1. Defined Terms. All initially capitalized terms used herein (including in thepreamble and recitals hereof) without definition shall have the meanings ascribed thereto in theCredit Agreement (including Schedule 1.1 thereto). Any terms (whether capitalized or lower case)used in this Agreement that are defined in the Code shall be construed and defined as set forth inthe Code unless otherwise defined herein or in the Credit Agreement; provided,however, that to the extent that the Code is used to define any term used herein and ifsuch term is defined differently in different Articles of the Code, the definition of such termcontained in Article 9 of the Code shall govern. In addition to those terms defined elsewhere inthis Agreement, as used in this Agreement, the following terms shall have the following meanings:               (a) “Account” means an account (as that term is defined in Article 9 of the Code).               (b) “Account Debtor” means an account debtor (as that term is defined in the Code).               (c) “Agent” has the meaning specified therefor in the preamble to this Agreement.               (d) “Agent’s Lien” has the meaning specified therefor in the Credit Agreement.               (e) “Agreement” has the meaning specified therefor in the preamble to this Agreement.               (f) “Bank Product Obligations” has the meaning specified therefor in the Credit Agreement.               (g) “Bank Product Provider” has the meaning specified therefor in the Credit Agreement.               (h) “Books” means books and records (including each Grantor’s Records indicating, summarizing,or evidencing such Grantor’s assets (including the Collateral) or liabilities, each Grantor’sRecords relating to such Grantor’s business operations or financial condition, and each Grantor’sgoods or General Intangibles related to such information).               (i) “Borrower” and “Borrowers” have the respective meanings specified therefor in the recitalsto this Agreement.               (j) “Cash Equivalents” has the meaning specified therefor in the Credit Agreement.               (k) “Chattel Paper” means chattel paper (as that term is defined in the Code), and includestangible chattel paper and electronic chattel paper.               (l) “Code” means the New York Uniform Commercial Code, as in effect from time to time;provided, however, that in the event that, by reason of mandatory provisions oflaw, any or all of the attachment, perfection, priority, or remedies with respect to
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Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and ineffect in a jurisdiction other than the State of New York, the term “Code” shall mean the UniformCommercial Code as enacted and in effect in such other jurisdiction solely for purposes of theprovisions thereof relating to such attachment, perfection, priority, or remedies.               (m) “Collateral” has the meaning specified therefor in Section 2.               (n) “Collections” has the meaning specified therefor in the Credit Agreement.               (o) “Commercial Tort Claims” means commercial tort claims (as that term is defined in theCode) listed on Schedule 1, as such schedule may be updated from time to time, butexcluding commercial tort claims that constitute Excluded Property.               (p) “Copyrights” means any and all rights in any works of authorship, including (i) copyrightsand moral rights, (ii) copyright registrations and recordings thereof and all applications inconnection therewith including those listed on Schedule 2, (iii) income, license fees,royalties, damages, and payments now and hereafter due or payable under and with respect thereto,including payments under all licenses entered into in connection therewith and damages and paymentsfor past, present, or future infringements thereof, (iv) the right to sue for past, present, andfuture infringements thereof, and (v) all of each Grantor’s rights corresponding theretothroughout the world.               (q) “Copyright Security Agreement” means each Copyright Security Agreement executed anddelivered by Grantors, or any of them, and Agent, in substantially the form of Exhibit A.               (r) “Credit Agreement” has the meaning specified therefor in the recitals to this Agreement.               (s) “Deposit Account” means a deposit account (as that term is defined in the Code).               (t) “Equipment” means equipment (as that term is defined in the Code).               (u) “Event of Default” has the meaning specified therefor in the Credit Agreement.               (v) “Excluded Property” has the meaning specified therefor in the Credit Agreement.”               (w) “Fixtures” means fixtures (as that term is defined in the Code).               (x) “General Intangibles” means general intangibles (as that term is defined in the Code), andincludes payment intangibles, contract rights, rights to payment, rights under Hedge Agreements(including the right to receive payment on account of the termination (voluntarily orinvoluntarily) of any such Hedge Agreements), rights arising under common law,
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statutes, or regulations, choses or things in action, goodwill, Intellectual Property,Intellectual Property Licenses, purchase orders, customer lists, monies due or recoverable frompension funds, route lists, rights to payment and other rights under any royalty or licensingagreements, including Intellectual Property Licenses, infringement claims, pension plan refunds,pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims,interests in a partnership or limited liability company which do not constitute a security underArticle 8 of the Code, and any other personal property other than Commercial Tort Claims, money,Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related Property, NegotiableCollateral, and oil, gas, or other minerals before extraction.               (y) “Grantor” and “Grantors” have the respective meanings specified therefor in the preambleto this Agreement.               (z) “Guaranty” has the meaning specified therefor in the Credit Agreement.               (aa) “Insolvency Proceeding” has the meaning specified therefor in the Credit Agreement.               (bb) “Intellectual Property” means any and all Patents, Copyrights, Trademarks, trade secrets,know-how, inventions (whether or not patentable), algorithms, software programs (including sourcecode and object code), processes, product designs, industrial designs, blueprints, drawings, data,customer lists, URLs and domain names, specifications, documentations, reports, catalogs,literature, and any other forms of technology or proprietary information of any kind, including allrights therein and all applications for registration or registrations thereof.               (cc) “Intellectual Property Licenses” means, with respect to any Person (the “SpecifiedParty”), (i) any licenses or other similar rights provided to the Specified Party in or withrespect to Intellectual Property owned or controlled by any other Person, and (ii) any licenses orother similar rights provided to any other Person in or with respect to Intellectual Property ownedor controlled by the Specified Party, in each case, including (A) any software license agreements(other than license agreements for commercially available off-the-shelf software that is generallyavailable to the public which have been licensed to a Grantor pursuant to end-user licenses), (B)the license agreements listed on Schedule 3, and (C) the right to use any of the licensesor other similar rights described in this definition in connection with the enforcement of theLender Group’s rights under the Loan Documents.               (dd) “Intercreditor Arrangements” has the meaning specified therefor in the Credit Agreement               (ee) “Inventory” means inventory (as that term is defined in the Code).               (ff) “Investment Related Property” means (i) any and all investment property (as that term isdefined in the Code), and (ii) any and all of the following (regardless of whether classified asinvestment property under the Code): all Pledged Interests, Pledged Operating Agreements, andPledged Partnership Agreements.
