exv4w4






Exhibit 4.4




Notwithstanding anything herein to the contrary, the liens and security interests granted to
Agent pursuant to this Agreement and the exercise of any right or remedy by Agent hereunder are
subject to the provisions of the Intercreditor Agreement dated as of January 25, 2011 (as amended,
restated, supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), among Wells Fargo Capital Finance, LLC, as ABL Agent, Wells Fargo Bank, National
Association, as trustee and collateral agent under the Indenture, as Agent, and the Grantors (as
defined in the Intercreditor Agreement) from time to time party thereto. In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the
terms of the Intercreditor Agreement shall govern and control.




SECURITY AGREEMENT




     THIS SECURITY AGREEMENT (this “Agreement”) is dated as of January 25, 2011, among the
Grantors listed on the signature pages hereof and those additional Persons that hereafter become
parties hereto by executing a Joinder Agreement (each, a “Grantor,” and collectively, the
“Grantors”), and Wells Fargo Bank, National Association, not in its individual capacity,
but solely in its capacity as collateral agent under the Indenture (in such capacity, together with
its successors and assigns in such capacity, “Agent”).



WITNESSETH:




     WHEREAS, pursuant to that certain Indenture of even date herewith (as amended, restated,
supplemented, or otherwise modified from time to time, the “Indenture”) by and among Exide
Technologies, a Delaware corporation (the “Company”) and Wells Fargo Bank, National
Association, as trustee (in such capacity, together with its successors and assigns, the
“Trustee”), on behalf of the holders (the “Noteholders”) of the Notes (as defined
below), pursuant to which the Company is issuing $675,000,000
aggregate principal amount of its 85⁄8%
Senior Secured Notes due 2018 (and, together with any Additional Notes and Exchange Notes (as
defined in the Indenture) which may be issued from time to time under the Indenture, the
“Notes”), which, in accordance with the terms of the Indenture, are or will be guaranteed
by each of the other Grantors;



     WHEREAS, the Trustee has been appointed to serve as Collateral Agent under the Indenture and,
in such capacity, directed to enter into this Agreement;



     WHEREAS, following the date hereof, the Grantors may incur Permitted Additional Pari Passu
Obligations (as defined in the Indenture) which are secured equally and ratably with the Grantors’
obligations in respect of the Notes in accordance with Section 28 of this Agreement;



     WHEREAS, each Grantor will receive substantial benefits from the execution, delivery and
performance of the obligations under the Indenture, the Notes and any Additional Pari Passu
Agreement and each is, therefore, willing to enter into this Agreement;



     WHEREAS, the Grantors are executing and delivering this Agreement pursuant to the terms of the
Indenture to induce Agent to enter into the Indenture and induce the Noteholders to purchase the
Notes; and



     WHEREAS, this Agreement is made by the Grantors in favor of Agent for the benefit of the
Secured Parties to secure the payment and performance in full when due of the Obligations.



 









 





     NOW, THEREFORE, for and in consideration of the recitals made above and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:



     1. Defined Terms. All initially capitalized terms used herein (including in the
preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the
Indenture or, if not defined in the Indenture, the meanings ascribed thereto in the Intercreditor
Agreement. Any terms (whether capitalized or lower case) used in this Agreement that are defined
in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein
or in the Indenture; provided, however, that to the extent that the Code is used to
define any term used herein and if such term is defined differently in different Articles of the
Code, the definition of such term contained in Article 9 of the Code shall govern. In addition to
those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms
shall have the following meanings:




     (a) “Account” means an account (as that term is defined in the Code).




     (b) “Account Debtor” means an account debtor (as that term is defined in the
Code).




     (c) “Additional Pari Passu Agent” means the Person appointed to act as trustee,
agent or representative for the holders of Permitted Additional Pari Passu Obligations
pursuant to any Additional Pari Passu Agreement.




     (d) “Additional Pari Passu Agreement” means the indenture, credit agreement or
other agreement under which any Permitted Additional Pari Passu Obligations (other than
Additional Notes) are incurred and any notes or other instruments representing such
Permitted Additional Pari Passu Obligations.




     (e) “Additional Pari Passu Joinder Agreement” means an agreement substantially
in the form of Exhibit E.




     (f) “After Acquired Mortgaged Property” has the meaning specified therefor in
Section 2.2.




     (g) “Agent” has the meaning specified therefor in the preamble to this
Agreement.




     (h) “Agent’s Lien” means the Liens granted by the Company and the Guarantors
(if any) to Agent under the Indenture, this Agreement and the other Security Documents.




     (i) “Agreement” has the meaning specified therefor in the preamble to this
Agreement.




     (j) “Books” means books and records (including each Grantor’s Records
indicating, summarizing, or evidencing such Grantor’s assets (including the Collateral) or
liabilities, each Grantor’s Records relating to such Grantor’s business operations or
financial condition, and each Grantor’s goods or General Intangibles related to such
information).




     (k) “Chattel Paper” means chattel paper (as that term is defined in the Code),
and includes tangible chattel paper and electronic chattel paper.




     (l) “Code” means the New York Uniform Commercial Code, as in effect from time
to time; provided, however, that in the event that, by reason of mandatory
provisions of law, any



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or all of the attachment, perfection, priority, or remedies with respect to Agent’s
Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority, or remedies.




     (m) “Collateral” has the meaning specified therefor in Section 2.




     (n) “Commercial Tort Claims” means commercial tort claims (as that term is
defined in the Code), and includes those commercial tort claims listed on Schedule
1.




     (o) “Copyrights” means any and all rights in any works of authorship, including
(i) copyrights and moral rights, (ii) copyright registrations and recordings thereof and all
applications in connection therewith including those listed on Schedule 5 to this
Agreement, (iii) income, license fees, royalties, damages, and payments now and hereafter
due or payable under and with respect thereto, including payments under all licenses entered
into in connection therewith and damages and payments for past, present, or future
infringements, misappropriations, and violations thereof, (iv) the right to sue for past,
present, and future infringements, misappropriations, and violations thereof, and (v) all of
each Grantor’s rights corresponding thereto throughout the world.




     (p) “Copyright Security Agreement” means each Copyright Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially the form of
Exhibit A.




     (q) “Deposit Account” means a deposit account (as that term is defined in the
Code).




     (r) “Documents” means documents (as that term is defined in the Code).




     (s) “Equipment” means equipment (as that term is defined in the Code).




     (t) “Event of Default” has the meaning specified therefor in the Indenture or
under any Additional Pari Passu Agreement.




     (u) “Excluded Accounts” means (x) deposit accounts the balance of which
consists exclusively of withheld income taxes, employment taxes or amounts required to be
paid over to certain employee benefit plans and (y) segregated deposit accounts constituting
tax, payroll and trust accounts,




     (v) “Fixtures” means fixtures (as that term is defined in the Code).




     (w) “General Intangibles” means general intangibles (as that term is defined in
the Code), and includes payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action, goodwill,
Intellectual Property, Intellectual Property Licenses, purchase orders, customer lists,
monies due or recoverable from pension funds, route lists, rights to payment and other
rights under any royalty or licensing agreements, including Intellectual Property Licenses,
infringement claims, pension plan refunds, pension plan refund claims, insurance premium
rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability
company which do not constitute a security under Article 8 of the Code, and any other
personal property other than Commercial Tort Claims,



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money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related Property,
Negotiable Collateral, and oil, gas, or other minerals before extraction.




     (x) “Governmental Authority” means any foreign, federal, state, local, or other
governmental or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body.




     (y) “Grantor” and “Grantors” have the respective meanings specified
therefor in the preamble to this Agreement.




     (z) “Guarantee” has the meaning specified therefor in the Indenture.




     (aa) “Indenture” has the meaning specified thereof in the recitals to this
Agreement.




     (bb) “Insolvency Proceeding” means any proceeding commenced by or against any
Person under any provision of any Bankruptcy Law or any assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with creditors,
or proceedings seeking reorganization, receivership, dissolution, liquidation, or other
similar relief.




     (cc) “Intellectual Property” means any and all (i) Patents, Copyrights,
Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms,
software programs (including source code and object code), processes, product designs,
industrial designs, blueprints, drawings, data, customer lists, URLs and domain names,
specifications, documentations, reports, catalogs, literature, and any other forms of
technology or proprietary information of any kind, including all rights therein and all
applications for registration or registrations thereof, (ii) all copies and embodiments of
any of the foregoing (in whatever form or medium); (iii) all income, royalties, damages and
payments now and hereafter due or payable under and with respect thereto, including payments
under all licenses entered into in connection therewith and damages and payments for past,
present, or future infringements, misappropriations, and violations thereof, (iv) the right
to sue for past, present, and future infringements, misappropriations, and violations
thereof, and (v) all rights corresponding thereto throughout the world.




     (dd) “Intellectual Property Licenses” means, with respect to any Person (the
“Specified Party”), (i) any licenses or other similar rights provided to the
Specified Party in or with respect to Intellectual Property owned or controlled by any other
Person, (ii) any licenses or other similar rights provided to any other Person in or with
respect to Intellectual Property owned or controlled by the Specified Party, in each case,
including (A) any software license agreements (other than license agreements for
commercially available off-the-shelf software that is generally available to the public
which have been licensed to a Grantor pursuant to end-user licenses), (B) the license
agreements listed on Schedule 5 to this Agreement, and (C) the right to use any of
the licenses or other similar rights described in this definition in connection with the
enforcement of the Secured Parties’ rights under the Security Documents and (iii) all
income, royalties, damages and payments now and hereafter due or payable under and with
respect to clause (i) and (ii) above, including payments there under and damages and
payments for past, present, or future infringements, misappropriations, and violations
thereof, (iv) the right to sue for past, present, and future breach, infringements,
misappropriations, or violations thereof, and (v) all rights corresponding thereto
throughout the world.




     (ee) “Inventory” means inventory (as that term is defined in the Code).



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     (ff) “Investment Related Property” means (i) any and all investment property
(as that term is defined in the Code), and (ii) any and all of the following (regardless of
whether classified as investment property under the Code): all Pledged Interests, Pledged
Operating Agreements, and Pledged Partnership Agreements.




     (gg) “Joinder Agreement” means a joinder agreement executed by a new Grantor
substantially in the form attached hereto as Exhibit F.




     (hh) “Laws” means, collectively, all international, foreign, federal, state,
provincial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with, any
Governmental Authority, in each case whether or not having the force of Law.




     (ii) “Material Adverse Change” means (i) a material adverse change in the
business, operations, results of operations, assets, liabilities or financial condition of
the Company and its Subsidiaries, taken as a whole, (ii) a material adverse effect on the
Company and its Subsidiaries ability, taken as a whole, to perform their obligations under
the Indenture, each Additional Pari Passu Agreement, if any, this Agreement or the other
Security Documents to which they are parties or of any Secured Party’s ability to enforce
the Obligations or realize upon the Collateral, or (iii) a material adverse effect on the
enforceability or priority of Agent’s Liens with respect to the Collateral as a result of an
action or failure to act on the part of any Grantor.




     (jj) “Material Copyrights” has the meaning specified therefor in Section
5(d)(iv).




     (kk) “Material Intellectual Property” has the meaning specified therefor in
Section 5(d)(i).




     (ll) “Material Patents” has the meaning specified therefor in Section 5(d)(iv).




     (mm) “Material Pledged Note” has the meaning specified therefor in Section 5(h).




     (nn) “Material Trademarks” has the meaning specified therefor in Section 5(d)(iv).




     (oo) “Mortgage” means an agreement, including, but not limited to, a mortgage,
deed of trust or any other document creating and evidencing a Lien on a Mortgaged Property
in favor of or for the benefit of Agent on behalf of the Secured Parties, which shall be in
a form which is effective to grant a Lien in favor of or for the benefit of Agent on behalf
of the Secured Parties enforceable against the applicable Grantor and creates rights in
favor of or for the benefit of Agent on behalf of the Secured Parties in respect of the
applicable Mortgaged Property in form and substance substantially the same as the mortgages
of the Grantors in favor of or for the benefit of Agent provided on the Issue Date, in each
case, with such schedules and including such provisions as shall be necessary or desirable
to conform such document to applicable local law or as shall be customary under applicable
local law.




     (pp) “Mortgaged Property” means (i) each of the owned Real Properties
identified on Schedule 6 to this Agreement and (ii) each After Acquired Mortgaged
Property.



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     (qq) “Negotiable Collateral” means letters of credit, letter-of-credit rights,
instruments, promissory notes, drafts and documents (as each such term is defined in the
Code).




