exv10w2






Exhibit 10.2




 





SECURITY AGREEMENT




Dated as of January 28, 2011



among



POLYMER GROUP, INC.,



SCORPIO ACQUISITION CORPORATION,



CERTAIN OTHER SUBSIDIARIES OF SCORPIO ACQUISITION CORPORATION

IDENTIFIED HEREIN



and



WILMINGTON TRUST COMPANY,

as COLLATERAL AGENT



 




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	
ARTICLE I
	 
	 	 	 	 
	
Definitions
	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Defined Terms
	 	 	1	 
	 
	 	 	 	 
	
ARTICLE II
	 
	 	 	 	 
	
Pledge of Securities
	 
	 	 	 	 
	Section 2.01 Pledge
	 	 	9	 
	Section 2.02 Delivery of the Pledged Collateral
	 	 	11	 
	Section 2.03 Representations, Warranties and Covenants
	 	 	12	 
	Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests
	 	 	13	 
	Section 2.05 Registration in Nominee Name; Denominations
	 	 	13	 
	Section 2.06 Voting Rights; Dividends and Interest
	 	 	14	 
	Section 2.07 Collateral Agent Not a Partner or Limited Liability Company Member
	 	 	16	 
	 
	 	 	 	 
	
ARTICLE III
	 
	 	 	 	 
	
Security Interests in Personal Property and Real Property
	 
	 	 	 	 
	Section 3.01 Security Interest
	 	 	16	 
	Section 3.02 Real Estate Collateral
	 	 	18	 
	Section 3.03 Representations and Warranties
	 	 	19	 
	Section 3.04 Covenants
	 	 	20	 
	Section 3.05 Other Actions
	 	 	23	 
	 
	 	 	 	 
	
ARTICLE IV
	 
	 	 	 	 
	
Special Provisions Concerning Intellectual Property Collateral
	 
	 	 	 	 
	Section 4.01 Grant of License to Use Intellectual Property
	 	 	25	 
	Section 4.02 Protection of Collateral Agent’s Security
	 	 	26	 






 









 






	 	 	 	 	 
	 	 	Page	 
	
ARTICLE V
	 
	 	 	 	 
	
[Reserved]
	 
	 	 	 	 
	
ARTICLE VI
	 
	 	 	 	 
	
Remedies
	 
	 	 	 	 
	Section 6.01 Remedies Upon Default
	 	 	27	 
	Section 6.02 Application of Proceeds
	 	 	30	 
	 
	 	 	 	 
	
ARTICLE VII
	 
	 	 	 	 
	
Indemnity, Subrogation and Subordination
	 
	 	 	 	 
	
ARTICLE VIII
	 
	 	 	 	 
	
Miscellaneous
	 
	 	 	 	 
	Section 8.01 Notices
	 	 	31	 
	Section 8.02 Waivers; Amendment
	 	 	31	 
	Section 8.03 Collateral Agent’s Fees and Expenses; Indemnification
	 	 	32	 
	Section 8.04 Successors and Assigns
	 	 	32	 
	Section 8.05 Survival of Agreement
	 	 	32	 
	Section 8.06 Counterparts; Effectiveness; Several Agreement
	 	 	33	 
	Section 8.07 Severability
	 	 	33	 
	Section 8.08 [Reserved]
	 	 	33	 
	Section 8.09 GOVERNING LAW
	 	 	33	 
	Section 8.10 WAIVER OF RIGHT TO TRIAL BY JURY
	 	 	33	 
	Section 8.11 Headings
	 	 	34	 
	Section 8.12 Security Interest Absolute
	 	 	34	 
	Section 8.13 Termination or Release
	 	 	34	 
	Section 8.14 Additional Guarantors
	 	 	35	 
	Section 8.15 Collateral Agent Appointed Attorney-in-Fact
	 	 	35	 
	Section 8.16 Recourse; Limited Obligations
	 	 	36	 
	Section 8.17 Mortgages
	 	 	36	 
	Section 8.18 Intercreditor Agreement and ABL Facility
	 	 	36	 
	Section 8.19 Collateral Agency Agreement
	 	 	36	 





	 	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	Schedule I

	 	-
	 	Guarantors
	Schedule II

	 	-
	 	Pledged Equity; Pledged Debt
	Schedule III

	 	-
	 	Commercial Tort Claims
	Schedule IV

	 	-
	 	Intellectual Property
	Schedule V

	 	-
	 	Mortgaged Property






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	Schedule VI

	 	-
	 	Post-Closing Matters
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Security Agreement Supplement
	Exhibit B

	 	-
	 	Form of Perfection Certificate
	Exhibit C

	 	-
	 	Form of Grant of Security Interest in Trademarks
	Exhibit D

	 	-
	 	Form of Grant of Security Interest in Patents
	Exhibit E

	 	-
	 	Form of Grant of Security Interest in Copyrights






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          SECURITY AGREEMENT (as amended, supplemented, restated or otherwise modified from time to time
pursuant to the terms hereof, this “Agreement”) is entered into as of January 28, 2011, by
and among POLYMER GROUP, INC., a Delaware corporation (the “Company”); SCORPIO ACQUISITION
CORPORATION, a Delaware corporation (“Parent”); the Guarantors set forth on Schedule I
hereto (together with the Company and Parent, collectively, the “Grantors”); and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as collateral agent (in such capacity, the
“Collateral Agent”) for the Secured Parties. Capitalized terms used herein and defined in
Article I are used herein as therein defined.




          Reference is made to the Indenture, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “Indenture”), by and among the
Company, the Guarantors from time to time party thereto and Wilmington Trust Company, as trustee
(the “Trustee”).




          The Company will issue Senior Secured Notes pursuant to the Indenture. The obligations of the
Holders to purchase the Senior Secured Notes are conditioned upon, among other things, the
execution and delivery of this Agreement by each of the Grantors.




          The Grantors are entering into this Security Agreement in order to secure their obligations
under the Indenture and the other Secured Obligations.




          ACCORDINGLY, the parties hereto hereby agree as follows:




ARTICLE I




Definitions



          Section 1.01 Definitions.




          (a) Capitalized terms used in this Agreement and not otherwise defined herein have the
meanings specified in the Indenture. Unless otherwise defined in the Indenture, all terms defined
in the UCC and used but not defined in this Agreement have the meanings specified in the UCC; the
term “instrument” shall have the meaning specified in Article 9 of the UCC.




          (b) The rules of construction specified in Article I of the Indenture also apply to this
Agreement.




          Section 1.02 Other Defined Terms. As used in this Agreement, the following terms have the meanings
specified below:




          “ÁBL Security Documents” has the meaning assigned to such term in the Intercreditor
Agreement.




          “Agreement” has the meaning assigned to such term in the preamble.




          “Article 9 Collateral” has the meaning assigned to such term in Section 3.01(a).





 









 








          “Bankruptcy Event of Default” means any Event of Default under Sections 6.01(a)(6) or
(7) of the Indenture.




          “Collateral” means, collectively, the Article 9 Collateral, the Pledged Collateral and
Mortgaged Properties.




          “Collateral Account” means any cash collateral account established pursuant to, or in
connection with, any Senior Secured Notes Document, which cash collateral account shall be
maintained with, and under the sole dominion and control of, the Collateral Agent for the benefit
of the relevant Secured Parties.




          “Collateral Agency Agreement” means that certain Intercreditor and Collateral Agency
Agreement, dated as of the date hereof (as it may be amended, restated, supplemented or otherwise
modified from time to time), by and among the Company, Parent, the other Grantors from time to time
party thereto, the Collateral Agent, the Trustee and the ABL Collateral Agent.




          “Collateral Agent” has the meaning assigned to such term in the preamble.




          “Company” has the meaning assigned to such term in the preamble.




          “Copyright License” means any written agreement, now or hereafter in effect, granting
any right to any third party under any Copyright now or hereafter owned by any Grantor or that such
Grantor otherwise has the right to license, or granting any right to any Grantor under any
Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such
agreement.




          “Copyrights” means all of the following now owned or hereafter acquired by or assigned
to any Grantor: (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, whether
registered or unregistered and whether published or unpublished, (b) all registrations and
applications for registration of any such copyright in the United States or any other country,
including registrations, supplemental registrations and pending applications for registration in
the United States Copyright Office, including those copyright registrations and applications listed
on Schedule IV and (c) all (i) rights and privileges arising under applicable Law with
respect to such Grantor’s use of such copyrights, (ii) renewals and extensions thereof and
amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter
due and/or payable with respect thereto, including damages and payments for past, present or future
Infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue
for past, present or future Infringements thereof.




          “Credit Agreement” means that certain credit agreement, dated as of the date hereof
(as amended, restated, supplemented or otherwise modified from time to time), by and among the
Company, Scorpio Merger Sub Corporation, Parent, the ABL Collateral Agent, the other agents listed
therein and the Lenders from time to time party thereto.




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







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          “Equipment” means (x) any “equipment” as such term is defined in Article 9 of the UCC
and in any event, shall include, but shall not be limited to, all machinery, equipment,
furnishings, appliances, furniture, fixtures, tools, and vehicles now or hereafter owned by any
Grantor in each case, regardless of whether characterized as equipment under the UCC (but excluding
any such items which constitute Inventory) and (y) any and all additions, substitutions and
replacements of any of the foregoing and all accessions thereto, wherever located, whether or not
at any time of determination incorporated or installed therein or attached thereto, and all
replacements therefor, together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.




          “Equity Interests” has the meaning assigned to such term in the Indenture.




          “Excluded Accounts” means (i) accounts, the funds in which are specifically and
exclusively used for the payment of payroll, salaries and wages, workers’ compensation, benefits
and similar expenses or taxes, including for withholding income taxes and federal, state or local
employment taxes or in escrow accounts or trust for third parties (other than another Grantor),
(ii) accounts the funds in which are specifically and exclusively required to be paid over to an
employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of
employees of one or more Grantors and (iii) accounts, the funds in which are used solely in
connection with Factoring Programs or a Receivables Facility.




          “Excluded Assets” has the meaning assigned to such term in Section 3.01(a).




          “Excluded Contract” means at any date any rights or interest of any Grantor in any
assets or under any agreement, contract, license, instrument, document or other general intangible
(referred to solely for purposes of this definition as a “Contract”) to the extent that such
Contract by the terms of a restriction in favor of a Person who is not or any Grantor, or any
requirement of law, prohibits, or requires any consent or establishes any other condition for or
would terminate because of an assignment thereof or a grant of a security interest therein by a
Grantor; provided that: (i) rights under any such Contract otherwise constituting an Excluded
Contract by virtue of this definition shall be included in the Collateral to the extent permitted
thereby or by Section 9-406 or Section 9-408 of the UCC and (ii) all proceeds paid or payable to
any Grantor from any sale, transfer or assignment of such Contract and all rights to receive such
proceeds shall be included in the Collateral. For the avoidance of doubt, the Equipment Lease
Agreement and all assets subject thereto shall constitute an “Excluded Contract”.




          “Excluded Equipment” means at any date any equipment or other assets of any Grantor
which is subject to, or secured by, a Capitalized Lease Obligation or a purchase money obligation
if and to the extent that (i) a restriction in favor of a Person who is not Holdings or a
Subsidiary thereof contained in the agreements or documents granting or governing such Capitalized
Lease Obligation or purchase money obligation prohibits, or requires any consent or establishes any
other conditions for or would result in the termination of such agreement or document because of an
assignment thereof, or a grant of a security interest therein, by a Grantor and (ii) such
restriction relates only to the asset or assets acquired by a Grantor with the proceeds of such
Capitalized Lease Obligation or purchase money obligation and attachments thereto, improvements
thereof or substitutions therefor; provided that all proceeds paid or payable to any Grantor from
any sale, transfer or assignment or other voluntary or involuntary disposition of such assets






-3-









 







and all rights to receive such proceeds shall be included in the Collateral to the extent not
otherwise required to be paid to the holder of any Capitalized Lease Obligations or purchase money
obligations secured by such assets.




          “Excluded Equity Interests” has the meaning assigned to such term in Section 2.01.




          “General Intangibles” has the meaning provided in Article 9 of the UCC and shall in
any event include all choses in action and causes of action and all other intangible personal
property of every kind and nature (other than Accounts) now owned or hereafter acquired by any
Grantor, as the case may be, including 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
Grantor.




          “Grant of Security Interest” means a Grant of Security Interest in certain
Intellectual Property in the form of Exhibit C, D or E attached hereto.




          “Grantors” has the meaning assigned to such term in the preamble.




          “Immaterial Foreign Subsidiary” means a Foreign Subsidiary if the book value of such
Foreign Subsidiary’s total assets, when taken together with the aggregate book value of the total
assets of all other Foreign Subsidiaries that were also designated by the Company as Immaterial
Foreign Subsidiaries, as of the end of the Company’s most recently ended fiscal quarter for which
internal financial statements are available prior to such date, does not exceed in the aggregate
$10.0 million.




          “Immaterial Subsidiaries” means collectively, Immaterial Domestic Subsidiaries and
Immaterial Foreign Subsidiaries.




          “Indenture” has the meaning assigned to such term in the preamble.




          “Infringement” means infringement, misappropriation, dilution, tarnishment, impairment
or other violation.




          “Intellectual Property” means all intellectual and similar property of every kind and
nature now owned or hereafter acquired by any Grantor, including (a) inventions, designs, Domain
Names, Patents, Copyrights, Licenses, Trademarks, trade secrets, and (b) confidential or
proprietary technical and business information, know how, show how, or other proprietary data or
information relating to its business, software, databases, and all other proprietary information
relating to its business.