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               (gg) “Joinder” means each US Joinder Agreement executed and delivered by Agent and each of theother parties listed on the signature pages thereto, in substantially the form of Exhibit J-1 tothe Credit Agreement.               (hh) “Lender” and “Lenders” have the respective meanings specified therefor in the recitals tothis Agreement.               (ii) “Lender Group” has the meaning specified therefor in the Credit Agreement.               (jj) “Loan Document” has the meaning specified therefor in the Credit Agreement.               (kk) “Negotiable Collateral” means letters of credit, letter-of-credit rights, instruments,promissory notes, drafts and documents (as each such term is defined in the Code).               (ll) “Obligations” has the meaning specified therefor in the Credit Agreement.               (mm) “Parent” has the meaning specified therefor in the recitals to this Agreement.               (nn) “Patents” means patents and patent applications, including (i) the patents and patentapplications listed on Schedule 4, (ii) all continuations, divisionals,continuations-in-part, re-examinations, and reissues thereof, (iii) all income, royalties, damagesand payments now and hereafter due or payable under and with respect thereto, including paymentsunder all licenses entered into in connection therewith and damages and payments for past, present,or future infringements thereof, (iv) the right to sue for past, present, and future infringementsthereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.               (oo) “Patent Security Agreement” means each Patent Security Agreement executed and deliveredby Grantors, or any of them, and Agent, in substantially the form of Exhibit B.               (pp) “Permitted Liens” has the meaning specified therefor in the Credit Agreement.               (qq) “Person” has the meaning specified therefor in the Credit Agreement.               (rr) “Pledged Companies” means each Person listed on Schedule 6 as a “PledgedCompany”, together with each other Person, all or a portion of whose Stock is acquired or otherwiseowned by a Grantor after the Closing Date.               (ss) “Pledged Interests” means all of each Grantor’s right, title and interest in and to allof the Stock now owned or hereafter acquired by such Grantor, regardless of
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class or designation, including in each of the Pledged Companies, and all substitutionstherefor and replacements thereof, all proceeds thereof and all rights relating thereto, alsoincluding any certificates representing the Stock, the right to receive any certificatesrepresenting any of the Stock, all warrants, options, share appreciation rights and other rights,contractual or otherwise, in respect thereof and the right to receive all dividends, distributionsof income, profits, surplus, or other compensation by way of income or liquidating distributions,in cash or in kind, and all cash, instruments, and other property from time to time received,receivable, or otherwise distributed in respect of or in addition to, in substitution of, onaccount of, or in exchange for any or all of the foregoing; provided that to the extent that suchPledged Interests secure Secured Obligations constituting US Obligations, the term “PledgedInterests” shall not include voting Stock in excess of 65% of the total outstanding voting Stock ofany first tier Foreign Subsidiary of any US Loan Party that is a CFC (and none of the Stock of anySubsidiary of such CFC).               (tt) “Pledged Interests Addendum” means a Pledged Interests Addendum substantially in the formof Exhibit C.               (uu) “Pledged Notes” has the meaning specified therefor in Section 5(g).               (vv) “Pledged Operating Agreements” means all of each Grantor’s rights, powers, and remediesunder the limited liability company operating agreements of each of the Pledged Companies that arelimited liability companies.               (ww) “Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and remediesunder the partnership agreements of each of the Pledged Companies that are partnerships.               (xx) “Proceeds” has the meaning specified therefor in Section 2.               (yy) “PTO” means the United States Patent and Trademark Office.               (zz) “Real Property” means any estates or interests in real property now owned or hereafteracquired by any Grantor or any Subsidiary of any Grantor and the improvements thereto.               (aaa) “Records” means information that is inscribed on a tangible medium or which is stored inan electronic or other medium and is retrievable in perceivable form.               (bbb) “Secured Obligations” means each and all of the following: (a) all of the present andfuture obligations of each of the Grantors arising from, or owing under or pursuant to, thisAgreement, the Credit Agreement, or any of the other Loan Documents (including any Guaranty), (b)all Bank Product Obligations, and (c) all other Obligations of Borrowers (including, in the case ofeach of clauses (a), (b) and (c), reasonable attorneys fees and expenses and any interest, fees, orexpenses that accrue after the filing of an Insolvency Proceeding, regardless of whether allowed orallowable in whole or in part as a claim in any Insolvency Proceeding).
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               (ccc) “Securities Account” means a securities account (as that term is defined in the Code).               (ddd) “Security Interest” has the meaning specified therefor in Section 2.               (eee) “Stock” has the meaning specified therefor in the Credit Agreement.               (fff) “Supporting Obligations” means supporting obligations (as such term is defined in theCode), and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper,documents, General Intangibles, instruments or Investment Related Property.               (ggg) “Trademarks” means any and all trademarks, trade names, registered trademarks, trademarkapplications, service marks, registered service marks and service mark applications, including (i)the registered trademarks, trademark applications, registered service marks and service markapplications listed on Schedule 5, (ii) all renewals thereof, (iii) all income, royalties,damages and payments now and hereafter due or payable under and with respect thereto, includingpayments under all licenses entered into in connection therewith and damages and payments for pastor future infringements or dilutions thereof, (iv) the right to sue for past, present and futureinfringements and dilutions thereof, (v) the goodwill of each Grantor’s business symbolized by theforegoing or connected therewith, and (vi) all of each Grantor’s rights corresponding theretothroughout the world.               (hhh) “Trademark Security Agreement” means each Trademark Security Agreement executed anddelivered by Grantors, or any of them, and Agent, in substantially the form of Exhibit D.               (iii) “URL” means “uniform resource locator,” an internet web address.          2. Grant of Security. Each Grantor hereby unconditionally grants and pledges toAgent, for the benefit of each member of the Lender Group and each of the Bank Product Providers,to secure the Secured Obligations, a continuing security interest (hereinafter referred to as the“Security Interest”) in all of such Grantor’s right, title, and interest in and to the following,whether now owned or hereafter acquired or arising and wherever located (the “Collateral”):               (a) all of such Grantor’s Accounts;               (b) all of such Grantor’s Books;               (c) all of such Grantor’s Chattel Paper;               (d) all of such Grantor’s Deposit Accounts;               (e) all of such Grantor’s Equipment and Fixtures;               (f) all of such Grantor’s General Intangibles;
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               (g) all of such Grantor’s Inventory;               (h) all of such Grantor’s Investment Related Property;               (i) all of such Grantor’s Negotiable Collateral;               (j) all of such Grantor’s Supporting Obligations;               (k) all of such Grantor’s Commercial Tort Claims;               (l) all of such Grantor’s money, Cash Equivalents, or other assets of such Grantor that now orhereafter come into the possession, custody, or control of Agent (or its agent or designee) or anyother member of the Lender Group; and               (m) all of the proceeds (as such term is defined in the Code) and products, whether tangibleor intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claimscovering or relating to any or all of the foregoing, and any and all Accounts, Books, ChattelPaper, Deposit Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment RelatedProperty, Negotiable Collateral, Supporting Obligations, money, or other tangible or intangibleproperty resulting from the sale, lease, license, exchange, collection, or other disposition of anyof the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing,any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, orany portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of,damage to, or destruction of the above, whether insured or not insured, and, to the extent nototherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, orotherwise with respect to any of the foregoing (the “Proceeds”). Without limiting the generalityof the foregoing, the term “Proceeds” includes whatever is receivable or received when InvestmentRelated Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether suchdisposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payableto any Grantor or Agent from time to time with respect to any of the Investment Related Property.          Notwithstanding anything contained in this Agreement to the contrary, the term “Collateral”shall not include: (i) to the extent required to secure Secured Obligations constituting USObligations, voting Stock in excess of 65% of the total outstanding voting Stock of any first tierForeign Subsidiary of any US Loan Party that is a CFC (and none of the Stock of any Subsidiary ofsuch CFC); (ii) any rights or interest in any contract, lease, permit, license, or licenseagreement covering real or personal property of any Grantor if under the terms of such contract,lease, permit, license, or license agreement, or applicable law with respect thereto, the grant ofa security interest or lien therein is prohibited as a matter of law or under the terms of suchcontract, lease, permit, license, or license agreement and such prohibition or restriction has notbeen waived or the consent of the other party to such contract, lease, permit, license, or licenseagreement has not been obtained (provided, that, (A) the foregoing exclusions of this clause (ii)shall in no way be construed (1) to apply to the extent that any described prohibition orrestriction is unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the Code or otherapplicable law, or (2) to apply to the extent that any consent or waiver has been obtained that