     (rr) “Noteholders” has the meaning specified therefor in the recitals to this
Agreement.




     (ss) “Notes” has the meaning specified therefor in the recitals to this
Agreement.




     (tt) “Obligations” means any principal, premium, interest (including any
interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or
similar proceeding at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable state, federal or foreign
law), penalties, fees, indemnifications, reimbursements, damages and other liabilities, and
guarantees of payment of such principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities, (including, without limitation, reasonable
attorney’s fees and expenses that occur subsequent to the filing of a petition in
bankruptcy, reorganization or similar proceeding whether or not allowed or allowable as a
claim under applicable state, federal or foreign law) payable under any of (i) the Indenture
(including the Indenture Obligations (as defined in the Indenture), but (except to the
extent constituting Permitted Additional Pari Passu Obligations) excluding any Additional
Notes and provisions in the Indenture relating solely to such Additional Notes), (ii) the
Notes, (iii) any Additional Pari Passu Agreement and (iv) the documentation relating to any
other Permitted Additional Pari Passu Obligations; provided that no obligations in
respect of Permitted Additional Pari Passu Obligations (other than obligations with respect
to Additional Notes) shall constitute “Obligations” unless the Additional Pari Passu Agent
for the holders of such Permitted Additional Pari Passu Obligations has executed an
Additional Pari Passu Joinder Agreement in the form of Exhibit E hereto.




     (uu) “Organizational Documents” means, with respect to any person, (i) in the
case of any corporation, the certificate of incorporation and by-laws (or similar documents)
of such person, (ii) in the case of any limited liability company, the certificate of
formation and operating agreement (or similar documents) of such person, (iii) in the case
of any limited partnership, the certificate of formation and limited partnership agreement
(or similar documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other case, the
functional equivalent of the foregoing.




     (vv) “Patents” means patents and patent applications, including (i) the patents
and patent applications listed on Schedule 5 to this Agreement, (ii) all
continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals
thereof and improvements thereon, (iii) all income, royalties, damages and payments now and
hereafter due or payable under and with respect thereto, including payments under all
licenses entered into in connection therewith and damages and payments for past, present, or
future infringements, misappropriations, or violations thereof, (iv) the right to sue for
past, present, and future infringements, misappropriations, or violations thereof, and (v)
all of each Grantor’s rights corresponding thereto throughout the world.




     (ww) “Patent Security Agreement” means each Patent Security Agreement executed
and delivered by Grantors, or any of them, and Agent, in substantially the form of
Exhibit B.




     (xx) “Permitted Collateral Liens” has the meaning specified therefor in the
Indenture.



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     (yy) “Pledged Companies” means each Person listed on Schedule 2 as a
“Pledged Company,” together with each other Person, all or a portion of whose Capital Stock
is acquired or otherwise owned by a Grantor after the Issue Date.




     (zz) “Pledged Interests” means all of each Grantor’s right, title and interest
in and to all of the Capital Stock now owned or hereafter acquired by such Grantor,
regardless of class or designation, including in each of the Pledged Companies, and all
substitutions therefor and replacements thereof, all proceeds thereof and all rights
relating thereto, also including any certificates representing the Capital Stock, the right
to receive any certificates representing any of the Capital Stock, all warrants, options,
share appreciation rights and other rights, contractual or otherwise, in respect thereof and
the right to receive all dividends, distributions of income, profits, surplus, or other
compensation by way of income or liquidating distributions, in cash or in kind, and all
cash, instruments, and other property from time to time received, receivable, or otherwise
distributed in respect of or in addition to, in substitution of, on account of, or in
exchange for any or all of the foregoing.




     (aaa) “Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit C.




     (bbb) “Pledged Operating Agreements” means all of each Grantor’s rights,
powers, and remedies under the limited liability company operating agreements of each of the
Pledged Companies that are limited liability companies.




     (ccc) “Pledged Partnership Agreements” means all of each Grantor’s rights,
powers, and remedies under the partnership agreements of each of the Pledged Companies that
are partnerships.




     (ddd) “Proceeds” has the meaning specified therefor in Section 2.




     (eee) “PTO” means the United States Patent and Trademark Office.




     (fff) “Real Property” means, collectively, all right, title and interest
(including any leasehold, mineral or other estate) in and to any and all parcels of or
interests in real property owned, leased or operated by any Person, whether in fee or by
lease, license or other means, together with, in each case, but only to the extent
constituting real property under applicable local law, all easements, hereditaments and
appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all
general intangibles and contract rights and other property and rights incidental to the
ownership, lease or operation thereof.




     (ggg) “Records” means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in perceivable form.




     (hhh) “Required Secured Parties” means the holders of a majority in aggregate
principal amount of (i) the Notes and (ii) any Indebtedness constituting Permitted
Additional Pari Passu Obligations, in each case, excluding any holder of such Indebtedness
whose vote is required to be disregarded under the Indenture or the applicable Additional
Pari Passu Agreement.




     (iii) “Restricted Subsidiary” has the meaning specified therefor in the
Indenture.



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     (jjj) “Secured Parties” means, collectively, Agent, the Trustee, each
Additional Pari Passu Agent, the Noteholders and any other holders of Obligations.




     (kkk) “Securities Account” means a securities account (as that term is defined
in the Code).




     (lll) “Security Interest” has the meaning specified therefor in Section
2.




     (mmm) “Supporting Obligations” means supporting obligations (as such term is
defined in the Code), and includes letters of credit and guaranties issued in support of
Accounts, Chattel Paper, documents, General Intangibles, instruments or Investment Related
Property.




     (nnn) “Third Party Agreements” has the meaning specified therefor in
Section 27.




     (ooo) “Trademarks” means any and all trademarks, trade names, registered
trademarks, trademark applications, service marks, registered service marks and service mark
applications, including (i) the trade names, registered trademarks, trademark applications,
registered service marks and service mark applications listed on Schedule 5 to this
Agreement, (ii) all renewals thereof, (iii) all income, royalties, damages and payments now
and hereafter due or payable under and with respect thereto, including payments under all
licenses entered into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (iv) the right to sue for past, present and future
infringements, misappropriations, violations, and dilutions thereof, (v) the goodwill of
each Grantor’s business symbolized by the foregoing or connected therewith, and (vi) all of
each Grantor’s rights corresponding thereto throughout the world.




     (ppp) “Trademark Security Agreement” means each Trademark Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially the form of
Exhibit D.




     (qqq) “Trustee” has the meaning specified therefor in the recitals to this Agreement.




     (rrr) “URL” means “uniform resource locator,” an internet web address.



     2. Grant of Security.



          2.1 Each Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit
of the Secured Parties, to secure the Obligations, a continuing security interest (hereinafter
referred to as the “Security Interest”) in all of such Grantor’s right, title, and interest
in and to the following, whether now owned or hereafter acquired or arising and wherever located
(the “Collateral”):





     (a) all of such Grantor’s Accounts;




     (b) all of such Grantor’s Books;




     (c) all of such Grantor’s Chattel Paper;




     (d) all of such Grantor’s Deposit Accounts;




     (e) all of such Grantor’s Goods, Equipment and Fixtures;




     (f) all of such Grantor’s General Intangibles;



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     (g) all of such Grantor’s Intellectual Property and Intellectual Property Licenses;




     (h) all of such Grantor’s Documents;




     (i) all of such Grantor’s Inventory;




     (j) all of such Grantor’s Investment Related Property;




     (k) all of such Grantor’s Negotiable Collateral;




     (l) all of such Grantor’s Supporting Obligations;




     (m) all of such Grantor’s Commercial Tort Claims;




     (n) all of such Grantor’s money, Cash Equivalents, or other assets of such Grantor that
now or hereafter come into the possession, custody, or control of Agent (or its agent or
designee) or any other Secured Party; and




     (o) all of the proceeds (as such term is defined in the Code) and products, whether
tangible or intangible, of any of the foregoing, including proceeds of insurance or
Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all
Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, Fixtures, General Intangibles,
Inventory, Investment Related Property, Negotiable Collateral, Supporting Obligations,
money, or other tangible or intangible property resulting from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, the proceeds of any
award in condemnation with respect to any of the foregoing, any rebates or refunds, whether
for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or
interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or
destruction of the above, whether insured or not insured, and, to the extent not otherwise
included, any indemnity, warranty, or guarantee payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”). Without limiting
the generality of the foregoing, the term “Proceeds” includes whatever is receivable or
received when Investment Related Property or proceeds are sold, exchanged, collected, or
otherwise disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guarantee payable to any Grantor or Agent from time to time
with respect to any of the Investment Related Property.



     Notwithstanding anything contained in this Agreement to the contrary, and except for so long
as such Collateral constitutes ABL Collateral (as defined in the Intercreditor Agreement (and
which, for the avoidance of doubt, shall exclude Excluded Foreign Collateral (as defined in the
Intercreditor Agreement))), the term “Collateral” shall not include (collectively, “Excluded
Assets”): (i) (x) voting Capital Stock of any Foreign Subsidiary, solely to the extent that
such Capital Stock represents more than 65% of the outstanding voting Capital Stock of such Foreign
Subsidiary; and (y) any Capital Stock of a Person that is not a Subsidiary of the Company to the
extent, and for so long as, a pledge of such Capital Stock is prohibited by such Person’s
organizational documents or any shareholders agreement or joint venture agreement relating to such
Capital Stock; (ii) Government Grant Property to the extent and for so long as any applicable law,
rule or regulation governing the grant related to such Government Grant Property prohibits or
otherwise restricts such Government Grant Property from being encumbered or subject to any Lien or
other similar restriction; (iii) any rights or interest in any contract, lease, permit, license,
license agreement or other agreement covering real or personal property of any Grantor if under the
terms of such contract, lease, permit, license, license agreement or other agreement, or applicable
law with respect thereto, the grant of a security interest or lien therein would violate applicable
law or result in



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the invalidation thereof or provide any party thereto with a right of termination of such
contract, lease, permit, license or license agreement or other agreement has not been obtained
(provided that, (A) the foregoing exclusions of this clause (iii) shall in no way be construed (1)
to apply to the extent that any described prohibition or restriction is unenforceable under Section
9-406, 9-407, 9-408, or 9-409 of the Code or other applicable law, or (2) to apply to the extent
that any consent or waiver has been obtained that would permit Agent’s security interest or lien
notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit,
license, license agreement or other agreement and (B) the foregoing exclusions of clauses (i) and
(iii) shall in no way be construed to limit, impair, or otherwise affect any of Agent’s, any other
Secured Party’s continuing security interests in and liens upon any rights or interests of any
Grantor in or to (1) monies due or to become due under or in connection with any described
contract, lease, permit, license, license agreement or other agreement, or Capital Stock (including
any Accounts or Capital Stock), or (2) any proceeds from the sale, license, lease, or other
dispositions of any such contract, lease, license, other agreement, or Capital Stock); (iv) any
United States intent-to-use trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the validity or enforceability of
such intent-to-use trademark applications under applicable federal law, provided that upon
submission and acceptance by the PTO of an amendment to allege use pursuant to 15 U.S.C. Section
1060(a) (or any successor provision), such intent-to-use trademark application shall be considered
Collateral; (v) (A) any fee interest in real property of any Grantor, including all fixtures,
easements and appurtenances related thereto (other than the real property, including fixtures,
easements and appurtenances related thereto, (1) listed on Schedule 6 that is subject to a
Mortgage or (2) required to become subject to a Mortgage pursuant to Section 2.2 of this
Agreement and (B) any leasehold interest in any real property of any Grantor, as tenant, including
all fixtures, easements and appurtenances relating thereto; (vi) assets located outside the United
States to the extent a Lien on such assets cannot be perfected by the filing of UCC financing
statements in the jurisdictions of organization of the applicable Grantor; (vii) to the extent not
constituting collateral for the ABL Obligations, (x) assets and proceeds thereof securing
Indebtedness permitted to be incurred under clause (9) or (15) of the definition of “Permitted
Indebtedness” set forth in the Indenture to the extent such Indebtedness prohibits the granting of
a security interest in such assets and proceeds thereof and (y) assets and proceeds thereof subject
to Liens pursuant to clause (15) of the definition of “Permitted Liens” set forth in the Indenture
to the extent and for so long as the agreements relating to such Liens prohibit such assets from
being Collateral; (viii) motor vehicles, aircraft and other assets subject to certificates of title
to the extent that a Lien therein cannot be perfected by the filing of UCC financing statements in
the jurisdictions of organization of the applicable Grantor; (ix) any property or assets owned by a
Foreign Subsidiary or any other Subsidiary that, in each case, is not required to be a Grantor; (x)
Excluded Accounts; or (xi) proceeds and products of any and all of the foregoing Excluded Assets
described in clauses (i) through (x) above only to the extent such proceeds and products would
constitute property or assets of
the type described in clauses (i) through (x) above. For the
avoidance of doubt, any assets (including, without limitation, the Capital Stock of Exide Holding
Asia PTE Limited) held by the Company solely in its capacity as the general partner of and for the
benefit of Exide Global Holding Netherlands C.V. shall be deemed to be assets of Exide Global
Holding Netherlands C.V. and shall not be considered to be assets or Collateral of the Company.




