EX-10.1






Exhibit 10.1




      




SECURITY AGREEMENT




By




CMP SUSQUEHANNA CORP.




and




THE GUARANTORS PARTY HERETO




and




WELLS FARGO BANK, N.A.,




as Collateral Agent




Dated as of March 26, 2009




 





 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND INTERPRETATION
	 	 	2	 
	Section 1.1. Definitions
	 	 	2	 
	Section 1.2. Interpretation
	 	 	8	 
	Section 1.3. Resolution of Drafting Ambiguities
	 	 	8	 
	Section 1.4. Perfection Certificate
	 	 	8	 
	 
	 	 	 	 
	ARTICLE II GRANT OF SECURITY AND SECURED OBLIGATIONS
	 	 	8	 
	Section 2.1. Grant of Security Interest
	 	 	8	 
	Section 2.2. Filings
	 	 	9	 
	Section 2.3. Intercreditor Agreement
	 	 	9	 
	 
	 	 	 	 
	ARTICLE III PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL
	 	 	10	 
	Section 3.1. Financing Statements and Other Filings; Maintenance of Perfected Security Interest
	 	 	10	 
	Section 3.2. Other Actions
	 	 	10	 
	Section 3.3. Joinder of Additional Guarantors
	 	 	11	 
	Section 3.4. Supplements; Further Assurances
	 	 	11	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	12	 
	Section 4.1. Title
	 	 	12	 
	Section 4.2. Validity of Security Interest
	 	 	12	 
	Section 4.3. Defense of Claims; Transferability of Pledged Collateral
	 	 	13	 
	Section 4.4. Other Financing Statements
	 	 	13	 
	Section 4.5. Consents, etc
	 	 	13	 
	Section 4.6. Pledged Collateral
	 	 	13	 
	Section 4.7. Insurance
	 	 	13	 
	Section 4.8. Chief Executive Office; Change of Name; Jurisdiction of Organization
	 	 	14	 
	 
	 	 	 	 
	ARTICLE V CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL
	 	 	14	 
	Section 5.1. Grant of License
	 	 	14	 
	Section 5.2. Protection of Collateral Agent’s Security
	 	 	14	 
	Section 5.3. Litigation
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI CERTAIN PROVISIONS CONCERNING RECEIVABLES
	 	 	15	 






i









 






TABLE OF CONTENTS

(continued)





	 	 	 	 	 
	 	 	Page	 
	Section 6.1. Maintenance of Records
	 	 	15	 
	Section 6.2. Legend
	 	 	16	 
	Section 6.3. Modification of Terms, etc
	 	 	16	 
	Section 6.4. Collection
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VII REMEDIES
	 	 	16	 
	Section 7.1. Remedies
	 	 	16	 
	Section 7.2. Notice of Sale
	 	 	18	 
	Section 7.3. Waiver of Notice and Claims
	 	 	18	 
	Section 7.4. Certain Sales of Pledged Collateral
	 	 	19	 
	Section 7.5. No Waiver; Cumulative Remedies
	 	 	19	 
	Section 7.6. Certain Additional Actions Regarding Intellectual Property
	 	 	20	 
	 
	 	 	 	 
	ARTICLE VIII APPLICATION OF PROCEEDS
	 	 	20	 
	Section 8.1. Application of Proceeds
	 	 	20	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	20	 
	Section 9.1. Concerning Collateral Agent
	 	 	20	 
	Section 9.2. Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact
	 	 	21	 
	Section 9.3. Continuing Security Interest; Assignment
	 	 	22	 
	Section 9.4. Termination; Release
	 	 	22	 
	Section 9.5. Modification in Writing
	 	 	23	 
	Section 9.6. Expenses
	 	 	23	 
	Section 9.7. Notices
	 	 	24	 
	Section 9.8. GOVERNING LAW
	 	 	24	 
	Section 9.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL
	 	 	24	 
	Section 9.10. Severability of Provisions
	 	 	25	 
	Section 9.11. Execution in Counterparts
	 	 	25	 
	Section 9.12. Business Days
	 	 	25	 
	Section 9.13. No Credit for Payment of Taxes or Imposition
	 	 	25	 
	Section 9.14. No Claims Against Collateral Agent
	 	 	25	 
	Section 9.15. No Release
	 	 	25	 






ii









 





TABLE OF CONTENTS

(continued)





	 	 	 	 	 
	 	 	Page	 
	Section 9.16. Obligations Absolute
	 	 	26	 
	Section 9.17. FCC Approval
	 	 	26	 
	Section 9.18. Subordination
	 	 	27	 
	Section 9.19. Indemnity, Subrogation and Subordination
	 	 	27	 






iii









 





Exhibits



EXHIBIT 1 Form of Joinder Agreement



EXHIBIT 2 Form of Perfection Certificate






iv









 








SECURITY AGREEMENT




     This second lien SECURITY AGREEMENT dated as of March 26, 2009 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance with the provisions
hereof, this “Agreement”) made by CMP SUSQUEHANNA CORP., a Delaware corporation (the
“Issuer”), and the Guarantors from to time to time party hereto (the “Guarantors”),
as pledgors, assignors and debtors (Issuer, together with the Guarantors, in such capacities and
together with any successors in such capacities, the “Pledgors,” and each, a
“Pledgor”), in favor of WELLS FARGO BANK, N.A., in its capacity as notes collateral agent
pursuant to the Indenture (as hereinafter defined), as pledgee, assignee and secured party (in such
capacities and together with any successors in such capacities, the “Collateral Agent”).



R E C I T A L S :




     A. The Issuer, the Guarantors, and Wells Fargo Bank, N.A., as Trustee, have, in connection
with the execution and delivery of this Agreement, entered into that certain Indenture, dated as of
March 26, 2009 (as amended, amended and restated, supplemented or otherwise modified from time to
time, the “Indenture”).



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



     C. The Issuer and each Guarantor will receive substantial benefits from the execution,
delivery and performance of the obligations under the Indenture, the Notes, this Agreement and the
other Security Documents and each is, therefore, willing to enter into this Agreement.



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



     E. The Collateral Agent hereunder and the Bank Collateral Agent may enter into an
Intercreditor Agreement in the form attached to the Indenture which provides for, inter alia, the
relative priorities of the security interests granted herein and in the other Security Documents,
on the one hand, and in the Credit Facility Security Documents, on the other hand.



     F. It is a condition to the obligations of the Trustee to enter into the Indenture and of the
Holders to purchase the Notes under the Indenture that each Pledgor execute and deliver the
applicable Security Documents, including this Agreement.



A G R E E M E N T :




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



 









 





ARTICLE I




DEFINITIONS AND INTERPRETATION




     Section 1.1. Definitions.



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



     “Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”;
“Commodity Account”; “Commodity Contract”; “Documents”;
“Equipment”; “Goods”, “Inventory”; “Letter-of-Credit Rights”;
“Letters of Credit”; “Payment Intangibles”; “Proceeds”; “Records”;
“Securities Account”; “Security Entitlements”; “Supporting Obligations”;
and “Tangible Chattel Paper.”



     (b) Terms used but not otherwise defined herein that are defined in the Indenture shall have
the meanings given to them in the Indenture.



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



     “Account Debtor” shall mean any person who is or who may become obligated to any
Pledgor under, with respect to or on account of an Account.



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



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



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



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



     “Copyrights” shall mean, collectively, with respect to each Pledgor, (a) all copyright
rights in any work subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, (b) all registrations and applications for
registration of any copyright in the United States or any other country, including registrations,
recordings, supplemental registrations and pending applications for registration in the United
States Copyright Office, including those listed on Schedule 7 to the Perfection Certificate
and (c) all causes of action arising prior to or after the date hereof for infringement of any
copyright or unfair competition regarding the same.



     “Copyright License” shall mean any written agreement, now or hereafter in effect,
granting any right to any third party under any Copyright now or hereafter owned by any Pledgor



2









 







or that such Pledgor otherwise has the right to license or granting any right to any Pledgor
under any copyright now or hereafter owned by any third party , and all rights of such Pledgor
under any such agreement.



     “Credit Facility Documents” shall have the meaning assigned to such term in the
Intercreditor Agreement.



     “Credit Facility Security Documents” shall have the meaning assigned to such term in
the Intercreditor Agreement.



     “Domain Names” shall mean, all Internet domain names and associated URL addresses in
or to which any Pledgor now or hereafter has any right, title or interest.