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would permit Agent’s security interest or lien notwithstanding the prohibition or restrictionon the pledge of such contract, lease, permit, license, or license agreement; provided,that the Grantors shall use their commercially reasonable efforts to obtain consent to the grant ofa security interest in favor of Agent in relation to any asset determined to be material by Agentand (B) the foregoing exclusions of clauses (i) and (ii) shall in no way be construed to limit,impair, or otherwise affect any of Agent’s, any other member of the Lender Group’s or any BankProduct Provider’s continuing security interests in and liens upon any rights or interests of anyGrantor in or to (1) monies due or to become due under or in connection with any describedcontract, lease, permit, license, license agreement, or Stock (including any Accounts or Stock), or(2) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease,permit, license, license agreement, or Stock); (iii) any United States intent-to-use trademarkapplications to the extent that, and solely during the period in which, the grant of a securityinterest therein would impair the validity or enforceability of such intent-to-use trademarkapplications under applicable federal law, provided that upon submission and acceptance by the PTOof an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision),such intent-to-use trademark application shall be considered Collateral or (iv) any other ExcludedProperty.          3. Security for Secured Obligations. The Security Interest created hereby secures thepayment and performance of the Secured Obligations, whether now existing or arising hereafter.Without limiting the generality of the foregoing, this Agreement secures the payment of all amountswhich constitute part of the Secured Obligations and would be owed by Grantors, or any of them, toAgent, the Lender Group, the Bank Product Providers or any of them, but for the fact that they areunenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceedinginvolving any Grantor due to the existence of such Insolvency Proceeding.          4. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) eachof the Grantors shall remain liable under the contracts and agreements included in the Collateral,including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform allof the duties and obligations thereunder to the same extent as if this Agreement had not beenexecuted, (b) the exercise by Agent or any other member of the Lender Group of any of the rightshereunder shall not release any Grantor from any of its duties or obligations under such contractsand agreements included in the Collateral, and (c) none of the members of the Lender Group shallhave any obligation or liability under such contracts and agreements included in the Collateral byreason of this Agreement, nor shall any of the members of the Lender Group be obligated to performany of the obligations or duties of any Grantors thereunder or to take any action to collect orenforce any claim for payment assigned hereunder. Until an Event of Default shall occur and becontinuing, except as otherwise provided in this Agreement, the Credit Agreement, or any other LoanDocument, Grantors shall have the right to possession and enjoyment of the Collateral for thepurpose of conducting their respective businesses as provided in the Credit Agreement, subject toand upon the terms hereof and of the Credit Agreement and the other Loan Documents. Withoutlimiting the generality of the foregoing, it is the intention of the parties hereto that record andbeneficial ownership of the Pledged Interests, including all voting, consensual, dividend, anddistribution rights, shall remain in the applicable Grantor until (i) the occurrence andcontinuance of an Event of Default and (ii)
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Agent has notified the applicable Grantor of Agent’s election to exercise such rights withrespect to the Pledged Interests pursuant to Section 15.          5. Representations and Warranties. Each Grantor hereby represents and warrants toAgent, for the benefit of the Lender Group and the Bank Product Providers, which representationsand warranties shall be true, correct, and complete, in all material respects (except that suchmateriality qualifier shall not be applicable to any representations and warranties that alreadyare qualified or modified by materiality in the text thereof), as of the Closing Date, and shall betrue, correct, and complete, in all material respects (except that such materiality qualifier shallnot be applicable to any representations and warranties that already are qualified or modified bymateriality in the text thereof), as of the date of the making of each Advance (or other extensionof credit) made thereafter, as though made on and as of the date of such Advance (or otherextension of credit) (except to the extent that such representations and warranties relate solelyto an earlier date, in which case such representations and warranties shall be true, correct andcomplete in all material respects as of such earlier date) and such representations and warrantiesshall survive the execution and delivery of this Agreement:               (a) The exact legal name of each of the Grantors is set forth on the signature pages of thisAgreement or a written notice provided to Agent pursuant to Section 6.5 of the Credit Agreement.               (b) As of the Closing Date: (i) Schedule 2 provides a complete and correct list ofall registered Copyrights owned by any Grantor, all applications for registration of Copyrightsowned by any Grantor; (ii) Schedule 3 provides a complete and correct list of allIntellectual Property Licenses entered into by any Grantor pursuant to which (A) any Grantor hasprovided any license or other rights in Intellectual Property owned or controlled by such Grantorto any other Person other than non-exclusive licenses granted in the ordinary course of business or(B) any Person has granted to any Grantor any license or other rights in Intellectual Propertyowned or controlled by such Person in each case with respect to (A) and (B), that is material tothe business of such Grantor (iii) Schedule 4 provides a complete and correct list of allissued Patents owned by any Grantor and all applications for Patents owned by any Grantor; and (iv)Schedule 5 provides a complete and correct list of all registered Trademarks owned by anyGrantor, all applications for registration of Trademarks owned by any Grantor.               (c) (i) each Grantor owns exclusively or has the valid right to use all Intellectual Propertythat is material to or necessary for the conduct of its business;                    (ii) to each Grantor’s knowledge, no Person is currently infringing or misappropriating anyIntellectual Property rights owned by such Grantor, in each case, that either individually or inthe aggregate could reasonably be expected to result in a Material Adverse Change;                    (iii) (A) to each Grantor’s knowledge, (1) such Grantor is not currently infringing ormisappropriating any Intellectual Property rights of any Person, and (2) no product manufactured,used, distributed, licensed, or sold by or service provided by such Grantor is currently infringingor misappropriating any Intellectual Property rights of any Person, in each case, except where suchinfringement either individually or in the aggregate could not
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reasonably be expected to result in a Material Adverse Change, and (B) there are no pending,or to any Grantor’s knowledge, threatened infringement or misappropriation claims or proceedingspending against any Grantor, and no Grantor has received any notice or other communication of anyactual or alleged infringement or misappropriation of any Intellectual Property rights of anyPerson, in each case, except where such infringement either individually or in the aggregate couldnot reasonably be expected to result in a Material Adverse Change;                    (iv) to each Grantor’s knowledge, all registered Copyrights, registered Trademarks, andissued Patents that are owned by such Grantor and material to or necessary for the conduct of itsbusiness are valid, subsisting and enforceable and in compliance with all legal requirements,filings, and payments and other actions that are required to maintain such Intellectual Property infull force and effect, and                    (v) each Grantor has taken commercially reasonable steps to maintain the confidentiality ofand otherwise protect and enforce its rights in all trade secrets owned by such Grantor that arenecessary in the business of such Grantor               (d) This Agreement creates a valid security interest in the Collateral of each Grantor, to theextent a security interest therein can be created under the Code, securing the payment of theSecured Obligations. Except to the extent a security interest in the Collateral cannot beperfected by the filing of a financing statement under the Code, all filings and other actionsnecessary or reasonably desirable to perfect and protect such security interest have been dulytaken or will have been taken upon the filing of financing statements listing each applicableGrantor, as a debtor, and Agent, as secured party, in the jurisdictions listed next to suchGrantor’s name on Schedule 8. Upon the making of such filings, Agent shall have a firstpriority perfected security interest in the ABL Priority Collateral (subject only to (x) PermittedLiens which are either permitted purchase money Liens or the interests of lessors under CapitalLeases and (y) Permitted Liens that are subject to the terms of the Intercreditor Arrangements) ofeach Grantor to the extent such security interest can be perfected by the filing of a financingstatement. Upon filing of the Copyright Security Agreement with the United States CopyrightOffice, filing of the Patent Security Agreement and the Trademark Security Agreement with the PTO,and the filing of appropriate financing statements in the jurisdictions listed on Schedule8, all action necessary or desirable to protect and perfect the Security Interest in and to oneach Grantor’s United States issued Patents and applications for Patents, United States federallyregistered Trademarks and pending applications therefor, or United States registered or applied-forCopyrights has been taken and such perfected Security Interest is enforceable as such as againstany and all creditors of and purchasers from any Grantor with respect to such United States issuedPatents and applications for Patents, United States federally registered Trademarks and pendingapplications therefore, or United States registered or applied-for Copyrights. Upon the executionand delivery of Control Agreements in favor of the Agent with respect to any Deposit and SecurityAccounts, all action by any Grantor necessary to protect and perfect such security interest on eachitem of Collateral will have been duly taken.               (e) (i) Except for the Security Interest created hereby, each Grantor is and will at all timesbe the sole holder of record and the legal and beneficial owner, free and clear of all Liens otherthan Permitted Liens, of the Pledged Interests indicated on Schedule 6 as being owned bysuch Grantor and, when acquired by such Grantor, any Pledged Interests
