










 



-24-



Certificate to include any Intellectual
Property Collateral of such Pledgor acquired or arising after the date hereof.




          Section 6.4. Litigation. Unless there shall occur and be continuing any Event of Default, each
Pledgor shall have the right to commence and prosecute in its own name, as the party in interest,
for its own benefit and at the sole cost and expense of the Pledgors, such applications for
protection of the Intellectual Property Collateral and suits, proceedings or other actions to
prevent the infringement, counterfeiting, unfair competition, dilution, diminution in value or
other damage as are necessary to protect the Intellectual Property Collateral. Upon the occurrence
and during the continuance of any Event of Default, the Collateral Agent shall have the right but
shall in no way be obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent or the Secured
Parties to enforce the Intellectual Property Collateral and any license thereunder. In the event of
such suit, each Pledgor shall, at the reasonable request of the Collateral Agent, do any and all
lawful acts and execute any and all documents requested by the Collateral Agent in aid of such
enforcement and the Pledgors shall promptly reimburse and indemnify the Collateral Agent for all
costs and expenses incurred by the Collateral Agent in the exercise of its rights under this
Section 6.4 in accordance with Section 11.03 of the Credit Agreement. In the event that the
Collateral Agent shall elect not to bring suit to enforce the Intellectual Property Collateral,
each Pledgor agrees, at the reasonable request of the Collateral Agent, to take all commercially
reasonable actions necessary, whether by suit, proceeding or other action, to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value of or other damage
to any of the Intellectual Property Collateral by any person.




ARTICLE VII




CERTAIN PROVISIONS CONCERNING RECEIVABLES




          Section 7.1. Maintenance of Records. Each Pledgor shall keep and maintain at its own cost and
expense complete records of each Receivable, in a manner consistent with prudent business practice,
including records of all payments received, all credits granted thereon, all merchandise returned
and all other documentation relating thereto. Each Pledgor shall, at such Pledgor’s sole cost and
expense, upon the Collateral Agent’s demand made at any time after the occurrence and during the
continuance of any Event of Default, deliver all tangible evidence of Receivables, including all
documents evidencing Receivables and any books and records relating thereto to the Collateral Agent
or to its representatives (copies of which evidence and books and records may be retained by such
Pledgor). Upon the occurrence and during the continuance of any Event of Default, the Collateral
Agent may transfer a full and complete copy of any Pledgor’s books, records, credit information,
reports, memoranda and all other writings relating to the Receivables to and for the use by any
person that has acquired or is contemplating acquisition of an interest in the Receivables or the
Collateral Agent’s security interest therein without the consent of any Pledgor.




          Section 7.2. Modification of Terms, etc. No Pledgor shall rescind or cancel any obligations
evidenced by any Receivable or modify any term thereof or make any adjustment, discount, credit,
rebate or reduction with respect thereto except in the ordinary course of business consistent with
prudent business practice, or extend or renew any such obligations except in the ordinary course of
business consistent with prudent business practice or compromise or settle any dispute, claim, suit
or legal


 

 










 



-25-



proceeding relating thereto or sell any Receivable or interest therein except in the
ordinary course of business consistent with prudent business practice without the prior written
consent of the Collateral Agent. Each Pledgor shall timely fulfill all obligations on its part to
be fulfilled under or in connection with the Receivables except as may be otherwise consistent with
the exercise of reasonable business
judgment in the ordinary course of business. If (i) any material adjustment, discount, credit
or agreement to make a rebate or to otherwise reduce the amount owing on a material Receivable
exists or (ii) if, to the knowledge of any Pledgor, any material dispute, setoff, claim,
counterclaim or defense exists or has been asserted or threatened with respect to a material
Receivable, the Pledgors will promptly disclose such fact to the Collateral Agent in writing.




          Section 7.3. Collection. Each Pledgor shall cause to be collected from the Account Debtor of each
of the Receivables, as and when due in the ordinary course of business and consistent with prudent
business practice (including Receivables that are delinquent, such Receivables to be collected in
accordance with generally accepted commercial collection procedures), any and all amounts owing
under or on account of such Receivable, and apply forthwith upon receipt thereof all such amounts
as are so collected to the outstanding balance of such Receivable, except that any Pledgor may,
with respect to a Receivable, allow in the ordinary course of business (i) a refund or credit due
as a result of returned or damaged or defective merchandise and (ii) such extensions of time to pay
amounts due in respect of Receivables and such other modifications of payment terms or settlements
in respect of Receivables as shall be commercially reasonable in the circumstances, all in
accordance with such Pledgor’s ordinary course of business consistent with its collection practices
as in effect from time to time. The costs and expenses (including attorneys’ fees) of collection,
in any case, whether incurred by any Pledgor, the Collateral Agent or any Secured Party, shall be
paid by the Pledgors.




          Section 7.4. Legend. Each Pledgor shall legend, at the request of the Collateral Agent and in form,
substance and manner satisfactory to the Collateral Agent, the Receivables and the other books,
records and documents of such Pledgor evidencing or pertaining to the Receivables with an
appropriate reference to the fact that the Receivables have been assigned to the Collateral Agent
for the benefit of the Secured Parties and that the Collateral Agent has a security interest
therein.




          Section 7.5. Special Representations and Warranties and Covenants.




          (a) As of the time when each of its Receivables arises, each Pledgor shall be deemed to have
represented and warranted that such Account and all records, papers and documents relating thereto
represent the legal, valid and binding obligation of the Account Debtor or other relevant obligor,
except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability, evidencing indebtedness unpaid and owed by such Account Debtor or
obligor, arising out of the performance of labor or services or the sale, lease, license,
assignment or other disposition and delivery of the goods or other property listed therein or out
of an advance or a loan.




          (b) The names of the obligors, amounts owing, due dates and other information with respect to
each Pledgor’s Receivables that are Pledged Collateral are and will be correctly stated, at the
time furnished, in all records of such Pledgor relating thereto and in all invoices (if any) and
each Collateral Report with respect thereto furnished to any Agent by such Pledgor from time to
time.




          (c) Except as disclosed on the most recent Collateral Report, (i) there are no setoffs, claims
or disputes existing or asserted with respect to any Accounts referred to in such Collateral Report
and no Pledgor has made any agreement with any Account Debtor for any extension of time for the


 

 










 



-26-



payment thereof, any compromise or settlement for less than the full amount thereof, any release of
any Account Debtor from liability therefor, or any deduction therefrom except a discount or
allowance allowed by a Pledgor in the ordinary course of its business for prompt payment, (ii) to
the knowledge of such Pledgor, there are no facts, events or occurrences that in any way impair the
validity or enforceability thereof or could reasonably be expected to reduce the amount payable
thereunder as shown
on such Pledgor’s books and records and any invoices, statements and the most recent
Collateral Report with respect thereto, (iii) no Pledgor has received any written notice of
proceedings or actions that are threatened or pending against any Account Debtor that might result
in any material adverse change in such Account Debtor’s financial condition and (iv) no Pledgor has
knowledge that any Account Debtor is unable generally to pay its debts as they become due.




ARTICLE VIII




TRANSFERS




          Section 8.1. Transfers of Pledged Collateral. No Pledgor shall sell, convey, assign or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral pledged by it
hereunder except as not prohibited by the Credit Agreement.