     “Distributions” shall mean, collectively, with respect to each Pledgor, all dividends,
cash, options, warrants, rights, instruments, distributions, returns of capital or principal,
income, interest, profits and other property, interests (debt or equity) or proceeds, from time to
time received, receivable or otherwise distributed to such Pledgor in respect of or in exchange for
any or all of any Securities (as defined in clause (c) of the definition of Excluded Property).



     “Excluded Property” shall mean



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



     (b) Equipment owned by any Pledgor on the date hereof or hereafter acquired that is subject to
a Lien securing a purchase money obligation or Capitalized Lease Obligation permitted to be
incurred pursuant to the provisions of the Indenture if the contract or other agreement in which
such Lien is granted (or the documentation providing for such purchase money obligation or
Capitalized Lease Obligation) validly prohibits the creation of any other Lien on such Equipment;



     (c) all (i) “securities” of the Pledgors or the Pledgors’ “affiliates” (as the terms
“securities” and “affiliates” are used in Rule 3-16 of Regulation S-X under the Securities Act)
(“Securities”), (ii) Investment Property, (iii) Intercompany Notes and (iv) all Capital
Stock of any Subsidiary;



     (d) motor vehicles the perfection of a security interest in which is excluded from the UCC in
the relevant jurisdiction;



     (e) any specifically identified asset with respect to which the Issuer has certified to the
Collateral Agent in writing that the Administrative Agent for the Senior Credit Facilities has
confirmed that the costs or other consequences (including adverse tax consequences) of



3









 







providing a security interest is excessive in view of the benefits to be obtained by the
holders of the Senior Indebtedness under the Senior Credit Facilities;



     (f) Equipment owned by any Pledgor on the date hereof or hereafter acquired that is subject to
a Lien securing a purchase money obligation or Capitalized Lease Obligation permitted to be
incurred pursuant to the provisions of the Indenture if the contract or other agreement in which
such Lien is granted (or the documentation providing for such purchase money obligation or
Capitalized Lease Obligation) validly prohibits the creation of any other Lien on such Equipment;



     (g) any General Intangible, Permit or other such rights of a Pledgor arising under any
contract, lease, instrument, license (including FCC Licenses, in which a security interest is
prohibited by applicable law), or other document if (but only to the extent that) the grant of a
security interest therein would (x) constitute a violation of a valid and enforceable restriction
in respect of such General Intangible or other such rights in favor of a third party or under any
law, regulation, permit, order or decree of any Governmental Authority, unless and until all
required consents shall have been obtained (for the avoidance of doubt, the restrictions described
herein are not negative pledges or similar undertakings in favor of a lender or other financial
counterparty) or (y) expressly give any other party in respect of any such contract, lease,
instrument, license or other document, the right to terminate its obligations thereunder;
provided, however, that the limitation set forth in this clause (g) shall not
affect, limit, restrict or impair the grant by a Pledgor of a security interest pursuant to this
Agreement in any such Pledged Collateral to the extent that an otherwise applicable prohibition or
restriction on such grant is rendered ineffective by any applicable law, including the UCC, and any
such collateral shall not be Excluded Property hereunder; and



     (h) with respect to any Trademarks, applications in the United States Patent and Trademark
Office to register Trademarks or service marks on the basis of any Pledgor’s “intent to use” such
Trademarks or service marks will not be deemed to be Collateral, unless and until a “Statement of
Use” or “Amendment to Allege Use” has been filed and accepted in the United States Patent and
Trademark Office, whereupon such application shall be automatically subject to the security
interest granted herein and deemed to be included in the Collateral;



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



     “FCC” shall mean the Federal Communications Commission (or any successor).



     “FCC Licenses” shall mean any licenses, permits and authorizations issued by the FCC
for the operation of Stations.



     “General Intangibles” shall mean, collectively, with respect to each Pledgor, all
“general intangibles,” as such term is defined in the UCC, of such Pledgor and, in any event, shall
include (i) choses in action and causes of action and all other intangible personal property of
every kind and nature now owned or hereafter acquired by any Pledgor, as the case may be, including



4









 







corporate or other business records, indemnification claims, contract rights (including rights
under leases, whether entered into as lessor or lessee, Swap Contracts and other agreements),
goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Pledgor, as the case me be, to secure
payment by an Account Debtor of any of the Accounts.



     “Governmental Authority” shall mean the government of the United States or any other
nation, or of any political subdivision thereof, whether state, provincial or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (including any supra-national bodies such as the European Union or the
European Central Bank and the FCC).



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



     “Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of the UCC.



     “Intellectual Property” shall mean, all intellectual and similar property of every
kind and nature now owned or hereafter acquired by any Pledgor, including inventions, designs,
Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know how, show how or other data or information, software, databases, all
other proprietary information, including, but not limited to Domain Names and all embodiments or
fixations thereof and related documentation, registrations and franchises, and all additions,
improvements and Accessions to, and books and records describing or used in connection with any of
the foregoing.



     “Intellectual Property Collateral” shall mean, collectively, Pledged Collateral
consisting of Intellectual Property.



     “Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany notes
(if any) existing on the date hereof and intercompany notes hereafter acquired by such Pledgor and
all certificates, instruments or agreements evidencing such intercompany notes, and all
assignments, amendments, restatements, supplements, extensions, renewals, replacements or
modifications thereof to the extent permitted pursuant to the terms hereof.



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



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



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



     “License” shall mean any Patent License, Trademark License, Copyright License or other
license of sublicense agreement to which any Pledgor is a party , including those listed on
Schedule 7 to the Perfection Certificate.



5









 





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



     “Organizational Documents” shall mean, 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.



     “Patent License” shall mean, any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on which a Patent, now or
hereafter owned by any Pledgor or that any Pledgor otherwise has the right to license, is in
existence or granting to any Pledgor any right to make, use or sell any invention on which a
patent, now or hereafter owned by any third party, is in existence, and all rights of any Pledgor
under any such agreement.



     “Patents” shall mean all of the following now owned or hereafter acquired by any
Pledgor (a) all letters patent of the United States or the equivalent thereof in any other country,
all registrations and recordings thereof, and all applications for letters patent of the United
States or the equivalent thereof in any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any similar offices in any
other country, including those listed on Schedule 7 to the Perfection Certificate and (b)
all reissues, continuations, divisions, continuations–in–part, renewals or extensions thereof, and
the inventions disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.



     “Perfection Certificate” shall mean that certain perfection certificate dated as of
the date of this Agreement, substantially in the form of Exhibit 2 hereto, executed and
delivered by each Pledgor in favor of the Collateral Agent for the benefit of the Secured Parties,
and each other Perfection Certificate (which shall be substantially in the form of Exhibit
2 hereto) executed and delivered by the applicable Guarantor in favor of the Collateral Agent
for the benefit of the Secured Parties contemporaneously with the execution and delivery of each
Joinder Agreement executed in accordance with Section 3.3 hereof.



     “Permits” shall mean any and all franchises, licenses, permits, approvals,
notifications, certifications, registrations, authorizations, exemptions, qualifications, and other
rights, privileges and approvals required for the operation of the Issuer’s business under its
organizational documents or under any loan treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable or binding upon such
person or any of its property or to which such person or any of its property is subject.



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



6









 





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



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



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



     “Secured Obligations” shall mean all obligations of the Issuer and the Guarantors from
time to time arising under or in respect of (a) the full and punctual payment of principal of and
interest (including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Notes when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Issuer and the Guarantors under the Indenture,
the Notes and the Security Documents and (b) the full and punctual performance within applicable
grace periods of all other Obligations of the Issuer and the Guarantors under the Indenture, the
Notes and the Security Documents.



     “Secured Parties” shall mean, collectively, the Collateral Agent, the Trustee and each
of the present and future Holders and each other holder of, or obligee in respect of, any
Obligations in respect of the Notes.



     “Securities Act” shall mean the Securities Act of 1933, as amended.



     “Stations” shall mean all media broadcasting facilities owned by any Pledgor for which
licenses, permits and authorizations have been issued by the FCC.



     “Trademark License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter owned by any Pledgor or
that any Peldgor otherwise has the right to license, or granting to any Pledgor any right to use
any Trademark now or hereafter owned by any third party, and all rights of any Pledgor under any
such agreement.