     In addition, notwithstanding anything herein to the contrary, in the event that Rule 3-16 of
Regulation S-X under the Securities Act requires (or is replaced with another rule or regulation,
or any other law, rule or regulation is adopted, which would require) the filing with the SEC of
separate financial statements of any Subsidiary of the Company due to the fact that such
Subsidiary’s Capital Stock or other securities of such Grantor secure the Notes or any Permitted
Additional Pari Passu Obligations affected thereby, then the Capital Stock and such other
securities of such Subsidiary will automatically be deemed not to be part of the Collateral
securing the Notes or Permitted Additional Pari Passu Obligations affected thereby but only to the
extent necessary to not be subject to such requirement and only for so long as



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required to not be subject to such requirement and only with respect to Obligations affected thereby;
provided, however, that, for the avoidance of doubt, in the event that Rule
3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to
permit (or is replaced with another rule or regulation, or any other law, rule or regulation is
adopted, which would permit) such Subsidiary’s Capital Stock or other securities to secure the
Notes or any Permitted Additional Pari Passu Obligations in excess of the amount then pledged
without the filing with the SEC (or any other governmental agency) of separate financial statements
of such Subsidiary, then the Capital Stock and other securities of such Subsidiary will
automatically be deemed to be a part of the Collateral for the relevant Notes or Permitted
Additional Pari Passu Obligations but only to the extent necessary to not be subject to any such
financial statement requirement.




          2.2 The Obligations shall also be secured by (i) Mortgages upon all Real Property and Fixtures
located thereon owned by each Grantor and listed on Schedule 6 hereto and (ii) to the
extent not excluded from “Collateral” pursuant to Section 2.1 hereof, all Real Property
located in the United States and acquired in fee simple following the Issue Date with a fair market
value (as defined in the Indenture) of $2,500,000 or more as of the date of acquisition (an
“After Acquired Mortgaged Property”). The Grantors shall provide a Mortgage in favor of
Agent in any After Acquired Mortgaged Property within 90 days (or such greater number of days as
the Agent may agree) following the date of acquisition thereof. The amount of Obligations secured
by any Real Property which becomes a Mortgaged Property following the Issue Date shall be limited
to an amount equal to no more than 100% of the replacement cost of such Mortgaged Property in the
event that such Mortgaged Property is located in a jurisdiction that imposes mortgage recording or
similar taxes. In the event that any Permitted Additional Pari Passu Obligations are incurred
following the Issue Date, the Grantors shall notify Agent thereof in writing and take all such
action as may be reasonably required to amend each then existing Mortgage in order to cause such
Permitted Additional Pari Passu Obligations to be secured equally and ratably with the
then-existing Obligations. In connection with the provision of any Mortgage or any amendment to
any Mortgage pursuant to this Section 2.2, the related Grantors will provide to Agent (i)
an opinion of counsel consistent with those provided on the issue Date with respect to the
Mortgages, (ii) a title insurance policy issued by Fidelity National Title Insurance Company or
such other nationally-recognized title insurer as shall be reasonably selected by the relevant
Grantor (the “Title Company”) (or modification and date down endorsements to existing title
insurance policy) providing title insurance in an amount consistent with the manner in which the
amounts were determined on the Issue Date and including such endorsements, exceptions and other
similar items which are consistent with those provided on the Issue Date, (iii) evidence of the
insurance required under Section 6(o) hereof, (iv) survey (or an existing survey together
with an “affidavit of no change”) in such form as shall be reasonably acceptable to the Title
Company to allow the Title Company to issue the so-called comprehensive endorsement, to remove the
standard survey exception from such policy and to issue survey related endorsements consistent with
those provided on the Issue Date, (v) fixture filings under the Uniform Commercial Code on Form
UCC-1 for filing under the Uniform Commercial Code in the appropriate jurisdiction in which the
Mortgaged Property are located, required to perfect the security interests in fixtures purported to
be created by the Mortgage, and (vi) such other items which the Agent determines in good faith are
consistent with those provided on the Issue Date.




     3. Security for Obligations. The Security Interest created hereby secures the payment
and performance of the Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Agreement secures the payment of all amounts which constitute
part of the Obligations and would be owed by the Grantors, or any of them, to the Secured Parties
or any of them, but for the fact that they are unenforceable or not allowable (in whole or in part)
as a claim in an Insolvency Proceeding involving any Grantor due to the existence of such
Insolvency Proceeding.



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     4. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under the contracts and agreements included in the Collateral,
including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the
duties and obligations thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by Agent or any other Secured Party of any of the rights hereunder shall not
release any Grantor from any of its duties or obligations under such contracts and agreements
included in the Collateral, and (c) no Secured Party shall have any obligation or liability under
such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any
Secured Party be obligated to perform any of the obligations or duties of any Grantors thereunder
or to take any action to collect or enforce any claim for payment assigned hereunder. Until an
Event of Default shall occur and be continuing, except as otherwise provided in this Agreement, the
Indenture or any Additional Pari Passu Agreement, the Grantors shall have the right to possession
and enjoyment of the Collateral for the purpose of conducting the ordinary course of their
respective businesses, subject to and upon the terms hereof and of the Indenture and each
Additional Pari Passu Agreement, if any. Without limiting the generality of the foregoing, it is
the intention of the parties hereto that record and beneficial ownership of the Pledged Interests,
including all voting, consensual, dividend, and distribution rights, shall remain in the applicable
Grantor until (i) the occurrence and continuance of an Event of Default and (ii) Agent has notified
the applicable Grantor of Agent’s election to exercise such rights with respect to the Pledged
Interests pursuant to Section 15.



     5. Representations and Warranties. Each Grantor hereby represents and warrants to
Agent, for the benefit of the Secured Parties that:




     (a) The exact legal name of each of the Grantors is set forth on the signature pages of
this Agreement as of the Issue Date.




     (b) Schedule 3 sets forth all Real Property owned by any of the Grantors as of
the Issue Date.




     (c) As of the Issue Date, Schedule 5 to this Agreement provides a true,
correct, and complete listing of all Intellectual Property registered with any Governmental
Authority of the United States and other Material Intellectual Property that constitutes
Collateral as to which any Grantor is the owner or is a licensee.




     (d) i) each Grantor owns exclusively or holds licenses in, or otherwise has to its
knowledge the right to use, all Intellectual Property and Intellectual Property Licenses
that are necessary to the conduct of its business, and the loss of which could reasonably be
expected to have a Material Adverse Change (collectively, “Material Intellectual
Property”);




     (i) to each Grantor’s knowledge, no Person has infringed or misappropriated or is
currently infringing or misappropriating any Intellectual Property rights owned by such
Grantor, in each case, that either individually or in the aggregate could reasonably be
expected to result in a Material Adverse Change;




     (ii) (A) to each Grantor’s knowledge, (1) such Grantor has never infringed or
misappropriated and is not currently infringing or misappropriating any Intellectual
Property rights of any Person, and (2) no product manufactured, used, distributed, licensed,
or sold by or service provided by such Grantor has ever infringed or misappropriated or is
currently infringing or misappropriating any Intellectual Property rights of any Person, in
each case under (1) and (2), except where such infringement or misappropriation either
individually or in the aggregate could not reasonably be expected to result in a Material
Adverse Change, and (B) there are no pending,



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or to any Grantor’s knowledge, threatened
infringement or misappropriation claims or proceedings pending against any Grantor, and no
Grantor has received any notice or other
communication of any actual or alleged infringement or misappropriation of any
Intellectual Property rights of any Person, in each case, except where such infringement
either individually or in the aggregate could not reasonably be expected to result in a
Material Adverse Change;




     (iii) to each Grantor’s knowledge after reasonable inquiry, all registered Copyrights
with respect to which the loss of rights therein could reasonably be expected to have a
Material Adverse Change (collectively, “Material Copyrights”), registered Trademarks
with respect to which the loss of rights therein could reasonably be expected to have a
Material Adverse Change (collectively, “Material Trademarks”), and issued Patents
with respect to which the loss of rights therein could reasonably be expected to have a
Material Adverse Change (collectively, “Material Patents”) that are owned by such
Grantor and necessary in to the conduct of its business are valid, subsisting and
enforceable and in compliance with all legal requirements, filings, and payments and other
actions that are required to maintain such Material Copyrights, Material Trademarks, and
Material Patents in full force and effect; and




     (iv) each Grantor has taken reasonable steps to (1) have all employees and contractors
of each Grantor who were involved in the creation or development of Material Intellectual
Property sign agreements containing assignment of such Material Intellectual Property rights
to such Grantor, and (2) maintain the confidentiality of and otherwise protect and enforce
its rights in all trade secrets owned or used by such Grantor except, in the case of clauses
(1) and (2), to the extent the failure to do so could not reasonably be expected to have a
Material Adverse Change.




     (e) This Agreement creates a valid security interest in the Collateral of each Grantor,
to the extent a security interest therein can be created under the Code, securing the
payment of the Obligations. Except to the extent a security interest in the Collateral
cannot be perfected by the filing of a financing statement under the Code, all filings and
other actions necessary or desirable to perfect and protect such security interest have been
duly taken or will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Agent, as secured party, in the jurisdictions listed
next to such Grantor’s name on Schedule 4. Upon the making of such filings, Agent
shall have (a) a first priority perfected security interest (subject to Permitted Collateral
Liens) in the Notes Priority Collateral of each Grantor to the extent such security interest
can be perfected by the filing of a financing statement and (b) a second priority perfected
security interest (subject to Permitted Collateral Liens) in the ABL Priority Collateral of
each Grantor to the extent such security interest can be perfected by the filing of a
financing statement. Upon filing of the Copyright Security Agreement with the United States
Copyright Office, filing of the Patent Security Agreement and the Trademark Security
Agreement with the PTO, and the filing of appropriate financing statements in the
jurisdictions listed on Schedule 4, all action necessary or desirable in the United
States to protect and perfect the Security Interest in and on each Grantor’s Patents,
Trademarks, or Copyrights that are registered, or with respect to which applications for
registration have been filed, in the United States has been taken and such perfected
Security Interest is enforceable as such as against any and all creditors of and purchasers
from any Grantor.




     (f) (i) Except for the Security Interest created hereby, each Grantor is and will at
all times be the sole holder of record and the legal and beneficial owner, free and clear of
all Liens (other than Permitted Collateral Liens), of the Pledged Interests indicated on
Schedule 2 as being owned by such Grantor and, when acquired by such Grantor, any
Pledged Interests acquired after the Issue Date; (ii) to the extent applicable to any such
Pledged Interests, all of the Pledged



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Interests are duly authorized, validly issued, fully
paid and nonassessable and the Pledged Interests constitute or will constitute the
percentage of the issued and outstanding Capital Stock of the Pledged Companies of such
Grantor identified on Schedule 2 as supplemented or modified by
any Pledged Interests Addendum or any Joinder Agreement; (iii) such Grantor has the
right and requisite authority to pledge, the Investment Related Property pledged by such
Grantor to Agent as provided herein; (iv) subject to Section 30 of this Agreement,
all actions necessary or desirable to perfect and establish, or otherwise protect, Agent’s
Liens in the Investment Related Property, and the proceeds thereof, will have been duly
taken, upon (A) the execution and delivery of this Agreement; (B) the taking of possession
by Agent (or its agent or designee) of any certificates representing the Pledged Interests,
together with undated powers (or other documents of transfer acceptable to Agent) endorsed
in blank by the applicable Grantor; (C) the filing of financing statements in the applicable
jurisdiction set forth on Schedule 4 for such Grantor with respect to the Pledged
Interests of such Grantor that are not represented by certificates, and (D) subject to
Section 6(c), with respect to any Securities Accounts, the delivery of control
agreements with respect thereto granting “control” (within the meaning of the UCC) over such
Securities Account; and (v) each Grantor has delivered to and deposited with Agent all
certificates representing the Pledged Interests owned by such Grantor to the extent such
Pledged Interests are represented by certificates, and undated powers (or other documents of
transfer acceptable to Agent) endorsed in blank with respect to such certificates. None of
the Pledged Interests owned or held by such Grantor has been issued or transferred in
violation of any securities registration, securities disclosure, or similar laws of any
jurisdiction to which such issuance or transfer may be subject.