ARTICLE IX




REMEDIES




          Section 9.1. Remedies. Upon the occurrence and during the continuance of any Event of Default, the
Collateral Agent may from time to time (alternatively, successively or concurrently on any one or
more occasions) exercise in respect of the Pledged Collateral, in addition to the other rights and
remedies provided for herein or otherwise available to it, the following remedies:




          (i) Personally, or by agents or attorneys, immediately take possession of the Pledged
Collateral or any part thereof, from any Pledgor or any other person who then has possession of any
part thereof with or without notice or process of law, and for that purpose may enter upon any
Pledgor’s premises where any of the Pledged Collateral is located, remove such Pledged Collateral,
remain present at such premises to receive copies of all communications and remittances relating to
the Pledged Collateral and use in connection with such removal and possession any and all services,
supplies, aids and other facilities of any Pledgor;




          (ii) Demand, sue for, collect or receive any money or property at any time payable or
receivable in respect of the Pledged Collateral including instructing the obligor or obligors on
any agreement, instrument or other obligation constituting part of the Pledged Collateral to make
any payment required by the terms of such agreement, instrument or other obligation directly to the
Collateral Agent, and in connection with any of the foregoing, compromise, settle, extend the time
for payment and make other modifications with respect thereto; provided, however,
that in the event that any such payments are made directly to any Pledgor, prior to receipt by any
such obligor of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall


 

 










 



-27-



promptly (but in no event later
than one Business Day after receipt thereof) pay such amounts to the Collateral Agent;




          (iii) Sell, assign, grant a license to use or otherwise liquidate, or direct any Pledgor to
sell, assign, grant a license to use or otherwise liquidate and dispose of, any and all investments
made in
whole or in part with the Pledged Collateral or any part thereof, and take possession of the
proceeds of any such sale, assignment, license, liquidation or disposition;




          (iv) Take possession of the Pledged Collateral or any part thereof, by directing any Pledgor
in writing to deliver the same to the Collateral Agent at any place or places so designated by the
Collateral Agent, in which event such Pledgor shall at its own expense: (A) forthwith cause the
same to be moved to the place or places designated by the Collateral Agent and therewith delivered
to the Collateral Agent, (B) store and keep any Pledged Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral Agent and (C) while the
Pledged Collateral shall be so stored and kept, provide such security and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in good condition. Each
Pledgor’s obligation to deliver the Pledged Collateral as contemplated in this Section
9.1(iv) is of the essence hereof. Upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific performance by any Pledgor of
such obligation;




          (v) Withdraw all moneys, instruments, securities and other property in any bank, financial
securities, deposit or other account of any Pledgor constituting Pledged Collateral for application
to the Secured Obligations as provided in Article X hereof;




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




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




          (viii) In the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent,
or in the name of any Pledgor communicate (by mail, telephone, facsimile or otherwise) with the
Account Debtors and other obligors in respect of Receivables of such Pledgor and parties to
contracts with such Pledgor, to verify with such persons, to the Collateral Agent’s satisfaction,
the existence, amount, terms of, and any other matter relating to, Accounts, Chattel Paper, Payment
Intangibles, General Intangibles, Instruments and other Receivables that are Pledged Collateral;
and




          (ix) Exercise all the rights and remedies of a secured party on default under the UCC, and the
Collateral Agent may also in its sole discretion, without notice except as specified in Section
9.2 hereof, sell, assign or grant a license to use the Pledged Collateral or any part thereof
in one or more parcels at public or private sale, at any exchange, broker’s board or at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery, and at such
price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable.
The Collateral Agent or any other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of the Pledged Collateral or any part thereof at any
such sale and shall be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Pledged Collateral sold, assigned or licensed at such
sale, to use and apply any of the Secured Obligations owed to such person as a credit on account of
the purchase price of the Pledged Collateral or any part


 

 










 



-28-


thereof payable by such person at such
sale. Each purchaser, assignee, licensee or recipient at any such sale shall acquire the property
sold, assigned or licensed absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives, to the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. The Collateral Agent shall not be obligated to make any
sale of the Pledged Collateral or any part thereof regardless of notice of sale having been given.
The
Collateral Agent may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Pledgor hereby waives, to the fullest extent permitted
by law, any claims against the Collateral Agent arising by reason of the fact that the price at
which the Pledged Collateral or any part thereof may have been sold, assigned or licensed at such a
private sale was less than the price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree.




          Section 9.2. Notice of Sale. Each Pledgor acknowledges and agrees that, to the extent notice of
sale or other disposition of the Pledged Collateral or any part thereof shall be required by law,
10 days’ prior notice to such Pledgor of the time and place of any public sale or of the time after
which any private sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any Pledgor if it has
signed, after the occurrence of an Event of Default, a statement renouncing or modifying any right
to notification of sale or other intended disposition.




          Section 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives, to the fullest extent
permitted by applicable law, notice or judicial hearing in connection with the Collateral Agent’s
taking possession or the Collateral Agent’s disposition of the Pledged Collateral or any part
thereof, including any and all prior notice and hearing for any prejudgment remedy or remedies and
any such right which such Pledgor would otherwise have under law, and each Pledgor hereby further
waives, to the fullest extent permitted by applicable law: (i) all damages occasioned by such
taking of possession, (ii) all other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral Agent’s rights hereunder and (iii)
all rights of redemption, appraisal, valuation, stay, extension or moratorium now or hereafter in
force under any applicable law. The Collateral Agent shall not be liable for any incorrect or
improper payment made pursuant to this Article IX in the absence of gross negligence or
willful misconduct on the part of the Collateral Agent. Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the applicable Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against such Pledgor and
against any and all persons claiming or attempting to claim the Pledged Collateral so sold,
optioned or realized upon, or any part thereof, from, through or under such Pledgor.




          Section 9.4. Certain Sales of Pledged Collateral.




          (a) Each Pledgor recognizes that, by reason of certain prohibitions contained in law, rules,
regulations or orders of any Governmental Authority, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to those who
meet the requirements of such Governmental Authority. Each Pledgor acknowledges that any such sales
may be at prices and on terms less favorable to the Collateral Agent than those obtainable through
a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any
such restricted sale shall be deemed to have been made in a commercially reasonable manner and
that, except as may be required by applicable law, the Collateral Agent shall have no obligation to
engage in public sales.



 

 










 



-29-




          (b) Each Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act, and applicable state securities laws, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Securities Collateral and Investment Property, to
limit purchasers to persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the Securities Act),
and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner and that the Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any Securities
Collateral or Investment Property for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would agree to do so.




          (c) Notwithstanding the foregoing, each Pledgor shall, upon the occurrence and during the
continuance of any Event of Default, at the reasonable request of the Collateral Agent, for the
benefit of the Collateral Agent, cause any registration, qualification under or compliance with any
Federal or state securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of the Pledgors. Each
Pledgor will use its commercially reasonable efforts to cause such registration to be effected (and
be kept effective) and will use its commercially reasonable efforts to cause such qualification and
compliance to be effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including registration under the
Securities Act (or any similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with all other requirements of
any Governmental Authority. Each Pledgor shall use its commercially reasonable efforts to cause the
Collateral Agent to be kept advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, shall furnish to the Collateral Agent
such number of prospectuses, offering circulars or other documents incident thereto as the
Collateral Agent from time to time may request, and shall indemnify and shall cause the issuer of
the Securities Collateral to indemnify the Collateral Agent and all others participating in the
distribution of such Securities Collateral against all claims, losses, damages and liabilities
caused by any untrue statement (or alleged untrue statement) of a material fact contained therein
(or in any related registration statement, notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements therein not
misleading.