     “Trademarks” shall mean, all of the following now owned or hereafter acquired by any
Pledgor: (a) all trademarks, service marks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, trade dress, logos, other source or business
identifiers , designs, and general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and recording applications
filed in connection therewith, including registrations and registration applications in the United
States Patent and Trademark Office or any similar office in any State of the United States or any
other country or any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule 7 to the Perfection Certificate, (b) all goodwill
associated therewith and symbolized thereby, (c) all other assets, rights and interests that



7









 







uniquely reflect or embody such goodwill and (d) all causes of action arising prior to or
after the date hereof for infringement of any trademark or unfair competition regarding the same.



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



     Section 1.2. Interpretation. The rules of construction specified in the Indenture
(including Section 1.04 thereof) shall be applicable to this Agreement.



     Section 1.3. Resolution of Drafting Ambiguities. Each Pledgor acknowledges and agrees
that it was represented by counsel in connection with the execution and delivery hereof, that it
and its counsel reviewed and participated in the preparation and negotiation hereof and that any
rule of construction to the effect that ambiguities are to be resolved against the drafting party
(i.e., the Collateral Agent) shall not be employed in the interpretation hereof.



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



ARTICLE II




GRANT OF SECURITY AND SECURED OBLIGATIONS




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



               (i) all Accounts;



               (ii) all Equipment, Goods and Inventory;



               (iii) all Documents, Instruments and Chattel Paper;



               (iv) all Letter-of-Credit Rights;



               (v) all Investment Property;



               (vi) all Intellectual Property Collateral;



8









 





               (vii) the Commercial Tort Claims described on Schedule 8 to the Perfection
Certificate;



               (viii) all General Intangibles and Permits;



               (ix) all Security Entitlements in any or all of the foregoing;



               (x) all Supporting Obligations;



               (xi) all books and records pertaining to the Pledged Collateral; and



               (xii) to the extent not covered by clauses (i) through (xi) of this sentence, all Proceeds and
products of each of the foregoing.



     Notwithstanding anything to the contrary contained in clauses (i) through (xii) above, the
security interest created by this Agreement shall not extend to, and the term “Pledged Collateral”
shall not include, any Excluded Property and (i) the Pledgors shall from time to time at the
request of the Collateral Agent give written notice to the Collateral Agent identifying in
reasonable detail the Excluded Property and shall provide to the Collateral Agent such other
information regarding the Excluded Property as the Collateral Agent may reasonably request and
(ii) from and after the Closing Date, no Pledgor shall permit to become effective in any document
creating, governing or providing for any permit, license or agreement a provision that would
prohibit the creation of a Lien on such permit, license or agreement in favor of the Collateral
Agent unless such Pledgor believes, in its reasonable judgment, that such prohibition is usual and
customary in transactions of such type.



     Section 2.2. Filings. Each Pledgor hereby ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any financing statements (including renewal
statements and in lieu statements) relating to the Pledged Collateral if filed prior to the date
hereof; provided, however, such authorization shall not relieve the Pledgor’s of their obligations
under Section 3.1 to file financing statements and any necessary amendment or continuations
thereof. Neither the Trustee nor the Collateral Agent nor any of their respective officers,
directors, employees, attorneys or agents will be responsible for the existence, genuineness, value
or protection of any Pledged Collateral, for the legality, enforceability, effectiveness or
sufficiency of this Agreement, or for the creation, perfection, priority, sufficiency or protection
of any Lien securing the Secured Obligations.



     Section 2.3. Intercreditor Agreement. Notwithstanding anything to the contrary
contained in this Agreement, the priorities with respect to all security interests granted to the
Collateral Agent hereunder and under the other Security Documents and to the Bank Collateral Agent
under the Credit Facility Documents shall be governed by the terms and provisions of the
Intercreditor Agreement.



9









 





ARTICLE III




PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF PLEDGED COLLATERAL




     Section 3.1. Financing Statements and Other Filings; Maintenance of Perfected Security
Interest. Each Pledgor represents and warrants that all financing statements, agreements,
instruments and other documents (other than filings with the US Patent, Trademark and Copyright
Offices) necessary to perfect the security interest granted by it to the Collateral Agent in
respect of the Pledged Collateral have been duly executed in a form for filing in each
governmental, municipal or other office specified in Schedule 4 to the Perfection
Certificate. Each Pledgor agrees that at the sole cost and expense of the Pledgors, such Pledgor
will provide for the initial filing or other perfection of such security interests and shall
maintain the security interest created by this Agreement in the Pledged Collateral as a perfected
security interest subject only to Permitted Liens, Permitted Prior Liens and any other Liens
permitted under the Indenture.



     Section 3.2. Other Actions. In order to further ensure the attachment, perfection and
priority of, and the ability of the Collateral Agent to enforce, the Collateral Agent’s security
interest in the Pledged Collateral, each Pledgor represents and warrants (as to itself) as follows
and agrees, in each case at such Pledgor’s own expense, to take the following actions with respect
to the following Pledged Collateral:



     (a) Instruments and Tangible Chattel Paper. As of the date hereof, no amounts payable
under or in connection with any of the Pledged Collateral are evidenced by any Instrument or
Tangible Chattel Paper other than such Instruments and Tangible Chattel Paper listed in
Schedule 6 to the Perfection Certificate. Each Instrument included in the Pledged
Collateral listed in Schedule 6 to the Perfection Certificate has been properly endorsed,
assigned and delivered to the Collateral Agent, or to the Bank Collateral Agent in accordance with
the Intercreditor Agreement, accompanied by instruments of transfer or assignment duly executed in
blank. If any amount then payable under or in connection with any of the Pledged Collateral shall
be evidenced by any Instrument and such amount exceeds $2,000,000, the Pledgor acquiring such
Instrument shall promptly (but in any event within five days after receipt thereof) endorse, assign
and deliver the same to the Collateral Agent, or to the Bank Collateral Agent in accordance with
the Intercreditor Agreement, accompanied by such instruments of transfer or assignment duly
executed in blank as the Collateral Agent (at the request of any Holder) or the Bank Collateral
Agent, as applicable, may from time to time specify.



     (b) [Reserved].



     (c) Letter-of-Credit Rights. If any Pledgor is at any time a beneficiary under a
Letter of Credit now or hereafter issued, such Pledgor shall promptly notify the Collateral Agent
thereof, and, at the request of the Collateral Agent (acting at the request of any Holder), such
Pledgor shall use its reasonable best efforts to either (i) arrange for the issuer and any
confirmer of such Letter of Credit to consent to an assignment to the Collateral Agent, of the
proceeds of any drawing under the Letter of Credit or (ii) arrange for the Collateral Agent, to
become the transferee beneficiary of such Letter of Credit, with the Collateral Agent agreeing, in
each case,



10









 







that the proceeds of any drawing under the Letter of Credit are to be applied as provided in
the Indenture, after an Event of Default, subject to the Intercreditor Agreement. The actions in
the preceding sentence shall not be required to the extent that the amount of any such Letter of
Credit does not exceed $5,000,000.



     (d) Commercial Tort Claims. As of the date hereof, each Pledgor hereby represents and
warrants that it holds no Commercial Tort Claims other than those listed in Schedule 8 to
the Perfection Certificate. If any Pledgor shall at any time hold or acquire a Commercial Tort
Claim, such Pledgor shall immediately notify the Collateral Agent in writing signed by such Pledgor
of the brief details thereof and execute and deliver such statements, documents and notices and do
and cause to be done all such things as may be required by the Collateral Agent or by law,
including all things which may from time to time be necessary under the UCC to fully create,
preserve, perfect and protect the priority of the Collateral Agent’s security interest therein and
in the Proceeds thereof, all upon the terms of this Agreement and the Intercreditor Agreement. The
requirement in the preceding sentence shall not apply to the extent that the amount of any such
Commercial Tort Claim does not exceed $5,000,000 (taking the greater of the aggregate claimed
damages thereunder or the reasonably estimated value thereof).



     Section 3.3. Joinder of Additional Guarantors. The Pledgors shall cause each
Restricted Subsidiary of the Issuer which, from time to time, after the date hereof shall be
required to pledge any assets to the Collateral Agent for the benefit of the Secured Parties
pursuant to the provisions of the Indenture, to execute and deliver to the Collateral Agent (i) a
Joinder Agreement substantially in the form of Exhibit 1 hereto within thirty (30) days of
the date on which it was acquired or created and (ii) a Perfection Certificate, in each case,
within thirty (30) days of the date on which it was acquired or created and upon such execution and
delivery, such Subsidiary shall constitute a “Guarantor” and a “Pledgor” for all purposes hereunder
with the same force and effect as if originally named as a Guarantor and Pledgor herein. The
execution and delivery of such Joinder Agreement shall not require the consent of any Pledgor
hereunder. The rights and obligations of each Pledgor hereunder shall remain in full force and
effect notwithstanding the addition of any new Guarantor and Pledgor as a party to this Agreement.