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acquired after the Closing Date; (ii) all of the Pledged Interests are duly authorized,validly issued, fully paid and nonassessable and the Pledged Interests constitute or willconstitute the percentage of the issued and outstanding Stock of the Pledged Companies of suchGrantor identified on Schedule 6 as supplemented or modified by any Pledged InterestsAddendum or any Joinder to this Agreement; (iii) such Grantor has the right and requisite authorityto pledge, the Investment Related Property pledged by such Grantor to Agent as provided herein;(iv) all actions necessary or reasonably desirable to perfect and establish the first priority of,or otherwise protect, Agent’s Liens in the Investment Related Property, and the proceeds thereof,have been duly taken, upon (A) the execution and delivery of this Agreement; (B) the taking ofpossession by Agent (or its agent or designee) of any certificates representing the PledgedInterests, together with undated powers (or other documents of transfer reasonably acceptable toAgent) endorsed in blank by the applicable Grantor; (C) the filing of financing statements in theapplicable jurisdiction set forth on Schedule 8 for such Grantor with respect to thePledged Interests of such Grantor that are not represented by certificates, and (D) with respect toany Securities Accounts, the delivery of Control Agreements with respect thereto (to the extentrequired to be delivered pursuant to the Credit Agreement); and (v) each Grantor has delivered toand deposited with Agent all certificates representing the Pledged Interests owned by such Grantorto the extent such Pledged Interests are represented by certificates, and undated powers (or otherdocuments of transfer acceptable to Agent) endorsed in blank with respect to such certificates.None of the Pledged Interests owned or held by such Grantor has been issued or transferred inviolation of any securities registration, securities disclosure, or similar laws of anyjurisdiction to which such issuance or transfer may be subject.               (f) No consent, approval, authorization, or other order or other action by, and no notice toor filing with, any Governmental Authority or any other Person is required (i) for the grant of aSecurity Interest by such Grantor in and to the Collateral pursuant to this Agreement or for theexecution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise byAgent of the voting or other rights provided for in this Agreement with respect to the InvestmentRelated Property or the remedies in respect of the Collateral pursuant to this Agreement, except asmay be required in connection with such disposition of Investment Related Property by lawsaffecting the offering and sale of securities generally. Except for the absence of IntellectualProperty Licenses that either individually or in the aggregate could reasonably be expected toresult in a Material Adverse Change, no Intellectual Property License of any Grantor that isnecessary to the conduct of such Grantor’s business requires any consent of any other Person inorder for such Grantor to grant the security interest granted hereunder in such Grantor’s right,title or interest in or to such Intellectual Property License.               (g) (i) Schedule 7 sets forth each promissory note (as defined in the Code)constituting Collateral and pledged hereunder (each a “Pledged Note”) and (ii) there is no materialdefault, breach, violation, or event of acceleration existing under any Pledged Note and no eventhas occurred or circumstance exists which, with the passage of time or the giving of notice, orboth, would constitute a material default, breach, violation, or event of acceleration under anyPledged Note. No Grantor that is an obligee under a Pledged Note has waived any default, breach,violation, or event of acceleration under such Pledged Note.               (h) As to all limited liability company or partnership interests, issued under any PledgedOperating Agreement or Pledged Partnership Agreement, each Grantor
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hereby represents and warrants that the Pledged Interests issued pursuant to such agreement(A) are not dealt in or traded on securities exchanges or in securities markets, (B) do notconstitute investment company securities, and (C) are not held by such Grantor in a securitiesaccount. In addition, none of the Pledged Operating Agreements, the Pledged PartnershipAgreements, or any other agreements governing any of the Pledged Interests issued under any PledgedOperating Agreement or Pledged Partnership Agreement, provide that such Pledged Interests aresecurities governed by Article 8 of the Uniform Commercial Code as in effect in any relevantjurisdiction.          6. Covenants. Each Grantor, jointly and severally, covenants and agrees with Agentthat from and after the date of this Agreement and until the date of termination of this Agreementin accordance with Section 18 and Section 23:               (a) Possession of Collateral. In the event that any Collateral, including Proceeds,is evidenced by or consists of Negotiable Collateral, Investment Related Property, or ChattelPaper, in each case, having an aggregate value or face amount of $1,000,000 or more for all suchNegotiable Collateral, Investment Related Property, or Chattel Paper, the Grantors shall promptly(and in any event within ten (10) days after receipt thereof), notify Agent thereof, and if and tothe extent that perfection or priority of Agent’s Security Interest therein is dependent onpossession, the applicable Grantor, promptly (and in any event within ten (10) days) after requestby Agent, shall execute such other documents and instruments as shall be reasonably requested byAgent or, if applicable, endorse and deliver physical possession of such Negotiable Collateral,Investment Related Property, or Chattel Paper to Agent, together with such undated powers (or otherrelevant document of transfer acceptable to Agent) endorsed in blank as shall be reasonablyrequested by Agent, and shall do such other acts or things deemed necessary or desirable by Agentto protect Agent’s Security Interest therein;               (b) Chattel Paper.                    (i) Promptly (and in any event, to the extent reasonably practicable, within ten (10) days)after request by Agent, each Grantor shall take all steps reasonably necessary to grant Agentcontrol of all electronic Chattel Paper in accordance with the Code and all “transferable records”as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 ofthe federal Electronic Signatures in Global and National Commerce Act as in effect in any relevantjurisdiction, to the extent that the aggregate value or face amount of such electronic ChattelPaper equals or exceeds $1,000,000;                    (ii) If any Grantor retains possession of any Chattel Paper or instruments (which retention ofpossession shall be subject to the extent permitted hereby and by the Credit Agreement), promptlyupon the request of Agent, such Chattel Paper and instruments shall be marked with the followinglegend: “This writing and the obligations evidenced or secured hereby are subject to the SecurityInterest of Wells Fargo Capital Finance, LLC, as Agent for the benefit of the Lender Group and theBank Product Providers”;
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               (c) Control Agreements. Except to the extent otherwise excused by Sections 2.15, 5.18and 6.11 of the Credit Agreement:                    (i) each Grantor shall obtain an authenticated Control Agreement, from each bank maintaining aDeposit Account for such Grantor; and                    (ii) each Grantor shall obtain an authenticated Control Agreement, from each issuer ofuncertificated securities, securities intermediary, or commodities intermediary, as applicable,issuing or holding any financial assets or commodities or maintaining any Securities Account to orfor any Grantor.               (d) Letter-of-Credit Rights. If the Grantors (or any of them) are or become thebeneficiary of letters of credit having a face amount or value of $500,000 or more individually orin the aggregate, then the applicable Grantor or Grantors shall promptly (and in any event withinten (10) days after becoming a beneficiary), notify Agent thereof and, promptly after request byAgent, use commercially reasonable efforts to enter into a tri-party agreement with Agent and theissuer or confirming bank with respect to letter-of-credit rights assigning such letter-of-creditrights to Agent and directing all payments thereunder to Agent’s Account, all in form and substancereasonably satisfactory to Agent;               (e) Commercial Tort Claims. If the Grantors (or any of them) obtain any CommercialTort Claims having a value, or involving an asserted claim, in the amount of $5,000,000 or moreindividually or in the aggregate for all Commercial Tort Claims, then the applicable Grantor orGrantors shall promptly (and in any event within ten (10) days of obtaining such Commercial TortClaim), notify Agent upon incurring or otherwise obtaining such Commercial Tort Claims and,promptly (and in any event within five (5) Business Days) after request by Agent, amend orsupplement Schedule 1 to describe such Commercial Tort Claims in a manner that reasonablyidentifies such Commercial Tort Claims and which is otherwise reasonably satisfactory to Agent, andhereby authorizes the filing of additional financing statements or amendments to existing financingstatements describing such Commercial Tort Claims, and agrees to do such other acts or thingsdeemed necessary or desirable by Agent to give Agent a first priority, perfected security interestin any such Commercial Tort Claim;               (f) Government Contracts. Other than Accounts and Chattel Paper the aggregate valueof which does not at any one time exceed $1,000,000, if any Account or Chattel Paper arises out ofa contract or contracts with the United States of America or any department, agency, orinstrumentality thereof, Grantors shall promptly (and in any event within ten (10) days of thecreation thereof) notify Agent thereof and, promptly (and in any event within twenty (20) days)after request by Agent, subject to the terms of the Credit Agreement, execute any instruments ortake any steps reasonably required by Agent in order that all moneys due or to become due undersuch contract or contracts shall be assigned to Agent, for the benefit of the Lender Group and theBank Product Providers, and shall provide written notice thereof under the Assignment of Claims Actor other applicable law;
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               (g) Intellectual Property.                    (i) Upon the request of Agent, in order to facilitate filings with the United States Patentand Trademark Office and the United States Copyright Office, each Grantor shall execute and deliverto Agent one or more Copyright Security Agreements, Trademark Security Agreements, or PatentSecurity Agreements to further evidence Agent’s Lien on such Grantor’s Patents, Trademarks, orCopyrights, and the General Intangibles of such Grantor relating thereto or represented thereby;                    (ii) Except to the extent that a Grantor determines in its reasonable business judgment thatsuch steps are not material to, necessary for, economically desirable or prudent in the conduct ofits business, each Grantor shall have the duty, with respect to Intellectual Property owned by suchGrantor that is necessary in the conduct of such Grantor’s business, to protect and diligentlyenforce and defend at such Grantor’s expense its Intellectual Property, including (A) to diligentlyenforce and defend, including promptly suing for infringement, misappropriation, or dilution and torecover any and all damages for such infringement, misappropriation, or dilution, and filing foropposition, interference, and cancellation against conflicting Intellectual Property rights of anyPerson, (B) to prosecute diligently any trademark application or service mark application that ispart of the Intellectual Property pending as of the date hereof or hereafter until the terminationof this Agreement, (C) to prosecute diligently any patent application that is part of theIntellectual Property pending as of the date hereof or hereafter until the termination of thisAgreement, (D) to take all reasonable and necessary action to preserve and maintain all of suchGrantor’s Intellectual Property and Intellectual Property Licenses, and its rights therein,including paying all maintenance fees and filing of applications for renewal, affidavits of use,and affidavits of noncontestability, and (E) to use commercially reasonable efforts to require allemployees, consultants, and contractors of each Grantor who were involved in the creation ordevelopment of such Intellectual Property to sign agreements containing assignment of IntellectualProperty rights and obligations of confidentiality. Except to the extent that a Grantor determinesin its reasonable business judgment that such steps are not material to, necessary for,economically desirable or prudent in the conduct of its business, each Grantor further agrees notto abandon any Intellectual Property or Intellectual Property License that is necessary in theconduct of such Grantor’s business. Each Grantor hereby agrees to take the steps described in thisSection 6(g)(ii) with respect to all new or acquired Intellectual Property included in theCollateral;                    (iii) Grantors acknowledge and agree that the Lender Group shall have no duties with respectto any Intellectual Property or Intellectual Property Licenses of any Grantor. Without limitingthe generality of this Section 6(g)(iii), Grantors acknowledge and agree that no member ofthe Lender Group shall be under any obligation to take any steps necessary to preserve rights inthe Collateral consisting of Intellectual Property or Intellectual Property Licenses against anyother Person, but any member of the Lender Group may do so at its option from and after theoccurrence and during the continuance of an Event of Default, and all expenses incurred inconnection therewith (including reasonable fees and expenses of attorneys and other professionals)shall be for the sole account of Borrowers and shall be chargeable to the Loan Account;