          “Intellectual Property Collateral” means Collateral consisting of Intellectual
Property.







-4-









 








          “Intercreditor Agreement” means the Lien Subordination and Intercreditor Agreement,
dated as of January 28, 2011, among the ABL Collateral Agent, the Collateral Agent, Parent, the
Company and the subsidiaries of the Company named therein (as amended, restated, supplemented or
otherwise modified from time to time).




          “Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directives, requests, licenses, authorizations and permits
of, and agreements with, any Governmental Authority.




          “Lease” means any agreement pursuant to which a Grantor is entitled to the use or
occupancy of any space in a structure, land, improvements or premises for any period of time.




          “License” means any Patent License, Trademark License, Copyright License or other
written intellectual property license or sublicense agreement relating solely to Intellectual
Property to which any Grantor is a party, including those exclusive license agreements listed on
Schedule IV.




          “Margin Stock” means any “margin stock” (as defined in Regulation U issued by the
Board of Governors of the Federal Reserve System).




          “Material Adverse Effect” means (i) a material adverse effect on the business,
operations, assets, liabilities (actual or contingent) or financial condition of Parent and its
Subsidiaries, taken as a whole, (ii) a material adverse effect on the ability of the Grantors
(taken as a whole) to perform their respective payment obligations under the Indenture to which any
of the Grantors is a party or (iii) a material adverse effect on the rights and remedies of the
Holders or the trustee or agents under the Senior Secured Notes Documents.




          “Material Real Property” means any Real Property owned in fee by a Grantor where the
greater of its cost and net book value exceeds $3,000,000.




          “Mortgage” means, collectively, the deeds of trust, trust deeds, hypothecs and
mortgages creating and evidencing a Lien on a Mortgaged Property made by the Company and the
Subsidiary Guarantors in favor or for the benefit of the Collateral Agent on behalf of the Secured
Parties in form and substance as may be necessary to perfect the lien of the Collateral Agent with
such modifications as may be required by local law, and any other mortgages executed and delivered
pursuant to Section 3.02 hereof.




          “Mortgage Policy” has the meaning assigned to such term in Section 3.04(h).




          “Mortgaged Property” has the meaning assigned to such term in Section 3.02.




          “Organization Documents” means: (i) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (ii) with respect to any limited liability company,






-5-









 







the certificate or articles of formation or organization and operating or limited
liability company agreement; and (iii) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other applicable agreement of
formation or organization and any agreement, instrument, filing or notice with respect thereto
filed in connection with its formation or organization with the applicable Governmental Authority
in the jurisdiction of its formation or organization and, if applicable, any certificate or
articles of formation or organization of such entity.




          “Parent” has the meaning assigned to such term in the preamble.




          “Patent License” means any written agreement, now or hereafter in effect, granting to
any third party any right to make, have made, use, sell, offer to sell or import any invention
covered in whole or in part by a Patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, or granting to any Grantor any right to make, have made, use,
sell, offer to sell or import any invention covered in whole or in part by a patent, now or
hereafter owned by any third party, and all rights of any Grantor under any such agreement.




          “Patents” means all of the following now owned or hereafter acquired by any Grantor:
(a) all letters patent of the United States or the equivalent thereof in any other country, all
registrations thereof, and all applications for letters patent of the United States or the
equivalent thereof in any other country, including registrations and pending applications in the
United States Patent and Trademark Office or any similar offices in any other country, including
those listed on Schedule IV, and (b) all (i) rights and privileges arising under applicable
Law with respect to such Grantor’s use of any patents, (ii) inventions and improvements described
and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable thereunder and with respect thereto including
damages and payments for past, present or future Infringements thereof, (v) rights corresponding
thereto throughout the world and (vi) rights to sue for past, present or future Infringements
thereof.




          “Perfection Certificate” means a certificate substantially in the form of Exhibit
B, completed and supplemented with the schedules and attachments contemplated thereby, and duly
executed on behalf of each Grantor.




          “Pledged Collateral” has the meaning assigned to such term in Section 2.01.




          “Pledged Debt” has the meaning assigned to such term in Section 2.01.




          “Pledged Equity” has the meaning assigned to such term in Section 2.01.




          “Pledged Securities” means any promissory notes, stock certificates or other
securities now or hereafter included in the Pledged Collateral, including all Pledged Equity,
Pledged Debt and all other certificates, instruments or other documents representing or evidencing
any Pledged Collateral.







-6-









 








          “Proceeds” means (a) all “proceeds” as defined in Article 9 of the UCC, with respect
to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold,
exchanged, collected, or disposed of, whether voluntarily or involuntarily.




          “Purchase Agreement” means that certain Purchase Agreement, dated January 13, 2011 by
and among Scorpio Merger Sub Corporation and Citigroup Global Markets Inc., Morgan Stanley & Co.
Incorporated, Barclays Capital Inc. and RBC Capital Markets, LLC, as supplemented by the Joinder
Agreement dated the Issue Date by and among the Company, the Guarantors and Citigroup Global
Markets Inc., Morgan Stanley & Co. Incorporated, Barclays Capital Inc. and RBC Capital Markets,
LLC.




          “Real Property” means a Grantor’s interest in all Leases and all land, tenements,
hereditaments and any estate or interest therein, together with the buildings, structures, parking
areas and other improvements thereon (including all fixtures), now or hereafter owned or leased by
any Grantor, together with all easements, rights-of-way, and similar rights relating thereto and
all leases, licenses tenancies and occupancies thereof.




          “Secured Obligations” shall mean the collective reference to the due and punctual
payment of (i) the principal of and premium, if any, Additional Interest, if any, and interest at
the applicable rate provided in the Senior Secured Notes Documents (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 Senior Secured Notes, when
and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) all other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of a Grantor to any of
the Secured Parties under the Senior Secured Notes Documents and (iii) the Tranche 2 Sub-Facility
Obligations.




          “Secured Parties” means (a) the Holders, (b) the Trustee, (c) the Notes Collateral
Agent, (d) the beneficiaries of each indemnification obligation undertaken by the Company or any
Guarantor under this Indenture, the Notes, the Security Agreement, the Intercreditor Agreement, the
Collateral Agency Agreement or the other Collateral Documents, (e) the successors and assigns of
each of the foregoing, (f) holders of Additional Parity Debt from time to time and (g) holders of
the Tranche 2 Sub-Facility Obligations.




          “Security” means any “security” as such term is defined in Article 8 of the UCC, any
stock, shares, partnership interests, voting trust certificates, certificates of interest or
participation in any profit sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any certificates of
interest, shares or participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.




          “Security Agreement Supplement” means an instrument substantially in the form of
Exhibit A hereto.







-7-









 








          “Security Interest” has the meaning assigned to such term in Section 3.01(a).




          “Senior Secured Notes” means the 7.75% Senior Secured Notes due 2019 issued under the
Indenture on the date hereof, and any Exchange Notes and Additional Notes issued by the Company, as
any such notes may be amended, restated, supplemented or otherwise modified from time to time in
accordance with the Indenture.




          “Senior Secured Notes Documents” means the Indenture, this Agreement, the other
Collateral Documents and each of the other agreements, documents and instruments providing for or
evidencing any other Secured Obligations, and any other document or instrument executed or
delivered at any time in connection with any Secured Obligations, including any intercreditor or
joinder agreement (including, without limitation, the Intercreditor Agreement and the Collateral
Agency Agreement) among holders of Secured Obligations, to the extent such are effective at the
relevant time, as each may be amended, supplemented, refunded, deferred, restructured, replaced or
refinanced from time to time in whole or in part (whether with the Collateral Agent and holders of
the Senior Secured Notes or other agents and lenders or otherwise), in each case in accordance with
the provisions of this Agreement.




          “Swap Contract” means (i) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (ii) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.




          “Trademark License” means 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 Grantor or that any
Grantor otherwise has the right to license, or granting to any Grantor any right to use any
trademark now or hereafter owned by any third party, and all rights of any Grantor under any such
agreement.




          “Trademarks” means all of the following now owned or hereafter acquired by any
Grantor: (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 owned or hereafter adopted,
acquired or assigned to, all registrations and applications filed in connection therewith,
including registrations and applications in the United States Patent and Trademark Office or any
similar offices in any State of the United States or any other country or any political subdivision
thereof, including those listed on Schedule IV and (b) any and all (i) rights and
privileges arising under






-8-









 







applicable Law with respect to such Grantor’s use of any trademarks, (ii) renewals thereof and
amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due
and/or payable thereunder and with respect thereto, including damages, claims and payments for
past, present or future Infringements thereof, (iv) rights corresponding thereto throughout the
world and (v) rights to sue for past, present and future Infringements thereof.




          “Tranche 2 Sub-Facility Obligations” shall have the meaning assigned to such term in
the Intercreditor Agreement.




          “Trigger Date” has the meaning assigned to such term in Section 3.04(h).




          “Trustee” has the meaning assigned to such term in the preamble.




          “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 Secured Parties’ security
interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” 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.




ARTICLE II




Pledge of Securities



          Section 2.01 Pledge. As security for the payment or performance, as the case may be, in full of
the Secured Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, a security interest in,
all of such Grantor’s right, title and interest in, to and under:




          (a) (i) all Equity Interests held by it and listed on Schedule II and any other Equity
Interests obtained in the future by such Grantor and the certificates representing all such Equity
Interests (the “Pledged Equity”); provided that (x) pledges of voting Equity
Interests of each Foreign Subsidiary shall be limited to 65% of the total combined voting power of
all Equity Interests of such Foreign Subsidiary at any time; and (y) the Pledged Equity shall not
include (A) Equity Interests of any Subsidiary of a Foreign Subsidiary, (B) Equity Interests of a
Person that is not a direct or indirect wholly owned Subsidiary of a Grantor to the extent
prohibited by the terms of such Subsidiary’s Organization Documents, (C) any Margin Stock owned by
such Grantor, (D) pledges prohibited by law or by agreements containing anti-assignment clauses not
overridden by the UCC or applicable Law, (E) any Equity Interests of any Restricted Subsidiary
subject to a Lien existing at the time such Restricted Subsidiary is acquired or merged with or
into or consolidated with any Grantor and not incurred in connection with such acquisition, merger
or consolidation that is permitted by the Indenture to the extent and for so long as the contract
or other agreement in which such Lien is granted limits or prohibits the creation of any other Lien
on such Equity Interests, (F) any Equity Interests of any “not-for-profit” Subsidiary, (G) any Equity






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Interests of any Captive Insurance Subsidiary, (H) any Equity Interests of any Domestic
Restricted Subsidiary of the Company that is treated as a disregarded entity for U.S. federal
income tax purposes, (I) Equity Interests of any Subsidiary with respect to which in the reasonable
judgment of the Company the costs or other consequences (including adverse tax consequences
(including as a result of Section 956 of the Code or any similar law, rule or regulation in any
applicable jurisdiction) in the reasonable judgment of the Company confirmed in writing by notice
to the Collateral Agent) of providing a pledge of its Equity Interests or perfection thereof is
excessive in view of the benefits to be obtained by the Secured Parties, (J) Equity Interests of
Unrestricted Subsidiaries (until such time as any Unrestricted Subsidiary becomes a Restricted
Subsidiary in accordance with the Indenture, at which time, and without any further action, this
clause (y)(J) shall no longer apply to the Equity Interests of such Subsidiary), (K) Equity
Interests of Subsidiaries that are not Grantors and which are Immaterial Subsidiaries or (L) any
Equity Interests of any Subsidiary which would require material or non-ministerial consent,
approval, license or authorization from a Governmental Authority, unless such consent, approval,
license or authorization has been received (clauses (A) through (L) collectively, the “Excluded
Equity Interests”); (ii)(A) the promissory notes and any instruments evidencing indebtedness
owned by it and listed opposite the name of such Grantor on Schedule II and (B) any
promissory notes and instruments evidencing indebtedness obtained in the future by such Grantor
(the “Pledged Debt”); (iii) all other property that may be delivered to and held by the
Collateral Agent pursuant to the terms of this Section 2.01; (iv) subject to Section
2.06, all payments of principal or interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other Proceeds received in respect of, the securities referred to
in clauses (i) and (ii) above; (v) subject to Section 2.06, all rights and
privileges of such Grantor with respect to the securities and other property referred to in
clauses (i), (ii), (iii) and (iv) above; and (vi) all Proceeds of,
and Security Interests in, any of the foregoing (the items referred to in clauses (i)
through (vi) above, being collectively referred to as the “Pledged Collateral”).




          (b) Notwithstanding the foregoing and anything in this Agreement to the contrary, the Pledged
Collateral shall not include Equity Interests and other securities of a Subsidiary to the extent
that the pledge of such Equity Interests or other securities results in the Company or Parent being
required to file separate financial statements of such Subsidiary with the SEC (or any other
Governmental Authority), but only to the extent necessary to not be subject to such requirement and
only for so long as such requirement is in existence. In addition, in the event that Rule 3-16 of
Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to require
(or is replaced with another rule or regulation or another law, rule or regulation is adopted,
which would require) the filing with the SEC (or another Governmental Authority) of separate
financial statements of any Subsidiary of the Company due to the fact that such Subsidiary’s Equity
Interests and other securities secure any Secured Obligations, then the Equity Interests and other
securities of such Subsidiary shall automatically be deemed not to be part of the Pledged
Collateral (but only to the extent necessary to not be subject to such requirement). In such
event, this Agreement may be amended or modified, without the consent of any Secured Party, to the
extent necessary to release the security interests in the Equity Interests and other securities
that are so deemed to no longer constitute part of the Pledged Collateral. In the event that Rule
3-16 of Regulation S-X under the Securities Act is amended, modified or interpreted by the SEC to
permit (or is replaced with another rule or regulation, or any other law, rule or regulation






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is adopted, which would permit) such Subsidiary’s Equity Interests or other
securities to secure the Secured Obligations in excess of the amount then pledged without the
filing with the SEC (or any other Governmental Authority) of separate financial statements of such
Subsidiary, then the Equity Interests and other securities of such Subsidiary shall automatically
be deemed to be a part of the Pledged Collateral (but only to the extent necessary to not be
subject to any such financial statement requirements).




          TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its
successors and assigns, for the benefit of the applicable Secured Parties, forever; subject,
however, to the terms, covenants and conditions hereinafter set forth.




          Section 2.02 Delivery of the Pledged Collateral.




          (a) Each Grantor agrees promptly (but in any event within 30 days of acquisition, formation or
obtaining an interest in such Pledged Securities) to deliver or cause to be delivered to the
Collateral Agent, for the benefit of the applicable Secured Parties, any and all Pledged Securities
(other than any uncertificated securities, but only for so long as such securities remain
uncertificated) (unless the ABL Collateral Agent is granted a prior security interest in such
Pledged Securities and the same are required to be delivered (and are delivered) to the ABL
Collateral Agent pursuant to the Intercreditor Agreement) and to the extent such Pledged Securities
are promissory notes and instruments evidencing Indebtedness, only as are required to be delivered
under clause (b) immediately below.




          (b) Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal
amount equal to or in excess of $5,000,000, which for avoidance of doubt excludes accounts
receivable in the ordinary course of business, owed to such Grantor by any Person (other than
another Grantor) to be evidenced by a duly executed promissory note that is pledged and delivered
promptly (but in any event within 30 days of acquisition, issuance or obtaining an interest in such
promissory note) to the Collateral Agent, for the benefit of the applicable Secured Parties,
pursuant to the terms hereof (unless the ABL Collateral Agent is granted a prior security interest
in such promissory note and the same are required to be delivered (and are delivered) to the ABL
Collateral Agent pursuant to the Intercreditor Agreement).




          (c) Upon delivery to the Collateral Agent, (i) any Pledged Securities shall be accompanied by
stock or bond powers duly executed in blank or other instruments of transfer as may be reasonably
necessary to perfect the security interest of to the Collateral Agent and by such other instruments
and documents as the Collateral Agent may reasonably request and (ii) all other property comprising
part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Grantor and such other instruments or documents as the Collateral Agent
may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities, which schedule shall be deemed to supplement Schedule II and be
made a part hereof; provided that failure to attach any such schedule hereto shall not
affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall
supplement any prior schedules so delivered.




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          Section 2.03 Representations, Warranties and Covenants. Each Grantor represents, warrants and
covenants, as to itself and the other Grantors, to and with the Collateral Agent, for the benefit
of the Secured Parties, that:





     (a) Schedule II correctly sets forth the percentage of the issued and
outstanding units of each class of the Equity Interests of the issuer thereof represented by
the Pledged Equity and includes all Equity Interests, the promissory notes and instruments
required to be pledged pursuant to Section 10.01 of the Indenture and
Section 2.01 of this Agreement;




     (b) the Pledged Equity issued by the Grantors and Pledged Debt (solely with respect to
Pledged Debt issued by a Person other than the Company or a Subsidiary of the Company, to
the best of the Company’s knowledge) have been duly and validly authorized and issued by the
issuers thereof and (i) in the case of Pledged Equity (other than Pledged Equity consisting
of limited liability company interests or partnership interests which, pursuant to the
relevant organizational or formation documents, cannot be fully paid and non-assessable),
are fully paid and non-assessable and (ii) in the case of Pledged Debt (solely with respect
to Pledged Debt issued by a Person other than the Company or a Subsidiary of the Company, to
the best of the Company’s knowledge), are legal, valid and binding obligations of the
issuers thereof;




     (c) except for the security interests granted hereunder, each of the Grantors (i) is
and, subject to any transfers made in compliance with the Indenture and any other Senior
Secured Notes Document, will continue to be the direct owner, beneficially and of record, of
the Pledged Securities indicated on Schedule II as owned by such Grantors, (ii)
holds the same free and clear of all Liens, other than (A) Liens created by the Collateral
Documents and the ABL Security Documents and (B) Permitted Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than (A) Liens created by the
Collateral Documents and the ABL Security Documents and (B) nonconsensual Permitted Liens,
and (iv) will defend its title or interest thereto or therein against any and all Liens
(other than the Liens permitted pursuant to this Section 2.03(c)), however arising,
of all Persons whomsoever;




     (d) except (i) for restrictions and limitations imposed by the Intercreditor Agreement,
the Senior Secured Notes Documents or securities laws generally, (ii) in the case of Pledged
Equity of Persons that are not wholly owned Subsidiaries, for transfer restrictions that
exist at the time of acquisition of Equity Interests in such Persons, and (iii) as described
in the Perfection Certificate, the Pledged Collateral is and will continue to be freely
transferable and assignable, and none of the Pledged Collateral is or will be subject to any
option, right of first refusal, shareholders agreement, charter or by-law provisions or
contractual restriction of any nature that might prohibit, impair, delay or otherwise affect
in any manner material and adverse to the Secured Parties the pledge of such Pledged
Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the
Collateral Agent of rights and remedies hereunder;



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     (e) each of the Grantors has the power and authority to pledge the Pledged Collateral
pledged by it hereunder in the manner hereby done or contemplated (it being understood that
such Grantor’s power and authority to pledge the Equity Interests of a non-wholly owned
Subsidiary may be limited by the Organization Documents of such Subsidiary);




     (f) except as described in Section 2.03(d) above, no consent or approval of any
Governmental Authority, any securities exchange or any other Person was or is necessary to
the validity of the pledge effected hereby (other than such as have been obtained and are in
full force and effect);




     (g) by virtue of the execution and delivery by the Grantors of this Agreement, when any
Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement,
the Collateral Agent will obtain a legal, valid and perfected lien upon and security
interest in such Pledged Securities as security for the payment and performance of the
Secured Obligations;




     (h) all certificates, agreements or instruments representing or evidencing the Pledged
Securities in existence on the date hereof have been delivered to the Collateral Agent
pursuant to and as required by Section 2.02 except otherwise provided on
Schedule VI; and




     (i) the pledge effected hereby is effective to vest in the Collateral Agent, for the
benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral
as set forth herein.



          Section 2.04 Certification of Limited Liability Company and Limited Partnership Interests. Each
interest in any limited liability company or limited partnership controlled by any Grantor and
pledged under Section 2.01, to the extent such limited liability company elects to treat
its limited liability company interests as “securities” within the meaning of Article 8 of the UCC,
shall be represented by a certificate, shall be a “security” within the meaning of Article 8 of the
UCC and shall be governed by Article 8 of the UCC.




          Section 2.05 Registration in Nominee Name; Denominations. If an Event of Default shall occur and
be continuing and the Collateral Agent shall give the Company notice of its intent to exercise such
rights, subject to the terms of the Intercreditor Agreement, (a) the Collateral Agent, on behalf of
the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub agent) or the
name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent
and each Grantor will promptly give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Securities registered in the name of such
Grantor and (b) the Collateral Agent shall have the right to exchange the certificates representing
Pledged Securities for certificates of smaller or larger denominations for any purpose consistent
with this Agreement; provided that, notwithstanding the foregoing, if a Bankruptcy Event of
Default shall have occurred and be continuing, the Collateral Agent shall not be required to give
the notice referred to above in order to exercise the rights described above.




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          Section 2.06 Voting Rights; Dividends and Interest.




          (a) Unless and until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have notified the Company that the rights of the Grantors under this
Section 2.06 are being suspended:





     (i) Each Grantor shall be entitled to exercise any and all voting and/or other
consensual rights and powers inuring to an owner of Pledged Securities or any part thereof
for any purpose consistent with the terms of this Agreement, the Indenture and the other
Senior Secured Notes Documents; provided that such rights and powers shall not be
exercised in any manner that could materially and adversely affect the rights inuring to a
holder of any Pledged Securities or the rights and remedies of any of the Collateral Agent
or the other Secured Parties under this Agreement, the Indenture or any other Senior Secured
Notes Document or the ability of the Secured Parties to exercise the same.




     (ii) The Collateral Agent shall promptly execute and deliver to each Grantor, or cause
to be executed and delivered to such Grantor, all such proxies, powers of attorney and other
instruments as such Grantor may reasonably request for the purpose of enabling such Grantor
to exercise the voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above.




     (iii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest, principal and other distributions paid on or distributed in respect of the Pledged
Securities, to the extent (and only to the extent) that such dividends, interest, principal
and other distributions are permitted by, and otherwise paid or distributed in accordance
with, the terms and conditions of the Indenture, the other Senior Secured Notes Documents
and applicable Laws; provided that any non-cash dividends, interest, principal or
other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting
from a subdivision, combination or reclassification of the outstanding Equity Interests of
the issuer of any Pledged Securities or received in exchange for Pledged Securities or any
part thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or otherwise,
shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall
not be commingled by such Grantor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent
and the applicable Secured Parties and shall be forthwith delivered to the Collateral Agent
(unless the same are required to be delivered (and are delivered) to the ABL Collateral
Agent pursuant to the Intercreditor Agreement) in the same form as so received (with any
endorsement as may be reasonably necessary to perfect the security interest of the
Collateral Agent). So long as no Default or Event of Default has occurred and is
continuing, the Collateral Agent shall promptly deliver to each Grantor any Pledged
Securities in its possession if requested to be delivered to the issuer thereof in
connection with any exchange or redemption of such Pledged Securities.



          (b) Upon the occurrence and during the continuance of an Event of Default, after the
Collateral Agent shall have notified the Company of the suspension of the rights of the
Grantors under Section 2.06(a)(iii), then all rights of any Grantor to dividends,
interest, principal





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or other distributions that such Grantor is authorized to receive pursuant to
Section 2.06(a)(iii) shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain
such dividends, interest, principal or other distributions, subject to the terms of the
Intercreditor Agreement. All dividends, interest, principal or other distributions received by any
Grantor contrary to the provisions of this Section 2.06 shall be held in trust for the
benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor
and shall be forthwith delivered to the Collateral Agent upon demand (unless the same are required
to be delivered (and are delivered) to the ABL Collateral Agent pursuant to the Intercreditor
Agreement) in the same form as so received (with any necessary endorsement reasonably requested by
the Collateral Agent). Any and all money and other property paid over to or received by the
Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money
or other property and shall be applied in accordance with the provisions of Section 4.02.
At such time as an Event of Default is no longer continuing, the Collateral Agent shall promptly
repay to each Grantor (without interest) all dividends, interest, principal or other distributions
that such Grantor would otherwise be permitted to retain pursuant to the terms of Section
2.06(a)(iii) in the absence of an Event of Default and that remain in such account.




          (c) Upon the occurrence and during the continuance of an Event of Default, after the
Collateral Agent shall have notified the Company of the suspension of the rights of the Grantors
under Section 2.06(a)(i), then all rights of any Grantor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to Section 2.06(a)(i), and
the obligations of the Collateral Agent under Section 2.06(a)(ii), shall cease, and all
such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and powers, subject to
the terms of the Intercreditor Agreement; provided that the Collateral Agent shall have the
right from time to time following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights. After all Events of Default have been cured or waived, each
Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers
that such Grantor would otherwise be entitled to exercise pursuant to the terms of Section
2.06(a)(i), and the obligations of the Collateral Agent under Section 2.06(a)(ii) shall
be reinstated.




          (d) Any notice given by the Collateral Agent to the Company suspending the rights of the
Grantors under Section 2.06(a)(i) (x) shall be given in writing, (y) may be given with
respect to one or more of the Grantors at the same or different times and (z) may suspend the
rights of the Grantors under Section 2.06(a)(i) or (iii) in part without suspending
all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and
without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices
from time to time suspending other rights so long as an Event of Default has occurred and is
continuing. Notwithstanding anything to the contrary contained in Section 2.06(a),
(b) or (c), if a Bankruptcy Event of Default shall have occurred and be continuing,
the Collateral Agent shall not be required to give any notice referred to in said Section in order
to exercise any of its rights described in such Section, and the suspension of the rights of each
of the Grantors under each such Section shall be automatic upon the occurrence of such Bankruptcy
Event of Default.




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          Section 2.07 Collateral Agent Not a Partner or Limited Liability Company Member. Nothing contained
in this Agreement shall be construed to make the Collateral Agent or any other Secured Party liable
as a member of any limited liability company or as a partner of any partnership and neither the
Collateral Agent nor any other Secured Party by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall have any of the duties, obligations or liabilities of
a member of any limited liability company or as a partner in any partnership. The parties hereto
expressly agree that, unless the Collateral Agent shall become the absolute owner of Pledged Equity
consisting of a limited liability company interest or a partnership interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture among the Collateral
Agent, any other Secured Party, any Grantor and/or any other Person.




ARTICLE III




Security Interests in Personal Property and Real Property



          Section 3.01 Security Interest.