     Section 3.4. Supplements; Further Assurances. Subject to the terms of the
Intercreditor Agreement, each Pledgor shall take such further actions, and execute and/or deliver
to the Collateral Agent such additional financing statements (including renewals thereof),
amendments, assignments, agreements, supplements, powers and instruments, necessary or appropriate
in order to create, perfect, preserve and protect the security interest in the Pledged Collateral
as provided herein and the rights and interests granted to the Collateral Agent hereunder, to carry
into effect the purposes hereof or better to assure and confirm the validity, enforceability and
priority of the Collateral Agent’s security interest in the Pledged Collateral or permit the
Collateral Agent to exercise and enforce its rights, powers and remedies hereunder with respect to
any Pledged Collateral, including the filing of financing statements, continuation statements and
other documents (including this Agreement) under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interest created hereby (but
excluding filings with the United States Patent and Trademark Office and the United States
Copyright Office) wherever required by law to perfect, continue and maintain the validity,
enforceability and priority of the security interest in the Pledged Collateral as provided herein



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and to preserve the other rights and interests granted to the Collateral Agent hereunder,
subject to the Intercreditor Agreement, as against third parties, with respect to the Pledged
Collateral. Without limiting the generality of the foregoing, subject to the Intercreditor
Agreement, during the continuance of an Event of Default, each Pledgor shall make, execute,
endorse, acknowledge, file or refile and/or deliver to the Collateral Agent, from time to time upon
reasonable request by the Collateral Agent such lists, schedules, descriptions and designations of
the Pledged Collateral, copies of warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments,
supplements, additional security agreements, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or instruments as the
Collateral Agent shall reasonably request. Subject to the Intercreditor Agreement, if an Event of
Default has occurred and is continuing, the Collateral Agent may institute and maintain, in its own
name or in the name of any Pledgor, such suits and proceedings as the Collateral Agent may be
advised by counsel shall be necessary or expedient to prevent any impairment of the security
interest in or the perfection thereof in the Pledged Collateral. All of the foregoing shall be at
the sole cost and expense of the Pledgors.



ARTICLE IV




REPRESENTATIONS, WARRANTIES AND COVENANTS




     Each Pledgor represents, warrants and covenants for the benefit of the Secured Parties as
follows:



     Section 4.1. Title. Except for the security interest granted to the Collateral Agent
for the ratable benefit of the Secured Parties pursuant to this Agreement and Permitted Liens,
Permitted Prior Liens and any other Liens permitted under the Indenture, such Pledgor is the legal
and beneficial owner and has rights and, as to Pledged Collateral acquired by it from time to time
after the date hereof, will legally and beneficially own and have rights in each item of Pledged
Collateral pledged by it hereunder, free and clear of any and all liens or claims of others and has
the right, or will have the right to pledge, sell, assign or transfer the same, free and clear of
any Liens, other than Permitted Liens, Permitted Prior Liens and any other Liens permitted under
the Indenture. In addition, no Liens or claims exist on the Pledged Collateral, other than
Permitted Liens, Permitted Prior Liens and any other Liens permitted under the Indenture.



     Section 4.2. Validity of Security Interest. The security interest in and Lien on the
Pledged Collateral granted to the Collateral Agent for the benefit of the Secured Parties hereunder
constitutes (a) a legal and valid security interest in all the Pledged Collateral securing the
payment and performance of the Secured Obligations, and (b) subject to the filings and other
actions described in Schedule 4 to the Perfection Certificate (to the extent required to be
listed on the schedules to the Perfection Certificate as of the date this representation is made or
deemed made) and subject to the limitations in Section 3.4, a valid, perfected security
interest in all the Pledged Collateral. Subject to the limitations in Section 3.4, the
security interest and Lien granted to the Collateral Agent for the benefit of the Secured Parties
pursuant to this Agreement in and on the Pledged Collateral will at all times constitute a
perfected, continuing security interest therein, prior to all other Liens on the Pledged Collateral
except for Permitted Prior Liens, Permitted Liens and any other Liens permitted under the
Indenture.



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     Section 4.3. Defense of Claims; Transferability of Pledged Collateral. Subject to
Section 4.05 of the Indenture, each Pledgor shall, at its sole cost and expense, defend
title to the Pledged Collateral pledged by it hereunder and the security interest therein and Lien
thereon granted to the Collateral Agent, subject to the Intercreditor Agreement, and the priority
thereof against all claims and demands of all persons, at any time claiming any interest therein
adverse to the Collateral Agent or any other Secured Party other than Permitted Liens, Permitted
Prior Liens and any other Liens permitted under the Indenture.



     Section 4.4. Other Financing Statements. It has not filed, nor authorized any third
party to file any valid or effective financing statement (or similar statement, instrument of
registration or public notice under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Pledged Collateral, except such as have been filed in favor of the
Collateral Agent pursuant to this Agreement, in favor of the Bank Collateral Agent pursuant to the
Credit Facility Documents, or in favor of any holder of a Permitted Lien, a Permitted Prior Lien or
other Lien permitted under the Indenture with respect to such Permitted Lien, Permitted Prior Lien
or other Lien permitted under the Indenture. No Pledgor shall execute, authorize or permit to be
filed in any public office any financing statement (or similar statement, instrument of
registration or public notice under the law of any jurisdiction) relating to any Pledged
Collateral, except financing statements and other statements and instruments filed or to be filed
in respect of and covering the security interests granted hereby, by such Pledgor to the Bank
Collateral Agent and/or to the holder of the Permitted Prior Liens, Permitted Liens and/or other
Liens permitted under the Indenture.



     Section 4.5. Consents, etc. In the event that the Collateral Agent desires to
exercise any remedies, voting or consensual rights or attorney-in-fact powers set forth in this
Agreement and determines it necessary to obtain any approvals or consents of any Governmental
Authority or any other person therefor, then, upon the reasonable request of the Collateral Agent,
such Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to obtain as
soon as practicable any necessary approvals or consents for the exercise of any such remedies,
rights and powers.



     Section 4.6. Pledged Collateral. As of the date hereof, all information set forth
herein, including the schedules hereto, and all information contained in any documents, schedules
and lists heretofore delivered to any Secured Party, including the Perfection Certificate and the
schedules thereto, in connection with this Agreement, in each case, relating to the Pledged
Collateral, is accurate and complete in all material respects. As of the date hereof, the Pledged
Collateral described on the schedules to the Perfection Certificate constitutes all of the property
of such type of Pledged Collateral owned or held by the Pledgors.



     Section 4.7. Insurance. In the event that the proceeds of any insurance claim are
paid to any Pledgor after the Collateral Agent has (subject to the terms of the Intercreditor
Agreement) exercised its right to foreclose after an Event of Default, such net cash proceeds shall
be held in trust for the benefit of the Collateral Agent and immediately after receipt thereof
shall be paid to the Collateral Agent for application in accordance with the Indenture, subject to
the Intercreditor Agreement.



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     Section 4.8. Chief Executive Office; Change of Name; Jurisdiction of Organization.
The exact legal name, type of organization, jurisdiction of organization, Federal Taxpayer
Identification Number, organizational identification number (if any) and chief executive office of
such Pledgor is indicated and set forth in Schedule l and 2 annexed to the
Perfection Certificate. Such Pledgor shall not effect any change (i) in its legal name, (ii) in
the location of its chief executive office, (iii) in its identity or organizational structure,
(iv) in its Federal Taxpayer Identification Number or organizational identification number or
(v) in its jurisdiction of organization (in each case, including, without limitation, by merging
with or into any other entity, reorganizing, dissolving, liquidating, reincorporating or organizing
in any other jurisdiction), until (A) it shall have given the Collateral Agent not less than 30
days’ prior written notice (in the form of an Officers’ Certificate), or such lesser notice period
agreed to by the Collateral Agent, of its intention so to do, clearly describing such change and
providing such other information in connection therewith as the Collateral Agent may reasonably
request and (B) it shall have taken all action reasonably satisfactory to the Collateral Agent to
maintain the perfection and priority of the security interest of the Collateral Agent for the
benefit of the Secured Parties in the Pledged Collateral, if applicable. Each Pledgor agrees to
promptly provide the Collateral Agent with certified Organizational Documents reflecting any of the
changes described in the preceding sentence. Each Pledgor also agrees to promptly notify the
Collateral Agent of any change in the location of any office in which it maintains books or records
relating to Pledged Collateral owned by it or any office or facility at which Pledged Collateral is
located (including the establishment of any such new office or facility).