          (d) If the Collateral Agent determines to exercise its right to sell any or all of the
Securities Collateral or Investment Property, upon written request, the applicable Pledgor shall
from time to time furnish to the Collateral Agent all such information as the Collateral Agent may
request in order to determine the number of securities included in the Securities Collateral or
Investment Property which may be sold by the Collateral Agent as exempt transactions under the
Securities Act and the rules of the Securities and Exchange Commission thereunder, as the same are
from time to time in effect.




          (e) Each Pledgor further agrees that a breach of any of the covenants contained in this
Section 9.4 will cause irreparable injury to the Collateral Agent and the other Secured
Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant contained in this
Section 9.4 shall be specifically enforceable against such Pledgor, and such Pledgor hereby
waives and agrees not to assert any defenses



 

 










 



-30-



against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is continuing.




          Section 9.5. No Waiver; Cumulative Remedies.




          (a) No failure on the part of the Collateral Agent to exercise, no course of dealing with
respect to, and no delay on the part of the Collateral Agent in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right,
power, privilege or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy; nor shall the Collateral Agent be required
to look first to, enforce or exhaust any other security, collateral or guaranties. All rights and
remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by
law or otherwise available.




          (b) In the event that the Collateral Agent shall have instituted any proceeding to enforce any
right, power, privilege or remedy under this Agreement or any other Loan Document by foreclosure,
sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Collateral Agent, then and in every such
case, the Pledgors, the Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged Collateral, and all
rights, remedies, privileges and powers of the Collateral Agent and the other Secured Parties shall
continue as if no such proceeding had been instituted.




          Section 9.6. Certain Additional Actions Regarding Intellectual Property. If any Event of Default
shall have occurred and be continuing, upon the written demand of the Collateral Agent, each
Pledgor shall execute and deliver to the Collateral Agent an assignment or assignments of such
Pledgor’s rights in the Intellectual Property Collateral, in recordable form with respect to those
items of the Intellectual Property Collateral consisting of registered Patents, Trademarks and/or
Copyrights (or applications therefor) and such other documents as are necessary or appropriate to
carry out the intent and purposes hereof. Within five Business Days of written notice thereafter
from the Collateral Agent, each Pledgor shall make available to the Collateral Agent, to the extent
within such Pledgor’s power and authority, such personnel in such Pledgor’s employ on the date of
the Event of Default as the Collateral Agent may reasonably designate to permit such Pledgor to
continue, directly or indirectly, to produce, advertise and sell the products and services sold by
such Pledgor under the registered Patents, Trademarks and/or Copyrights of such Pledgor, and such
persons shall be available to perform their prior functions on the Collateral Agent’s behalf.




ARTICLE X




APPLICATION OF PROCEEDS




          Section 10.1. Application of Proceeds. Subject to the terms of the Intercreditor Agreement, the
proceeds received by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, in accordance with the Credit Agreement.


 

 











 



-31-




ARTICLE XI




MISCELLANEOUS




          Section 11.1. Concerning Collateral Agent.




          (a) The Collateral Agent has been appointed as collateral agent pursuant to the Credit
Agreement. The actions of the Collateral Agent hereunder are subject to the provisions of the
Credit Agreement. The Collateral Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or refrain from taking
action (including the release or substitution of the Pledged Collateral), in accordance with this
Agreement and the Credit Agreement. The Collateral Agent may employ agents and attorneys-in-fact in
connection herewith and shall not be liable for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Collateral Agent may resign and a successor
Collateral Agent may be appointed in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as the Collateral Agent by a successor Collateral Agent, that
successor Collateral Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent under this Agreement, and the
retiring Collateral Agent shall thereupon be discharged from its duties and obligations under this
Agreement. After any retiring Collateral Agent’s resignation, the provisions hereof shall inure to
its benefit as to any actions taken or omitted to be taken by it under this Agreement while it was
the Collateral Agent.




          (b) The Collateral Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which the Collateral Agent, in its individual capacity,
accords its own property consisting of similar instruments or interests, it being understood that
neither the Collateral Agent nor any of the Secured Parties shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Securities Collateral, whether or not the Collateral Agent or any
other Secured Party has or is deemed to have knowledge of such matters or (ii) taking any necessary
steps to preserve rights against any person with respect to any Pledged Collateral.




          (c) The Collateral Agent shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person, and, with respect to all
matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected by
it.




          (d) Except as otherwise provided in Sections 11.17 and 11.18 hereof, if any
item of Pledged Collateral also constitutes collateral granted to the Collateral Agent under any
other deed of trust, mortgage, security agreement, pledge or instrument of any type, in the event
of any conflict between the provisions hereof and the provisions of such other deed of trust,
mortgage, security agreement, pledge or instrument of any type in respect of such collateral, the
Collateral Agent, in its sole discretion, shall select which provision or provisions shall control.




          (e) The Collateral Agent may rely on advice of counsel as to whether any or all UCC financing
statements of the Pledgors need to be amended as a result of any of the changes described in
Section 5.13 of the Credit Agreement. If any Pledgor fails to provide information to the Collateral
Agent about such changes on a timely basis, the Collateral Agent shall not be liable or responsible
to any party


 

 











 



-32-



for any failure to maintain a perfected security interest in such Pledgor’s property
constituting Pledged
Collateral, for which the Collateral Agent needed to have information relating to such
changes. The Collateral Agent shall have no duty to inquire about such changes if any Pledgor does
not inform the Collateral Agent of such changes, the parties acknowledging and agreeing that it
would not be feasible or practical for the Collateral Agent to search for information on such
changes if such information is not provided by any Pledgor.




          Section 11.2. Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact. If any
Pledgor shall fail to perform any covenants contained in this Agreement (including such Pledgor’s
covenants to (i) pay the premiums in respect of all required insurance policies hereunder, (ii) pay
and discharge any taxes, assessments and special assessments, levies, fees and governmental charges
imposed upon or assessed against, and landlords’, carriers’, mechanics’, workmen’s, repairmen’s,
laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising by operation
of law against, all or any portion of the Pledged Collateral, (iii) make repairs, (iv) discharge
Liens or (v) pay or perform any obligations of such Pledgor under any Pledged Collateral) or if any
representation or warranty on the part of any Pledgor contained herein shall be breached, the
Collateral Agent may (but shall not be obligated to) do the same or cause it to be done or remedy
any such breach, and may expend funds for such purpose; provided, however, that the
Collateral Agent shall in no event be bound to inquire into the validity of any tax, Lien,
imposition or other obligation which such Pledgor fails to pay or perform as and when required
hereby and which such Pledgor does not contest in accordance with the provisions of the Credit
Agreement. Any and all amounts so expended by the Collateral Agent shall be paid by the Pledgors in
accordance with the provisions of Section 11.03 of the Credit Agreement. Neither the provisions of
this Section 11.2 nor any action taken by the Collateral Agent pursuant to the provisions
of this Section 11.2 shall prevent any such failure to observe any covenant contained in
this Agreement nor any breach of representation or warranty from constituting an Event of Default.
Each Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with full power and
authority in the place and stead of such Pledgor and in the name of such Pledgor, or otherwise,
from time to time in the Collateral Agent’s discretion to take any action and to execute any
instrument consistent with the terms of the Credit Agreement, this Agreement and the other Security
Documents which the Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof (but the Collateral Agent shall not be obligated to and shall have no liability to such
Pledgor or any third party for failure to so do or take action). The foregoing grant of authority
is a power of attorney coupled with an interest and such appointment shall be irrevocable for the
term hereof. Each Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof.