          (a) As security for the payment or performance, as the case may be, in full of the Secured
Obligations, including the Guarantees, each Grantor hereby assigns and pledges to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, a security
interest (the “Security Interest”) in, all right, title or interest in or to any and all of
the following assets and properties now owned or at any time hereafter acquired by such Grantor or
in which such Grantor now has or at any time in the future may acquire any right, title or interest
(collectively, the “Article 9 Collateral”):





     (i) all Accounts;




     (ii) all Chattel Paper;




     (iii) all Documents;




     (iv) all Equipment;




     (v) all General Intangibles;




     (vi) all Instruments;




     (vii) all books and records pertaining to the Article 9 Collateral;




     (viii) all Goods and Fixtures;




     (ix) all Money and Deposit Accounts;




     (x) all Commercial Tort Claims described on Schedule III from time to time;



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     (xi) the Collateral Account, and all cash, securities and other investments deposited
therein;




     (xii) all Supporting Obligations;




     (xiii) all Security Entitlements in any or all of the foregoing and all Securities
Accounts;




     (xiv) all Intellectual Property Collateral;




     (xv) all Inventory;




     (xvi) all Investment Property; and




     (xvii) to the extent not otherwise included, all Books and Records and all Proceeds and
products of any and all of the foregoing and all collateral security and guarantees given by
any Person with respect to any of the foregoing;


provided that (i) this Agreement shall not constitute a grant of security interest in any
trademark application filed in the United States Patent and Trademark Office on the basis of any
Grantor’s “intent to use” such mark and for which a form evidencing use of the mark has not yet
been filed with the United States Patent and Trademark Office, to the extent that granting a
security interest in such trademark application prior to such filing would adversely affect the
enforceability or validity of such trademark application or any registration that issues therefrom
under applicable federal law and (ii) notwithstanding anything to the contrary in this Agreement,
this Agreement shall not constitute a grant of a security interest in (A) motor vehicles and other
assets subject to certificates of title except to the extent perfection of a security interest
therein may be accomplished by filing of financing statements in appropriate form in the applicable
jurisdiction under the UCC, (B) commercial tort claims in amounts less than $10,000,000, (C) the
Excluded Equity Interests or Equity Interests excluded from the Pledged Collateral pursuant to
Section 2.01(b), (D) any property or assets owned by any Foreign Subsidiary or an
Unrestricted Subsidiary, (E) any Excluded Equipment; (F) any Excluded Contract, (G) Excluded
Accounts, (H) Letter of Credit Rights, other than Letter of Credit Rights that are Supporting
Obligations, (I) assets as reasonably determined by the Company to the extent obtaining a security
interest in such assets or perfection thereof would result in costs or consequences (including as a
result of Section 956 of the Code or any similar law, rule or regulation in any applicable
jurisdiction) that are excessive in relation to the value to the Holders of the security to be
afforded thereby (J) accounts, property or other assets pledged pursuant to the Factoring Programs
or Receivables Facility and (I) proceeds and products from any and all of the foregoing excluded
assets described in clauses (i) and (ii)(A) through (J), unless such proceeds or products would
otherwise constitute Collateral (the items referred to in clauses (i) and (ii), being collectively
referred to as the “Excluded Assets”). Each Grantor shall, if requested to do so by the
Collateral Agent, use commercially reasonable efforts to obtain any such required consent referred
to above that is reasonably obtainable with respect to Collateral which the Collateral Agent
reasonably determines to be material. In addition, no Grantor shall be required (i) to take actions
to perfect security interests in commercial tort claims in amounts less than $10,000,000 or Letter
of Credit Rights (other than Letter of Credit Rights to the extent perfection of a security
interest therein may be accomplished by filing





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of financing statements in appropriate form in the applicable jurisdiction under the
UCC), (ii) to take actions to perfect by Control other than with respect to the Pledged Collateral
and as set forth clause (e) below or (iii) take any actions under any laws outside of the United
States to grant, perfect or enforce any security interest.




          (b) Each Grantor hereby irrevocably authorizes the Collateral Agent for the benefit of the
Secured Parties at any time and from time to time to file in any relevant jurisdiction any
financing statements (including fixture filings) with respect to the Collateral or any part thereof
and amendments thereto that (i) indicate the Collateral as all assets of such Grantor or words of
similar effect as being of an equal or lesser scope or with greater detail, and (ii) contain the
information required by Article 9 of the UCC or the analogous legislation of each applicable
jurisdiction for the filing of any financing statement or amendment, including (A) whether such
Grantor is an organization, the type of organization and any organizational identification number
issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a
sufficient description of the real property to which such Article 9 Collateral relates. Each
Grantor agrees to provide copies of such financing statements to the Collateral Agent promptly upon
any such filing.




          (c) The Security Interest is granted as security only and shall not subject the Collateral
Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Article 9 Collateral.




          (d) Each Grantor hereby further authorizes the Collateral Agent to file a Grant of Security
Interest substantially in the form of Exhibit C, D or E, as applicable,
covering relevant registered or applied for Intellectual Property Collateral with the United States
Patent and Trademark Office or United States Copyright Office, as applicable, or any similar
offices in any other country and such other documents executed by any Grantor as may be reasonably
necessary or reasonably advisable for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest granted by such Grantor hereunder, and naming such Grantor, as
debtor, and the Collateral Agent, as secured party.




          (e) Notwithstanding anything to the contrary in this Agreement, the Indenture or the other
Senior Secured Notes Documents, none of the Grantors shall be required to enter into any deposit
account control agreement or securities account control agreement, except that each Grantor shall
use commercially reasonable efforts to enter into deposit account control agreements and securities
account control agreements for the benefit of the Collateral Agent to the extent and at such time
required to enter into such control agreements for the benefit of the ABL Collateral Agent pursuant
to the terms of the Credit Agreement.




          Section 3.02 Real Estate Collateral. The Secured Obligations shall also be secured by (i)
Mortgages and fixture filings upon all Material Real Property and fixtures owned on the Issue Date
by the Company or any Subsidiary Guarantor and listed on Schedule V hereto, subject to
Section 3(n) of the Purchase Agreement and (ii) all Material Real Property acquired following the
Issue Date as of the date of acquisition (or, if later, upon the date of acquisition or completion
of construction of any improvements thereon) (collectively, the “Mortgaged Properties” and
each, a “Mortgaged Property”). For the avoidance of doubt, the Company and the Subsidiary





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Guarantors shall not be required to obtain any leasehold mortgages, landlord
waivers, estoppels or collateral access letters.




          Section 3.03 Representations and Warranties. Each Grantor represents and warrants, as to itself
and the other Grantors, to the Collateral Agent and the Secured Parties that:





     (a) Each Grantor has good and valid rights (not subject to any Liens other than
Permitted Liens) and/or title in the Article 9 Collateral with respect to which it has
purported to grant a Security Interest hereunder (which rights and/or title, are in any
event, sufficient under Section 9-203 of the UCC) and the Mortgaged Property with respect to
which it has purported to grant a Lien pursuant to a Mortgage, and has full power and
authority to grant to the Collateral Agent the Security Interest in such Article 9
Collateral pursuant hereto and the Mortgaged Property pursuant to a Mortgages and to
execute, deliver and perform its obligations in accordance with the terms of this Agreement,
without the consent or approval of any other Person other than (i) any consent or approval
that has been obtained and is in full force and effect and (ii) those consents or approvals,
the failure of which to be obtained or to be made could not reasonably be expected to have a
Material Adverse Effect.




     (b) The Perfection Certificate has been duly prepared, completed, executed and
delivered to the Collateral Agent and the information set forth therein, including the exact
legal name of each Grantor, is correct and complete in all material respects as of the date
hereof. The UCC financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations prepared based upon the information
provided in the Perfection Certificate for filing in each governmental, municipal or other
office in the jurisdiction of organization of each Grantor specified in Section 2(a) of the
Perfection Certificate (or specified by notice from the applicable Grantor to the Collateral
Agent after the Issue Date in the case of filings, recordings or registrations required by
Article 10 of the Indenture (or such equivalent provision in any other Senior Secured Notes
Document) and Section 3.01 of this Agreement), are all the filings, recordings and
registrations that are necessary to establish a legal, valid and perfected security interest
in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all
Article 9 Collateral in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its territories
and possessions, and no further or subsequent filing, refiling, recording, rerecording,
registration or reregistration is necessary in any such jurisdiction, except as provided
under applicable Law with respect to the filing of continuation statements. Each Grantor
represents and warrants that, as of the date hereof, fully executed Grants of Security
Interest in the form attached as Exhibit C, D or E, as applicable,
containing a description of all Collateral consisting of Intellectual Property with respect
to United States Patents (and Patents for which United States applications are pending),
registered United States Trademarks (and Trademarks for which United States applications to
register are pending) or United States registered Copyrights, as applicable, have been
delivered for recording in the United States Patent and Trademark Office or the United
States Copyright Office, as applicable, pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17
U.S.C. § 205 and



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the regulations thereunder or to any similar offices in any other country, as required by
applicable Law in such jurisdiction.




     (c) The Security Interest constitutes (i) a legal and valid security interest in all
the Article 9 Collateral securing the payment and performance of the Secured Obligations,
(ii) subject to the filings described in Section 3.02(b), a perfected security
interest in all Article 9 Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in the United
States (or any political subdivision thereof) and its territories and possessions pursuant
to the UCC and (iii) a security interest that shall be perfected in all Collateral in which
a security interest may be perfected upon the receipt and recording of the relevant Grants
of Security Interest substantially in the form of Exhibits C, D or E
hereto with the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, within the three month period (commencing as of the date hereof)
pursuant to 35 U.S.C. § 261 or 15 U.S.C. § 1060 or the one month period (commencing as of
the date hereof) pursuant to 17 U.S.C. § 205 and otherwise as may be required pursuant to
the laws of any other necessary jurisdiction. The Security Interest is and shall be prior
to any other Lien on any of the Article 9 Collateral, other than any nonconsensual Permitted
Lien that has priority as a matter of law and other than, with respect to ABL Collateral,
Liens created by the ABL Security Documents, subject to the terms of the Intercreditor
Agreement.




     (d) The Article 9 Collateral is owned by the Grantors free and clear of any Lien,
except for Permitted Liens. None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the UCC or any other applicable Laws
covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any
Article 9 Collateral or any security agreement or similar instrument covering any Collateral
with the United States Patent and Trademark Office or the United States Copyright Office, or
(iii) any assignment in which any Grantor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any foreign
governmental, municipal or other office, which financing statement or analogous document,
assignment, security agreement or similar instrument is still in effect, except, in each
case, for Permitted Liens.




     (e) All Commercial Tort Claims of each Grantor in excess of $10,000,000 in existence on
the date of this Agreement (or on the date upon which such Grantor becomes a party to this
Agreement) are described on Schedule III hereto.



          Section 3.04 Covenants.




          (a) The Company agrees to promptly (but in any event within 30 days) notify the Collateral
Agent of any change (i) in the legal name of any Grantor, (ii) in the identity or type of
organization or corporate structure of any Grantor, (iii) in the jurisdiction of organization of
any Grantor, (iv) in the “location” (as determined in accordance with Section 9-307 of the UCC) of
any Grantor or (v) in the organizational identification number of any Grantor. In addition, if any
Grantor does not have an organizational identification number on the Issue Date (or the date such
Grantor becomes a party to this Agreement) and later obtains one, the Company shall
promptly thereafter notify the Collateral Agent of such organizational identification number
and,





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in each case, shall take all actions reasonably satisfactory to the Collateral Agent to the
extent necessary to maintain the security interests (and the priority thereof) of the Collateral
Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.




          (b) Each Grantor shall, at its own expense, take any and all commercially reasonable actions
necessary to defend title to the Article 9 Collateral and Mortgaged Property against all Persons
and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and
Mortgaged Property and the priority thereof against any Lien that is not a Permitted Lien.




          (c) Each year, at the time of delivery of annual financial statements with respect to the
preceding fiscal year pursuant to Section 4.03(a)(1) of the Indenture, the Company shall deliver to
the Collateral Agent a certificate executed by the chief financial officer and the chief legal
officer of the Company setting forth the information required pursuant to Sections 1(a), 2(a), 2(c)
and 9 of the Perfection Certificate or confirming that there has been no change in such information
since the date of such certificate or the date of the most recent certificate delivered pursuant to
this Section 3.04(c).




          (d) The Company agrees, on its own behalf and on behalf of each other Grantor, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments
and documents and take all such actions necessary or as the Collateral Agent may from time to time
reasonably request to better assure, preserve, protect and perfect the Security Interest and the
rights and remedies created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including amendments or continuations thereof and
fixture filings) or other documents in connection herewith or therewith. If any amount payable
(other than by a Grantor) under or in connection with any of the Article 9 Collateral and Mortgaged
Property that equals or exceeds $5,000,000 shall be or become evidenced by any promissory note or
instrument, such note or instrument shall be promptly pledged and delivered to the Collateral Agent
(unless the same is required to be delivered (and is delivered) to the ABL Collateral Agent
pursuant to the Intercreditor Agreement), for the benefit of the Secured Parties, duly endorsed as
may be reasonably necessary to perfect the security interest of the Collateral Agent.




          (e) At its option, the Collateral Agent may discharge past due taxes, assessments, charges,
fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9
Collateral or Mortgaged Property (other than Permitted Liens), and may pay for the maintenance and
preservation of the Article 9 Collateral or Mortgaged Property to the extent any Grantor fails to
do so as required by the Indenture, any other Senior Secured Notes Document or this Agreement and
within a reasonable period of time after the Collateral Agent has requested that it do so, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent within 10 days after demand
for any payment made or any reasonable expense incurred by the Collateral Agent pursuant to the
foregoing authorization, provided, however, that a Grantor shall not be obligated
to reimburse the Collateral Agent with respect to any Intellectual Property Collateral which any
Grantor has failed to maintain or pursue, or otherwise has allowed to lapse,
terminate or put in the public domain, in accordance with Section 4.02(f). Nothing in
this paragraph





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shall be interpreted as excusing any Grantor from the performance of, or imposing
any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or
other promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the other Senior Secured
Notes Documents.