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                    (iv) On each date on which a Compliance Certificate is delivered by Parent pursuant to Section5.1 of the Credit Agreement, each Grantor shall provide Agent with a written report of all newCopyrights, Patents or Trademarks that are registered or the subject of pending applications forregistrations, and of all Intellectual Property Licenses that are material to the conduct of suchGrantor’s business, in each case, which were acquired, registered, or for which applications forregistration were filed by any Grantor during the prior period and any statement of use oramendment to allege use with respect to intent-to-use trademark applications. In the case of suchregistrations or applications therefor, which were acquired by any Grantor, each such Grantor shallfile the necessary documents with the appropriate Governmental Authority identifying the applicableGrantor as the owner (or as a co-owner thereof, if such is the case) of such Intellectual Property.In each of the foregoing cases, the applicable Grantor shall promptly cause to be prepared,executed, and delivered to Agent supplemental schedules to the applicable Loan Documents toidentify such Copyright, Patent and Trademark registrations and applications therefor (with theexception of Trademark applications filed on an intent-to-use basis for which no statement of useor amendment to allege use has been filed) and material Intellectual Property Licenses as beingsubject to the security interests created thereunder;                    (v) Anything to the contrary in this Agreement notwithstanding, in no event shall any Grantor,either itself or through any agent, employee, licensee, or designee, file an application for theregistration of any Copyright with the United States Copyright Office or any similar office oragency in another country without giving Agent written notice thereof at least 10 days prior tosuch filing and complying with Section 6(g)(i). Upon receipt from the United StatesCopyright Office of notice of registration of any Copyright, each Grantor shall promptly (but in noevent later than three 10 days following such receipt) notify (but without duplication of anynotice required by Section 6(g)(v)) Agent of such registration by delivering, or causing tobe delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens on suchCopyright. If any Grantor acquires from any Person any Copyright registered with the United StatesCopyright Office or an application to register any Copyright with the United States CopyrightOffice, such Grantor shall promptly (but in no event later than 10 days following such acquisition)notify Agent of such acquisition and deliver, or cause to be delivered, to Agent, documentationsufficient for Agent to perfect Agent’s Liens on such Copyright. In the case of such Copyrightregistrations or applications therefor which were acquired by any Grantor, each such Grantor shallpromptly (but in no event later than 20 days following such acquisition) file the necessarydocuments with the appropriate Governmental Authority identifying the applicable Grantor as theowner (or as a co-owner thereof, if such is the case) of such Copyrights;                    (vi) Each Grantor shall take commercially reasonable steps to maintain the confidentiality of,and otherwise protect and enforce its rights in, the Intellectual Property that is material to ornecessary for conduct of such Grantor’s business, including, as applicable (A) protecting thesecrecy and confidentiality of its confidential information and trade secrets by having andenforcing a policy requiring all current employees, consultants, licensees, vendors and contractorswith access to such information to execute appropriate confidentiality agreements and (B) takingactions reasonably necessary to ensure that no trade secret falls into the public domain;
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                    (vii) No Grantor shall enter into any material Intellectual Property License to receive anylicense or rights in any Intellectual Property of any other Person unless such Grantor has usedcommercially reasonable efforts to permit the assignment of or grant of a security interest in suchIntellectual Property License (and all rights of Grantor thereunder) to the (and any transferees ofAgent);               (h) Investment Related Property.                    (i) If any Grantor shall acquire, obtain, receive or become entitled to receive any PledgedInterests after the Closing Date, it shall promptly (and in any event within twenty (20) days ofacquiring or obtaining such Collateral) deliver to Agent a duly executed Pledged Interests Addendumidentifying such Pledged Interests;                    (ii) Upon the occurrence and during the continuance of an Event of Default, following therequest of Agent, all sums of money and property paid or distributed in respect of the InvestmentRelated Property that are received by any Grantor shall be held by the Grantors in trust for thebenefit of Agent segregated from such Grantor’s other property, and such Grantor shall deliver itforthwith to Agent in the exact form received;                    (iii) Each Grantor shall promptly deliver to Agent a copy of each material notice or othermaterial communication received by it in respect of any Pledged Interests;                    (iv) No Grantor shall make or consent to any amendment or other modification or waiver withrespect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership Agreement, orenter into any agreement or permit to exist any restriction with respect to any Pledged Interestsif the same is prohibited pursuant to the Loan Documents;                    (v) Each Grantor agrees that it will cooperate with Agent in obtaining all necessary approvalsand making all necessary filings under federal, state, local, or foreign law to effect theperfection of the Security Interest on the Investment Related Property or to effect any sale ortransfer thereof;                    (vi) As to all limited liability company or partnership interests, issued under any PledgedOperating Agreement or Pledged Partnership Agreement, each Grantor hereby covenants that thePledged Interests issued pursuant to such agreement (A) are not and shall not be dealt in or tradedon securities exchanges or in securities markets, (B) do not and will not constitute investmentcompany securities, and (C) are not and will not be held by such Grantor in a securities account.In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or anyother agreements governing any of the Pledged Interests issued under any Pledged OperatingAgreement or Pledged Partnership Agreement, provide or shall provide that such Pledged Interestsare securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevantjurisdiction.
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               (i) Fixtures. Each Grantor acknowledges and agrees that, to the extent permitted byapplicable law, all of the Collateral shall remain personal property regardless of the manner ofits attachment or affixation to real property;1               (j) Transfers and Other Liens. Grantors shall not (i) sell, assign (by operation oflaw or otherwise) or otherwise dispose of, or grant any option with respect to, any of theCollateral, except as expressly permitted by the Credit Agreement or as otherwise agreed by theLender Group thereunder, or (ii) create or permit to exist any Lien upon or with respect to any ofthe Collateral of any Grantor, except for Permitted Liens or as otherwise agreed by the LenderGroup under the Credit Agreement. The inclusion of Proceeds in the Collateral shall not be deemedto constitute Agent’s consent to any sale or other disposition of any of the Collateral except asexpressly permitted in this Agreement or the other Loan Documents;               (k) Controlled Accounts. Each Grantor shall establish and maintain cash managementservices as required pursuant to Section 2.15 of the Credit Agreement and enter into ControlAgreements with respect to its Deposit Accounts and Securities Accounts as required by Sections5.18 and 6.11 of the Credit Agreement; and               (l) Pledged Notes. Except as otherwise expressly permitted by the Credit Agreement orthe Intercompany Subordination Agreement, Grantors (i) without the prior written consent of Agent,will not (A) waive or release any obligation of any Person that is obligated under any of thePledged Notes, (B) take or omit to take any action or knowingly suffer or permit any action to beomitted or taken, the taking or omission of which would result in any right of offset against sumspayable under the Pledged Notes, or (C) other than Permitted Dispositions, assign or surrendertheir rights and interests under any of the Pledged Notes or terminate, cancel, modify, change,supplement or amend the Pledged Notes, and (ii) shall provide to Agent copies of all materialwritten notices (including notices of default) given or received with respect to the Pledged Notespromptly after giving or receiving such notice.          7. Relation to Other Security Documents. The provisions of this Agreement shall beread and construed with the other Loan Documents referred to below in the manner so indicated.               (a) Credit Agreement. In the event of any conflict between any provision in thisAgreement and a provision in the Credit Agreement, such provision of the Credit Agreement shallcontrol.               (b) Patent, Trademark, Copyright Security Agreements. The provisions of the CopyrightSecurity Agreements, Trademark Security Agreements, and Patent Security Agreements are supplementalto the provisions of this Agreement, and nothing contained in the Copyright Security Agreements,Trademark Security Agreements, or the Patent Security Agreements shall limit any of the rights orremedies of Agent hereunder. In the event of any conflict between any provision in this Agreementand a provision in a Copyright Security Agreement, Trademark Security Agreement or Patent SecurityAgreement, such provision of this Agreement shall control. 1 Discuss if still in issue.