ARTICLE V




CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL




     Section 5.1. Grant of License. For the purpose of enabling the Collateral Agent,
during the continuance of an Event of Default, to exercise rights and remedies under Article
VII hereof at such time as the Collateral Agent shall be lawfully entitled to exercise such
rights and remedies (subject to the Intercreditor Agreement), and for no other purpose, each
Pledgor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable,
non-exclusive worldwide license (exercisable without payment of royalty or other compensation to
any Pledgor) to use, assign, license or sublicense any of the Intellectual Property Collateral now
owned or hereafter acquired by such Pledgor, wherever the same may be located. Such license shall
include access to all media in which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout hereof.



     Section 5.2. Protection of Collateral Agent’s Security. On a continuing basis, each
Pledgor shall, at its sole cost and expense, (i) promptly following its becoming aware thereof,
notify the Collateral Agent of any adverse determination in any proceeding or the institution of
any proceeding in any federal, state or local court or administrative body or in the United States
Patent and Trademark Office or the United States Copyright Office regarding any Material
Intellectual Property Collateral, such Pledgor’s right to register such Material Intellectual
Property Collateral or its right to keep and maintain such registration in full force and effect,
(ii) maintain all Material Intellectual Property Collateral as presently used and operated,
(iii) not permit to lapse or become abandoned or dedicated to the public domain, or cause or permit
to be invalidated any Material Intellectual Property Collateral, and not settle or compromise any



14









 







pending or future litigation or administrative proceeding with respect to any such Material
Intellectual Property Collateral, in either case except as shall be consistent with commercially
reasonable business judgment, (iv) upon such Pledgor obtaining knowledge thereof promptly notify
the Collateral Agent in writing of any event which may be reasonably expected to materially and
adversely affect the value or utility of any Material Intellectual Property Collateral or the
rights and remedies of the Collateral Agent in relation thereto including a levy or threat of levy
or any legal process against any Material Intellectual Property Collateral, (v) subject to the
Intercreditor Agreement, not license any Intellectual Property Collateral other than licenses
entered into by such Pledgor in, or incidental to, the ordinary course of business, or amend or
permit the amendment of any of the licenses in a manner that materially and adversely affects the
right to receive payments thereunder, or in any manner that would materially impair the value of
any Intellectual Property Collateral or the Lien on and security interest in the Intellectual
Property Collateral created therein hereby, and (vi) diligently keep adequate records respecting
all Intellectual Property Collateral.



     Section 5.3. Litigation. Unless there shall occur and be continuing any Event of
Default, each Pledgor shall have the right to commence and prosecute in its own name, as the party
in interest, for its own benefit and at the sole cost and expense of the Pledgors, such
applications for protection of the Intellectual Property Collateral and suits, proceedings or other
actions to prevent the infringement, counterfeiting, unfair competition, dilution, diminution in
value or other damage as are necessary to protect the Intellectual Property Collateral. Upon the
occurrence and during the continuance of any Event of Default, subject to the Intercreditor
Agreement, the Collateral Agent shall have the right but shall in no way be obligated to file
applications for protection of the Intellectual Property Collateral and/or bring suit in the name
of any Pledgor, the Collateral Agent or the Secured Parties to enforce the Intellectual Property
Collateral and any license thereunder. In the event of such suit subject to the Intercreditor
Agreement, each Pledgor shall, at the reasonable request of the Collateral Agent, do any and all
lawful acts and execute any and all documents requested by the Collateral Agent in aid of such
enforcement and the Pledgors shall promptly reimburse and indemnify the Collateral Agent for all
costs and expenses incurred by the Collateral Agent in the exercise of its rights under this
Section 5.3 in accordance with Section 9.6 hereof. In the event that the
Collateral Agent shall elect not to bring suit to enforce the Intellectual Property Collateral,
each Pledgor agrees, at the reasonable request of the Collateral Agent and subject to the
Intercreditor Agreement, to take all commercially reasonable actions necessary, whether by suit,
proceeding or other action, to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value of or other damage to any of the Intellectual Property Collateral by
any person.



ARTICLE VI




CERTAIN PROVISIONS CONCERNING RECEIVABLES




     Section 6.1. Maintenance of Records. Each Pledgor shall keep and maintain at its sole
cost and expense complete records of each Receivable, in a manner consistent with prudent business
practice, including records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto. Subject to the Intercreditor Agreement,
each Pledgor shall, at such Pledgor’s sole cost and expense, upon the Collateral Agent’s demand
made at any time after the occurrence and during the continuance of any Event



15









 




of Default, deliver all tangible evidence of Receivables, including all documents evidencing
Receivables and any books and records relating thereto to the Collateral Agent, or to its
representatives (copies of which evidence and books and records may be retained by such Pledgor).
Subject to the Intercreditor Agreement, upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent may transfer a full and complete copy of any Pledgor’s books,
records, credit information, reports, memoranda and all other writings relating to the Receivables
to and for the use by any person that has acquired or is contemplating acquisition of an interest
in the Receivables or the Collateral Agent’s security interest therein without the consent of any
Pledgor.




     Section 6.2. Legend. Subject to the Intercreditor Agreement, during the continuance
of an Event of Default, each Pledgor shall legend the Receivables and the other books, records and
documents of such Pledgor evidencing or pertaining to the Receivables with an appropriate reference
to the fact that the Receivables have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.



     Section 6.3. Modification of Terms, etc. No Pledgor shall rescind or cancel any
obligations evidenced by any Receivable or modify any term thereof or make any adjustment with
respect thereto except in the ordinary course of business consistent with prudent business
practice, or extend or renew any such obligations except in the ordinary course of business
consistent with prudent business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Receivable or interest therein except in the ordinary
course of business consistent with prudent business practice. Each Pledgor shall timely fulfill
all obligations on its part to be fulfilled under or in connection with the Receivables.



     Section 6.4. Collection. Each Pledgor shall cause to be collected from the Account
Debtor of each of the Receivables, as and when due in the ordinary course of business and
consistent with prudent business practice (including Receivables that are delinquent, such
Receivables to be collected in accordance with generally accepted commercial collection
procedures), any and all amounts owing under or on account of such Receivable, and apply forthwith
upon receipt thereof all such amounts as are so collected to the outstanding balance of such
Receivable, except that any Pledgor may, with respect to a Receivable, allow in the ordinary course
of business (i) a refund or credit due as a result of returned or damaged or defective merchandise
and (ii) such extensions of time to pay amounts due in respect of Receivables and such other
modifications of payment terms or settlements in respect of Receivables as shall be commercially
reasonable in the circumstances, all in accordance with such Pledgor’s ordinary course of business
consistent with its collection practices as in effect from time to time. The costs and expenses
(including attorneys’ fees) of collection, in any case, whether incurred by any Pledgor, the
Collateral Agent or any Secured Party, shall be paid by the Pledgors.