     (g) Subject to Section 30 of this Agreement, no consent, approval,
authorization, or other order or other action by, and no notice to or filing with, any
Governmental Authority or any other Person is required (i) for the grant of a Security
Interest by such Grantor in and to the Collateral pursuant to this Agreement or for the
execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the
exercise by Agent of the voting or other rights provided for in this Agreement with respect
to the Investment Related Property or the remedies in respect of the Collateral pursuant to
this Agreement, except as may be required in connection with such disposition of Investment
Related Property by laws affecting the offering and sale of securities generally.




     (h) As of the Issue Date, there is no default, breach, violation, or event of
acceleration existing under any promissory note (as defined in the Code) with an aggregate
principal amount outstanding thereunder in excess of $1,000,000 constituting Collateral and
pledged hereunder (each a “Material Pledged Note”) and no event has occurred or
circumstance exists which, with the passage of time or the giving of notice, or both, would
constitute a default, breach, violation, or event of acceleration under any Material Pledged
Note. As of the Issue Date, no Grantor that is an obligee under a Material Pledged Note has
waived any default, breach, violation, or event of acceleration under such Material Pledged
Note. The only Material Pledged Notes held by any of the Grantors as of the Issue Date are
the Notes Intercompany Loans described in the Intercreditor Agreement as of the date hereof
and delivered to Agent.




     (i) As to all limited liability company or partnership interests, issued under any
Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents
and warrants that the Pledged Interests issued pursuant to such agreement (A) are not dealt
in or traded on securities exchanges or in securities markets, (B) do not constitute
investment company securities, and (C) are not held by such Grantor in a securities account.
In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements,
or any other agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or



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Pledged Partnership Agreement, provides that such Pledged Interests
are securities governed by Article 8 of the Uniform Commercial Code as in effect in any
relevant jurisdiction.




     (j) Such Grantor is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Such Grantor is duly qualified, authorized to
do business and in good standing as a foreign corporation in each jurisdiction where failure
to be so qualified could reasonably be expected to result in a Material Adverse Change.




     (k) Such Grantor is duly authorized to execute, deliver and perform the Security
Documents to which it is a party. The execution, delivery and performance of the Security
Documents have been duly authorized by all necessary action, and do not (a) require any
consent or approval of any holders of equity interests of such Grantor, other than those
already obtained; (b) contravene the Organizational Documents of such Grantor; (c) violate
or cause a default under any applicable law or any material contract to which such Grantor
is a party; (d) subject to Section 30 of this Agreement, require any authorization,
approval or other action by, or any notice to or filing with (other than any such filing
listed in Schedule 4 to this Agreement), any domestic or foreign governmental
authority or regulatory body or consent of any other Person; or (e) result in or require the
imposition of any Lien (other than Permitted Collateral Liens) on any property of such
Grantor. Each Security Document is a legal, valid and binding obligation of each Grantor
party thereto, enforceable in accordance with its terms, except (i) as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally and (ii) equitable limitations upon the enforcement (whether by an action
for specific performance, injunctive relief or otherwise) of remedies or obligations
enforceable in a court of equity and the discretion of courts in granting or withholding
equitable relief with respect to such enforcement.



     6. Covenants. Each Grantor, jointly and severally, covenants and agrees with Agent
that from and after the date of this Agreement and until the date of termination of this Agreement
in accordance with Section 22:




     (a) Possession of Collateral. In the event that any Collateral, including
Proceeds, is evidenced by or consists of Negotiable Collateral, Investment Related Property
(other than Investment Related Property held in a Securities Account), or Chattel Paper, in
each case, having an aggregate value or face amount of $1,000,000 (or any value with respect
to the Investment Related Property issued by any Subsidiary of such Grantor) or more for all
such Negotiable Collateral, Investment Related Property, or Chattel Paper, the Grantors
shall promptly (and in any event within ten (10) Business Days after receipt thereof) notify
Agent thereof, and if and to the extent that perfection or priority of Agent’s Security
Interest is dependent on or enhanced by possession, the applicable Grantor, promptly (and in
any event within ten (10) Business Days or such longer period as Agent may agree) shall
endorse and deliver physical possession of such Negotiable Collateral, Investment Related
Property, or Chattel Paper to Agent, together with such undated powers (or other relevant
document of transfer acceptable to Agent) endorsed in blank, and shall execute such other
documents and instruments and do such other acts or things deemed necessary or desirable by
Agent to protect Agent’s Security Interest therein.




     (b) Chattel Paper.




          (i) Each Grantor shall promptly (and in any event within ten (10) Business Days or such
longer period as Agent may agree), take all steps reasonably necessary to grant Agent
control of all electronic Chattel Paper that constitutes Collateral in accordance with the
Code and all “transferable records” as that term is defined in Section 16 of the Uniform



-15-









 







Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global
and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the
aggregate value or face amount of such electronic Chattel Paper equals or exceeds
$1,000,000;




          (ii) If any Grantor retains possession of any Chattel Paper or instruments that
constitute Collateral with an aggregate value or face amount in excess of $1,000,000 (which
retention of possession shall be subject to the extent permitted hereby and by the Indenture
and each Additional Pari Passu Agreement, if any), such Chattel Paper and instruments shall
be marked with the following legend: “This writing and the obligations evidenced or secured
hereby are subject to the Security Interest of Wells Fargo Bank, National Association, as
Agent for the Secured Parties.”




     (c) Control Agreements.




          (i) As of the date hereof, no Grantor has any Deposit Accounts or Securities Accounts
that constitutes Collateral other than the accounts listed in Schedule 7 to this
Agreement.




          (ii) No Grantor shall maintain any Deposit Account that constitutes Collateral unless
the bank where such Deposit Account is maintained and such Grantor shall have duly executed
and delivered to (A) in the case of any Deposit Account constituting ABL Priority
Collateral, prior to the Discharge of ABL Obligations, the ABL Agent (as such term is
defined in the Intercreditor Agreement) or, thereafter, the Agent or (B) in the case of any
Deposit Account not constituting ABL Priority Collateral, the Agent, in each case a control
agreement with respect to such Deposit Account granting “control” (within the meaning of the
UCC) over such Deposit Account to the Agent or ABL Agent, as applicable; provided
that, prior to the Discharge of ABL Obligations no Grantor shall be required to grant
“control” over any such Deposit Account constituting ABL Priority Collateral if such Grantor
is not required to grant such “control” to the ABL Agent. To the extent that a Grantor is
required pursuant to the first sentence of this Section 6(c)(ii) to grant “control”
over any Deposit Account prior to the Discharge of ABL Obligations, such requirements shall
be deemed satisfied with respect to any Deposit Account constituting ABL Priority Collateral
so long as the ABL Agent is a party to a control agreement granting “control” (within the
meaning of the UCC) with respect to such Deposit Account to the ABL Agent; provided
that upon the Discharge of ABL Obligations each Grantor shall cooperate with the ABL Agent,
Agent and each bank to have each control agreement assigned to Agent or replaced with a
substantially similar agreement.




          (iii) No Grantor shall maintain any Securities Account that constitutes Collateral
unless the securities intermediary or commodities intermediary where such Securities Account
is maintained and such Grantor shall have duly executed and delivered to (A) in the case of
any Securities Account constituting ABL Priority Collateral, prior to the Discharge of ABL
Obligations, the ABL Agent (as such term is defined in the Intercreditor Agreement) or,
thereafter, the Agent or (B) in the case of any Securities Account not constituting ABL
Priority Collateral, the Agent, in each case a control agreement with respect to such
Securities Account granting “control” (within the meaning of the UCC) over such Securities
Account to the Agent or ABL Agent, as applicable; provided that, prior to the
Discharge of ABL Obligations, no Grantor shall be required to grant “control” over any such
Securities Account constituting ABL Priority Collateral if such Grantor is not required to
grant such “control” to the ABL Agent. To the extent that a Grantor is required pursuant to
the first sentence of this Section 6(c)(iii) to grant “control” over any Securities
Account prior to the Discharge of ABL Obligations, such requirements shall



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be deemed
satisfied with respect to any Securities Account constituting ABL Priority Collateral so
long as the ABL Agent is a party to a control agreement granting “control” (within the
meaning of the UCC) with respect to such Securities Account to the ABL Agent;
provided that upon the Discharge of ABL Obligations each Grantor shall cooperate
with the ABL Agent, Agent
and each securities and commodities intermediary to have each control agreement
assigned to Agent or replaced with a substantially similar agreement.




     (d) Letter-of-Credit Rights. If the Grantors (or any of them) are or become
the beneficiary of letters of credit having a face amount or value of $1,000,000 or more in
the aggregate, then the applicable Grantor or the Grantors shall promptly (and in any event
within ten (10) Business Days after becoming a beneficiary) notify Agent thereof and
promptly (and in any event within ten (10) Business Days or such longer period as Agent may
agree) exercise commercially reasonable efforts to grant control over such letters of credit
to the Agent by entering into a tri-party agreement with Agent and the issuer or confirming
bank with respect to letter-of-credit rights for the purposes of assigning such
letter-of-credit rights to Agent and directing all payments thereunder to Agent’s Account,
all in form and substance satisfactory to Agent.




     (e) Commercial Tort Claims. If the Grantors (or any of them) obtain a
Commercial Tort Claim having a value, or involving an asserted claim, in the amount of
$1,000,000 or more, then the applicable Grantor or the Grantors shall promptly (and in any
event within ten (10) Business Days of obtaining such Commercial Tort Claim) notify Agent
upon incurring or otherwise obtaining such Commercial Tort Claims and promptly (and in any
event within ten (10) Business Days or such longer period as Agent may agree) amend
Schedule 1 to describe such Commercial Tort Claims in a manner that reasonably
identifies such Commercial Tort Claims, and hereby authorizes the filing of additional
financing statements or amendments to existing financing statements describing such
Commercial Tort Claims, and agrees to do such other acts or things deemed necessary or
desirable by Agent to give Agent a first priority (subject to Permitted Collateral Liens),
perfected security interest in any such Commercial Tort Claim.




     (f) Government Contracts. At any time during the existence and continuation of
an Event of Default (and, in the case of any Accounts or Chattel Paper constituting ABL
Priority Collateral, only after the Discharge of ABL Obligations), if any Account or Chattel
Paper that constitutes Collateral arises out of a contract or contracts with the United
States of America or any department, agency, or instrumentality thereof, the Grantors shall
promptly (and in any event within ten (10) Business Days of the creation thereof) notify
Agent thereof and promptly (and in any event within ten (10) Business Days or such longer
period as Agent may agree), but only to the extent not prohibited by the terms of any such
contract or applicable Law, use commercial reasonable efforts to execute any instruments or
take any steps reasonably required by Agent in order that all moneys due or to become due
under such contract or contracts shall be assigned to Agent, for the benefit of the Secured
Parties, and shall provide written notice thereof under the Assignment of Claims Act or
other applicable Law.




     (g) Intellectual Property.