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          8. Further Assurances.               (a) Each Grantor agrees that from time to time, at its own expense, such Grantor will promptlyexecute and deliver all further instruments and documents, and take all further action, that Agentmay reasonably request, in order to perfect and protect the Security Interest granted hereby, tocreate, perfect or protect the Security Interest purported to be granted hereby or to enable Agentto exercise and enforce its rights and remedies hereunder with respect to any of the Collateral.               (b) Each Grantor authorizes the filing by Agent of financing or continuation statements, oramendments thereto, and such Grantor will execute and deliver to Agent such other instruments ornotices, as Agent may reasonably request, in order to perfect and preserve the Security Interestgranted or purported to be granted hereby.               (c) Each Grantor authorizes Agent at any time and from time to time to file, transmit, orcommunicate, as applicable, financing statements and amendments (i) describing the Collateral as“all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii)describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) thatcontain any information required by part 5 of Article 9 of the Code for the sufficiency or filingoffice acceptance. Each Grantor also hereby ratifies any and all financing statements oramendments previously filed by Agent in any jurisdiction.               (d) Each Grantor acknowledges that it is not authorized to file any financing statement oramendment or termination statement with respect to any financing statement filed in connection withthis Agreement without the prior written consent of Agent, subject to such Grantor’s rights underSection 9-509(d)(2) of the Code.          9. Agent’s Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence andduring the continuance of an Event of Default, Agent (or its designee) (a) may proceed to performany and all of the obligations of any Grantor contained in any contract, lease, or other agreementand exercise any and all rights of any Grantor therein contained as fully as such Grantor itselfcould, (b) shall have the right to use any Grantor’s rights under Intellectual Property Licensesconstituting Collateral in connection with the enforcement of Agent’s rights hereunder, includingthe right to prepare for sale and sell any and all Inventory and Equipment now or hereafter ownedby any Grantor and now or hereafter covered by such licenses, and (c) shall have the right torequest that any Stock that is pledged hereunder be registered in the name of Agent or any of itsnominees.          10. Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints Agentits attorney-in-fact, with full authority in the place and stead of such Grantor and in the name ofsuch Grantor or otherwise, at such time as an Event of Default has occurred and is continuing underthe Credit Agreement, to take any action and to execute any instrument which Agent may reasonablydeem necessary or advisable to accomplish the purposes of this Agreement, including:
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               (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance andreceipts for moneys due and to become due under or in connection with the Accounts or any otherCollateral of such Grantor;               (b) to receive and open all mail addressed to such Grantor and to notify postal authorities tochange the address for the delivery of mail to such Grantor to that of Agent;               (c) to receive, indorse, and collect any drafts or other instruments, documents, NegotiableCollateral or Chattel Paper;               (d) to file any claims or take any action or institute any proceedings which Agent may deemnecessary or desirable for the collection of any of the Collateral of such Grantor or otherwise toenforce the rights of Agent with respect to any of the Collateral;               (e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part thepurchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;               (f) subject to the Intercreditor Arrangements, to use any Intellectual Property orIntellectual Property Licenses of such Grantor, including but not limited to any labels, Patents,Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, or advertising matter,in preparing for sale, advertising for sale, or selling Inventory or other Collateral and tocollect any amounts due under Accounts, contracts or Negotiable Collateral of such Grantor; and               (g) Agent, on behalf of the Lender Group or the Bank Product Providers, shall have the right,but shall not be obligated, to bring suit in its own name, to the extent permissible underapplicable Law, to enforce the Intellectual Property and Intellectual Property Licenses and, ifAgent shall commence any such suit, the appropriate Grantor shall, at the request of Agent, do anyand all lawful acts and execute any and all proper documents reasonably required by Agent in aid ofsuch enforcement.          To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-factshall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with aninterest and shall be irrevocable until this Agreement is terminated.          11. Agent May Perform. If any Grantor fails to perform any agreement containedherein, Agent may itself perform, or cause performance of, such agreement, and the reasonableexpenses of Agent incurred in connection therewith shall be payable, jointly and severally, byGrantors.          12. Agent’s Duties. The powers conferred on Agent hereunder are solely to protectAgent’s interest in the Collateral, for the benefit of the Lender Group and the Bank ProductProviders, and shall not impose any duty upon Agent to exercise any such powers. Except for thesafe custody of any Collateral in its actual possession and the accounting for moneys actuallyreceived by it hereunder, Agent shall have no duty as to any Collateral or as to the taking of anynecessary steps to preserve rights against prior parties or any other rights
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pertaining to any Collateral. Agent shall be deemed to have exercised reasonable care in thecustody and preservation of any Collateral in its actual possession if such Collateral is accordedtreatment substantially equal to that which Agent accords its own property.          13. Collection of Accounts, General Intangibles and Negotiable Collateral. At anytime upon the occurrence and during the continuance of an Event of Default, Agent or Agent’sdesignee may (a) notify Account Debtors of any Grantor that the Accounts, General Intangibles,Chattel Paper or Negotiable Collateral of such Grantor have been assigned to Agent, for the benefitof the Lender Group and the Bank Product Providers, or that Agent has a security interest therein,and (b) collect the Accounts, General Intangibles and Negotiable Collateral of any Grantordirectly, and any collection costs and expenses shall constitute part of such Grantor’s SecuredObligations under the Loan Documents.          14. Disposition of Pledged Interests by Agent. None of the Pledged Interests existingas of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on thedate of acquisition thereof will be, registered or qualified under the various federal or statesecurities laws of the United States and disposition thereof after an Event of Default may berestricted to one or more private (instead of public) sales in view of the lack of suchregistration. Each Grantor understands that in connection with such disposition, Agent mayapproach only a restricted number of potential purchasers and further understands that a sale undersuch circumstances may yield a lower price for the Pledged Interests than if the Pledged Interestswere registered and qualified pursuant to federal and state securities laws and sold on the openmarket. Each Grantor, therefore, agrees that: (a) if Agent shall, pursuant to the terms of thisAgreement, sell or cause the Pledged Interests or any portion thereof to be sold at a private sale,Agent shall have the right to rely upon the advice and opinion of any nationally recognizedbrokerage or investment firm (but shall not be obligated to seek such advice and the failure to doso shall not be considered in determining the commercial reasonableness of such action) as to thebest manner in which to offer the Pledged Interest or any portion thereof for sale and as to thebest price reasonably obtainable at the private sale thereof; and (b) such reliance shall beconclusive evidence that Agent has handled the disposition in a commercially reasonable manner.          15. Voting and Other Rights in Respect of Pledged Interests.               (a) Upon the occurrence and during the continuation of an Event of Default, (i) Agent may, atits option, and with two (2) Business Days prior notice to any Grantor, and in addition to allrights and remedies available to Agent under any other agreement, at law, in equity, or otherwise,exercise all voting rights, or any other ownership or consensual rights (including any dividend ordistribution rights) in respect of the Pledged Interests owned by such Grantor, but under nocircumstances is Agent obligated by the terms of this Agreement to exercise such rights, and (ii)if Agent duly exercises its right to vote any of such Pledged Interests, each Grantor herebyappoints Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote suchPledged Interests in any manner Agent deems advisable for or against all matters submitted or whichmay be submitted to a vote of shareholders, partners or members, as the case may be. Thepower-of-attorney and proxy granted hereby is coupled with an interest and shall be irrevocable.