ARTICLE VII




REMEDIES




     Section 7.1. Remedies. Upon the occurrence and during the continuance of any Event of
Default, subject in all cases to the Intercreditor Agreement, the Collateral Agent may from



16









 




time to time exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following remedies:


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


               (ii) Demand, sue for, collect or receive any money or property at any time payable or
receivable in respect of the Pledged Collateral including instructing the obligor or obligors on
any agreement, instrument or other obligation constituting part of the Pledged Collateral to make
any payment required by the terms of such agreement, instrument or other obligation directly to the
Collateral Agent, and in connection with any of the foregoing, compromise, settle, extend the time
for payment and make other modifications with respect thereto; provided, however,
that in the event that any such payments are made directly to any Pledgor, prior to receipt by any
such obligor of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly (but in no event later
than one (1) Business Day after receipt thereof) pay such amounts to the Collateral Agent;


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


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


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


17







 





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



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



               (viii) Exercise all the rights and remedies of a secured party on default under the UCC, and
the Collateral Agent may also in its sole discretion, without notice except as specified in
Section 7.2 hereof, sell, assign or grant a license to use the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange, broker’s board or
at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Collateral Agent may deem commercially
reasonable. The Collateral Agent or any other Secured Party or any of their respective Affiliates
may be the purchaser, licensee, assignee or recipient of the Pledged Collateral or any part thereof
at any such sale and shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Pledged Collateral sold, assigned or licensed
at such sale, to use and apply any of the Secured Obligations owed to such person as a credit on
account of the purchase price of the Pledged Collateral or any part thereof payable by such person
at such sale. Each purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives, to the fullest extent permitted by law, all rights of
redemption, stay and/or appraisal which it now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted. The Collateral Agent shall not be
obligated to make any sale of the Pledged Collateral or any part thereof regardless of notice of
sale having been given. The Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby waives, to
the fullest extent permitted by law, any claims against the Collateral Agent arising by reason of
the fact that the price at which the Pledged Collateral or any part thereof may have been sold,
assigned or licensed at such a private sale was less than the price which might have been obtained
at a public sale, even if the Collateral Agent accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.



     Section 7.2. Notice of Sale. Each Pledgor acknowledges and agrees that, to the extent
notice of sale or other disposition of the Pledged Collateral or any part thereof shall be required
by law, ten (10) days’ prior notice to such Pledgor of the time and place of any public sale or of
the time after which any private sale or other intended disposition is to take place shall be
commercially reasonable notification of such matters. No notification need be given to any Pledgor
if it has signed, after the occurrence of an Event of Default, a statement renouncing or modifying
any right to notification of sale or other intended disposition.



     Section 7.3. Waiver of Notice and Claims. Each Pledgor hereby waives, to the fullest
extent permitted by applicable law, notice or judicial hearing in connection with the Collateral
Agent’s taking possession or the Collateral Agent’s disposition of the Pledged Collateral or any
part thereof, including any and all prior notice and hearing for any prejudgment remedy or remedies
and any such right which such Pledgor would otherwise have under law, and each



18









 







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



     Section 7.4. Certain Sales of Pledged Collateral.



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



     (b) Each Pledgor further agrees that a breach of any of the covenants contained in this
Section 7.4 will cause irreparable injury to the Collateral Agent and the other Secured
Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant contained in this
Section 7.4 shall be specifically enforceable against such Pledgor, and such Pledgor hereby
waives and agrees not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is continuing.



     Section 7.5. No Waiver; Cumulative Remedies.



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



     (b) In the event that the Collateral Agent shall have instituted any proceeding to enforce any
right, power, privilege or remedy under the Indenture, any Note, this Agreement or any other
Security Document by foreclosure, sale, entry or otherwise, and such proceeding shall



19









 







have been discontinued or abandoned for any reason or shall have been determined adversely to
the Collateral Agent, then and in every such case, the Pledgors, the Collateral Agent and each
other Secured Party shall be restored to their respective former positions and rights hereunder
with respect to the Pledged Collateral (subject to the Intercreditor Agreement), and all rights,
remedies, privileges and powers of the Collateral Agent and the other Secured Parties shall
continue as if no such proceeding had been instituted.



     Section 7.6. Certain Additional Actions Regarding Intellectual Property. If any Event
of Default shall have occurred and be continuing subject to the Intercreditor Agreement, each
Pledgor shall execute and deliver to the Collateral Agent an assignment or assignments of the
registered Patents, Trademarks and/or Copyrights and such other documents as are necessary or
appropriate to carry out the intent and purposes hereof. Within five (5) Business Days of written
notice thereafter from the Collateral Agent, subject to the Intercreditor Agreement, each Pledgor
shall make available to the Collateral Agent, to the extent within such Pledgor’s power and
authority, such personnel in such Pledgor’s employ on the date of the Event of Default as the
Collateral Agent may reasonably designate to permit such Pledgor to continue, directly or
indirectly, to produce, advertise and sell the products and services sold by such Pledgor under the
registered Patents, Trademarks and/or Copyrights, and such persons shall be available to perform
their prior functions on the Collateral Agent’s behalf.



ARTICLE VIII




APPLICATION OF PROCEEDS




     Section 8.1. Application of Proceeds. Subject to the Intercreditor Agreement, the
proceeds received by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Pledged Collateral pursuant to the exercise by the
Collateral Agent of its remedies shall be applied, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, in accordance with the Indenture.



ARTICLE IX




MISCELLANEOUS




     Section 9.1. Concerning Collateral Agent.



     (a) The Collateral Agent has been appointed as collateral agent pursuant to the Indenture.
The actions of the Collateral Agent hereunder are subject to the provisions of the Indenture and
the Intercreditor Agreement. The Collateral Agent shall have the right hereunder to make demands,
to give notices, to exercise or refrain from exercising any rights, and to take or refrain from
taking action (including the release or substitution of the Pledged Collateral), in accordance with
this Agreement, the Intercreditor Agreement and the Indenture. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith. The Collateral
Agent may resign and a successor Collateral Agent may be appointed in the manner provided in the
Indenture. Upon the acceptance of any appointment as the Collateral Agent by a successor
Collateral Agent, that successor Collateral Agent shall thereupon succeed



20









 







to and become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall thereupon be
discharged from its duties and obligations under this Agreement. After any retiring Collateral
Agent’s resignation, the provisions hereof shall inure to its benefit as to any actions taken or
omitted to be taken by it under this Agreement while it was the Collateral Agent.



     (b) The Collateral Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which the Collateral Agent, in its individual capacity,
accords its own property consisting of similar instruments or interests, it being understood that
neither the Collateral Agent nor any of the Secured Parties shall have responsibility for taking
any necessary steps to preserve rights against any person with respect to any Pledged Collateral.



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



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



     (e) The Collateral Agent may rely on advice of counsel as to whether any or all UCC financing
statements of the Pledgors need to be amended as a result of any of the changes described in
Section 4.8 hereof. The Collateral Agent shall not be liable or responsible to any party
for any failure to maintain a perfected security interest in such Pledgor’s property constituting
Pledged Collateral. The Collateral Agent shall have no duty to inquire about any changes described
in Section 4.8, the parties acknowledging and agreeing that it would not be feasible or
practical for the Collateral Agent to search for information on such changes if such information is
not provided by any Pledgor.



     Section 9.2. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained in this
Agreement (including such Pledgor’s covenants to (i) pay the premiums in respect of all required
insurance policies hereunder, (ii) pay and discharge any taxes, assessments and special
assessments, levies, fees and governmental charges imposed upon or assessed against, and
landlords’, carriers’, mechanics’, workmen’s, repairmen’s, laborers’, materialmen’s, suppliers’ and
warehousemen’s Liens and other claims arising by operation of law against, all or any portion of
the Pledged Collateral, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any
obligations of such Pledgor under any Pledged Collateral) or if any representation or warranty on
the part of any Pledgor contained herein shall be breached, the Collateral Agent may (but shall not
be obligated to) do the same or cause it to be done or remedy any such breach, and may expend funds
for such



21









 







purpose; provided, however, that the Collateral Agent shall in no event be
bound to inquire into the validity of any tax, Lien, imposition or other obligation which such
Pledgor fails to pay or perform as and when required hereby and which such Pledgor does not contest
in accordance with the provisions of the Indenture. Any and all amounts so expended by the
Collateral Agent shall be paid by the Pledgors in accordance with the provisions of Section 9.6
hereof. Neither the provisions of this Section 9.2 nor any action taken by the Collateral
Agent pursuant to the provisions of this Section 9.2 shall prevent any such failure to
observe any covenant contained in this Agreement nor any breach of representation or warranty from
constituting an Event of Default. Each Pledgor hereby appoints the Collateral Agent its
attorney-in-fact, with full power and authority in the place and stead of such Pledgor and in the
name of such Pledgor, or otherwise, from time to time in the Collateral Agent’s discretion to take
any action and to execute any instrument consistent with the terms of the Indenture, this
Agreement, the Intercreditor Agreement and the other Security Documents which the Collateral Agent
may deem necessary or advisable to accomplish the purposes hereof (but the Collateral Agent shall
not be obligated to and shall have no liability to such Pledgor or any third party for failure to
so do or take action). The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof. Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof.