          (i) (1) If after the Issue Date but prior to the Discharge of ABL Obligations,
any Grantor executes and delivers any additional copyright security agreements,
trademark security agreements, or patent security agreements, or any supplements
thereto, in favor of the ABL Agent and/or files such agreements with the PTO or the
United States Copyright Office, as applicable, in each case to further evidence



-17-









 







the
ABL Agent’s liens in any Intellectual Property that also constitutes Collateral
hereunder, then at the time such actions are so taken such Grantor shall also
execute and deliver to the Agent one or more Copyright Security Agreements,
Trademark Security Agreements, or Patent Security Agreements, or supplements
thereto, and, subject to the cooperation of the Collateral Agent, promptly
thereafter file such agreements with the
PTO and the United States Copyright Office to further evidence Agent’s Lien on
such Intellectual Property, and the General Intangibles relating thereto or
represented thereby, in each case, that are registered, or subject to an application
for registration, in the United States; and




          (2) Following the Discharge of ABL Obligations, each Grantor shall at the time
that any supplement referred to in sub-clause (v) below is delivered to the Agent,
execute and deliver to Agent one or more Copyright Security Agreements, Trademark
Security Agreements, or Patent Security Agreements, or supplements thereto, and,
subject to the cooperation of the Collateral Agent, shall promptly thereafter file
such agreements with the PTO and the United States Copyright Office, as applicable,
to further evidence Agent’s Lien on any of such Grantor’s Patents, Trademarks, or
Copyrights, and the General Intangibles of such Grantor relating thereto or
represented thereby, that are described in such supplement;




          (ii) Each Grantor (through itself and its licensees) shall, with respect to Material
Intellectual Property which constitutes Collateral, except to the extent Agent may otherwise
agree in writing in its sole and absolute discretion with respect to any such Material
Intellectual Property, protect and diligently enforce and defend at such Grantor’s expense
such Material Intellectual Property, including (A) to diligently enforce and defend,
including promptly suing for infringement, misappropriation, or dilution and to recover any
and all damages for such infringement, misappropriation, or dilution, and filing for
opposition, interference, and cancellation against conflicting Intellectual Property rights
of any Person, (B) to prosecute diligently any trademark application or service mark
application that is part of the Material Trademarks pending as of the date hereof or
hereafter until the termination of this Agreement, (C) to prosecute diligently any patent
application that is part of the Material Patents pending as of the date hereof or hereafter
until the termination of this Agreement, (D) to take all reasonable and necessary action to
preserve and maintain all of such Grantor’s Material Intellectual Property, and its rights
therein, including paying all maintenance fees and filing of applications for renewal,
affidavits of use, and affidavits of noncontestability (other than with respect to
registrations and applications deemed by such Grantor in its reasonable business judgment to
be no longer prudent to pursue), (E) take commercially reasonable steps to have all
employees and contractors of each Grantor who are involved in the creation or development of
Material Intellectual Property sign agreements containing assignment of such Material
Intellectual Property rights to such Grantor, (F) and take commercially reasonable steps to
maintain the confidentiality of trade secrets that constitute Material Intellectual
Property. Each Grantor (through itself and its licensees) further agrees not to do any act
or knowingly omit to do any act that results in the abandonment, dilution, impairment, or
invalidation of any Material Intellectual Property (other than with respect to registrations
and applications deemed by such Grantor in its reasonable business judgment to be no longer
prudent to pursue) without the prior written consent of Agent in its sole and absolute
discretion. Each Grantor hereby agrees to take the steps described in this Section
6(g)(ii) with respect to all new or acquired Material Intellectual Property to which it
or any of its Subsidiaries is now or later becomes entitled that is necessary in the conduct
of such Grantor’s business;



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          (iii) Each Grantor acknowledges and agrees that the Secured Parties have no duties with
respect to any Intellectual Property or Intellectual Property Licenses of any Grantor.
Without limiting the generality of this Section 6(g)(iii), each Grantor acknowledges
and agrees that no Secured Party shall be under any obligation to take any steps necessary
to preserve rights in the Collateral consisting of Intellectual Property or Intellectual
Property Licenses against any other Person, but Agent may do so at its option from and after
the occurrence and during the continuance of an Event of Default, and all expenses incurred
in connection therewith (including
reasonable fees and expenses of attorneys and other professionals) shall be for the
sole account of the Company and shall be chargeable to the Company;




          (iv) Except as provided in clause (vi) below, each Grantor shall promptly file an
application with the United States Copyright Office for any Material Copyright that has not
been registered with the United States Copyright Office if such Copyright is necessary in
connection with the conduct of such Grantor’s business, except to the extent Agent may
otherwise agree in writing in its sole and absolute discretion. Any expenses incurred in
connection with the foregoing shall be borne by the Grantors;




          (v) Quarterly, each Grantor shall deliver to the Agent a supplement to Schedule
5 to this Agreement identifying any Intellectual Property registered with, or are
subject to an application for registration with, any Governmental Authority of the United
States and other Material Intellectual Property that constitutes Collateral as to which any
Grantor is the owner or is an exclusive licensee created, established or acquired since the
later of the Issue Date and delivery of the last quarterly supplement pursuant to this
subsection (v). In the case of such registrations or applications therefor which were
acquired by any Grantor, each such Grantor shall file the necessary documents with the
appropriate Governmental Authority identifying the applicable Grantor as the owner (or as a
co-owner thereof, if such is the case) of any Material Intellectual Property. Except as
required by the Intercreditor Agreement or Section 27 below, none of the Grantors shall be
required to make any filings or registrations to perfect or protect the security interests
granted herein or in any other Security Document with any Governmental Authority in any
jurisdiction (other than in the United States to the extent provided herein) with respect to
any Intellectual Property registered, applied for, or otherwise created or established under
any such jurisdiction;




          (vi) Anything to the contrary in this Agreement notwithstanding, in no event shall any
Grantor, either itself or through any agent, employee, licensee, or designee, file an
application for the registration of any Material Copyright with the United States Copyright
Office or any similar office or agency in another country without giving Agent written
notice thereof at least three (3) Business Days prior to such filing and complying with
Section 6(g)(i). Upon receipt from the United States Copyright Office of notice of
registration of any Material Copyright, each Grantor shall promptly (but in no event later
than ten (10) Business Days following such receipt or such longer period as Agent may agree)
notify (but without duplication of any notice required by Section 6(g)(v)) Agent of
such registration by delivering, or causing to be delivered, to Agent, documentation
sufficient for Agent to perfect Agent’s Liens on such Material Copyright. In the case of
such Material Copyright registrations or applications therefor which were acquired by any
Grantor, each such Grantor shall promptly (but in no event later than ten (10) Business Days
following such acquisition or such longer period as Agent may agree) file the necessary
documents with the appropriate Governmental Authority identifying the applicable Grantor as
the owner (or as a co-owner thereof, if such is the case) of such Material Copyrights; and



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          (vii) Each Grantor shall take reasonable steps to maintain the confidentiality of, and
otherwise protect and enforce its rights in, the Material Intellectual Property that by its
nature must be kept confidential in order to retain its commercial value, including, as
applicable (A) protecting the secrecy and confidentiality of its confidential information
and trade secrets; (B) taking actions reasonably necessary to ensure that no trade secret
falls into the public domain; and (C) protecting the secrecy and confidentiality of the
source code of all material software programs and applications of which it is the owner or
licensee.




     (h) Investment Related Property.




          (i) If any Grantor shall acquire, obtain, receive or become entitled to receive any
Pledged Interests that constitute Collateral after the Issue Date, it shall promptly (and in
any event within ten (10) Business Days of acquiring or obtaining such Collateral or such
longer period as Agent may agree) deliver to Agent a duly executed Pledged Interests
Addendum identifying such Pledged Interests;




          (ii) Upon the occurrence and during the continuance of an Event of Default, all sums of
money and property paid or distributed in respect of the Investment Related Property that
constitute Collateral that are received by any Grantor shall be held by the Grantors in
trust for the benefit of Agent segregated from such Grantor’s other property, and such
Grantor shall deliver it forthwith to Agent in the exact form received;




          (iii) Each Grantor shall promptly deliver to Agent a copy of each material notice or
other material communication received by it in respect of any Pledged Interests;




          (iv) No Grantor shall make or consent to any amendment or other modification or waiver
with respect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership
Agreement, or enter into any agreement or permit to exist any restriction with respect to
any Pledged Interests if the same is prohibited pursuant to the Indenture or any Additional
Pari Passu Agreement;




          (v) Subject to Section 30 of this Agreement, each Grantor agrees that it will
cooperate with Agent in obtaining all necessary approvals and making all necessary filings
under federal, state, local, or foreign law to effect the perfection of the Security
Interest on the Investment Related Property or to effect any sale or transfer thereof;




          (vi) As to all limited liability company or partnership interests, issued under any
Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby covenants
that the Pledged Interests issued pursuant to such agreement (A) are not and shall not be
dealt in or traded on securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be held by such
Grantor in a securities account. In addition, none of the Pledged Operating Agreements, the
Pledged Partnership Agreements, or any other agreements governing any of the Pledged
Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
provide or shall provide that such Pledged Interests are securities governed by Article 8 of
the Uniform Commercial Code as in effect in any relevant jurisdiction.




     (i) Transfers and Other Liens. No Grantor shall (i) sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Collateral if such sale, assignment, disposition, or grant is prohibited by the
Indenture or any Additional Pari Passu Agreement, or (ii) create or permit to exist any Lien
upon or with respect to any of the



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Collateral of any Grantor, except for Permitted
Collateral Liens. The inclusion of Proceeds in the Collateral shall not be deemed to
constitute Agent’s consent to any sale or other disposition of any of the Collateral that
would be prohibited by the Indenture or any Additional Pari Passu Agreement.




     (j) [Reserved].




     (k) Pledged Notes. Each Grantor (i) without the prior written consent of
Agent, will not (A) waive or release any obligation of any Person that is obligated under
any of the Material Pledged Notes to the extent such waiver or release is prohibited by the
Indenture or any Additional Pari Passu Agreement, (B) take or omit to take any action or
knowingly suffer or permit any action to be omitted or taken, the taking or omission of
which would result in any right of offset against sums payable under the Material Pledged
Notes, or (C) other than to the extent not prohibited by the Indenture or any Additional
Pari Passu Agreement, assign or surrender their rights and interests under any of the
Material Pledged Notes or terminate, cancel, modify, change, supplement or amend the
Material Pledged Notes, and (ii) shall provide to Agent copies of all material written
notices (including notices of default) given or received with respect to the Material
Pledged Notes promptly after giving or receiving such notice.




     (l) Accounts.




          (i) No credit, discount, allowance or extension or agreement for any of the foregoing
shall be granted to any Account Debtor, except in the ordinary course of a Grantor’s
business in accordance with practices and policies or as otherwise disclosed to Agent. So
long as no Event of Default has occurred and is continuing, the Grantors may settle, adjust
or compromise any claim, offset, counterclaim or dispute with any Account Debtor. At any
time that an Event of Default has occurred and is continuing (and, in the case of any
Accounts constituting ABL Priority Collateral, only after the Discharge of ABL Obligations),
Agent shall, at its option, have the exclusive right to settle, adjust or compromise any
claim, offset, counterclaim or dispute with Account Debtors or grant any credits, discounts
or allowances;




          (ii) Agent shall have the right but only during the existence of an Event of Default
(and, in the case of any Accounts or other Collateral constituting ABL Priority Collateral,
only after the Discharge of ABL Obligations), in the name of any applicable Grantor, in
Agent’s name or in the name of a nominee of Agent, to verify the validity, amount or any
other matter relating to any Accounts or other Collateral, by mail, telephone, facsimile
transmission or otherwise.




     (m) Inventory and Equipment.




          (i) Each Grantor agrees to maintain a system of accounting that enables such Grantor to
produce financial statements in accordance with United States Generally Accepted Accounting
Principles. Each Grantor shall also (i) keep a reporting system that shows all additions,
sales, claims, returns, and allowances with respect to its and its Restricted Subsidiaries’
sales, and (ii) maintain its billing systems/practices substantially as in effect as of the
Issue Date and shall only make material modifications thereto with notice to, and with the
consent of, Agent (such consent not to be unreasonably withheld);




          (ii) Except as would not be prohibited by the Indenture or any Additional Pari Passu
Agreement, no Grantor shall move any Inventory or Equipment (other than vehicles) located in
the continental United States that is Collateral to any location outside of the continental



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United States unless (1) immediately following such move the Agent’s Lien in such Inventory
or Equipment continues to be perfected under applicable Law or all required actions have
been taken under applicable Law to cause Agent’s Lien to continue to be perfected under
applicable Law, or (2) after such move the aggregate book value of all such Inventory and
Equipment located outside of the continental United States does not exceed $3,000,000 at any
time;




          (iii) The Grantors shall produce, use, store and maintain the Inventory with all
reasonable care and caution and in accordance with applicable standards of any insurance and
in conformity with applicable laws (including the requirements of the Federal Fair Labor
Standards Act of 1938, as amended and all rules, regulations and orders related thereto);
and




          (iv) Each Grantor assumes all responsibility and liability arising from or relating to
the production, use, sale or other disposition of the Inventory.




     (n) Notices. Each Grantor shall notify Agent in writing, promptly after such
Grantor’s obtaining knowledge thereof, of any of the following that affects such Grantor:
any environmental release by such Grantor or on any Mortgaged Property, which environmental
release could reasonably be expected to result in a Material Adverse Change; or receipt of
any environmental notice with respect to any Mortgaged Property, if an adverse resolution
could reasonably be expected to result in a Material Adverse Change. In the event of any
change by any Grantor of (i) such Grantor’s legal name, (ii) such Grantor’s jurisdiction of
organization, (iii) such Grantor’s organizational identification number, if any, (iv) such
Grantor’s federal taxpayer identification number or (v) such Grantor’s chief executive
office, the Grantors will notify Agent thereof within 30 days thereafter and will cause such
amendments to any UCC financing statements and other filings or registrations relating to
the Collateral as may be required to maintain the perfection and priority of Agent’s
security interest in the Collateral of such Grantor.