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               (b) For so long as any Grantor shall have the right to vote the Pledged Interests owned by it,such Grantor covenants and agrees that it will not, without the prior written consent of Agent,vote or take any consensual action with respect to such Pledged Interests which would materiallyadversely affect the rights of Agent, the other members of the Lender Group, or the Bank ProductProviders, or the value of the Pledged Interests.          16. Remedies. Upon the occurrence and during the continuance of an Event of Default:               (a) Agent may, and, at the instruction of the Required Lenders, shall exercise in respect ofthe Collateral, in addition to other rights and remedies provided for herein, in the other LoanDocuments, or otherwise available to it, all the rights and remedies of a secured party on defaultunder the Code or any other applicable law. Without limiting the generality of the foregoing, eachGrantor expressly agrees that, in any such event and subject to the terms of the Credit Agreementand this Agreement, Agent without demand of performance or other demand, advertisement or notice ofany kind (except a notice specified below of time and place of public or private sale) to or uponany Grantor or any other Person (all and each of which demands, advertisements and notices arehereby expressly waived to the maximum extent permitted by the Code or any other applicable law),may take immediate possession of all or any portion of the Collateral and (i) require Grantors to,and each Grantor hereby agrees that it will at its own expense and upon request of Agent forthwith,assemble all or part of the Collateral as directed by Agent and make it available to Agent at oneor more locations where such Grantor regularly maintains Inventory, and (ii) without notice exceptas specified below, sell the Collateral or any part thereof in one or more parcels at public orprivate sale, at any of Agent’s offices or elsewhere, for cash, on credit, and upon such otherterms as Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice ofsale shall be required by law, at least ten (10) days notice to the applicable Grantor of the timeand place of any public sale or the time after which any private sale is to be made shallconstitute reasonable notification and specifically such notice shall constitute a reasonable“authenticated notification of disposition” within the meaning of Section 9-611 of the Code. Agentshall not be obligated to make any sale of Collateral regardless of notice of sale having beengiven. Agent may adjourn any public or private sale from time to time by announcement at the timeand place fixed therefor, and such sale may, without further notice, be made at the time and placeto which it was so adjourned. Each Grantor agrees that the internet shall constitute a “place” forpurposes of Section 9-610(b) of the Code. Each Grantor agrees that any sale of Collateral to alicensor pursuant to the terms of a license agreement between such licensor and a Grantor issufficient to constitute a commercially reasonable sale (including as to method, terms, manner, andtime) within the meaning of Section 9-610 of the Code.               (b) Agent is hereby granted a license or other right to use, without liability for royaltiesor any other charge, each Grantor’s Intellectual Property, including but not limited to, anylabels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, andadvertising matter, whether owned by any Grantor or with respect to which any Grantor has rightsunder license, sublicense, or other agreements (including, to the extent permitted under anyIntellectual Property License), as it pertains to the Collateral, in preparing for sale,advertising for sale and selling any Collateral, and each Grantor’s rights under all licenses andall franchise agreements shall inure to the benefit of Agent.
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               (c) Agent may, in addition to other rights and remedies provided for herein, in the other LoanDocuments, or otherwise available to it under applicable law and without the requirement of noticeto or upon any Grantor or any other Person (which notice is hereby expressly waived to the maximumextent permitted by the Code or any other applicable law), (i) with respect to any Grantor’sDeposit Accounts in which Agent’s Liens are perfected by control under Section 9-104 of the Code,instruct the bank maintaining such Deposit Account for the applicable Grantor to pay the balance ofsuch Deposit Account to or for the benefit of Agent, and (ii) with respect to any Grantor’sSecurities Accounts in which Agent’s Liens are perfected by control under Section 9-106 of theCode, instruct the securities intermediary maintaining such Securities Account for the applicableGrantor to (A) transfer any cash in such Securities Account to or for the benefit of Agent, or (B)liquidate any financial assets in such Securities Account that are customarily sold on a recognizedmarket and transfer the cash proceeds thereof to or for the benefit of Agent.               (d) Any cash held by Agent as Collateral and all cash proceeds received by Agent in respect ofany sale of, collection from, or other realization upon all or any part of the Collateral shall beapplied against the Secured Obligations in the order set forth in the Credit Agreement. In theevent the proceeds of Collateral are insufficient to satisfy all of the Secured Obligations infull, each Grantor shall remain jointly and severally liable for any such deficiency.               (e) Each Grantor hereby acknowledges that the Secured Obligations arise out of a commercialtransaction, and agrees that if an Event of Default shall occur and be continuing Agent shall havethe right to an immediate writ of possession without notice of a hearing. Agent shall have theright to the appointment of a receiver for the properties and assets of each Grantor, and eachGrantor hereby consents to such rights and such appointment and hereby waives any objection suchGrantor may have thereto or the right to have a bond or other security posted by Agent.          17. Remedies Cumulative. Each right, power, and remedy of Agent, any other member ofthe Lender Group, or any Bank Product Provider as provided for in this Agreement, the other LoanDocuments or any Bank Product Agreement now or hereafter existing at law or in equity or by statuteor otherwise shall be cumulative and concurrent and shall be in addition to every other right,power, or remedy provided for in this Agreement, the other Loan Documents and the Bank ProductAgreements or now or hereafter existing at law or in equity or by statute or otherwise, and theexercise or beginning of the exercise by Agent, any other member of the Lender Group, or any BankProduct Provider, of any one or more of such rights, powers, or remedies shall not preclude thesimultaneous or later exercise by Agent, such other member of the Lender Group or such Bank ProductProvider of any or all such other rights, powers, or remedies.          18. Termination. This Agreement and the Security Interests granted hereby shallterminate, and each Loan Party shall be released from its obligations under this Agreement inaccordance with Section 15.11 of the Credit Agreement.          19. Marshaling. Agent shall not be required to marshal any present or futurecollateral security (including but not limited to the Collateral) for, or other assurances of
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payment of, the Secured Obligations or any of them or to resort to such collateral security orother assurances of payment in any particular order, and all of its rights and remedies hereunderand in respect of such collateral security and other assurances of payment shall be cumulative andin addition to all other rights and remedies, however existing or arising. To the extent that itlawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshalingof collateral which might cause delay in or impede the enforcement of Agent’s rights and remediesunder this Agreement or under any other instrument creating or evidencing any of the SecuredObligations or under which any of the Secured Obligations is outstanding or by which any of theSecured Obligations is secured or payment thereof is otherwise assured, and, to the extent that itlawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.          20. Indemnity and Expenses.               (a) Each Grantor agrees to indemnify Agent and the other members of the Lender Group from andagainst all claims, lawsuits and liabilities (including reasonable attorneys fees) growing out ofor resulting from this Agreement (including enforcement of this Agreement) or any other LoanDocument to which such Grantor is a party, except claims, losses or liabilities resulting from thegross negligence or willful misconduct of the party seeking indemnification as determined by afinal non-appealable order of a court of competent jurisdiction. This provision shall survive thetermination of this Agreement and the Credit Agreement and the repayment of the SecuredObligations.               (b) Grantors, jointly and severally, shall, upon demand, pay to Agent (or Agent, may charge tothe Loan Account) all the Lender Group Expenses which Agent may incur in connection with (i) theadministration of this Agreement, (ii) the custody, preservation, use or operation of, or, upon anEvent of Default, the sale of, collection from, or other realization upon, any of the Collateral inaccordance with this Agreement and the other Loan Documents, (iii) the exercise or enforcement ofany of the rights of Agent hereunder or (iv) the failure by any Grantor to perform or observe anyof the provisions hereof.          21. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OFPRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTENAGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and no consent toany departure by any Grantor herefrom, shall in any event be effective unless the same shall be inwriting and signed by Agent, and then such waiver or consent shall be effective only in thespecific instance and for the specific purpose for which given. No amendment of any provision ofthis Agreement shall be effective unless the same shall be in writing and signed by Agent and eachGrantor to which such amendment applies.          22. Addresses for Notices. All notices and other communications provided forhereunder shall be given in the form and manner and delivered to Agent at its address specified inthe Credit Agreement, and to any of the Grantors at their respective addresses