          (f) If at any time any Grantor shall take a security interest in any property of an Account
Debtor or any other Person the value of which equals or exceeds $5,000,000 to secure payment and
performance of an Account, subject to the terms of the Intercreditor Agreement, such Grantor shall
promptly assign such security interest to the Collateral Agent for the benefit of the applicable
Secured Parties. Such assignment need not be filed of public record unless necessary to continue
the perfected status of the security interest against creditors of and transferees from the Account
Debtor or other Person granting the security interest.




          (g) Each Grantor (rather than the Collateral Agent or any Secured Party) shall remain liable
(as between itself and any relevant counterparty) to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or instrument
relating to the Article 9 Collateral or Mortgaged Property, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless
the Collateral Agent and the Secured Parties from and against any and all liability for such
performance.




          (h) Within 60 days from the first date on which any Real Property owned in fee simple by a
Grantor becomes Material Real Property (a “Trigger Date”), such Grantor shall cause such
Material Real Property to be subjected to a Lien in favor of the Collateral Agent for the benefit
of the Secured Parties and will take or cause the relevant Person to take, such actions as shall be
necessary or reasonably requested by the Collateral Agent to grant and perfect or record such Lien
in favor of the Collateral Agent for the benefit of the Secured Parties. Within 60 days after such
Trigger Date, the Collateral Agent shall have received (i) counterparts of a Mortgage with respect
to such Mortgaged Property duly executed and delivered by the record owner of such property in form
suitable for filing or recording in all filing or recording offices that are necessary or desirable
in order to create a valid and subsisting perfected first-priority Lien (subject only to Liens
described in clause (ii) below) on the property and/or rights described therein in favor of the
Collateral Agent for the benefit of the Secured Parties, and evidence that all filing and recording
taxes and fees have been paid or otherwise provided for (it being understood that if a mortgage tax
or similar charge will be owed on the entire amount of the Indebtedness evidenced thereby, then the
amount secured by such Mortgage shall be limited to 100% of the fair market value of the property
at the time such Mortgage is entered into if such limitation results in such mortgage tax being
calculated based upon such fair market value), (ii) fully paid policies of title insurance (or
marked-up title insurance commitments having the effect of policies of title insurance) on such
Mortgaged Property naming the Collateral Agent as the insured for its benefit and that of the
Secured Parties and their respective successors and assigns (the “Mortgage Policies”)
issued by a nationally recognized title insurance company and in an amount not to exceed the fair
market value of such Mortgaged Property, insuring such Mortgages to be valid subsisting
first-priority Liens on the property described therein, free and clear of all Liens other than Permitted
Liens, each of which shall (A) to the extent reasonably necessary, include





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such reinsurance arrangements (with provisions for direct access, if reasonably necessary), (B) contain
a “tie-in” or “cluster” endorsement, if available under applicable law (i.e., policies which insure
against losses regardless of location or allocated value of the insured property up to a stated
maximum coverage amount) and (C) have been supplemented by commercially reasonable endorsements
(including endorsements on matters relating to usury, first loss, last dollar, zoning, contiguity,
revolving credit (if available after the applicable Grantor uses commercially reasonable efforts),
doing business, non-imputation, public road access, variable rate, environmental lien, subdivision,
mortgage recording tax, separate tax lot and so-called comprehensive coverage over covenants and
restrictions; provided, however, the applicable Grantor shall not be obligated to
obtain a “creditor’s rights” endorsement) to the extent available at commercially reasonable rates,
(iii) such new or existing surveys as may be reasonably requested by the Collateral Agent, (iv)
legal opinions, addressed to the Collateral Agent and the other Secured Parties, as to the
enforceability and perfection of the Mortgages (and such other matters as are customarily opined
upon by local counsel) and (v) a completed “life of the loan” Federal Emergency Management Agency
Standard Flood Hazard Determination with respect to such Mortgaged Property duly executed and
acknowledged by the appropriate Grantors.




          (i) Within ninety (90) days after the Issue Date, the Company shall provide to the Collateral
Agent evidence that all insurance (including title insurance) required to be maintained pursuant to
the Security Documents has been obtained and is in effect with financially sound and reputable
insurance companies, such insurance to be maintained with respect to its properties and business
against loss or damage of the kinds customarily insured against in accordance with normal industry
practice or by Persons engaged in the same or similar business, of such types and in such amounts
(after giving effect to any self-insurance reasonable and customary for similarly situated Persons
engaged in the same or similar businesses as Parent, the Company and the Restricted Subsidiaries)
as are customarily carried under similar circumstances in accordance with normal industry practice
or by such other Persons as determined by the Company in good faith. Each Grantor shall name the
Trustee and the Collateral Agent as a co-loss payee on property and casualty policies and as an
additional insured as its interests may appear on general liability policies.




          Section 3.05 Other Actions. In order to further insure the attachment, perfection and priority of,
and the ability of the Collateral Agent to enforce, the Security Interest, each Grantor agrees, in
each case at such Grantor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:





     (a) Instruments. If any Grantor shall at any time hold or acquire any
Instrument constituting Collateral and evidencing an amount equal to or in excess of
$5,000,000 such Grantor shall forthwith endorse, assign and deliver the same to the
Collateral Agent for the benefit of the applicable Secured Parties (unless the same is
required to be delivered (and is delivered) to the ABL Collateral Agent pursuant to the
Intercreditor Agreement), accompanied by such instruments of transfer or assignment duly
executed in blank as may be reasonably necessary to prefect the security interest of the
Collateral Agent.




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          (b) Investment Property. Except to the extent otherwise provided in
Article II, if any Grantor shall at any time hold or acquire any certificated securities,
such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent
for the benefit of the applicable Secured Parties (unless the ABL Collateral Agent is
granted a prior security interest in such Investment Property and the same is required to be
delivered (and is delivered) to the ABL Collateral Agent pursuant to the Intercreditor
Agreement), accompanied by such instruments of transfer or assignment duly executed in blank
as may be reasonably necessary to perfect the security interest of the Collateral Agent. If
any securities now or hereafter acquired by any Grantor are uncertificated and are issued to
such Grantor or its nominee directly by the issuer thereof, upon the Collateral Agent’s
request following the occurrence of an Event of Default such Grantor shall promptly notify
the Collateral Agent thereof and, at the Collateral Agent’s reasonable request, pursuant to
an agreement in form and substance reasonably satisfactory to the Collateral Agent (unless
the ABL Collateral Agent is granted a prior security interest in such Investment Property
and such Grantor is required to do so (and does so) in favor of the ABL Collateral Agent
pursuant to the Intercreditor Agreement), either (i) cause the issuer to agree to comply
with instructions from the Collateral Agent as to such securities, without further consent
of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the
registered owner of the securities. If any securities, whether certificated or
uncertificated, or other investment property are held by any Grantor (or its nominee through
a securities intermediary or commodity intermediary) for more than 45 days and such
securities or other investment property exceed $2,500,000 in value, upon the Collateral
Agent’s request and following the occurrence of an Event of Default, such Grantor shall
immediately notify the Collateral Agent thereof and at the Collateral Agent’s request and
option, pursuant to an agreement in form and substance reasonably satisfactory to the
Collateral Agent shall, unless such Grantor is required to do so (and does so) in favor of
the ABL Collateral Agent, either (i) cause such securities intermediary or (as the case may
be) commodity intermediary to agree to comply with entitlement orders or other instructions
from the Collateral Agent to such securities intermediary as to such security entitlements,
or (as the case may be) to apply any value distributed on account of any commodity contract
as directed by the Collateral Agent to such commodity intermediary, in each case without
further consent of any Grantor or such nominee, or (ii) in the case of financial assets or
other Investment Property held through a securities intermediary, arrange for the Collateral
Agent to become the entitlement holder with respect to such Investment Property, with the
Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights
to withdraw or otherwise deal with such Investment Property. The Collateral Agent agrees
with each of the Grantors that the Collateral Agent shall not give any such entitlement
orders or instructions or directions to any such issuer, securities intermediary or
commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal
or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing.
The provisions of this paragraph shall not apply to any financial assets credited to a
securities account for which the Collateral Agent is the securities intermediary. Each
Grantor that is the issuer of Pledged Equity agrees that it will be bound by the terms of
this Agreement with respect to the Pledge
d Equity issued by it and will comply with such
terms insofar as such terms are applicable to it.







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     (c) Commercial Tort Claims. If any Grantor shall at any time after the date of
this Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the
aggregate claimed damages thereunder or the reasonably estimated value thereof) of
$10,000,000 or more, such Grantor shall promptly notify the Collateral Agent thereof in a
writing signed by such Grantor and provide supplements to Schedule III describing
the details thereof and shall grant to the Collateral Agent a security interest therein and
in the proceeds thereof, all upon the terms of this Agreement.



ARTICLE IV




          Special Provisions Concerning Intellectual Property Collateral



          Section 4.01 Grant of License to Use Intellectual Property. Without limiting the provisions of
Section 3.01 hereof or any other rights of the Collateral Agent as the holder of a Security
Interest in any Intellectual Property Collateral, for the purpose of enabling the Collateral Agent
to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor shall, upon request by the
Collateral Agent at any time after the occurrence and during the continuance of an Event of
Default, grant to the Collateral Agent to the full extent such Grantor is permitted to grant such a
license and to the extent that the Collateral Agent does not exercise its rights pursuant to
Section 6.01(vi) herein, an irrevocable, nonexclusive license (exercisable without payment
of royalty or other compensation to the Grantors) to use, license or, solely to the extent
necessary to exercise such rights and remedies, sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Grantor, and wherever the same may be located
(whether or not any license agreement by and between any Grantor and any other Person relating to
the use of such Intellectual Property Collateral may be terminated hereafter), and, to the extent
permitted by such Grantor’s existing contractual obligations, including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof. The use of such
license by the Collateral Agent may be exercised, subject to the terms of the Intercreditor
Agreement, at the option of the Collateral Agent, during the continuation of an Event of Default;
provided that any license, sublicense or other transaction entered into by the Collateral
Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure
of an Event of Default; and provided, further, that the terms of any license or
sublicense shall include all terms and restrictions that are customarily required to ensure the
continuing validity and effectiveness of the Intellectual Property at issue, such as, without
limitation, quality control and inure provisions with regard to Trademarks, patent designation
provisions with regard to Patents, and copyright notices and restrictions or provisions on
decompilation and reverse engineering of copyrighted software. In the event the license set forth
in this Section 4.01 is exercised with regard to any Trademarks, then the following shall
apply: (i) all goodwill arising from any licensed or sublicensed use of any Trademark shall inure
to the Grantor; (ii) the licensed or sublicensed Trademarks shall only be used in association with
goods or services of a quality and nature consistent with the quality and reputation with which
such Trademarks were associated when used by Grantor prior to the exercise of the license rights
set forth herein; and (iii) at the Grantor’s request and expense, licensees and sublicensees shall
provide reasonable cooperation in any effort by the Grantor to maintain the registration or
otherwise secure the ongoing validity and effectiveness of



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such licensed Trademarks, including, without limitation, the actions and conduct described in
Section 4.02 below.




          Section 4.02 Protection of Collateral Agent’s Security.



          (a) Except to the extent that failure to act could not reasonably be expected to have a
Material Adverse Effect, with respect to any registration or pending application of each item of
its Intellectual Property Collateral for which such Grantor has standing to do so, each Grantor
agrees to take, at its expense, all reasonable steps, including, without limitation, in the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other governmental authority located
in the United States or with any similar offices in any other country, to (i) maintain the validity
and enforceability of any material registered Intellectual Property Collateral and maintain such
Intellectual Property Collateral in full force and effect, and (ii) pursue the registration and
maintenance of each material Patent, Trademark, or Copyright registration or application, now or
hereafter included in such Intellectual Property Collateral of such Grantor, including, without
limitation, the payment of required fees and taxes, the filing of responses to office actions
issued by the U.S. Patent and Trademark Office, the U.S. Copyright Office or other governmental
authorities or any similar offices in any other country, the filing of applications for renewal or
extension, the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the filing
of divisional, continuation, continuation-in-part, reissue and renewal applications or extensions,
the payment of maintenance fees and the participation in interference, reexamination, opposition,
cancellation, and Infringement proceedings.



          (b) Except to the extent that failure to act could not reasonably be expected to have a
Material Adverse Effect, no Grantor shall do or permit any act or knowingly omit to do any act
whereby any of its material Intellectual Property Collateral may prematurely lapse, be terminated,
or become invalid or unenforceable or placed in the public domain (or in case of a trade secret,
become publicly known).



          (c) Except to the extent that failure to act could not reasonably be expected to have a
Material Adverse Effect, each Grantor shall take all reasonable steps to preserve and protect each
item of its material Intellectual Property Collateral, including, without limitation, maintaining
the quality of any and all products or services used or provided in connection with any of the
material Trademarks, consistent with the quality of the products and services as of the date
hereof, and taking all reasonable steps necessary to ensure that all licensed users of any of the
material Trademarks abide by the applicable license’s terms with respect to the standards of
quality.



          (d) Each Grantor agrees that, should it obtain an ownership or other interest in any
Intellectual Property Collateral after the Issue Date (i) the provisions of this Agreement shall
automatically apply thereto, and (ii) any such Intellectual Property and, in the case of
Trademarks, the goodwill symbolized thereby, shall automatically become part of the Intellectual
Property Collateral subject to the terms and conditions of this Agreement with respect thereto.