          Section 11.3. Continuing Security Interest; Assignment. This Agreement shall create a continuing
security interest in the Pledged Collateral and shall (i) be binding upon the Pledgors, their
respective successors and assigns and (ii) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and the other Secured Parties
and each of their respective successors, transferees and assigns. No other persons (including any
other creditor of any Pledgor) shall have any interest herein or any right or benefit with respect
hereto. Without limiting the generality of the foregoing clause (ii), any Secured Party may assign
or otherwise transfer any indebtedness held by it secured by this Agreement to any other person,
and such other person shall thereupon become vested with all the benefits in respect thereof
granted to such Secured Party, herein or otherwise, subject however, to the provisions of the
Credit Agreement. Each of the Pledgors agrees that its obligations hereunder and the security
interest created hereunder shall continue to be effective or be reinstated, as applicable, if at
any time payment, or any part thereof, of all or any part of the Secured Obligations is rescinded
or must otherwise be restored by the Secured Party upon the bankruptcy or reorganization of any
Pledgor or otherwise.


 

 










 



-33-




          Section 11.4. Termination; Release. When all the Secured Obligations (other than Treasury
Obligations) have been paid in full, all Treasury Obligations have been paid in full or otherwise
collateralized in a manner satisfactory to the holders and providers of the Treasury Obligations,
in their sole discretion, and the Commitments of the Lenders to make any Loan or to issue any
Letter of Credit under the Credit Agreement shall have expired or been sooner terminated and all
Letters of Credit have been terminated or cash collateralized in accordance with the provisions of
the Credit Agreement, this Agreement shall terminate. Upon termination of this Agreement the
Pledged Collateral shall be released from the Lien of this Agreement. Upon such release or any
release of Pledged Collateral or any part thereof in accordance with the provisions of the Credit
Agreement, the Collateral Agent shall, upon the request and at the sole cost and expense of the
Pledgors, assign, transfer and deliver to the relevant Pledgor, against receipt and without
recourse to or warranty by the Collateral Agent except as to the fact that the Collateral Agent has
not encumbered the released assets, such of the Pledged Collateral or any part thereof to be
released (in the case of a release) as may be in possession of the Collateral Agent and as shall
not have been sold or otherwise applied pursuant to the terms hereof, and, with respect to any
other Pledged Collateral, proper documents and instruments (including any necessary UCC-3
termination financing statements or releases) acknowledging the termination hereof or the release
of such Pledged Collateral, as the case may be.




          Section 11.5. Modification in Writing. No amendment, modification, supplement, termination or waiver
of or to any provision hereof, nor consent to any departure by any Pledgor therefrom, shall be
effective unless the same shall be made in accordance with the terms of the Credit Agreement and
unless in writing and signed by the Collateral Agent. Any amendment, modification or supplement of
or to any provision hereof, any waiver of any provision hereof and any consent to any departure by
any Pledgor from the terms of any provision hereof in each case shall be effective only in the
specific instance and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other document evidencing the Secured Obligations,
no notice to or demand on any Pledgor in any case shall entitle any Pledgor to any other or further
notice or demand in similar or other circumstances.




          Section 11.6. Notices. Unless otherwise provided herein or in the Credit Agreement, any notice or
other communication herein required or permitted to be given shall be given in the manner and
become effective as set forth in the Credit Agreement, as to any Pledgor, addressed to it at the
address of the Administrative Borrower set forth in the Credit Agreement and as to the Collateral
Agent, addressed to it at the address set forth in the Credit Agreement, or in each case at such
other address as shall be designated by such party in a written notice to the other party complying
as to delivery with the terms of this Section 11.6.




          Section 11.7. Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.
Sections 11.09 and 11.10 of the Credit Agreement are incorporated herein, mutatis mutandis, as if a
part hereof.




          Section 11.8. Severability of Provisions. Any provision hereof which is invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without invalidating the remaining provisions
hereof or affecting the validity, legality or enforceability of such provision in any other
jurisdiction.




          Section 11.9. Execution in Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed to



 

 










 



-34-



be an
original, but all such counterparts together shall constitute one and the same agreement. Delivery
of
an executed counterpart of a signature page of this Agreement by telecopier shall be effective
as delivery of a manually executed counterpart of this Agreement.




          Section 11.10. Business Days. In the event any time period or any date provided in this Agreement
ends or falls on a day other than a Business Day, then such time period shall be deemed to end and
such date shall be deemed to fall on the next succeeding Business Day, and performance herein may
be made on such Business Day, with the same force and effect as if made on such other day.




          Section 11.11. No Credit for Payment of Taxes or Imposition. Such Pledgor shall not be entitled to
any credit against the principal, premium, if any, or interest payable under the Credit Agreement,
and such Pledgor shall not be entitled to any credit against any other sums which may become
payable under the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.




          Section 11.12. No Claims Against Collateral Agent. Nothing contained in this Agreement shall
constitute any consent or request by the Collateral Agent, express or implied, for the performance
of any labor or services or the furnishing of any materials or other property in respect of the
Pledged Collateral or any part thereof, nor as giving any Pledgor any right, power or authority to
contract for or permit the performance of any labor or services or the furnishing of any materials
or other property in such fashion as would permit the making of any claim against the Collateral
Agent in respect thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to the Lien hereof.




          Section 11.13. No Release. Nothing set forth in this Agreement or any other Loan Document, nor the
exercise by the Collateral Agent of any of the rights or remedies hereunder, shall relieve any
Pledgor from the performance of any term, covenant, condition or agreement on such Pledgor’s part
to be performed or observed under or in respect of any of the Pledged Collateral or from any
liability to any person under or in respect of any of the Pledged Collateral or shall impose any
obligation on the Collateral Agent or any other Secured Party to perform or observe any such term,
covenant, condition or agreement on such Pledgor’s part to be so performed or observed or shall
impose any liability on the Collateral Agent or any other Secured Party for any act or omission on
the part of such Pledgor relating thereto or for any breach of any representation or warranty on
the part of such Pledgor contained in this Agreement, the Credit Agreement or the other Loan
Documents, or under or in respect of the Pledged Collateral or made in connection herewith or
therewith. Anything herein to the contrary notwithstanding, neither the Collateral Agent nor any
other Secured Party shall have any obligation or liability under any contracts, agreements and
other documents included in the Pledged Collateral by reason of this Agreement, nor shall the
Collateral Agent or any other Secured Party be obligated to perform any of the obligations or
duties of any Pledgor thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Pledged Collateral hereunder. The obligations of each
Pledgor contained in this Section 11.13 shall survive the termination hereof and the
discharge of such Pledgor’s other obligations under this Agreement, the Credit Agreement and the
other Loan Documents.




          Section 11.14. Obligations Absolute. All obligations of each Pledgor hereunder shall be absolute and
unconditional irrespective of:





     (i) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any other Pledgor;


 

 










 



-35-



     (ii) any lack of validity or enforceability of the Credit Agreement or any other Loan
Document, or any other agreement or instrument relating thereto;




     (iii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Secured Obligations, or any other amendment or waiver of or any consent to
any departure from the Credit Agreement or any other Loan Document or any other agreement or
instrument relating thereto;




     (iv) any pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any guarantee, for all or
any of the Secured Obligations;




     (v) any exercise, non-exercise or waiver of any right, remedy, power or privilege under
or in respect hereof, the Credit Agreement or any other Loan Document; or




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



          Section 11.15. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE
LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES,
PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE
OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN
THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT
AND THIS AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.