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specified in the Credit Agreement or Guaranty, as applicable, or, as to any party, at suchother address as shall be designated by such party in a written notice to the other party.          23. Continuing Security Interest: Assignments under Credit Agreement. This Agreementshall create a continuing security interest in the Collateral and shall (a) remain in full forceand effect until the Obligations have been paid in full in accordance with the provisions of theCredit Agreement and the Commitments have expired or have been terminated, (b) be binding upon eachGrantor, and their respective successors and assigns, and (c) inure to the benefit of, and beenforceable by, Agent, and its successors, transferees and assigns. Without limiting thegenerality of the foregoing clause (c), any Lender may, in accordance with the provisions of theCredit Agreement, assign or otherwise transfer all or any portion of its rights and obligationsunder the Credit Agreement to any other Person, and such other Person shall thereupon become vestedwith all the benefits in respect thereof granted to such Lender herein or otherwise. Upon paymentin full of the Secured Obligations in accordance with the provisions of the Credit Agreement andthe expiration or termination of the Commitments, the Security Interest granted hereby shallterminate and all rights to the Collateral shall revert to Grantors or any other Person entitledthereto. At such time, Agent will authorize the filing of appropriate termination statements toterminate such Security Interests. No transfer or renewal, extension, assignment, or terminationof this Agreement or of the Credit Agreement, any other Loan Document, or any other instrument ordocument executed and delivered by any Grantor to Agent nor any additional Advances or other loansor extensions of credit made by any Lender to Borrowers, nor the taking of further security, northe retaking or re-delivery of the Collateral to Grantors, or any of them, by Agent, nor any otheract of the Lender Group or the Bank Product Providers, or any of them, shall release any Grantorfrom any obligation, except a release or discharge executed in writing by Agent in accordance withthe provisions of the Credit Agreement. Agent shall not by any act, delay, omission or otherwise,be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writingand signed by Agent and then only to the extent therein set forth. A waiver by Agent of any rightor remedy on any occasion shall not be construed as a bar to the exercise of any such right orremedy which Agent would otherwise have had on any other occasion.          24. Governing Law.               (a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF,AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATEDHERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULDREQUIRE THE APPLICATION OF LAWS OF ANOTHER JURISDICTION.               (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THISAGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLELAW, FEDERAL COURTS, LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,HOWEVER, THAT ANY SUIT SEEKING
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ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THECOURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OROTHER PROPERTY MAY BE FOUND. AGENT AND EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDERAPPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUMNONCONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITHTHIS SECTION 24(b).               (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR HEREBY WAIVETHEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUTOF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORTCLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. AGENT AND EACHGRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITSJURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OFTHIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.          25. New Subsidiaries. Pursuant to Section 5.11 of the Credit Agreement, certainSubsidiaries (whether by acquisition or creation) of any Grantor are required to enter into thisAgreement by executing and delivering in favor of Agent a Joinder to this Agreement insubstantially the form of Exhibit J-1 to the Credit Agreement. Upon the execution and delivery ofExhibit J-1 to the Credit Agreement by any such new Subsidiary, such Subsidiary shall become aGrantor hereunder with the same force and effect as if originally named as a Grantor herein. Theexecution and delivery of any instrument adding an additional Grantor as a party to this Agreementshall not require the consent of any Grantor hereunder. The rights and obligations of each Grantorhereunder shall remain in full force and effect notwithstanding the addition of any new Grantorhereunder.          26. Agent. Each reference herein to any right granted to, benefit conferred upon orpower exercisable by the “Agent” shall be a reference to Agent, for the benefit of each member ofthe Lender Group and each of the Bank Product Providers.          27. Luxembourg Pledge. The perfection and enforcement of the Pledged Interests (the“Luxembourg Pledge”) of a Pledged Company whose registered office/place of centraladministration is in Luxembourg (the “Luxembourg Pledged Company”) shall be subject to themandatory provisions of Luxembourg law and, more particularly, the law dated August 5, 2005 onfinancial collateral arrangements. The Parties agree that the Luxembourg Pledge shall be perfectedby the acknowledgement and acceptance thereof by the Luxembourg Pledged Company and the entry ofthe Luxembourg Pledge in the shareholders’ register of the Luxembourg Pledged Company promptlyafter the signature of this Agreement as follows:“All existing and future shares and Pledged Interests held by Pregis Corporation inthe share capital of Pregis (Luxembourg) Holding S.àr.l. are pledged as a
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continuing security interest for the benefit of Wells Fargo Capital Finance, LLC(“WFCF”) in its capacity as administrative agent and collateral agent for the LenderGroup and the Bank Product Providers pursuant to a security agreement dated 23 March2011 by and between the Grantors and WFCF (the “Security Agreement” and any definedterms therein shall be read in accordance with the Security Agreement). Pregis(Luxembourg) Holding S.àr.l. has been duly notified of the existence of the pledgeand the Pledged Interests may not be disposed of in any way without the priorwritten consent of WFCF.”          28. Miscellaneous.               (a) This Agreement is a Loan Document. This Agreement may be executed in any number ofcounterparts and by different parties on separate counterparts, each of which, when executed anddelivered, shall be deemed to be an original, and all of which, when taken together, shallconstitute but one and the same Agreement. Delivery of an executed counterpart of this Agreementby telefacsimile or other electronic method of transmission shall be equally as effective asdelivery of an original executed counterpart of this Agreement. Any party delivering an executedcounterpart of this Agreement by telefacsimile or other electronic method of transmission alsoshall deliver an original executed counterpart of this Agreement but the failure to deliver anoriginal executed counterpart shall not affect the validity, enforceability, and binding effect ofthis Agreement. The foregoing shall apply to each other Loan Document mutatismutandis.               (b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffectiveto the extent of such prohibition or unenforceability without invalidating the remaining provisionshereof in that jurisdiction or affecting the validity or enforceability of such provision in anyother jurisdiction. Each provision of this Agreement shall be severable from every other provisionof this Agreement for the purpose of determining the legal enforceability of any specificprovision.               (c) Headings and numbers have been set forth herein for convenience only. Unless the contraryis compelled by the context, everything contained in each Section applies equally to this entireAgreement.               (d) Neither this Agreement nor any uncertainty or ambiguity herein shall be construed againstany member of the Lender Group or any Grantor, whether under any rule of construction or otherwise.This Agreement has been reviewed by all parties and shall be construed and interpreted accordingto the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions ofall parties hereto.               (e) The pronouns used herein shall include, when appropriate, either gender and both singularand plural, and the grammatical construction of sentences shall conform thereto.               (f) Unless the context of this Agreement clearly requires otherwise, references to the pluralinclude the singular, references to the singular include the plural, the terms “includes” and“including” are not limiting, and the term “or” has, except where otherwise
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indicated, the inclusive meaning represented by the phrase “and/or”. The words “hereof”,“herein”, “hereby”, “hereunder”, and similar terms in this Agreement refer to this Agreement as awhole and not to any particular provision of this Agreement. Section, subsection, clause,schedule, and exhibit references herein are to this Agreement unless otherwise specified. Anyreference in this Agreement to any agreement, instrument, or document shall include allalterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on suchalterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,joinders, and supplements set forth herein). The words “asset” and “property” shall be construedto have the same meaning and effect and to refer to any and all tangible and intangible assets andproperties, including cash, securities, accounts, and contract rights. Any reference herein to thesatisfaction, repayment, or payment in full of the Secured Obligations shall mean the repayment infull in cash or immediately available funds (or, (a) in the case of contingent reimbursementobligations with respect to Letters of Credit, providing Letter of Credit Collateralization, and(b) in the case of obligations with respect to Bank Products (other than Hedge Obligations),providing Bank Product Collateralization) of all of the Secured Obligations (including the paymentof any termination amount then applicable (or which would or could become applicable as a result ofthe repayment of the other Secured Obligations) under Hedge Agreements provided by Hedge Providers)other than (i) unasserted contingent indemnification Secured Obligations, (ii) any Bank ProductObligations (other than Hedge Obligations) that, at such time, are allowed by the applicable BankProduct Provider to remain outstanding without being required to be repaid or cash collateralized,and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider toremain outstanding without being required to be repaid. Any reference herein to any Person shallbe construed to include such Person’s successors and assigns. Any requirement of a writingcontained herein shall be satisfied by the transmission of a Record.               (g) All of the annexes, schedules and exhibits attached to this Agreement shall be deemedincorporated herein by reference.               (h) THE RIGHTS AND REMEDIES OF THE AGENT, THE LENDER GROUP AND THE BANK PRODUCT PROVIDERSHEREUNDER ARE SUBJECT TO THE INTERCREDITOR ARRANGEMENTS. IN THE EVENT OF ANY CONFLICT BETWEEN THETERMS OF THIS AGREEMENT AND THE INTERCREDITOR ARRANGEMENTS, THE TERMS OF THE INTERCREDITORARRANGEMENTS SHALL CONTROL.[signature pages follow]
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     IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to beexecuted and delivered as of the day and year first above written.     **GRANTORS:** PREGIS HOLDING II CORPORATION, a Delaware corporation