          (e) Subject to the requirements and exclusions of Section 3.01, on December 31 of
every fiscal year of the Company, each Grantor shall sign and deliver to the Collateral Agent an
appropriate Security Agreement Supplement or related Grant of Security Interest sub-



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stantially in the form of Exhibits A, C, D and E, as applicable,
with respect to all such registered or applied for Intellectual Property owned or exclusively
licensed by it as licensee as of the last day of such period, to the extent that such Intellectual
Property is not covered by any previous Security Agreement Supplement (or Grant of Security
Interests) so signed and delivered by it. In each case, it will promptly cooperate as reasonably
necessary to enable the Collateral Agent to make any necessary or reasonably desirable recordations
with the U.S. Copyright Office or the U.S. Patent and Trademark Office.




          (f) Notwithstanding the foregoing provisions of this Section 4.02 or elsewhere in this
Agreement, nothing in this Agreement shall prevent any Grantor from disposing of, discontinuing the
use or maintenance of, causing or permitting expiration, lapse or abandonment, or failing to renew
any applications or registrations of any of its Intellectual Property Collateral to the extent not
prohibited by the Indenture or any other Senior Secured Notes Document if such Grantor determines
in its reasonable business judgment that such actions are desirable in the conduct of its business.



ARTICLE V




[Reserved]



ARTICLE VI



Remedies



          Section 6.01 Remedies Upon Default. Upon the occurrence and during the continuance of an Event of
Default, it is agreed that the Collateral Agent shall have the right to exercise any and all rights
afforded to a secured party with respect to the Secured Obligations, as applicable, under the UCC
or other applicable Law, and also may, subject to the terms of the Intercreditor Agreement, (i)
require each Grantor to, and each Grantor agrees that it will at its expense and upon request of
the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the
Collateral Agent and make it available to the Collateral Agent at a place and time to be designated
by the Collateral Agent that is reasonably convenient to both parties; (ii) occupy any premises
owned or, to the extent lawful and permitted, leased by any of the Grantors where the Collateral or
any part thereof is assembled or located for a reasonable period in order to effectuate its rights
and remedies hereunder or under law, without obligation to such Grantor in respect of such
occupation; provided that the Collateral Agent shall provide the applicable Grantor with
notice thereof prior to or promptly after such occupancy; (iii) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or otherwise in respect
of the Collateral; provided that the Collateral Agent shall provide the applicable Grantor
with notice thereof prior to or promptly after such exercise; (iv) withdraw any and all cash or
other Collateral from any Collateral Account and apply such cash and other Collateral to the
payment of any and all Secured Obligations in the manner provided in Section 6.02 of this
Agreement; (v) subject to the mandatory requirements of applicable Law and the notice requirements
described below, sell or otherwise dispose of all or any part of the Collateral securing the
Secured Obligations at a public or private sale or at any broker’s board or on any securities
exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropri-



-27-









 




ate; and (vi) with respect to any Intellectual Property Collateral, on demand, cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such Intellectual
Property Collateral by the applicable Grantors to the Collateral Agent, or license or sublicense,
whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such
Intellectual Property Collateral throughout the world on such terms and conditions and in such
manner as the Collateral Agent shall determine; provided that such terms shall include all
terms and restrictions customarily required to ensure the continuing validity and effectiveness of
the Intellectual Property at issue, such as, without limitation, quality control and inure
provisions with regard to Trademarks, patent designation provisions with regard to Patents, and
copyright notices and restrictions or decompilation and reverse engineering of copyrighted
software. The Grantors recognize that (a) the Collateral Agent may be unable to effect a public
sale of all or a part of the Collateral consisting of securities by reason of certain prohibitions
contained in the Securities Act of 1933, 15 U.S.C. §77 (as amended and in effect, the
“Securities Act”), or the securities laws of various states (the “Blue Sky Laws”),
but may be compelled to resort to one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof, (b) that private sales so
made may be at prices and upon other terms less favorable to the seller than if such securities
were sold at public sales, (c) that neither the Collateral Agent nor any other Secured Party has
any obligation to delay sale of any of the Collateral for the period of time necessary to permit
such securities to be registered for public sale under the Securities Act or the Blue Sky Laws, and
(d) that private sales made under the foregoing circumstances shall be deemed to have been made in
a commercially reasonable manner. Upon consummation of any such sale the Collateral Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any sale of Collateral shall hold the property sold
absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor
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 give the applicable Grantors 10 days’ written notice (which each
Grantor agrees is reasonable notice within the meaning of Section 9-611 of the UCC or its
equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the
board or exchange at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice (if any) of such sale. The Collateral Agent may
conduct one or more going out of business sales, in the Collateral Agent’s own right or by one or
more agents and contractors. Such sale(s) may be conducted upon any premises owned, leased, or
occupied by any Grantor. The Collateral Agent and any such agent or contractor, in conjunction
with any such sale, may augment the Inventory with other goods (all of which other goods shall
remain the sole property of the Collateral Agent or such agent or contractor). Any amounts
realized from the sale of such goods which constitute augmentations to the Inventory (net of an
allocable share of the costs and expenses incurred in their disposition) shall be the sole property
of the Collateral Agent or such agent or contractor and neither any Grantor nor any Person claiming



-28-









 




under or in right of any Grantor shall have any interest therein. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral shall have been given.
The Collateral Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place to which the same
was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for
future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale
price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At
any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any
Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then due and payable to
such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes of determining the Grantors’ rights
in the Collateral, a written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have
entered into such an agreement all Events of Default shall have been remedied and the Secured
Obligations paid in full; provided that such terms shall include all terms and restrictions
that customarily required to ensure the continuing validity and effectiveness of the Intellectual
Property at issue, such as, without limitation, quality control and inure provisions with regard to
Trademarks, patent designation provisions with regard to patents, and copyright notices and
restrictions or decompilation and reverse engineering of copyrighted software. As an alternative
to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a
suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction
or pursuant to a proceeding by a court appointed receiver. Any sale pursuant to the provisions of
this Section 6.01 shall be deemed to conform to the commercially reasonable standards as
provided in Section 9-610(b) of the UCC or its equivalent in other jurisdictions.




          Subject to the terms of the Intercreditor Agreement, each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by
the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) during the
continuance of an Event of Default and after notice to the Company of its intent to exercise such
rights (except in the case of a Bankruptcy Event of Default, in which case no such notice shall be
required), for the purpose of (i) making, settling and adjusting claims in respect of Article 9
Collateral or Mortgaged Property under policies of insurance, endorsing the name of such Grantor on
any check, draft, instrument or other item of payment for the proceeds of such



-29-









 




policies of insurance, (ii) making all determinations and decisions with respect thereto and (iii)
obtaining or maintaining the policies of insurance required by the Senior Secured Notes Documents
as they relate to Collateral or to pay any premium in whole or in part relating thereto. All sums
disbursed by the Collateral Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, within
10 days of demand, by the Grantors to the Collateral Agent and shall be additional Secured
Obligations secured hereby.




          By accepting the benefits of this Agreement and each other Collateral Document, the Secured
Parties expressly acknowledge and agree that this Agreement and each other Collateral Document may
be enforced only by the action of the Collateral Agent and that no other Secured Party shall have
any right individually to seek to enforce or to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such rights and remedies may be
exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this
Agreement and the other Collateral Documents.



          Section 6.02 Application of Proceeds. The Collateral Agent shall apply the proceeds of any
collection or sale of Collateral, including any Collateral consisting of cash, in accordance with
the provisions of the Collateral Agency Agreement and Section 6.13 of the Indenture, in each case,
subject to the terms of the Intercreditor Agreement. The Collateral Agent shall have absolute
discretion as to the time of application of any such proceeds, moneys or balances in accordance
with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral
Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see
to the application of any part of the purchase money paid over to the Collateral Agent or such
officer or be answerable in any way for the misapplication thereof. It is understood and agreed
that the Grantors shall remain jointly and severally liable to the extent of any deficiency between
the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.



ARTICLE VII




Indemnity, Subrogation and Subordination



          Each Grantor hereby unconditionally and irrevocably agrees not to exercise any rights that it
may now have or hereafter acquire against the Company or any other Grantor that arise from the
existence, payment, performance or enforcement of such Grantor’s Secured Obligations under or in
respect of this Agreement or any other Senior Secured Notes Document, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification
and any right to participate in any claim or remedy of any Secured Party against the Company or any
other Grantor or any Collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right to take or receive
from the Company or any other Grantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim, remedy or right,
unless and until all of the Secured Obligations (other than contingent in-



-30-









 




demnity obligations for then unasserted claims) and all other amounts payable under this Agreement
shall have been paid in full. If any amount shall erroneously be paid to the Company or any other
Grantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such indebtedness of the Company or any other Grantor, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith be paid to the Collateral Agent to
be credited against the payment of the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Indenture and the other Senior Secured Notes Documents.




ARTICLE VIII




Miscellaneous



          Section 8.01 Notices. All communications and notices hereunder shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 13.02 of the Indenture
(or such equivalent provision in any other Senior Secured Notes Document).



          Section 8.02 Waivers; Amendment.



          (a) No failure or delay by any Secured Party in exercising any right, remedy, power or
privilege hereunder or under any other Senior Secured Notes Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege
hereunder, or any abandonment or discontinuance of steps to enforce such a right, remedy, power or
privilege, preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges of the Secured Parties
hereunder and under the other Senior Secured Notes Documents are cumulative and are not exclusive
of any other rights, remedies, powers and privileges that they would otherwise have. No waiver of
any provision of any Senior Secured Notes Documents or consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section 8.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the purchase of any Senior Secured Notes shall not be construed as a waiver of any
Default or Event of Default, regardless of whether any Secured Party may have had notice or
knowledge of such Default or Event of Default at the time.



          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the
Grantor or Grantors with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with the Collateral Agency Agreement and Section 9.02
of the Indenture (or such equivalent provision in any other Senior Secured Notes Document). This
Agreement shall be construed as a separate agreement with respect to each Grantor and may be
amended, modified, supplemented, waived or released with respect to any Grantor without the
approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.



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          Section 8.03 Collateral Agent’s Fees and Expenses; Indemnification.



          (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of
its expenses incurred hereunder as provided in Section 7.07 of the Indenture (or such equivalent
provision in any other Senior Secured Notes Document).



          (b) Without limitation of its indemnification obligations under the other Senior Secured Notes
Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the
other Indemnified Parties (as defined in Section 7.07 of the Indenture) against, and hold each
Indemnified Party harmless from, any and all losses, claims, damages, liabilities and reasonably
related expenses (including the reasonable fees, charges and disbursements of any counsel for any
Indemnified Party) incurred by any Indemnified Party or asserted against any Indemnified Party by
any third party or by any Grantor arising out of, in connection with, or as a result of, (i) the
execution or delivery of this Agreement, any other Senior Secured Notes Documents or any agreement
or instrument contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby or the administration of this Agreement and the other Senior Secured Notes
Documents or (ii) any actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing brought by a third party or by any Grantor or any of such Grantor’s
directors, shareholders or creditors, and regardless of whether any Indemnified Party is a party
thereto; provided that such indemnity shall not, as to any Indemnified Party, be available
to the extent that such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence, fraud, bad faith or willful misconduct of such Indemnified Party.



          (c) Any such amounts payable as provided hereunder shall be additional Secured Obligations
secured by the Collateral Documents. The provisions of this Section 8.03 shall remain
operative and in full force and effect regardless of the termination of this Agreement or any other
Senior Secured Notes Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Secured Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Senior Secured Notes Document, or any investigation made
by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this
Section 8.03 shall be payable within 10 Business Days of written demand therefor.



          Section 8.04 Successors and Assigns. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the permitted successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral
Agent that are contained in this Agreement shall bind and inure to the benefit of their respective
successors and assigns.



          Section 8.05 Survival of Agreement. All covenants, agreements, indemnities, representations and
warranties made by the Grantors in the Senior Secured Notes Documents and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement or any other Senior
Secured Notes Document shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of the Senior Secured



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Notes Documents and the purchase of any Senior Secured Notes, regardless of any investigation made
by any such other party or on its behalf and, notwithstanding that any Secured Party may have had
notice or knowledge of any Default or Event of Default or incorrect representation or warranty at
the time any Senior Secured Notes are purchased, and shall continue in full force and effect until
this Agreement is terminated as provided in Section 8.13 hereof, or with respect to such
Grantor or such Grantor is otherwise released from its obligations under this Agreement in
accordance with the terms hereof.




          Section 8.06 Counterparts; Effectiveness; Several Agreement. This Agreement and each other Senior
Secured Notes Document may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. Delivery by
telecopier or by electronic pdf copy of an executed counterpart of a signature page to this
Agreement and each other Senior Secured Notes Document shall be effective as delivery of an
original executed counterpart of this Agreement and such other Senior Secured Notes Document. This
Agreement shall become effective when it shall have been executed by the Grantors and the
Collateral Agent and thereafter shall be binding upon and inure to the benefit of each Grantor and
the Collateral Agent and their respective permitted successors and assigns, except that no Grantor
shall have the right to assign its rights hereunder or any interest herein except as otherwise
permitted hereby or by the Indenture and any other Senior Secured Notes Document. This Agreement
shall be construed as a separate agreement with respect to each Grantor and may be amended,
restated, modified, supplemented, waived or released with respect to any Grantor without the
approval of any other Grantor and without affecting the obligations of any other Grantor hereunder.