     (o) Insurance of Collateral; Condemnation Proceeds. The Collateral and the
Mortgaged Property will be insured with financially sound and reputable insurance companies
that are not Affiliates of any of the Grantors in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties and other assets in localities where the Grantors operate.
All proceeds under each policy in respect of Collateral or Mortgaged Property constituting
Net Loss Proceeds shall, subject to the Intercreditor Agreement, be payable to Agent as
Trust Monies. From time to time upon reasonable request (it being understood that Agent
shall be under no obligation to any Secured Party or any Grantor to make any such request),
each Grantor shall deliver to Agent the originals or certified copies of its insurance
policies and updated flood plain searches. The Grantors shall use commercially reasonable
efforts (consistent with industry practice) to cause each such policy to include
satisfactory endorsements (i) showing Agent as loss payee/mortgagee or additional insured,
as appropriate and (ii) requiring 30 days (10 days in the case of nonpayment) prior written
notice to Agent in the event of cancellation of the policy for any reason whatsoever (or a
lesser period of time reasonably acceptable to Agent). If any Grantor fails to provide and
pay for any insurance, Agent may, at its option (but shall not be under any obligation to
any Secured Party or any Grantor to), procure the insurance and charge such Grantor
therefor. While no Event of Default exists, each Grantor may, but Agent may not, settle,
adjust or compromise any insurance claim, as long as the proceeds are delivered to Agent.
If an Event of Default exists, Agent may (but shall not be under any obligation to any
Secured Party or any Grantor to) reasonably settle, adjust and compromise such claims.




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     (p) Protection of Collateral. All reasonable expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all taxes payable
with respect to any Collateral (including any sale thereof), and all other payments required
to be made by Agent to any Person to realize upon any Collateral, shall be borne and paid by
the Grantors. Agent shall not be liable or responsible in any way for the safekeeping of
any Collateral, for any loss or damage thereto (except for reasonable care in its custody
while Collateral is in Agent’s actual possession), for any diminution in the value thereof
or for any act or default of any
warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall
be at each Grantor’s sole risk.




     (q) Defense of Title to Collateral. Each Grantor shall at all times defend its
title to Collateral and Agent’s Liens therein against all Persons, claims and demands
whatsoever, except Permitted Collateral Liens.




     (r) Post-Closing Matters. Each Grantor shall take the actions specified in
Schedule 8 within the time periods set forth in Schedule 8. The provisions
of Schedule 8 shall be deemed incorporated by reference herein as fully as if set
forth herein in its entirety.



     7. Relation to Other Security Documents. The provisions of this Agreement shall be
read and construed with the Indenture referred to below in the manner so indicated.



          (a) Indenture. In the event of any conflict between any provision in this Agreement
and a provision in the Indenture, such provision of the Indenture shall control.




          (b) Patent, Trademark, Copyright Security Agreements. The provisions of the Copyright
Security Agreements, Trademark Security Agreements, and Patent Security Agreements are supplemental
to the provisions of this Agreement, and nothing contained in the Copyright Security Agreements,
Trademark Security Agreements, or the Patent Security Agreements shall limit any of the rights or
remedies of Agent hereunder. In the event of any conflict between any provision in this Agreement
and a provision in a Copyright Security Agreement, Trademark Security Agreement or Patent Security
Agreement, such provision of this Agreement shall control.




     8. Further Assurances.



          (a) Each Grantor agrees that from time to time, at its own expense, such Grantor will promptly
execute and deliver all further instruments and documents, and take all further action, necessary
or that Agent may reasonably request, in order to perfect and protect the Security Interest granted
hereby, to create, perfect or protect the Security Interest purported to be granted hereby or to
enable Agent to exercise and enforce its rights and remedies hereunder with respect to any of the
Collateral other than, except as expressly set forth herein or as may be required by the
Intercreditor Agreement, any action under the Laws of any jurisdiction outside of the United
States.




          (b) Each Grantor authorizes the filing by Agent of financing or continuation statements, or
amendments thereto, and such Grantor will execute and deliver to Agent such other instruments or
notices, necessary or as Agent may reasonably request, in order to perfect and preserve the
Security Interest granted or purported to be granted hereby.




          (c) Each Grantor authorizes Agent at any time and from time to time to file, transmit, or
communicate, as applicable, financing statements and amendments (i) describing the Collateral as
“all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii)
describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that
contain any information



-23-









 






required by part 5 of Article 9 of the Code for the sufficiency or filing
office acceptance. Each Grantor also hereby ratifies any and all financing statements or
amendments previously filed by Agent in connection with the Indenture or any Additional Pari Passu
Agreement in any jurisdiction. Each Grantor agrees to prepare, record and file, at its own
expense, financing statements (and continuation statements when applicable) with respect to the
Collateral now existing or hereafter created meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect and maintain
perfected the Collateral, and to deliver a file stamped copy of each such financing statement
or other evidence of filing to the Agent.




          (d) Each Grantor acknowledges that it is not authorized to file any financing statement,
amendment or termination statement with respect to any financing statement filed in connection with
this Agreement (other than continuation statements with respect thereto) without the prior written
consent of Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the Code.




     9. Agent’s Right to Perform Contracts, Exercise Rights, Etc.



          (a) Agent may conclusively rely and shall be fully protected in acting or refraining from
acting on any document believed by it to be genuine and to have been signed or presented by the
proper Person. Agent need not investigate any fact or matter stated in any such document. Agent
shall not be obligated to communicate with or deal in any way with any Secured Party other than the
Trustee or any Additional Pari Passu Agent. In determining (x) the amount of Obligations
outstanding under the Indenture or any Additional Pari Passu Agreement or (y) whether the consent
of any Secured Party to any amendment, waiver or other action under this Agreement or any other
Security Document has been obtained, Agent may conclusively rely on any statement by the Trustee or
the applicable Additional Pari Passu Agent as to such matter.




          (b) Before Agent acts or refrains from acting, it may require an Officers’ Certificate. Agent
shall not be liable for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate. Agent may consult with counsel of Agent’s own choosing and Agent shall be
fully protected from liability in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance on the advice or opinion of such counsel or on any Opinion of
Counsel.




          (c) Agent may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any attorney or agent appointed with due care.




          (d) Agent shall not be liable for any action it takes or omits to take in good faith that it
believes to be authorized or within the rights or powers conferred upon it by this Agreement or any
Security Document. Any request or direction of the Company mentioned herein shall be sufficiently
evidenced by an Officers’ Certificate and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution. Whenever in the administration of this Agreement or
any Security Document Agent shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an
Officers’ Certificate.




          (e) Unless otherwise specifically provided in this Agreement or any Security Document, any
demand, request, direction or notice from any Grantor shall be sufficient if signed by an Officer
of such Grantor.




          (f) Agent shall be under no obligation to exercise any of the rights or powers vested in it by
this Agreement or any Security Document at the request or direction of any of the Secured Parties
unless such Secured Parties shall have offered to Agent reasonable security and indemnity
reasonably



-24-









 






satisfactory to Agent against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction.




          (g) Agent shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or documents,
but Agent, in its discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine during normal business hours (but not more than once
per year if no Event of Default has occurred and is continuing) the books, records and premises of
any Grantor, personally or by agent or attorney at the sole cost of the Grantors, and shall incur
no liability or additional liability of any kind by reason of such inquiry or investigation.




          (h) The rights, privileges, protections and benefits given to Agent, including, without
limitation, its rights to be indemnified, are extended to, and shall be enforceable by, Agent in
each of its capacities hereunder, and to each agent, custodian and other Persons employed to act
hereunder or under any Security Document.




          (i) Agent has no duty to inquire whether individuals providing officers’ certificates or
otherwise acting on behalf of the Company are authorized at such time to take such specified
actions.




          (j) The permissive right of Agent to take or refrain from taking any actions enumerated in
this Agreement or any Security Document shall not be construed as a duty.




          (k) In the event that Agent (in such capacity or in any other capacity hereunder or under any
Security Document) is unable to decide between alternative courses of action permitted or required
by the terms of this Agreement or any Security Document, or in the event that Agent is unsure as to
the application of any provision of this Agreement or any Security Document, or believes any such
provision is ambiguous as to its application, or is, or appears to be, in conflict with any other
applicable provision, or in the event that this Agreement or any Security Document permits any
determination by or the exercise of discretion on the part of Agent or is silent or is incomplete
as to the course of action that Agent is required to take with respect to a particular set of
facts, Agent shall promptly give notice (in such form as shall be appropriate under the
circumstances) to the Noteholders and the holders of any Indebtedness constituting Permitted
Additional Pari Passu Obligations requesting instruction as to the course of action to be adopted,
and to the extent Agent acts in good faith in accordance with any written instructions received
from a majority in aggregate principal amount of the aggregate of (x) then outstanding Notes and
(y) any Indebtedness constituting Permitted Additional Pari Passu Obligations, Agent shall not be
liable on account of such action to any Person. If Agent shall not have received appropriate
instruction within 10 days of such notice (or such shorter period as reasonably may be specified in
such notice or as may be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action as it shall deem to be in the best interests of the
Noteholders and the holders of any Indebtedness constituting Permitted Additional Pari Passu
Obligations and Agent shall have no liability to any Person for such action or inaction.




          (l) Any application by Agent for written instructions from the Company may, at the option of
Agent, set forth in writing any action proposed to be taken or omitted by Agent under this
Agreement or any other Security Document and the date on and/or after which such action shall be
taken or such omission shall be effective. Agent shall not be liable for any action taken by, or
omission of, Agent in accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than twenty Business Days after the
date any officer of the Company actually receives such application, unless any such officer shall
have consented in writing to


-25-









 







any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.




          (m) Agent in its individual or any other capacity may become the owner or pledgee of
Obligations and may otherwise deal with any Grantor or any Affiliate of any Grantor with the same
rights it would have if it were not Agent.




          (n) Agent shall not be responsible for and makes no representation as to the validity or
adequacy of this Agreement or any other Security Document, or the existence, genuineness, value or
protection of any Collateral (except for the safe custody of Collateral in its possession and the
accounting for Trust Monies actually received by it in accordance with the terms hereof) for the
legality, effectiveness or sufficiency of any Security Document, or for the creation, perfection,
priority, sufficiency or protection of any Lien on any Collateral, and it shall not be responsible
for any statement or recital herein or any statement in this Agreement or any Security Document.




          (o) Upon the occurrence and during the continuance of an Event of Default, Agent (or its
designee) (i) may proceed to perform any and all of the obligations of any Grantor contained in any
contract, lease, or other agreement and exercise any and all rights of any Grantor therein
contained as fully as such Grantor itself could, (ii) shall have the right to use any Grantor’s
rights under Intellectual Property Licenses in connection with the enforcement of Agent’s rights
hereunder, including the right to prepare for sale and sell any and all Inventory and Equipment now
or hereafter owned by any Grantor and now or hereafter covered by such licenses, and (iii) shall
have the right to request that any Capital Stock that is pledged hereunder be registered in the
name of Agent or any of its nominees.




          (p) To the extent not set forth herein, Agent shall enjoy all other rights, protections,
immunities and indemnities granted to it under the Indenture as though set forth herein. Agent
hereunder shall act solely as the agent of the Secured Parties and, by virtue of this Agreement,
does not assume any fiduciary obligation or relationship of trust with or for the Secured Parties.