          Section 11.16. Delivery of Collateral. Prior to the Discharge of Term Loan Obligations, to the extent
any Pledgor is required hereunder to deliver Pledged Collateral that is Term Loan Priority
Collateral to the Collateral Agent for purposes of possession and control and is unable to do so as
a result of having previously delivered such Pledged Collateral to any of the Term Loan Agents in
accordance with the terms of the Term Loan Security Documents, such Pledgor’s obligations hereunder
with respect to such delivery shall be deemed satisfied by the delivery to such Term Loan Agents,
acting as a gratuitous bailee and/or sub-agent of the Collateral Agent in accordance with the terms
of the Intercreditor Agreement.




          Section 11.17. Mortgages. In the case of a conflict between this Agreement and the Mortgages with respect
to Pledged Collateral that is real property (including Fixtures), the Mortgages shall govern. In
all other conflicts between this Agreement and the Mortgages, this Agreement shall govern.




          Section 11.18. Conflicts.




          (a) In the case of any conflict between this Agreement and the Credit Agreement, the
provisions of the Credit Agreement shall govern.



 

 










 



-36-




          (b) In the case of a conflict between this Agreement and the Canadian Security Agreement,
solely with respect to the Canadian Borrower, the provisions of the Canadian Security Agreement
shall govern.




[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




 

 



 











 





S-1




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




	 	 	 	 	 
	 	NOVELIS INC., as a Pledgor

 	 
	 	By:  	/s/
Orville Lunking	 
	 	 	Name:  	Orville G. Lunking	 
	 	 	Title:  	Vice President and Treasurer	 
	 
	 	NOVELIS CORPORATION, as a Pledgor

 	 
	 	By:  	/s/
Orville Lunking	 
	 	 	Name:  	Orville G. Lunking	 
	 	 	Title:  	Authorized Signatory	 
	 
	 	NOVELIS PAE CORPORATION, as a Pledgor

 	 
	 	By:  	/s/
Orville Lunking	 
	 	 	Name:  	Orville G. Lunking	 
	 	 	Title:  	Authorized Signatory	 
	 
	 	NOVELIS FINANCES USA LLC, as a Pledgor

 	 
	 	By:  	/s/
Orville Lunking	 
	 	 	Name:  	Orville G. Lunking	 
	 	 	Title:  	Authorized Signatory	 



 

 



 









 






	 	 	 	 	 



S-2




	 	 	 	 	 
	 	NOVELIS SOUTH AMERICA HOLDINGS LLC, as a Pledgor

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

 	 
	 	By:  	/s/
Orville Lunking	 
	 	 	Name:  	Orville G. Lunking	 
	 	 	Title:  	Vice President and Treasurer	 


 

 



 









 






	 	 	 	 	 



S-3




	 	 	 	 	 
	 	LASALLE BUSINESS CREDIT, LLC,

as Collateral Agent

 	 
	 	By:  	/s/
Steve Friedlander	 
	 	 	Name:  	Steve Friedlander	 
	 	 	Title:  	S.V.P.	 


 

 



 









 






	 	 	 	 	 



EXHIBIT 1




ISSUER’S ACKNOWLEDGMENT




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




	 	 	 	 	 
	 	[                                      
                      ]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 


 

 



 









 






	 	 	 	 	 



EXHIBIT 2




SECURITIES PLEDGE AMENDMENT




          This Securities Pledge Amendment, dated as of
[                ] (“Securities Pledge
Amendment”), is delivered by [                ] (the “Pledgor”), in favor of LASALLE
BUSINESS CREDIT, LLC, as collateral agent (in such capacity and together with any successors in
such capacity, the “Collateral Agent”), pursuant to Section 5.1 of the Security
Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time,
the “Security Agreement;” capitalized terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement), dated as of July 6, 2007, made
by NOVELIS INC., a corporation formed under the Canada Business Corporation Act, NOVELIS
CORPORATION, a Texas corporation, NOVELIS PAE CORPORATION, a Delaware corporation, NOVELIS FINANCES
USA LLC, a Delaware limited liability company, NOVELIS SOUTH AMERICA HOLDINGS LLC, a Delaware
limited liability company, and ALUMINUM UPSTREAM HOLDINGS LLC, a Delaware limited liability company
and the Guarantors party thereto, in favor of LASALLE BUSINESS CREDIT, LLC, as collateral agent (in
such capacity and together with any successors in such capacity, the “Collateral Agent”).




          As collateral security for the payment and performance in full of all the Secured Obligations,
the Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured
Parties, a lien on and security interest in all of the right, title and interest of the Pledgor in,
to and under the Pledged Securities and Intercompany Notes listed on this Securities Pledge
Amendment and all Proceeds of any and all of the foregoing (other than Excluded Property).




          The Pledgor hereby agrees that this Securities Pledge Amendment may be attached to the
Security Agreement and that the Pledged Securities and/or Intercompany Notes listed on this
Securities Pledge Amendment shall be deemed to be and shall become part of the Pledged Collateral
and shall secure all Secured Obligations.




          NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE
COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS SECURITIES PLEDGE
AMENDMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED
PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF
ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS
SECURITIES PLEDGE AMENDMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND
CONTROL.




PLEDGED SECURITIES



 

 



 









 








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





INTERCOMPANY NOTES




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	PRINCIPAL	 	DATE OF	 	INTEREST	 	MATURITY
	ISSUER	 	AMOUNT	 	ISSUANCE	 	RATE	 	DATE





	 	 	 	 	 
	 	[                                      
                      ],

as Pledgor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	AGREED TO AND ACCEPTED:





LASALLE BUSINESS CREDIT, LLC,

as Collateral Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 



 

 



 











 




 





EXHIBIT 3




JOINDER AGREEMENT




[Name of New Pledgor]

[Address of New Pledgor]




[Date]




                                        

                                        

                                        

                                        




Ladies and Gentlemen:




          Reference is made to the Security Agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Security Agreement;” capitalized terms used but
not otherwise defined herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of July 6, 2007, made by NOVELIS INC., a corporation formed under the Canada
Business Corporations Act, NOVELIS CORPORATION, a Texas corporation, NOVELIS PAE CORPORATION, a
Delaware corporation, NOVELIS FINANCES USA LLC, a Delaware limited liability company, NOVELIS SOUTH
AMERICA HOLDINGS LLC, a Delaware limited liability company, and ALUMINUM UPSTREAM HOLDINGS LLC, a
Delaware limited liability company and the Guarantors party thereto, in favor of LASALLE BUSINESS
CREDIT, LLC, as collateral agent (in such capacity and together with any successors in such
capacity, the “Collateral Agent”).




          This Joinder Agreement (“Joinder Agreement”) supplements the Security Agreement and is
delivered by the undersigned, [                    ] (the “New Pledgor”), pursuant to
Section 3.5 of the Security Agreement. The New Pledgor hereby agrees to be bound as a
Guarantor and as a Pledgor party to the Security Agreement by all of the terms, covenants and
conditions set forth in the Security Agreement to the same extent that it would have been bound if
it had been a signatory to the Security Agreement on the date of the Security Agreement. The New
Pledgor also hereby agrees to be bound as a party by all of the terms, covenants and conditions
applicable to it set forth in Articles V, VI and VII of the Credit Agreement to the same extent
that it would have been bound if it had been a signatory to the Credit Agreement on the execution
date of the Credit Agreement. Without limiting the generality of the foregoing, the New Pledgor
hereby grants and pledges to the Collateral Agent, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, a lien on and security interest in, all of its right, title
and interest in, to and under the Pledged Collateral and expressly assumes all obligations and
liabilities of a Guarantor and Pledgor thereunder. The New Pledgor hereby makes each of the



 













 





-2-






representations and warranties and agrees to each of the covenants applicable to the Pledgors
contained in the Security Agreement and the Credit Agreement.