          Section 8.07 Severability. If any provision of this Agreement or the other Senior Secured Notes
Documents is held to be illegal, invalid or unenforceable, the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Senior Secured Notes
Documents shall not be affected or impaired thereby. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.



          Section 8.08 [Reserved].



          Section 8.09 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY
JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF
PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN
COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT.



          Section 8.10 WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE GRANTORS, THE COLLATERAL AGENT AND THE
SECURED PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARIS-



-33-









 




ING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.




          Section 8.11 Headings. Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this Agreement.



          Section 8.12 Security Interest Absolute. All rights of the Collateral Agent hereunder, the
Security Interest, the grant of a security interest in the Pledged Collateral and all obligations
of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Indenture, any other Senior Secured Notes Document, any agreement
with respect to any of the Secured Obligations or any other agreement or instrument relating to any
of the foregoing, (b) 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, any other Senior Secured Notes Document, or any other agreement
or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any
release or amendment or waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Secured Obligations or (d) subject only to termination of a
Grantor’s obligations hereunder in accordance with the terms of Section 8.13, but without
prejudice to reinstatement rights under Article 11 of the Indenture (or such equivalent provision
in any other Senior Secured Notes Document), any other circumstance that might otherwise constitute
a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or
this Agreement.



          Section 8.13 Termination or Release.



          (a) This Agreement, the Security Interest and all other security interests granted hereby
shall terminate with respect to all Secured Obligations when (i) the principal of and interest
under the Senior Secured Notes and all fees and other Secured Obligations (other than contingent
indemnity obligations) shall have been paid in full and (ii) at such other time as provided in
Section 2.05 of the Intercreditor Agreement or Section 10.03 and Section 10.04 of the Indenture;
provided that in connection with the termination of this Agreement, the Collateral Agent
may require such indemnities as it shall reasonably deem necessary or appropriate to protect the
Secured Parties against loss on account of credits previously applied to the Secured Obligations
that may subsequently be reversed or revoked.



          (b) A Grantor shall automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor shall be automatically released upon the consummation of
any transaction permitted by the Indenture as a result of which such Grantor is released from its
Guarantee pursuant to Section 11.06 of the Indenture.



          (c) Upon any sale or other transfer by any Grantor of any Collateral that is permitted under
the Indenture (other than to another Grantor) and any other Senior Secured Notes Document, or upon
the effectiveness of any written consent to the release of the security interest granted hereby in
any Collateral pursuant to Section 9.02, Section 10.03 and Section 10.04 of the Indenture (or such
equivalent provision in any other Senior Secured Notes Document), the security interest in such
Collateral shall be automatically released.



-34-









 





          (d) In connection with any termination or release pursuant to paragraph (a),
(b), or (c) the Collateral Agent shall promptly (after reasonable advance notice)
execute and deliver to any Grantor, at such Grantor’s expense, all documents that such Grantor
shall reasonably request to evidence such termination or release. Any execution and delivery of
documents pursuant to this Section 8.13 shall be without recourse to or warranty by the
Collateral Agent or any Secured Party.



          (e) At any time that the respective Grantor desires that the Collateral Agent take any action
described in immediately preceding clause (d), it shall, upon request of the Collateral
Agent, deliver to the Collateral Agent an officer’s certificate certifying that the release of the
respective Collateral is permitted pursuant to paragraph (a), (b), or (c).
The Collateral Agent shall have no liability whatsoever to any Secured Party as the result of any
release of Collateral by it as permitted (or which the Collateral Agent in good faith believes to
be permitted) by this Agreement.



          Section 8.14 Additional Guarantors. Pursuant to Section 4.16 of the Indenture, certain
Subsidiaries of the Company or the Guarantors that were not in existence or not Grantors on the
date of the Indenture that are required to become Guarantors are required to enter in this
Agreement as Grantors. Upon execution and delivery by the Collateral Agent and a Restricted
Subsidiary of a Security Agreement Supplement, such Restricted Subsidiary shall become a Grantor
hereunder with the same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other Grantor hereunder.
The rights and obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.



          Section 8.15 Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the
Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof at any time after and
during the continuance of an Event of Default, which appointment is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, the Collateral Agent shall have the
right, upon the occurrence and during the continuance of an Event of Default and (unless a
Bankruptcy Event of Default has occurred and is continuing) delivery of notice by the Collateral
Agent to the Company of its intent to exercise such rights, with full power of substitution either
in the Collateral Agent’s name or in the name of such Grantor (a) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of the Collateral; (b)
to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral;
(c) to send verifications of Accounts to any Account Debtor; (d) to commence and prosecute any and
all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of
any Collateral; (e) to settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral; (f) to notify, or to require any Grantor to
notify, Account Debtors to make payment directly to the Collateral Agent or to a Collateral Account
and adjust, settle or compromise the amount of payment of any Account; and (g) to use, sell,
assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the purposes of



-35-









 




this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided that nothing herein contained shall be construed
as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to
the nature or sufficiency of any payment received by the Collateral Agent, or to present or file
any claim or notice, or to take any action with respect to the Collateral or any part thereof or
the moneys due or to become due in respect thereof or any property covered thereby. The Collateral
Agent and the other Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they nor their officers,
directors, employees or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct or that of any of their
Affiliates, directors, officers, employees, counsel, agents or attorneys-in-fact.




          Section 8.16 Recourse; Limited Obligations. This Agreement is made with full recourse to each
Grantor and pursuant to and upon all the warranties, representations, covenants and agreements on
the part of such Grantor contained herein, in the Senior Secured Notes Documents and the other
Senior Secured Notes Documents and otherwise in writing in connection herewith or therewith, with
respect to the Secured Obligations of each applicable Secured Party. It is the desire and intent
of each Grantor and each applicable Secured Party that this Agreement shall be enforced against
each Grantor to the fullest extent permissible under the laws applied in each jurisdiction in which
enforcement is sought.



          Section 8.17 Mortgages. In the event that any of the Collateral hereunder is also subject to a
valid and enforceable Lien under the terms of a Mortgage and the terms thereof are inconsistent
with the terms of this Agreement, then with respect to such Collateral, the terms of such Mortgage
shall control in the case of Fixtures and real estate leases, letting and licenses of, and
contracts, and agreements relating to the lease of, real property, and the terms of this Agreement
shall control in the case of all other Collateral.



          Section 8.18 Intercreditor Agreement and ABL Facility. Reference is made to the Intercreditor
Agreement. Notwithstanding any other provision contained herein, this Agreement, the Liens created
hereby and the rights, remedies, duties and obligations provided for herein are subject in all
respects to the provisions of the Intercreditor Agreement and, to the extent provided therein, the
applicable ABL Security Documents. In the event of any conflict or inconsistency between the
provisions of this Agreement and the Intercreditor Agreement, the provisions of the Intercreditor
Agreement shall control.



          Section 8.19 Collateral Agency Agreement. Reference is made to the Collateral Agency Agreement.
Notwithstanding any other provision contained herein, this Agreement, the Liens created hereby and
the rights, remedies, duties and obligations provided for herein are subject in all respects to the
provisions of the Collateral Agency Agreement. In the event of any conflict or inconsistency
between the provisions of this Agreement and the Collateral Agency Agreement, the provisions of the
Collateral Agency Agreement shall control.



[Signature Pages Follow]




-36-









 





          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.



	 	 	 	 	 
	 	SCORPIO ACQUISITION CORPORATION

 	 
	 	By:  	/s/ Jason Giordano
 	 
	 	 	Name:  	Jason Giordano 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



[Signature Page to the Security Agreement





S-1









 





          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.



	 	 	 	 	 
	 	POLYMER GROUP, INC.

 	 
	 	By:  	/s/ Daniel L. Rikard
 	 
	 	 	Name:  	Daniel L. Rikard 	 
	 	 	Title:  	Senior Vice President, General Counsel
and Secretary 	 
	 
	 	PGI POLYMER, INC.

 	 
	 	By:  	/s/ Daniel L. Rikard
 	 
	 	 	Name:  	Daniel L. Rikard 	 
	 	 	Title:  	Secretary 	 
	 
	 	CHICOPEE, INC.

 	 
	 	By:  	/s/ Daniel L. Rikard
 	 
	 	 	Name:  	Daniel L. Rikard 	 
	 	 	Title:  	Secretary 	 
	 
	 	FABRENE, L.L.C.

 	 
	 	By:  	/s/ Daniel L. Rikard
 	 
	 	 	Name:  	Daniel L. Rikard 	 
	 	 	Title:  	Secretary 	 
	 
	 	DOMINION TEXTILE (USA), L.L.C.

 	 
	 	By:  	/s/ Daniel L. Rikard
 	 
	 	 	Name:  	Daniel L. Rikard 	 
	 	 	Title:  	Secretary 	 
	 



[Signature Page to the Security Agreement





S-2









 





	 	 	 	 	 
	 	PGI EUROPE, INC.

 	 
	 	By:  	/s/ Daniel L. Rikard
 	 
	 	 	Name:  	Daniel L. Rikard 	 
	 	 	Title:  	Secretary 	 
	 



[Signature Page to the Security Agreement





S-3









 





          IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
above written.



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as Collateral Agent

 	 
	 	By:  	/s/ Joseph C. Jones
 	 
	 	 	Name:  	Joseph C. Jones 	 
	 	 	Title:  	Financial Services Officer 	 
	 



[Signature Page to the Security Agreement





S-4









 





SCHEDULE I TO SECURITY AGREEMENT




GUARANTORS



	 	 	 
	Company	 	State of Incorporation
	PGI Polymer, Inc.

	 	Delaware
	Chicopee, Inc.

	 	Delaware
	Fabrene, L.L.C.

	 	Delaware
	Dominion Textile (USA), L.L.C.

	 	Delaware
	PGI Europe, Inc.

	 	Delaware






Schedule I-1




 









 








SCHEDULE II TO SECURITY AGREEMENT




EQUITY INTERESTS



	 	 	 	 	 	 	 
	 	 	Issued and Outstanding	 	 
	 	 	 	 	Owner(s)
	 	 	Equity Interests	 	 
	 	 	No. of	 	 	 	 
	Issuer	 	shares/units	 	%	 	 
	 	 	 	 	 	 	 





Schedule II-1




 









 








PROMISSORY NOTES




	 	 	 	 	 	 	 
	Customer Name	 	Date	 	Open Amount	 	Maturity Date
	 	 	 	 	 	 	 





Schedule II-2






 









 








SCHEDULE III TO SECURITY AGREEMENT




COMMERCIAL TORT CLAIMS



[            ]



Schedule III-1





 









 








SCHEDULE IV TO SECURITY AGREEMENT




U.S. COPYRIGHT REGISTRATIONS AND APPLICATIONS




	 	 	 	 	 
	Copyright	 	Reg. No.	 	Owner
	 	 	 	 	 





U.S. PATENTS AND PATENT APPLICATIONS



[            ]



U.S. TRADEMARK REGISTRATIONS AND APPLICATIONS



	 	 	 	 	 	 	 
	Trademark	 	Reg. No.	 	Serial No.	 	Owner
	 
	 	 
	 	 
	 	 





EXCLUSIVE LICENSES OF U.S. COPYRIGHT REGISTRATIONS



[            ]



EXCLUSIVE LICENSES OF U.S. PATENTS AND PATENT APPLICATIONS



[            ]



EXCLUSIVE LICENSES OF U.S. TRADEMARK REGISTRATIONS AND APPLICATIONS



Schedule IV-1



 









 





SCHEDULE V TO SECURITY AGREEMENT




MORTGAGED PROPERTIES



Schedule V-1




 












 





SCHEDULE VI TO SECURITY AGREEMENT




POST-CLOSING MATTERS


Notwithstanding any conditions precedent representations and covenants in the Senior Secured Notes
Documents to the contrary (each such condition, representation and covenant deemed modified to the
extent necessary to effect the following, and to permit the taking of the actions described herein
within the time periods described herein), the Company shall, and shall cause each other Grantor
to, as expeditiously as possible, but in no event later than the number of days after the Issue
Date applicable to each item set forth below, do or deliver the items described below;
provided, that in each case, the Collateral Agent, may in its sole discretion waive or
extend the number of days for compliance, subject to such conditions as the Collateral Agent may
reasonably determine.




     1. Within 30 days after the Issue Date, the Collateral Agent shall have received certificates
representing all of the Equity Interests of Chicopee Asia, Limited, Bonlam S.A. de C.V., Chicopee
Holdings B.V., Dominion Textile Mauritius Inc. and PGI Nonwovens Mauritius, Ltd. required to be
pledged under the Security Agreement accompanied by stock powers duly executed in blank by a duly
authorized officer of the holder(s) of such Equity Interests to the extent (x) such ownership
interests are certificated, and (y) applicable local laws governing such entities permit the
delivery of such certificates to the Collateral Agent in the jurisdiction where the Collateral
Agent intends to hold such certificates.



     2. Within 30 days after the Issue Date, the Collateral Agent shall have received (i) the
promissory note held by PGI Polymer, Inc. having an outstanding amount of $6,252,523 (€4,674,783)
as of January 1, 2011, (ii) the promissory note held by POLYMER GROUP, INC. having an outstanding
amount of $5,869,851 as of January 1, 2011, (iii) the promissory note held by POLYMER GROUP, INC.
having an outstanding amount of $37,000,000 as of January 25, 2011 and (iv) the promissory note
held by POLYMER GROUP, INC. having an outstanding amount of $10,815,714.94 as of January 28, 2011,
each together with a proper instrument of assignment duly executed by the applicable Grantor.