     10. Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints Agent
its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, at such time as an Event of Default has occurred and is continuing under
the Indenture or any Additional Pari Passu Agreement, to take any action and to execute any
instrument which Agent may reasonably deem necessary or advisable to accomplish the purposes of
this Agreement, including:




     (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in connection with the Accounts or
any other Collateral of such Grantor;




     (b) to receive and open all mail addressed to such Grantor and to notify postal
authorities to change the address for the delivery of mail to such Grantor to that of Agent;




     (c) to receive, indorse, and collect any drafts or other instruments, documents,
Negotiable Collateral or Chattel Paper;




     (d) to file any claims or take any action or institute any proceedings which Agent may
deem necessary or desirable for the collection of any of the Collateral of such Grantor or
otherwise to enforce the rights of Agent with respect to any of the Collateral;




-26-












 






     (e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or
in part the purchase order of any Person obligated to such Grantor in respect of any Account
of such Grantor;




     (f) to use any Intellectual Property or Intellectual Property Licenses of such Grantor,
including but not limited to any labels, Patents, Trademarks, trade names, URLs, domain
names, industrial designs, Copyrights, or advertising matter, in preparing for sale,
advertising for sale, or selling Inventory or other Collateral and to collect any amounts
due under Accounts, contracts or Negotiable Collateral of such Grantor; and




     (g) Agent, on behalf of Secured Parties, shall have the right, but shall not be
obligated, to bring suit in its own name to enforce the Intellectual Property and
Intellectual Property Licenses and, if Agent shall commence any such suit, the appropriate
Grantor shall, at the request of Agent, do any and all lawful acts and execute any and all
proper documents reasonably required by Agent in aid of such enforcement.



     To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact
shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an
interest and shall be irrevocable until this Agreement is terminated.



     11. Agent May Perform. If any Grantor fails to perform any agreement contained
herein, Agent may itself perform, or cause performance of, such agreement, and the reasonable
expenses of Agent incurred in connection therewith shall be payable, jointly and severally, by the
Grantors.



     12. Agent’s Duties.




          (a) If an Event of Default has occurred and is continuing and Agent has received written
notice thereof from the Company, the Trustee, any Additional Pari Passu Agent or the Required
Secured Parties, Agent may exercise such of the rights and powers vested in it by this Agreement
and the Security Documents, and unless Agent has requested instruction pursuant to Section
9(k) hereof or has otherwise received appropriate direction from those entitled to provide it,
Agent shall use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own affairs.




          (b) Except during the continuance of an Event of Default:





          (i) the duties of Agent shall be determined solely by the express provisions of this
Agreement and Agent need perform only those duties that are specifically set forth in this
Agreement and the Security Documents and no others, and no implied covenants or obligations
shall be read into this Agreement or the Security Documents against Agent; and




          (ii) in the absence of gross negligence, willful misconduct or bad faith on its part,
Agent may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to Agent.



          (c) Agent may not be relieved from liability for its own grossly negligent action, its own
grossly negligent failure to act, or its own willful misconduct, except that:





          (i) this paragraph does not limit the effect of paragraph (b) or (e) of this
Section 12;



-27-









 






          (ii) Agent shall not be liable for any error of judgment made in good faith by an
officer of Agent, unless it is proved that Agent was grossly negligent in ascertaining the
pertinent facts; and




          (iii) Agent shall not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section 16
hereof or otherwise in accordance with the direction of the Required Secured Parties, or for
the method and place of conducting any proceeding for any remedy available to Agent, or
exercising any trust or power conferred upon Agent, under this Agreement or any Security
Document.



          (d) Whether or not therein expressly so provided, every provision of this Agreement or any
provision of any Security Document that in any way relates to Agent is subject to paragraphs (a),
(b), (c), (e) and (f) of this Section 12.




          (e) No provision of this Agreement or any Security Document shall require Agent to expend or
risk its own funds or incur any liability. Agent shall be under no obligation to exercise any of
its rights and powers under this Agreement or any Security Document at the request of any Secured
Parties, unless such Secured Parties shall have offered to Agent security and indemnity
satisfactory to it against any loss, liability or expense.




          (f) Agent shall not be liable for interest on any money received by it except as Agent may
agree in writing with the Grantors. Money held in trust by Agent need not be segregated from other
funds except to the extent required by law.




          (g) At any time or times, for the purpose of meeting the Laws of any jurisdiction in which any
of the Collateral may at the time be located, the Company and Agent shall have power to appoint
agents and sub-agents to the extent permitted under the Indenture and each Additional Pari Passu
Agreement, if any.




          (h) The powers conferred on Agent hereunder are solely to protect Agent’s interest in the
Collateral, for the benefit of the Secured Parties, and shall not impose any duty upon Agent to
exercise any such powers. Except for the safe custody of any Collateral in its actual possession
and the accounting for moneys actually received by it hereunder, Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its actual possession if such Collateral
is accorded treatment substantially equal to that which Agent accords its own property.




     13. Collection of Accounts, General Intangibles and Negotiable Collateral. At any
time upon the occurrence and during the continuance of an Event of Default, Agent or Agent’s
designee may, subject to applicable Laws and the Security Documents, (a) notify Account Debtors of
any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral of such
Grantor have been assigned to Agent, for the benefit of the Secured Parties, or that Agent has a
security interest therein, and (b) collect the Accounts, General Intangibles and Negotiable
Collateral of any Grantor directly, and any collection costs and expenses shall constitute part of
such Grantor’s Obligations under the Indenture, each Additional Pari Passu Agreement, if any, and
the Security Documents.



     14. Disposition of Pledged Interests by Agent. None of the Pledged Interests existing
as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on the
date of acquisition thereof will be, registered or qualified under the various federal or state
securities laws of the United States and disposition thereof after an Event of Default may be
restricted to one or more private



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sales in view of the lack of such registration. Each Grantor understands that in connection
with such disposition, Agent may approach only a restricted number of potential purchasers and
further understands that a sale under such circumstances may yield a lower price for the Pledged
Interests than if the Pledged Interests were registered and qualified pursuant to federal and state
securities laws and sold on the open market. Each Grantor, therefore, agrees that: (a) if Agent
shall, pursuant to the terms of this Agreement, sell or cause the Pledged Interests or any portion
thereof to be sold at a private sale, Agent shall have the right to rely upon the advice and
opinion of any nationally recognized brokerage or investment firm (but shall not be obligated to
seek such advice and the failure to do so shall not be considered in determining the commercial
reasonableness of such action) as to the best manner in which to offer the Pledged Interest or any
portion thereof for sale and as to the best price reasonably obtainable at the private sale
thereof; and (b) such reliance shall be conclusive evidence that Agent has handled the disposition
in a commercially reasonable manner. For the avoidance of doubt, the Grantors acknowledge that
such private sale for security laws purposes can be a public sale for purposes of the Code.




     15. Voting and Other Rights in Respect of Pledged Interests.



          (a) Upon the occurrence and during the continuation of an Event of Default and subject to the
terms of the Intercreditor Agreement, (i) Agent may, at its option, and with two (2) Business Days
prior notice to any Grantor, and in addition to all rights and remedies available to Agent under
any other agreement, at law, in equity, or otherwise, exercise all voting rights, or any other
ownership or consensual rights (including any dividend or distribution rights) in respect of the
Pledged Interests owned by such Grantor, but under no circumstances is Agent obligated by the terms
of this Agreement to exercise such rights or otherwise own or manage such Grantor, and (ii) if
Agent duly exercises its right to vote any of such Pledged Interests, each Grantor hereby appoints
Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged
Interests in any manner Agent deems advisable for or against all matters submitted or which may be
submitted to a vote of shareholders, partners or members, as the case may be. The
power-of-attorney and proxy granted hereby is coupled with an interest and shall be irrevocable.




          (b) For so long as any Grantor shall have the right to vote the Pledged Interests owned by it,
such Grantor covenants and agrees that it will not, without the prior written consent of Agent,
vote or take any consensual action with respect to such Pledged Interests which would materially
adversely affect the rights of Agent or the other Secured Parties or the value of the Pledged
Interests.




     16. Remedies. Upon the occurrence and during the continuance of an Event of Default
and subject to the terms of the Intercreditor Agreement:




     (a) Agent may, and, at the instruction of the Required Secured Parties, shall exercise
in respect of the Collateral and Mortgaged Property, in addition to other rights and
remedies provided for herein, in the Indenture, any Additional Pari Passu Agreement and the
other Security Documents, or otherwise available to it, all the rights and remedies of a
secured party on default under the Code or any other applicable law. Without limiting the
generality of the foregoing, each Grantor expressly agrees that, in any such event, Agent
without demand of performance or other demand, advertisement or notice of any kind (except a
notice specified below of time and place of public or private sale) to or upon any Grantor
or any other Person (all and each of which demands, advertisements and notices are hereby
expressly waived to the maximum extent permitted by the Code or any other applicable law),
may take immediate possession of all or any portion of the Collateral and Mortgaged Property
and (i) require Grantors to, and each Grantor hereby agrees that it will at its own expense
and upon request of Agent forthwith, assemble all or part of the Collateral as directed by
Agent and make it available to Agent at one or more locations



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where such Grantor regularly maintains Inventory, and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of Agent’s offices or elsewhere, for cash, on credit, and upon such
other terms as Agent may deem commercially reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days (or such lesser time
as may be reasonable) notice to the applicable Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute reasonable
notification and specifically such notice shall constitute a reasonable “authenticated
notification of disposition” within the meaning of Section 9-611 of the Code. Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale having been
given. 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 Grantor agrees that the internet shall
constitute a “place” for purposes of Section 9-610(b) of the Code. Each Grantor agrees that
any sale of Collateral to a licensor pursuant to the terms of a license agreement between
such licensor and a Grantor is sufficient to constitute a commercially reasonable sale
(including as to method, terms, manner, and time) within the meaning of Section 9-610 of the
Code.




     (b) Agent is hereby granted a license or other right to use, without liability for
royalties or any other charge, each Grantor’s Intellectual Property, including but not
limited to, any labels, Patents, Trademarks, trade names, URLs, domain names, industrial
designs, Copyrights, and advertising matter, whether owned by any Grantor or with respect to
which any Grantor has rights under license, sublicense, or other agreements (including any
Intellectual Property License), as it pertains to the Collateral, in preparing for sale,
advertising for sale and selling any Collateral, and each Grantor’s rights under all
licenses and all franchise agreements shall inure to the benefit of Agent.




     (c) Agent may, in addition to other rights and remedies provided for herein, in the
Indenture, any Additional Pari Passu Agreement or the other Security Documents, or otherwise
available to it under applicable Law and without the requirement of notice to or upon any
Grantor or any other Person (which notice is hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), (i) with respect to any Grantor’s
Deposit Accounts in which Agent’s Liens are perfected by control under Section 9-104 of the
Code, instruct the bank maintaining such Deposit Account for the applicable Grantor to pay
the balance of such Deposit Account to or for the benefit of Agent, and (ii) with respect to
any Grantor’s Securities Accounts in which Agent’s Liens are perfected by control under
Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities
Account for the applicable Grantor to (A) transfer any cash in such Securities Account to or
for the benefit of Agent, or (B) liquidate any financial assets in such Securities Account
that are customarily sold on a recognized market and transfer the cash proceeds thereof to
or for the benefit of Agent.




     (d) Any cash held by Agent as Collateral and all cash proceeds received by Agent in
respect of any sale of, collection from, or other realization upon all or any part of the
Collateral shall be applied against the Obligations in the order set forth in Annex
1. In the event the proceeds of Collateral are insufficient to satisfy all of the
Obligations in full, each Grantor shall remain jointly and severally liable for any such
deficiency.




     (e) Each Grantor hereby acknowledges that the Obligations arise out of a commercial
transaction, and agrees that if an Event of Default shall occur and be continuing Agent
shall have the right to an immediate writ of possession without notice of a hearing. Agent
shall have the right to the appointment of a receiver for the properties and assets of each
Grantor,



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and each Grantor hereby consents to such rights and such appointment and hereby waives
any objection such Grantor may have thereto or the right to have a bond or other security
posted by Agent.



     17. Remedies Cumulative. Each right, power, and remedy of Agent as provided for in
this Agreement or in the Indenture, any Additional Pari Passu Agreement or the other Security
Documents or now or hereafter existing at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power, or remedy provided
for in this Agreement or in the Indenture, any Additional Pari Passu Agreement or the other
Security Documents or now or hereafter existing at law or in equity or by statute or otherwise, and
the exercise or beginning of the exercise by Agent, of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by Agent of any or all such other
rights, powers, or remedies.



     18. Marshaling. Agent shall not be required to marshal any present or future
collateral security (including but not limited to the Collateral) for, or other assurances of
payment of, the Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be cumulative and in
addition to all other rights and remedies, however existing or arising. To the extent that it
lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling
of collateral which might cause delay in or impede the enforcement of Agent’s rights and remedies
under this Agreement or under any other instrument creating or evidencing any of the Obligations or
under which any of the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.