          Annexed hereto are supplements to each of the schedules to the Security Agreement and the
Credit Agreement, as applicable, with respect to the New Pledgor. Such supplements shall be deemed
to be part of the Security Agreement or the Credit Agreement, as applicable.




          This Joinder Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.




          THIS JOINDER AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION.




          NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE
COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS JOINDER AGREEMENT AND
THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER
ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS JOINDER AGREEMENT, THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.




[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




 








 





-3-





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




	 	 	 	 	 
	 	[NEW PLEDGOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



AGREED TO AND ACCEPTED:




LASALLE BUSINESS CREDIT, LLC,

as Collateral Agent




	 	 	 	 	 
	 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 



[Schedules to be attached]



 












 





 





EXHIBIT 4




COPYRIGHT SECURITY AGREEMENT




          COPYRIGHT SECURITY AGREEMENT, dated as of [                    ] ( “Copyright Security
Agreement”), by [                    ] and [                    ] (individually, an “Assignor”, and,
collectively, the “Assignors”), in favor of LASALLE BUSINESS CREDIT, LLC, a limited
liability company located at 135 South LaSalle Street, Suite 425, Chicago, Illinois 60603, in its
capacity as collateral agent pursuant to the Credit Agreement (in such capacity, the
“Assignee”).




WITNESSETH:




          WHEREAS, the Assignors are party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Assignee pursuant to which the Assignors are required
to execute and deliver this Copyright Security Agreement;




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




          SECTION 1. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings given to them in the Security Agreement. For purposes of this Copyright
Security Agreement, the term “Copyrights” shall mean, collectively, all copyrights (whether
statutory or common law, whether established, registered or recorded in the United States or any
other country or any political subdivision thereof, whether registered or unregistered and whether
published or unpublished) and all mask works (as such term is defined in 17 U.S.C. Section 901, et
seq.), together with any and all (i) copyright registrations and applications, (ii) rights and
privileges arising under applicable law with respect to such copyrights, (iii) renewals and
extensions thereof and amendments thereto, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable with respect thereto, including damages and payments
for past, present or future infringements or other violations thereof, (v) rights corresponding
thereto throughout the world and (vi) rights to sue for past, present or future infringements
thereof.




          SECTION 2. Grant of Security Interest in Copyright Collateral. As collateral security
for the payment and performance in full of all the Secured Obligations, each Assignor hereby
pledges and grants to the Assignee for the benefit of the Secured Parties, a lien on and security
interest in all of the right, title and interest of such Assignor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or acquired from time to
time (collectively, the “Pledged Copyright Collateral”):




          (a) all Copyrights of such Assignor, including, without limitation, the registered and
applied-for Copyrights of such Assignor listed on Schedule I attached hereto; and



 












 





-2-




          (b) all Proceeds and products of each of the foregoing and all accessions to, substitutions
and replacements for, and rents, profits and products of, each of the foregoing, and any and all
Proceeds of any insurance, indemnity, warranty or guaranty payable to such Assignor from time to
time with respect to any of the foregoing.



Notwithstanding anything to the contrary contained in clauses (a) and (b) above, the security
interest created by this Copyright Security Agreement shall not extend to any Excluded Property.




          SECTION 3. Security Agreement. The lien and security interest granted pursuant to
this Copyright Security Agreement is granted in conjunction with the lien and security interest
granted to the Assignee pursuant to the Security Agreement and Assignors hereby acknowledge and
affirm that the rights and remedies of the Assignee with respect to the lien and security interest
in the Copyrights made and granted hereby are more fully set forth in the Security Agreement. In
the event that any provision of this Copyright Security Agreement is deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall control unless the Assignee
shall otherwise determine.




          SECTION 4. Recordation. Each Assignor hereby authorizes and requests that the United
States Copyright Office record this Copyright Security Agreement.




          SECTION 5. Termination. When all the Secured Obligations have been paid in full and
the Commitments of the Lenders to make any Loan or to issue any Letter of Credit under the Credit
Agreement shall have expired or been sooner terminated and all Letters of Credit have been
terminated or cash collateralized in accordance with the provisions of the Credit Agreement, this
Copyright Security Agreement shall terminate. Upon termination of this Copyright Security
Agreement the Pledged Copyright Collateral shall be released from the Lien of this Copyright
Security Agreement and upon the request and at the sole cost and expense of the Assignors, the
Assignee shall execute, acknowledge, and deliver to the Assignors an instrument in writing in
recordable form releasing the Pledged Copyright Collateral from the Lien of this Copyright Security
Agreement.




          SECTION 6. Counterparts. This Copyright Security Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page of this Copyright Security
Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this
Copyright Security Agreement.




          SECTION 7. Governing Law. This Copyright Security Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard to conflicts of
law principles that would require the application of the laws of another jurisdiction.




          SECTION 8. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ASSIGNEE, FOR THE BENEFIT OF THE SECURED
PARTIES, PURSUANT TO THIS COPYRIGHT SECURITY AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY
THE ASSIGNEE AND THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT. IN THE EVENT




 










 





-3-






OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND
THIS COPYRIGHT SECURITY AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND
CONTROL.




[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




 











 






-4-





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




	 	 	 	 	 
	 	[ASSIGNORS]1

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Accepted and Agreed:




LASALLE BUSINESS CREDIT, LLC,

as Assignee




	 	 	 	 	 
	 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 





 




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




 












 





-5-





SCHEDULE I

to

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS




Copyright Registrations:




	 	 	 	 	 
	owner

	 	registration
number
	 	title of work

	 

	 	 
	 	 





Copyright Applications:




	 	 	 
	owner

	 	title of work

	 

	 	 






 









 





EXHIBIT 5




PATENT SECURITY AGREEMENT




          PATENT SECURITY AGREEMENT, dated as of [                    ] (“Patent Security Agreement”), by
[                    ] and [                    ] (individually, an “Assignor”, and, collectively, the
“Assignors”), in favor of LASALLE BUSINESS CREDIT, LLC, a limited liability company located
at 135 South LaSalle Street, Suite 425, Chicago, Illinois 60603, in its capacity as collateral
agent pursuant to the Credit Agreement (in such capacity, the “Assignee”).




WITNESSETH:




          WHEREAS, the Assignors are party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Assignee pursuant to which the Assignors are required
to execute and deliver this Patent Security Agreement;




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




          SECTION 1. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings given to them in the Security Agreement. For purposes of this Patent
Security Agreement, the term “Patents” shall mean, collectively, all patents, patent
applications, certificates of inventions, industrial designs and rights corresponding thereto
throughout the world (whether established or registered or recorded in the United States or any
other country or any political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to any of the foregoing, (ii) inventions and
improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties,
damages, claims and payments now or hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements or other
violations thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue
for past, present or future infringements or other violations thereof.