Schedule V-1







 









 








EXHIBIT A TO SECURITY AGREEMENT




FORM OF SECURITY AGREEMENT SUPPLEMENT



          SUPPLEMENT NO. __ dated as of ________, to the Security Agreement (as amended, restated,
supplemented or otherwise modified, the “Security Agreement”), dated as of January 28,
2011, by and among Polymer Group, Inc., a Delaware corporation (the “Company”), Parent, the
other Guarantors party thereto (together with the Company and Parent, collectively, the
“Grantors”) and Wilmington Trust Company, as Collateral Agent (in such capacity, the
“Collateral Agent”) for the Secured Parties.




          A. Reference is made to the Indenture, dated as of January 28, 2011 (as amended, restated,
supplemented or otherwise modified from time to time, the “Indenture”), by and among the
Company, the Guarantors from time to time party thereto and Wilmington Trust Company as trustee.




          B. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement referred to therein. Capitalized terms used
herein and not otherwise defined herein or in the Security Agreement shall have the meanings
assigned to such terms in the Indenture.




          C. The Grantors have entered into the Security Agreement in order to secure the obligations
under the Indenture and the other Secured Obligations. Section 8.14 of the Security Agreement
provides that additional Subsidiaries of the Grantors that are required to become Guarantors
pursuant to and in accordance with the Indenture shall become Grantors under the Security Agreement
by execution and delivery of an instrument substantially in the form of this Supplement. The
undersigned Restricted Subsidiary (the “New Subsidiary”) is executing this Supplement in
accordance with the requirements of the Indenture to become a Grantor under the Security Agreement.




          Accordingly, the Collateral Agent and the New Subsidiary agree as follows:





     Section 1. In accordance with Section 8.14 of the Security Agreement, the New
Subsidiary by its signature below becomes a Grantor under the Security Agreement with the
same force and effect as if originally named therein as a Grantor and the New Subsidiary
hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it
as a Grantor thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on and as of the date
hereof; provided that, to the extent that such representations and warranties
specifically refer to an earlier date, they shall be true and correct in all respects as of
such earlier date. In furtherance of the foregoing, the New Subsidiary, as security for the
payment and performance in full of the Secured Obligations does hereby create and grant to
the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties,
their successors and assigns, a security interest in and lien on all of the New Subsidiary’s
right, title and interest in and to the Collateral (as defined in the Security Agreement) of
the New Subsidiary. Each reference to a “Grantor” in the Security Agreement shall be



Exhibit A-1




 









 









deemed to include the New Subsidiary. The Security Agreement is hereby incorporated
herein by reference.




     Section 2. The New Subsidiary represents and warrants to the Collateral Agent and the
other Secured Parties that this Supplement has been duly authorized, executed and delivered
by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.




     Section 3. This Supplement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Supplement shall become
effective when the Collateral Agent shall have received a counterpart of this Supplement
that bears the signature of the New Subsidiary and the Collateral Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart of this
Supplement.




     Section 4. The New Subsidiary hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of the location of any and all
Collateral of the New Subsidiary and (b) set forth under its signature hereto is the true
and correct legal name of the New Subsidiary, its jurisdiction of formation and the location
of its chief executive office (or if different, its “location” as determined in accordance
with Section 9-307 of the UCC).




     Section 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.




     Section 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.




     Section 7. In case any one or more of the provisions contained in this Supplement
should be held invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and in the Security Agreement
shall not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.




     Section 8. All communications and notices hereunder shall be in writing and given as
provided in Section 8.01 of the Security Agreement.




     Section 9. The New Subsidiary agrees to reimburse the Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including all
reasonable attorneys’ fees of counsel for the Collateral Agent, court costs, expenses and
other charges relating thereto.



Exhibit A-2




 









 








          IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this
Supplement to the Security Agreement as of the date first above written.




	 	 	 	 	 
	 	[NAME OF NEW SUBSIDIARY]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Legal Name:

Jurisdiction of Formation:

Location of Chief Executive Office:




	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Exhibit A-3






 









 








SCHEDULE I TO SECURITY AGREEMENT SUPPLEMENT




LOCATION OF COLLATERAL



	 	 	 

	Description
	 	Location






EQUITY INTERESTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number and	 	 
	 	 	Number of	 	Registered	 	Class of	 	Percentage of
	Issuer	 	Certificate	 	Owner	 	Equity Interest	 	Equity Interests
	 

	 	 
	 	 
	 	 	 	 





PROMISSORY NOTES




	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 
	 	 	Amount as of the date	 	 	 	 
	 	 	of issuance	 	Date of	 	 
	Issuer	 	(or delivery)	 	Note/Instrument	 	Maturity Date
	 

	 	 
	 	 
	 	 





COMMERCIAL TORT CLAIMS




INTELLECTUAL PROPERTY



((a) U.S. Patents, U.S. Patent Applications, (b) U.S. Trademark Registrations and Applications, (c)
U.S. Copyright Registrations and Applications and (d) exclusive Licenses of U.S. Patents, Patent
Applications, Trademark Registrations or Applications and Copyrights where the New Subsidiary is
the Licensee)




REAL PROPERTY (LEASED AND OWNED)




Schedule I-1




 









 








BANK ACCOUNTS




Schedule I-2







 









 








EXHIBIT B TO SECURITY AGREEMENT




Form of Perfection Certificate



[TO BE INSERTED]



Exhibit B-1







 









 








EXHIBIT C TO SECURITY AGREEMENT




GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS


This Trademark Security Agreement, dated as of [____________] by and between [Name of Grantor], a [
] formed under the laws of [ ] (the “Grantor”), in favor of WILMINGTON TRUST
COMPANY, in its capacity as Collateral Agent pursuant to the Indenture dated as of the date hereof
(in such capacity, the “Grantee”).




W I T N E S S E T H :



Whereas, the Grantor is party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to
execute and deliver this Trademark Security Agreement;



Now, Therefore, in consideration of the premises and to induce the Grantee, for
the benefit of the Secured Parties, to enter into the Indenture, the Grantor hereby agrees with the
Grantee as follows:



SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security
Agreement and used herein have the meaning given to them in the Security Agreement.



SECTION 2. Grant of Security Interest in Trademark Collateral. The Grantor hereby pledges
and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in
and to all of its right, title and interest in, to and under all the Trademarks of the Grantor
including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of
any and all of the foregoing; provided that any United States Trademark, applications filed
in the United States Patent and Trademark Office on the basis of any Grantor’s “intent-to-use” such
Trademarks 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.



SECTION 3. Security Agreement. The security interest granted pursuant to this Trademark
Security Agreement is granted in connection with the Security Agreement and is expressly subject to
the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and
remedies of the Grantee with respect to the security interest in the Trademarks made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. The Security Agreement (and all
rights and remedies of the Secured Parties thereunder) shall remain in full force and effect in
accordance with its terms. In the event that any provision of this Trademark Security Agreement is
deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall
control.




Exhibit C-1





 









 







SECTION 4. Purpose. This Trademark Security Agreement has been executed and delivered by
the Grantor for the purpose of recording the grant of security interest herein with the United
States Patent and Trademark Office.



SECTION 5. Termination. Upon the payment in full of the Secured Obligations and
termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor,
execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form
releasing the collateral pledge, grant, lien and security interest in the Trademarks listed on
Schedule I attached hereto.



SECTION 6. Counterparts. This Trademark Security Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and any party hereto
may execute this Trademark Security Agreement by signing and delivering one or more counterparts.




[signature page follows]




Exhibit C-2




 









 







In Witness Whereof, the Grantor has caused this Trademark Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set forth above.




	 	 	 	 	 
	 	Very truly yours,





[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Accepted and Agreed:




WILMINGTON TRUST COMPANY,

as Collateral Agent and Grantee




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Exhibit C-3





 









 








SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES TRADEMARKS




	 	 	 	 	 
	Owner	 	Trademark	 	Registration No. or Serial No.
	 
	 	 	 	 
	 

	 	 
	 	 





Schedule I-1






 









 








EXHIBIT D TO SECURITY AGREEMENT




GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS


This Patent Security Agreement, dated as of [____________], by and between [Name of Grantor], a [     
] formed under the laws of [      ] (the “Grantor”), in favor of WILMINGTON TRUST COMPANY,
in its capacity as Collateral Agent pursuant to the Indenture dated as of the date hereof (in such
capacity, the “Grantee”).




W I T N E S S E T H :



Whereas, the Grantor is party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to
execute and deliver this Patent Security Agreement;



Now, Therefore, in consideration of the premises and to induce the Grantee, for the
benefit of the Secured Parties, to enter into the Indenture, the Grantor hereby agrees with the
Grantee as follows:



SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security
Agreement and used herein have the meaning given to them in the Security Agreement.



SECTION 2. Grant of Security Interest in Patent Collateral. The Grantor hereby pledges and
grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in and
to all of its right, title and interest in, to and under all the Patents of the Grantor including,
without limitation, those items listed on Schedule I attached hereto and all Proceeds of any and
all of the foregoing.



SECTION 3. Security Agreement. The security interest granted pursuant to this Patent
Security Agreement is granted in connection with the Security Agreement and is expressly subject to
the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and
remedies of the Grantee with respect to the security interest in the Patents made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. The Security Agreement (and all
rights and remedies of the Secured Parties thereunder) shall remain in full force and effect in
accordance with its terms. In the event that any provision of this Patent Security Agreement is
deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall
control.



SECTION 4. Purpose. This Patent Security Agreement has been executed and delivered by the
Grantor for the purpose of recording the grant of security interest herein with the United States
Patent and Trademark Office.



SECTION 5. Termination. Upon the payment in full of the Secured Obligations and
termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor,
execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form re-




Exhibit D-1




 









 







leasing the collateral pledge, grant, lien and security interest in the Patents listed on Schedule I
attached hereto.



SECTION 6. Counterparts. This Patent Security Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any party hereto may
execute this Patent Security Agreement by signing and delivering one or more counterparts.




[signature page follows]




Exhibit D-2



 









 




In Witness Whereof, the Grantor has caused this Patent Security Agreement to be executed
and delivered by its duly authorized officer as of the date first set forth above.




	 	 	 	 	 
	 	Very truly yours,







[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Accepted and Agreed:




WILMINGTON TRUST COMPANY,

as Collateral Agent and Grantee




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Exhibit D-3





 









 








SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES PATENTS




	 	 	 	 	 
	 	 	Patent or	 	 
	 	 	Patent	 	 
	 	 	Application	 	 
	Owner	 	Number	 	Title
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 





Schedule I-1





 









 








EXHIBIT E TO SECURITY AGREEMENT




GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS


This Copyright Security Agreement, dated as of [____________], by and between [Name of Grantor], a
[       ] formed under the laws of [       ] (the “Grantor”), in favor of WILMINGTON TRUST
COMPANY, in its capacity as Collateral Agent pursuant to the Indenture dated as of the date hereof
(in such capacity, the “Grantee”).




W I T N E S S E T H :



Whereas, the Grantor is party to a Security Agreement of even date herewith (the
“Security Agreement”) in favor of the Grantee pursuant to which the Grantor is required to
execute and deliver this Copyright Security Agreement;



Now, Therefore, in consideration of the premises and to induce the Grantee, for the
benefit of the Secured Parties, to enter into the Indenture, the Grantor hereby agrees with the
Grantee as follows:



SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the Security
Agreement and used herein have the meaning given to them in the Security Agreement.



SECTION 2. Grant of Security Interest in Copyright Collateral. The Grantor hereby pledges
and grants to the Grantee for the benefit of the Secured Parties a lien on and security interest in
and to all of its right, title and interest in, to and under all the Copyrights of the Grantor
including, without limitation, those items listed on Schedule I attached hereto and all Proceeds of
any and all of the foregoing.



SECTION 3. Security Agreement. The security interest granted pursuant to this Copyright
Security Agreement is granted in connection with the Security Agreement and is expressly subject to
the terms and conditions thereof. Grantor hereby acknowledges and affirms that the rights and
remedies of the Grantee with respect to the security interest in the Copyrights made and granted
hereby are more fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. The Security Agreement (and all
rights and remedies of the Secured Parties thereunder) shall remain in full force and effect in
accordance with its terms. In the event that any provision of this Copyright Security Agreement is
deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall
control.



SECTION 4. Purpose. This Copyright Security Agreement has been executed and delivered by
the Grantor for the purpose of recording the grant of security interest herein with the United
States Copyright Office.



SECTION 5. Termination. Upon the payment in full of the Secured Obligations and
termination of the Security Agreement, the Grantee shall, at the reasonable request of the Grantor,
execute, acknowledge, and deliver to the Grantor an instrument in writing in recordable form re-




Exhibit E-1




 









 







leasing the collateral pledge, grant, lien and security interest in the Copyrights listed on Schedule I
attached hereto.



SECTION 6. Counterparts. This Copyright Security Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and any party hereto
may execute this Copyright Security Agreement by signing and delivering one or more counterparts.




[signature page follows]




Exhibit E-2





 









 







In Witness Whereof, the Grantor has caused this Copyright Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set forth above.




	 	 	 	 	 
	 	Very truly yours,



[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Accepted and Agreed:




WILMINGTON TRUST COMPANY,

as Collateral Agent and Grantee




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Exhibit E-3






 









 








SCHEDULE I

to

GRANT OF SECURITY INTEREST

IN UNITED STATES COPYRIGHTS




	 	 	 
	 	 	Registration
	Title	 	Number
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 





Schedule I-1