     19. Indemnity and Expenses.



          (a) Each Grantor agrees to indemnify Agent and the Secured Parties from and against all
claims, lawsuits and liabilities (including reasonable attorneys fees) arising out of or resulting
from this Agreement (including enforcement of this Agreement), the Indenture, any Additional Pari
Passu Agreement or any other Security Document to which such Grantor is a party, except claims,
losses or liabilities resulting from (i) the gross negligence or willful misconduct of the party
seeking indemnification as determined by a final non-appealable order of a court of competent
jurisdiction or (ii) a claim brought by the Company or any other Grantor against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations under this Agreement, the Indenture, any
Additional Pari Passu Agreement or any other Security Document, if the Company or such other
Grantor has obtained a final non-appealable judgment in its favor on such claim as determined by a
court of competent jurisdiction. This provision shall survive the termination of this Agreement
and the Indenture and each Additional Pari Passu Agreement, if any, and the repayment of the
Obligations.




          (b) The Grantors, jointly and severally, shall, upon demand, pay to Agent all the expenses
which Agent may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection
from, or other realization upon, any of the Collateral in accordance with this Agreement, the
Indenture, any Additional Pari Passu Agreement and the other Security Documents, (iii) the exercise
or enforcement of any of the rights of Agent hereunder or (iv) the failure by any Grantor to
perform or observe any of the provisions hereof.




     20. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE INDENTURE, ANY
ADDITIONAL PARI PASSU AGREEMENT, AND THE OTHER SECURITY DOCUMENTS, REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY



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NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of
this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be made in accordance with the terms of the Indenture and each
Additional Pari Passu Agreement, if any, and unless in writing and signed by Agent, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given. No amendment of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by Agent and each Grantor to which such amendment applies.




     21. Addresses for Notices. All notices and other communications provided for
hereunder shall be given in the form and manner and delivered to Agent at its address specified in
the Indenture, to any of the Grantors at the address of the Company specified in the Indenture and
in the case of any Additional Pari Passu Agent, at the address specified in the applicable
Additional Pari Passu Agreement or the applicable Additional Pari Passu Joinder Agreement, as
applicable, or, as to any party, at such other address as shall be designated by such party in a
written notice to the other party.



     22. Continuing Security Interest: Assignments Under Indenture and Additional Pari Passu
Agreements. This Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the Obligations have been paid in full in
accordance with the provisions of the Indenture and each Additional Pari Passu Agreement, if any,
(b) be binding upon each Grantor, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Noteholder and any holder of any Permitted
Additional Pari Passu Obligations may, in accordance with the provisions and any of the Indenture
or the applicable Additional Pari Passu Agreement, assign or otherwise transfer all or any portion
of its rights and obligations thereunder to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Noteholder or holder herein
or otherwise. Upon payment in full of the Obligations in accordance with the provisions of the
Indenture and each Additional Pari Passu Agreement, if any, the Security Interest granted hereby
shall terminate and all rights to the Collateral shall revert to the Grantors or any other Person
entitled thereto. At such time, Agent will authorize the filing of appropriate termination
statements to terminate such Security Interests. No transfer or renewal, extension, assignment, or
termination of this Agreement or of the Indenture, any other Security Document or any Additional
Pari Passu Agreement, or any other instrument or document executed and delivered by any Grantor to
Agent, nor the taking of further security, nor the retaking or re-delivery of the Collateral to any
Grantor by Agent, nor any other act of a Secured Party, or any of them, shall release any Grantor
from any obligation, except a release or discharge executed in writing by Agent in accordance with
the provisions of the Indenture and any applicable Additional Pari Passu Agreement. Agent shall
not by any act, delay, omission or otherwise, be deemed to have waived any of its rights or
remedies hereunder, unless such waiver is in writing and signed by Agent and then only to the
extent therein set forth. A waiver by Agent of any right or remedy on any occasion shall not be
construed as a bar to the exercise of any such right or remedy which Agent would otherwise have had
on any other occasion. The Security Interest securing the Obligations securing the Notes will be
released, in whole or in part, as provided in Section 11.03 of the Indenture. The Security
Interests securing the Permitted Additional Pari Passu Obligations of any series will be released,
in whole or in part, as provided in Additional Pari Passu Agreement governing such obligations.



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     23. Governing Law.




          (a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF,
AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.




          (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, FEDERAL COURTS, LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW,
ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 23(b).




          (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACH
GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.




     24. New Subsidiaries. Pursuant to Section 4.15 of the Indenture, certain
Subsidiaries (whether by acquisition or creation) of the Company are required to enter into this
Agreement by executing and delivering in favor of Agent a Joinder Agreement. Upon the execution
and delivery of a Joinder Agreement by any such new Subsidiary, such Subsidiary shall become a
Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any instrument adding an additional Grantor as a party to this Agreement
shall not require the consent of any Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor
hereunder.



     25. Agent. Each reference herein to any right granted to, benefit conferred upon or
power exercisable by the “Agent” shall be a reference to Agent, for the benefit of each Secured
Party.



     26. Miscellaneous.




          (a) This Agreement is a Security Document. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement
by facsimile or other electronic method of transmission shall be equally as effective as delivery
of an original executed counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement






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by facsimile or other electronic method of transmission also shall deliver an original
executed counterpart of this Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing
shall apply to each other Security Document mutatis mutandis.




          (b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such provision in any
other jurisdiction. Each provision of this Agreement shall be severable from every other provision
of this Agreement for the purpose of determining the legal enforceability of any specific
provision.




          (c) Headings and numbers have been set forth herein for convenience only. Unless the contrary
is compelled by the context, everything contained in each Section applies equally to this entire
Agreement.




          (d) Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against
any Secured Party or any Grantor, whether under any rule of construction or otherwise. This
Agreement has been reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all
parties hereto.




          (e) The pronouns used herein shall include, when appropriate, either gender and both singular
and plural, and the grammatical construction of sentences shall conform thereto.




          (f) Unless the context of this Agreement clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the terms “includes” and
“including” are not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. Section, subsection, clause, schedule, and exhibit
references herein are to this Agreement unless otherwise specified. Any reference in this
Agreement to any agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations,
amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders,
and supplements set forth herein). The words “asset” and “property” shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts, and contract rights. Any reference herein to the
satisfaction, repayment, or payment in full of the Obligations shall mean the repayment in full in
cash of all Obligations other than unasserted contingent indemnification Obligations. Any
reference herein to any Person shall be construed to include such Person’s successors and assigns.
Any requirement of a writing contained herein shall be satisfied by the transmission of a Record.




          (g) All of the annexes, schedules and exhibits attached to this Agreement shall be deemed
incorporated herein by reference.




     27. ABL Priority Collateral; Etc. Notwithstanding anything herein to the contrary,
prior to the Discharge of ABL Obligations (as defined in the Intercreditor Agreement), the
requirements of this Agreement to deliver or grant control over ABL Priority Collateral to Agent
shall be deemed satisfied by delivery of or granting control over such ABL Priority Collateral to
the ABL Agent (as defined in the Intercreditor Agreement) as bailee for Agent pursuant to the
Intercreditor Agreement. Prior to the Discharge of ABL Obligations, each Grantor agrees that, in
the event any Grantor, pursuant to the ABL



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Security Documents, takes any action to grant or perfect a Lien in favor of the ABL Agent in
any assets (other than Excluded Foreign Collateral (as defined in the Intercreditor Agreement)),
such Grantor shall also take such action, subject to the cooperation of the Agent, to grant or
perfect a Lien (subject to the Intercreditor Agreement) in favor of Agent to secure the Obligations
without request of Agent. The parties hereto acknowledge and agree that pursuant to the ABL Credit
Agreement (as defined in the Intercreditor Agreement), the Grantors may from time to time seek
Collateral Access Agreements (as defined in the ABL Credit Agreement) or similar agreements with
landlords or bailees of a Grantor (collectively, “Third Party Agreements”). To the extent
any such Third Party Agreement is being sought in favor of the ABL Agent (as defined in the
Intercreditor Agreement), the applicable Grantor shall, subject to the cooperation of the Agent,
use commercially reasonable efforts to cause a substantially identical agreement to be executed in
favor of the Agent; provided, however, that if the terms of any such Third Party
Agreement are not acceptable to the Agent, then the applicable Grantor shall not be required to
obtain such Third Party Agreement in favor of the Agent and the Grantor shall not be prevented from
obtaining any such Third Party Agreement in favor of the ABL Agent (as defined in the Intercreditor
Agreement).




     28. Permitted Additional Pari Passu Obligations. On or after the Issue Date, the
Company may from time to time designate additional obligations as Permitted Additional Pari Passu
Obligations by delivering to Agent, the Trustee and each Additional Pari Passu Agent (a) a
certificate signed by an executive officer of the Company (i) identifying the obligations so
designated and the aggregate principal amount or face amount thereof, stating that such obligations
are designated as “Permitted Additional Pari Passu Obligations” for purposes hereof, (ii)
representing that such designation complies with the terms of the Indenture and each then extant
Additional Pari Passu Agreement and (iii) specifying the name and address of the Additional Pari
Passu Agent for such obligations (if other than the Trustee); and (b) except in the case of
Additional Notes, a fully executed Additional Pari Passu Joinder Agreement (in the form attached as
Exhibit E). Notwithstanding anything to the contrary contained herein, with respect to any
Additional Pari Passu Agreement the Agent shall have no responsibility for, or any duty to inquire
as to, any matter pertaining to such Additional Pari Passu Agreement (or the contents thereof) or
the compliance of any Grantor or Additional Pari Passu Agent with the terms thereof;
provided, however, that the foregoing in no way limits or alters the obligations,
duties or responsibilities of Wells Fargo Bank, National Association in its capacity as an
Additional Pari Passu Agent. Without limiting the foregoing, in the event Agent is required to
take action hereunder and such action is conditioned upon compliance with the terms of any
Additional Pari Passu Agreement, Agent shall be entitled to request, and be fully protected in
relying upon, an officer’s certificate of the relevant Grantor or the applicable Additional Pari
Passu Agent that such action is permitted or authorized under the terms of such Additional Pari
Passu Agreement. To the extent such Additional Pari Passu Agreement grants any rights,
protections, immunities or indemnities thereunder to the Agent, the Company and each applicable
additional Grantor agrees that the Agent is an express third-party beneficiary thereunder.



     29. Intercreditor Matters. By accepting the benefits of this Agreement and the other
Security Documents, each Secured Party agrees that it is bound by (i) the terms of the
Intercreditor Agreement applicable to such Secured Party and (ii) the provisions of Annex
1.



     30. Special Provisions Regarding Pledges of Stock and Promissory Notes in Non-Qualified
Jurisdictions. The parties hereto acknowledge and agree that the provisions of the Indenture,
any Additional Pari Passu Agreement, this Agreement and certain other Security Documents executed
and delivered by the Company and any Guarantor may require that, among other things, certain
Capital Stock and promissory notes be pledged to the Agent to secure the Obligations. The parties
hereto further acknowledge and agree that, to the extent provided in this Agreement and the other
applicable Security Documents, the Company and each Guarantor shall be required to take all actions
under the laws of the



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United States (and, in the case of Capital Stock of Exide C.V. to the extent constituting
Collateral hereunder, the Netherlands) to perfect the security interests in the Capital Stock and
promissory notes. Except as provided in the immediately preceding sentence, to the extent the
Indenture, any Additional Pari Passu Agreement, this Agreement or any other Security Document
requires or provides for the pledge of Capital Stock or promissory notes issued by any Person
organized under the laws of a jurisdiction other than the United States, it is acknowledged and
agreed that no actions have been or shall be required to be taken to perfect, under local law of
the jurisdiction of the Person who issued such Capital Stock or promissory notes, any Lien under
the Indenture, any Additional Pari Passu Agreement, this Agreement or any other Security Documents
(unless an Event of Default shall have occurred and be continuing, in which event the applicable
Grantors shall be required to take all necessary actions and such other actions as Agent may
reasonably request to perfect Agent’s Lien in such Capital Stock or promissory note).




[Signature pages follow]




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     IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be executed
and delivered as of the day and year first above written.



	 	 	 	 	 
	
GRANTORS: 	



EXIDE TECHNOLOGIES,


a Delaware corporation

 	 
	 	By:  	/s/  Brad S. Kalter	 
	 	 	Name:  	Brad S. Kalter 	 
	 	 	Title:  	Vice President, Deputy General Counsel

and Corporate Secretary 	 
	 



Exide Technologies

US Security Agreement — Signature Page









 









 











	 	 	 	 	 
	
AGENT:	




 WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Agent

 	 
	 	By:  	/s/  Stefan
Victory	 
	 	 	Name:  	Stefan Victory 	 
	 	 	Title:  	Vice President 	 
	 



Exide Technologies

US Security Agreement — Signature Page