          SECTION 2. Grant of Security Interest in Patent Collateral. As collateral security
for the payment and performance in full of all the Secured Obligations, each Assignor hereby
pledges and grants to the Assignee for the benefit of the Secured Parties, a lien on and security
interest in all of the right, title and interest of such Assignor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or acquired from time to
time (collectively, the “Pledged Patent Collateral”):




          (a) all Patents of such Assignor, including, without limitation, the registered and
applied-for Patents of such Assignor listed on Schedule I attached hereto; and





 









 



-2-




          (b) all Proceeds and products of each of the foregoing and all accessions to, substitutions
and replacements for, and rents, profits and products of, each of the foregoing, and any and all
Proceeds of any insurance, indemnity, warranty or guaranty payable to such Assignor from time to
time with respect to any of the foregoing.



Notwithstanding anything to the contrary contained in clauses (a) and (b) above, the security
interest created by this Patent Security Agreement shall not extend to any Excluded Property.




          SECTION 3. Security Agreement. The lien and security interest granted pursuant to
this Patent Security Agreement is granted in conjunction with the lien and security interest
granted to the Assignee pursuant to the Security Agreement and Assignors hereby acknowledge and
affirm that the rights and remedies of the Assignee with respect to the lien and security interest
in the Patents made and granted hereby are more fully set forth in the Security Agreement. In the
event that any provision of this Patent Security Agreement is deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall control unless the Assignee shall
otherwise determine.




          SECTION 4. Recordation. Each Assignor hereby authorizes and requests that the
Commissioner of Patents and Trademarks record this Patent and Security Agreement.




          SECTION 5. Termination. When all the Secured Obligations have been paid in full and
the Commitments of the Lenders to make any Loan or to issue any Letter of Credit under the Credit
Agreement shall have expired or been sooner terminated and all Letters of Credit have been
terminated or cash collateralized in accordance with the provisions of the Credit Agreement, this
Patent Security Agreement shall terminate. Upon termination of this Patent Security Agreement the
Pledged Patent Collateral shall be released from the Lien of this Patent Security Agreement and
upon the request and at the sole cost and expense of the Assignors, the Assignee shall execute,
acknowledge, and deliver to the Assignors an instrument in writing in recordable form releasing the
Pledged Patent Collateral from the Lien of this Patent Security Agreement.




          SECTION 6. Counterparts. This Patent Security Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page of this Patent Security
Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this
Patent Security Agreement.




          SECTION 7. Governing Law. This Patent Security Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard to conflicts of
law principles that would require the application of the laws of another jurisdiction.




          SECTION 8. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ASSIGNEE, FOR THE BENEFIT OF THE SECURED
PARTIES, PURSUANT TO THIS PATENT SECURITY AGREEMENT AND THE EXERCISE OF ANY RIGHT
OR REMEDY BY THE ASSIGNEE AND THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE
PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF




 
 










 



-3-




ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS PATENT SECURITY AGREEMENT, THE PROVISIONS OF
THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.




[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]




 
 










 



-4-




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




	 	 	 	 	 
	 	[ASSIGNORS]2

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Accepted and Agreed:



LASALLE BUSINESS CREDIT, LLC,

as Assignee

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 





 




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





 
 










 



-5-




SCHEDULE I

to

PATENT SECURITY AGREEMENT

PATENT REGISTRATIONS AND PATENT APPLICATIONS




Patent Registrations:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	REGISTRATION	 	 
	OWNER	 	NUMBER	 	NAME





Patent Applications:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	APPLICATION	 	 
	OWNER	 	NUMBER	 	NAME





 
 










 



 




EXHIBIT 6




TRADEMARK SECURITY AGREEMENT




          TRADEMARK SECURITY AGREEMENT, dated as of
[                    ] ( “Trademark Security
Agreement”), by [                    ] and
[                    ] (individually, an “Assignor”, and, collectively, the
“Assignors”), in favor of LASALLE BUSINESS CREDIT, LLC, a limited liability company located
at 135 South LaSalle Street, Suite 425, Chicago, Illinois 60603, in its capacity as collateral
agent pursuant to the Credit Agreement (in such capacity, the “Assignee”).




WITNESSETH:




          WHEREAS, the Assignors are party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Assignee pursuant to which the Assignors are required
to execute and deliver this Trademark Security Agreement;




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




          SECTION 1. Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings given to them in the Security Agreement. For purposes of this Trademark
Security Agreement, the term “Trademarks” shall mean, collectively, all trademarks
(including service marks and certification marks), slogans, logos, certification marks, trade
dress, Internet Domain Names, corporate names and trade names, whether registered or unregistered
(whether statutory or common law and whether established or registered in the United States or any
other country or any political subdivision thereof), together with any and all (i) registrations
and applications for any of the foregoing, (ii) goodwill connected with the use thereof and
symbolized thereby, (iii) rights and privileges arising under applicable law with respect to the
use of any of the foregoing, (iv) reissues, continuations, extensions and renewals thereof and
amendments thereto, (v) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and payments for past,
present or future infringements, dilutions or other violations thereof, (vi) rights corresponding
thereto throughout the world and (vii) rights to sue for past, present and future infringements,
dilutions or other violations thereof.




          SECTION 2. Grant of Security Interest in Trademark Collateral. As collateral security
for the payment and performance in full of all the Secured Obligations, each Assignor hereby
pledges and grants to the Assignee for the benefit of the Secured Parties, a lien on and security
interest in all of the right, title and interest of such Assignor in, to and under the following
property, wherever located, and whether now existing or hereafter arising or acquired from time to
time (collectively, the “Pledged Trademark Collateral”):




          (a) all Trademarks of such Assignor, including, without limitation, the registered and
applied-for Trademarks of such Assignor listed on Schedule I attached hereto; and




 
 










 



-2-




          (b) all Proceeds and products of each of the foregoing and all accessions to, substitutions
and replacements for, and rents, profits and products of, each of the foregoing, and any and all
Proceeds of any insurance, indemnity, warranty or guaranty payable to such Assignor from time to
time with respect to any of the foregoing.




Notwithstanding anything to the contrary contained in clauses (a) through (c) above, the security
interest created by this Trademark Security Agreement shall not extend to any Excluded Property.




          SECTION 3. Security Agreement. The lien and security interest granted pursuant to
this Trademark Security Agreement is granted in conjunction with the lien and security interest
granted to the Assignee pursuant to the Security Agreement and Assignors hereby acknowledge and
affirm that the rights and remedies of the Assignee with respect to the lien and security interest
in the Trademarks made and granted hereby are more fully set forth in the Security Agreement. In
the event that any provision of this Trademark Security Agreement is deemed to conflict with the
Security Agreement, the provisions of the Security Agreement shall control unless the Assignee
shall otherwise determine.




          SECTION 4. Recordation. Each Assignor hereby authorizes and requests that the
Commissioner of Patents and Trademarks record this Trademark Security Agreement.




          SECTION 5. Termination. When all the Secured Obligations have been paid in full and
the Commitments of the Lenders to make any Loan or to issue any Letter of Credit under the Credit
Agreement shall have expired or been sooner terminated and all Letters of Credit have been
terminated or cash collateralized in accordance with the provisions of the Credit Agreement, this
Trademark Security Agreement shall terminate. Upon termination of this Trademark Security
Agreement the Pledged Trademark Collateral shall be released from the Lien of this Trademark
Security Agreement and upon the request and at the sole cost and expense of the Assignors, the
Assignee shall execute, acknowledge, and deliver to the Assignors an instrument in writing in
recordable form releasing the Pledged Trademark Collateral from the Lien of this Trademark Security
Agreement.