     Section 9.3. Continuing Security Interest; Assignment. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) be binding upon the Pledgors,
their respective successors and assigns and (ii) inure, together with the rights and remedies of
the Collateral Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No other persons
(including any other creditor of any Pledgor) shall have any interest herein or any right or
benefit with respect hereto, except as otherwise provided in the Indenture or the Intercreditor
Agreement. Without limiting the generality of the foregoing clause (ii), any Secured Party may
assign or otherwise transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party, herein or otherwise, subject however, to the provisions of
the Indenture. Each of the Pledgors agrees that its obligations hereunder and the security
interest created hereunder shall continue to be effective or be reinstated, as applicable, if at
any time payment, or any part thereof, of all or any part of the Secured Obligations is rescinded
or must otherwise be restored by the Secured Party upon the bankruptcy or reorganization of any
Pledgor or otherwise.



     Section 9.4. Termination; Release. When all the Secured Obligations have been paid in
full in accordance with the provisions of the Indenture and the Intercreditor Agreement, this
Agreement shall terminate. Upon termination of this Agreement the Pledged Collateral shall be
released from the Lien of this Agreement. Upon such release or any release of Pledged Collateral
or any part thereof in accordance with the provisions of the Indenture and/or the Intercreditor
Agreement, the Collateral Agent shall, upon the request and at the sole cost and expense of the
Pledgors, assign, transfer and deliver to Pledgor, against receipt and without recourse to or
warranty by the Collateral Agent except as to the fact that the Collateral Agent has not encumbered
the released assets, such of the Pledged Collateral or any part thereof to be released (in the case
of a release) as may be in possession of the Collateral Agent and as shall not have been sold or
otherwise applied pursuant to the terms hereof, and, with respect to any other Pledged Collateral,
proper documents and instruments (including UCC-3 termination financing



22









 







statements or releases) acknowledging the termination hereof or the release of such Pledged
Collateral, as the case may be.



     Section 9.5. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any departure by any Pledgor
therefrom, shall be effective unless the same shall be made in accordance with the terms of the
Indenture and unless in writing and signed by the Collateral Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and any consent to any
departure by any Pledgor from the terms of any provision hereof in each case shall be effective
only in the specific instance and for the specific purpose for which made or given. Except where
notice is specifically required by this Agreement or any other document evidencing the Secured
Obligations, no notice to or demand on any Pledgor in any case shall entitle any Pledgor to any
other or further notice or demand in similar or other circumstances.



     Section 9.6. Expenses.



     (a) Each Pledgor will upon demand pay to the Collateral Agent the amount of any and all
reasonable costs and expenses, including the fees and expenses of its counsel and the fees and
expenses of any experts and agents which the Collateral Agent may incur in connection with (i) any
action, suit or other proceeding affecting the Pledged Collateral or any part thereof commenced, in
which action, suit or proceeding the Collateral Agent is made a party or participates or in which
the right to use the Pledged Collateral or any part thereof is threatened, or in which it becomes
necessary in the judgment of the Collateral Agent to defend or uphold the Lien hereof (including,
without limitation, any action, suit or proceeding to establish or uphold the compliance of the
Pledged Collateral with any requirements of any Governmental Authority or law), (ii) the collection
of the Secured Obligations, (iii) the enforcement and administration hereof, (iv) the custody or
preservation of, or the sale of, collection from, or other realization upon, any of the Pledged
Collateral, (v) the exercise or enforcement of any of the rights of the Collateral Agent or any
Secured Party hereunder or (vi) the failure by any Pledgor to perform or observe any of the
provisions hereof. All amounts expended by the Collateral Agent and payable by any Pledgor under
this Section 9.6 shall be due upon demand therefor (together with interest thereon accruing
at the interest rate in respect of the Notes under the Indenture during the period from and
including the date on which such funds were so expended to the date of repayment) and shall be part
of the Secured Obligations.



     (b) The Pledgors agree, jointly and severally, to indemnify the Collateral Agent, each other
Secured Party, each Affiliate of any of the foregoing persons and each of their respective
directors, officers, trustees, employees and agents (each such person being called an
“Indemnitee”), against, and to hold each Indemnitee harmless from, all reasonable
out-of-pocket costs and any and all losses, claims, damages, liabilities and related expenses,
including reason able counsel fees, charges, expenses and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result of the Indenture,
the Notes, this Agreement, any other Security Document or any other document evidencing the Secured
Obligations (including, without limitation, any misrepresentation by any Pledgor in the Indenture,
the Notes, this Agreement, any other Security Document or any other document evidencing the Secured
Obligations); provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related



23









 







expenses are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.



     (c) The provisions of this Section 9.6 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the repayment of any of the
Notes, the invalidity or unenforceability of any term or provision of the Indenture, the Notes,
this Agreement or any other Security Document, or any investigation made by or on behalf of the
Collateral Agent or other Secured Party. All amounts due under this Section 9.6 shall be
payable promptly upon (but in any event no more than ten (10) days following) written demand
therefor accompanied by reasonable documentation with respect to any reimbursement, indemnification
or other amount requested.



     Section 9.7. Notices. Unless otherwise provided herein or in the Indenture, any
notice or other communication herein required or permitted to be given shall be given in the manner
and become effective as set forth in the Indenture, as to any Pledgor, addressed to it at the
address of the Issuer set forth in the Indenture and as to the Collateral Agent, addressed to it at
the address of the Trustee set forth in the Indenture, or in each case at such other address as
shall be designated by such party in a written notice to the other party complying as to delivery
with the terms of this Section 9.7.



     Section 9.8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



     Section 9.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR OR SECURED PARTY WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY,
THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE
COURTS OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH PLEDGOR AND THE COLLATERAL AGENT
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PLEDGOR AND THE COLLATERAL AGENT
AGREES THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
APPLICABLE PARTY AT ITS ADDRESS SET FORTH IN THE INDENTURE OR AT SUCH OTHER ADDRESS OF WHICH THE
ISSUER (WITH RESPECT TO ADDRESSES OF THE COLLATERAL AGENT) OR THE COLLATERAL AGENT (WITH RESPECT TO
ADDRESSES OF THE PLEDGORS) SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; NOTHING HEREIN SHALL AFFECT
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE
COLLATERAL AGENT OR THE PLEDGORS TO BRING PROCEEDINGS AGAINST ANY OTHER PARTY HERETO IN THE COURTS
OF ANY OTHER JURISDICTION. EACH PARTY HERETO



24









 







HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.



     Section 9.10. Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without invalidating the remaining
provisions hereof or affecting the validity, legality or enforceability of such provision in any
other jurisdiction.



     Section 9.11. Execution in Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts together shall constitute one and the same
agreement.



     Section 9.12. Business Days. In the event any time period or any date provided in
this Agreement ends or falls on a day other than a Business Day, then such time period shall be
deemed to end and such date shall be deemed to fall on the next succeeding Business Day, and
performance herein may be made on such Business Day, with the same force and effect as if made on
such other day.



     Section 9.13. No Credit for Payment of Taxes or Imposition. No Pledgor shall be
entitled to any credit against the principal, premium, if any, or interest payable under the
Indenture, and no Pledgor shall be entitled to any credit against any other sums which may become
payable under the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.



     Section 9.14. No Claims Against Collateral Agent. Nothing contained in this Agreement
shall constitute any consent or request by the Collateral Agent, express or implied, for the
performance of any labor or services or the furnishing of any materials or other property in
respect of the Pledged Collateral or any part thereof, nor as giving any Pledgor any right, power
or authority to contract for or permit the performance of any labor or services or the furnishing
of any materials or other property in such fashion as would permit the making of any claim against
the Collateral Agent in respect thereof or any claim that any Lien based on the performance of such
labor or services or the furnishing of any such materials or other property is prior to the Lien
hereof.



     Section 9.15. No Release. Nothing set forth in this Agreement, the Indenture, the
Notes or any Security Document, nor the exercise by the Collateral Agent of any of the rights or
remedies hereunder, shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor’s part to be performed or observed under or in respect of any of the
Pledged Collateral or from any liability to any person under or in respect of any of the Pledged
Collateral or shall impose any obligation on the Collateral Agent or any other Secured Party to
perform or observe any such term, covenant, condition or agreement on such Pledgor’s part to be so
performed or observed or shall impose any liability on the Collateral Agent or any other Secured
Party for any act or omission on the part of such Pledgor relating thereto or for any



25









 







breach of any representation or warranty on the part of such Pledgor contained in this
Agreement, the Indenture, the Notes or any Security Document, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith. Anything herein to the contrary
notwithstanding, neither the Collateral Agent nor any other Secured Party shall have any obligation
or liability under any contracts, agreements and other documents included in the Pledged Collateral
by reason of this Agreement, nor shall the Collateral Agent or any other Secured Party be obligated
to perform any of the obligations or duties of any Pledgor thereunder or to take any action to
collect or enforce any such contract, agreement or other document included in the Pledged
Collateral hereunder. The obligations of each Pledgor contained in this Section 9.15 shall
survive the termination hereof and the discharge of such Pledger’s other obligations under this
Agreement, the Indenture, the Notes and the Security Documents.



     Section 9.16. Obligations Absolute. All obligations of each Pledgor hereunder shall
be absolute and unconditional irrespective of:



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



               (ii) any lack of validity or enforceability of the Indenture, the Notes, this Agreement or any
other Security Document, or any other agreement or instrument relating thereto;



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



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



               (v) any exercise, non-exercise or waiver of any right, remedy, power or privilege under or in
respect hereof, the Indenture, the Notes, this Agreement or any other Security Document except as
specifically set forth in a waiver granted pursuant to the provisions of Section 9.5
hereof; or



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



     Section 9.17. FCC Approval. Notwithstanding anything to the contrary set forth in
this Agreement, the Collateral Agent shall not take any action or exercise any remedy with respect
to the Pledged Collateral pursuant to this Agreement at any time, including after the occurrence of
an Event of Default, without first obtaining any required approval of the FCC if such action or the
exercise of such remedy would constitute or result in an assignment or transfer of control of any
FCC License or Pledgor under the Act or the published rules and regulations promulgated by the FCC.



26









 





     Section 9.18. Subordination. Nothing herein limits or modifies (or shall be construed
to limit or modify) the subordination and related provisions of Articles 11 and 13 of the
Indenture.



     Section 9.19. Indemnity, Subrogation and Subordination.



     (a) In addition to all such rights of indemnity and subrogation as the Pledgors may have under
applicable law (but subject to Section 9.19(c)), each Guarantor agrees that, in the event any
assets of any Pledgor that is a Restricted Subsidiary shall be sold pursuant to this Agreement or
any other Security Document to satisfy in whole or in part a Secured Obligation owing directly by
such Pledgor to any Secured Party (i.e., other than pursuant to its capacity as a Guarantor
under the Indenture), such Guarantor shall indemnify such Pledgor in an amount equal to the fair
market value of the assets so sold.



     (b) At any time a payment by any Restricted Subsidiary in respect of the Secured Obligations
is made under this Agreement or any other Security Document as a result of a sale of assets by such
Restricted Subsidiary that shall not have been fully indemnified as provided in Section 9.19(a),
the right of contribution of each Restricted Subsidiary against each other Restricted Subsidiary
shall be determined as provided in the immediately succeeding sentence, with the right of
contribution of each Restricted Subsidiary to be revised and restated as of each date on which a
payment (a “Relevant Payment”) is made on the Secured Obligations under this Agreement and
not indemnified pursuant to Section 9.19(a). At any time that a Relevant Payment is made by a
Restricted Subsidiary that results in the aggregate payments made by such Restricted Subsidiary in
respect of the Secured Obligations to and including the date of the Relevant Payment exceeding such
Restricted Subsidiary’s Contribution Percentage (as defined below) of the aggregate payments made
by all Restricted Subsidiaries in respect of the Secured Obligations to and including the date of
the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Restricted
Subsidiary shall have a right of contribution against each other Restricted Subsidiary who has made
payments in respect of the Secured Obligations to and including the date of the Relevant Payment in
an aggregate amount less than such other Restricted Subsidiary’s Contribution Percentage of the
aggregate payments made to and including the date of the Relevant Payment by all Restricted
Subsidiaries in respect of the Secured Obligations (the aggregate amount of such deficit, the
“Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Restricted Subsidiary and the denominator of which is the
Aggregate Excess Amount of all Restricted Subsidiaries multiplied by (y) the Aggregate Deficit
Amount of such other Restricted Subsidiary. A Restricted Subsidiary’s right of contribution
pursuant to the preceding sentences shall arise at the time of each computation, subject to
adjustment to the time of each computation; provided that the contribution rights of such
Restricted Subsidiary shall be subject to Section 9.19(c). As used in this Section 9.19(b): (i)
each Restricted Subsidiary’s “Contribution Percentage” shall mean the percentage obtained
by dividing (x) the Adjusted Net Worth (as defined below) of such Restricted Subsidiary by (y) the
aggregate Adjusted Net Worth of all Restricted Subsidiaries; (ii) the “Adjusted Net Worth”
of each Restricted Subsidiary shall mean the greater of (x) the Net Worth (as defined below) of
such Restricted Subsidiary and (y) zero; and (iii) the “Net Worth” of each Restricted
Subsidiary shall mean the amount by which the fair saleable value of such Restricted Subsidiary’s
assets on the date of any Relevant Payment exceeds its existing debts and other liabilities
(including contingent liabilities, but without giving



27









 







effect to any Secured Obligations arising under the Indenture) on such date. Notwithstanding
anything to the contrary contained above, any Restricted Subsidiary that is released from this
Agreement pursuant to the terms hereof shall thereafter have no contribution obligations, or
rights, pursuant to this Section 9.19(b), and at the time of any such release, if the released
Restricted Subsidiary had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be
deemed reduced to $0, and the contribution rights and obligations of the remaining Restricted
Subsidiaries shall be recalculated on the respective date of release (as otherwise provided above)
based on the payments made hereunder by the remaining Restricted Subsidiaries. Each of the
Restricted Subsidiaries recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such contribution. In this
connection, each Restricted Subsidiary has the right to waive its contribution right against any
other Restricted Subsidiary to the extent that after giving effect to such waiver such Restricted
Subsidiary would remain solvent, in the determination of the Holders.



     (c) Notwithstanding any provision of this Agreement to the contrary, all rights of the
Pledgors under Sections 9.19(a) and (b) and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Secured Obligations; provided, that if any amount shall be paid to
such Pledgor on account of such subrogation rights at any time prior to the irrevocable payment in
full in cash of all the Secured Obligations, such amount shall be held in trust for the benefit of
the Secured Parties and shall, subject to the Intercreditor Agreement, forthwith be paid to the
Collateral Agent to be credited and applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Indenture. No failure on the part of the Issuer or any Pledgor
to make the payments required by this Section 9.19 (or any other payments required under applicable
law or otherwise) shall in any respect limit the obligations and liabilities of any Pledgor with
respect to its obligations hereunder, and each Pledgor shall remain liable for the full amount of
the obligations of such Pledgor hereunder.



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



	 	 	 	 	 
	 	CMP SUSQUEHANNA CORP., as Pledgor

 	 
	 	By:  	/s/ Lewis W. Dickey, Jr.
 	 
	 	 	Name:  	Lewis W. Dickey, Jr. 	 
	 	 	Title:  	Chairman, President and Chief
Executive Officer	 
	 
	 	CMP SUSQUEHANNA RADIO HOLDINGS CORP., as Pledgor

 	 
	 	By:  	/s/ Lewis W. Dickey, Jr.
 	 
	 	 	Name:  	Lewis W. Dickey, Jr. 	 
	 	 	Title:  	Chairman, President and Chief
Executive Officer 	 
	 
	 	SUBSIDIARY GUARANTORS LISTED ON
SCHEDULE A, as Pledgors
 
	 
	 	By:  	/s/ Lewis W. Dickey, Jr.
 	 
	 	 	Name:  	Lewis W. Dickey, Jr. 	 
	 	 	Title:  	Chairman, President and Chief
Executive Officer 	 
	 
	 	WELLS FARGO BANK, N.A., as Collateral Agent

 	 
	 	By:  	/s/ Lynn M. Steiner
 	 
	 	 	Name:  	Lynn M. Steiner 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



SCHEDULE A




SUBSIDIARY GUARANTORS




KLIF Broadcasting, Inc.

KLIF Lico, Inc.

KPLX Lico, Inc.

Radio Metroplex, Inc.

Susquehanna Media Co.

Susquehanna Pfaltzgraff Co.

Susquehanna Radio Corp.

CMP KC Corp.

CMP Houston-KC, LLC