          SECTION 6. Counterparts. This Trademark Security Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page of this Trademark Security
Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this
Trademark Security Agreement.




          SECTION 7. Governing Law. This Trademark Security Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard to conflicts of
law principles that would require the application of the laws of another jurisdiction.




          SECTION 8. INTERCREDITOR AGREEMENT GOVERNS. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE ASSIGNEE, FOR THE BENEFIT OF THE SECURED
PARTIES, PURSUANT TO THIS TRADEMARK SECURITY AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY
THE ASSIGNEE AND THE OTHER SECURED PARTIES HEREUNDER



 
 










 



-3-



ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR
INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS TRADEMARK SECURITY
AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL.




[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]



 
 










 



-4-




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




	 	 	 	 	 
	 	[ASSIGNORS]3

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Accepted and Agreed:



LASALLE BUSINESS CREDIT, LLC,

as Assignee

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 





 




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





 
 










 



-5-




SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS




Trademark Registrations:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	REGISTRATION	 	 	 	 
	OWNER	 	 	NUMBER	 	 	TRADEMARK	 





Trademark Applications:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	APPLICATION	 	 	 	 
	OWNER	 	 	NUMBER	 	 	TRADEMARK	 





 
 










 



 




EXHIBIT 7




FORM OF BAILEE LETTER




LaSalle Business Credit, LLC, as Agent

135 South LaSalle Street, Suite 425

Chicago, Illinois 60603

Attention: Account Officer

Facsimile No: 312-904-6450




          Re:
[                              ]




          [                    ] (the “Bailor”), a
[                    ] and a subsidiary of Novelis Inc. (the
“Parent”), now does or hereafter may deliver to certain premises [managed][owned] by
[                              ] (the “Bailee”), a
[                    ], on behalf of the Bailor as owner and
located at [                    ] (the “Premises”), certain of its [DESCRIBE PROPERTY SUBJECT TO
BAILMENT] for [DESCRIBE PURPOSE FOR WHICH PROPERTY HAS BEEN DELIVERED TO BAILEE].




          The Parent and certain of its Subsidiaries (collectively, the “Borrowers”) have
entered into financing arrangements with certain financial institutions (the “Lenders”),
pursuant to a Credit Agreement, dated as of July 6, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) for which LaSalle Business
Credit, LLC shall act as collateral agent (the “Agent”). As a condition to the Agent’s and
the Lenders’ loans and other financial accommodations to the Borrowers (as defined in the Credit
Agreement), the Agent and the Lenders require, among other things, liens on all of the Bailor’s
property located on the Premises, and the proceeds thereof (the “Collateral”).




          To induce the Agent and the Lenders (together with their respective agents and assigns) to
enter into said financing arrangements, and for other good and valuable consideration, the Bailee
hereby acknowledges receipt of the above notice, and hereby further agrees that:





     (i) title to the Collateral remains with the Bailor while the Collateral is in
the custody, control or possession of the Bailee, the undersigned, to the best of
its knowledge without special inquiry, does not know of any security interest or
claim with respect to such goods or proceeds, other than the security interest which
is the subject of this Agreement, and the Bailee will not assert against the
Collateral any lien, right of distraint or levy, right of offset, claim, deduction,
counterclaim, security or other interest in the Collateral, including any of the
foregoing which might arise or exist in its favor pursuant to any agreement, common
law, statute (including the Federal Bankruptcy Code) or otherwise, all of which the
undersigned hereby subordinates in favor of the Agent;



 
 










 



-2-





     (ii) the Collateral shall be clearly identified or identifiable as being owned
by the Bailor and is distinguishable from the property of the Bailee and other
property in its possession;




     (iii) none of the Collateral located on the Premises shall be permitted to
become a fixture to the Premises;




     (iv) the Bailee has not issued, and shall not issue, any negotiable documents
or other negotiable instruments in respect of any Collateral;




     (v) if any Borrower defaults on its obligations to the Agent and the Lenders,
subject to any grace period, and, as a result, the Agent undertakes to enforce its
security interest in the Collateral, the Bailee, upon receipt of reasonable written
confirmation of the currency and existence of a default (a) will hold the Collateral
for the Agent’s account for the benefit of the Lenders, and release the Collateral
only to the Agent or its designee, (b) will permit the Agent to enter the Premises
upon reasonable notice and during regular business hours and without unduly
interrupting the Bailee’s operations, to inspect, assemble, take possession of, and
remove all of the Collateral located on the Premises and will reasonably cooperate
with the Agent in its efforts to do so; (c) will permit the Collateral to remain on
the Premises for forty-five (45) days after the Agent notifies the Bailee in writing
of the default, or, at the Agent’s option, to remove the Collateral from the
Premises within a reasonable time, not to exceed forty-five (45) days after the
Agent notifies the undersigned in writing of the default; (d) will not hinder the
Agent’s actions in enforcing its liens on the Collateral; and (e) after the Agent
notifies the Bailee in writing of the default, will, without further consent or
agreement of the Bailor, abide solely by Agent’s lawful instructions with respect to
the Collateral, and not those of the Bailor and




     (vi) the Bailee hereby waives and releases, for Agent’s benefit, any and all
claims, liens, including bailee’s liens, and demands of every kind which Bailee has
or may later have against the Collateral (including any right to include such goods
in any secured financing to which Bailee may become party).



          The Bailee hereby irrevocably and unconditionally authorizes Agent (or its designee) to file
at any time prior to the payment in full of the Secured Obligations (as defined in the Credit
Agreement) in any jurisdiction and with such filing offices as the Agent so chooses such financing
statements naming the Bailee as the debtor consignee, the Bailor as the secured party consignor,
and the Agent as assignee, describing the Collateral in a manner that Agent believes is reasonably
necessary or desirable to protect its security interest in the Bailor’s property, and including any
other information with respect to the Bailee required under the Uniform Commercial Code for the
sufficiency of such financing statement or for it to be accepted by the filing office of any
applicable jurisdiction (and any amendments or continuations with respect thereto); provided,
however, Agent shall provide to Bailor for review copies of any such filings to be made,
sufficiently in advance of filing and once filed, final copies of such filings.




          Any notice(s) required or desired to be given hereunder shall be directed to the party to be
notified at the address stated herein.


 
 










 



-3-




          The agreements contained herein shall continue in force until each Borrower’s obligations and
liabilities to the Agent and the Lenders are paid and satisfied in full and all financing
arrangements among the Agent, the Lenders and the Borrowers have been terminated.




          The consent of the Bailor hereto constitutes its acknowledgment that Agent may assert any of
the rights set forth or referred to herein, without objection by the Bailor, and that the Bailee
may act in accordance with this Agreement without liability to the Bailor. By its signature below,
the Bailor agrees to reimburse the Bailee for all reasonable costs and expenses incurred by the
Bailee as a direct result of compliance with this Agreement.




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



[Signature pages follow]


 
 










 



-4-




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




          Executed and delivered this ___ day of
                    , 20___.




	 	 	 	 	 
	 	[______________]

[Address]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	CONSENTED AND AGREED TO:



[______________]

[Address]

 	 	 
	By:  	 	 	 
	 	Title: 	 	 



ACKNOWLEDGED AND ACCEPTED:




LASALLE BUSINESS CREDIT, LLC, as Agent

135 South LaSalle Street, Suite 425

Chicago, Illinois 60603

Attention: Account Officer

Facsimile No: 312-904-6450




	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title: