EXHIBIT 4.2

EXECUTION VERSION


SECURITY AGREEMENT


Dated October 18, 2005
 
 From
 
 The Grantors referred to herein
 
 as Grantors
 
 to
 
 Citicorp USA, Inc.
 
 as Agent









T A B L E  O F  C O N T E N T S

	
  
Section
  	
   
 	
  
Page
  
	
  


  	
  
 
  	
  


  
	
  
Section 1. Grant of Security
  	
  
 
  	
  
2
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 2. Security for Obligations
  	
  
 
  	
  
6
  
	
   
  	
  
 
  	
   
 
	
  
Section 3. Grantors Remain Liable
  	
  
 
  	
  
6
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 4. Delivery and Control of Security   Collateral
  	
  
 
  	
  
6
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 5. Maintaining the Account Collateral
  	
  
 
  	
  
7
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 6. Representations and Warranties
  	
  
 
  	
  
8
  
	
   
  	
  
 
  	
   
 
	
  
Section 7. Further Assurances
  	
  
 
  	
  
12
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 8. As to Equipment and Inventory
  	
  
 
  	
  
13
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 9. Insurance
  	
  
 
  	
  
13
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 10. Post-Closing Changes; Collections on   Assigned Agreements and Receivables
  	
  
 
  	
  
14
  
	
   
  	
  
 
  	
   
 
	
  
Section 11. As to Intellectual Property Collateral
  	
  
 
  	
  
15
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 12. Voting Rights; Dividends; Etc.
  	
  
 
  	
  
16
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 13. As to the Assigned Agreements
  	
  
 
  	
  
17
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 14. As to Letter-of-Credit Rights
  	
  
 
  	
  
18
  
	
   
  	
  
 
  	
   
 
	
  
Section 15. Transfers and Other Liens; Additional   Shares
  	
  
 
  	
  
18
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 16. Agent Appointed Attorney in Fact
  	
  
 
  	
  
19
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 17. Agent May Perform
  	
  
 
  	
  
19
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 18. The Agent’s Duties
  	
  
 
  	
  19
  
	
   
  	
  
 
  	
   
 
	
  
Section 19. Remedies
  	
  
 
  	
  
20
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 20. Indemnity and Expenses
  	
  
 
  	
  
22
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 21. Amendments; Waivers; Additional   Grantors; Etc.
  	
  
 
  	
  
22
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 22. Confidentiality; Notices; References.
  	
  
 
  	
  22
  
	
   
  	
  
 
  	
   
 
	
  
Section 23. Continuing Security Interest;   Assignments Under the Credit Agreement
  	
  
 
  	
  
23
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 24. Release; Termination
  	
  
 
  	
  
24
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 25. Execution in Counterparts
  	
  
 
  	
  
24
  
	
  
 
  	
  
 
  	
   
 
	
  
Section 26. Governing Law
  	
  
 
  	
  
24
  



i








	
  
Schedules
  	
   
 	
  
 
  
	
  
 
  	
   
 	
  
 
  
	
  
Schedule I
  	
  
-
  	
  
Investment Property
  
	
  
Schedule II
  	
  
-
  	
  
Pledged Deposit Accounts
  
	
  
Schedule III
  	
  
-
  	
  
Receivables and Agreement Collateral
  
	
  
Schedule IV
  	
  
-
  	
  
Intellectual Property
  
	
  Schedule V
  	
  
-
  	
  
Location, Chief Executive Office, Type of Organization,   Jurisdiction of Organization and Organizational Identification Number
  
	
  
Schedule VI
  	
  
-
  	
  
Changes in Name, Location, Etc.
  
	
  
Schedule VII
  	
  
-
  	
  
Letters of Credit
  
	
  
Schedule VIII
  	
  
-
  	
  
Equipment Locations
  
	
  
Schedule IX
  	
  
-
  	
  
Inventory Locations
  
	
  
Schedule X
  	
  
-
  	
  
Collateral Reserved for Sale
  
	
  
 
  	
   
 	
  
 
  
	
  Exhibits
  	
   
 	
  
 
  
	
  
 
  	
   
 	
  
 
  
	
  
Exhibit A
  	
  
-
  	
  
Form of Intellectual Property Security Agreement
  
	
  
Exhibit B
  	
  
-
  	
  
Form of Intellectual Property Security Agreement   Supplement
  
	
  
Exhibit C
  	
  
-
  	
  
Form of Security Agreement Supplement
  




ii









SECURITY AGREEMENT

	
                      SECURITY   AGREEMENT dated October 18, 2005 (the “Agreement”) made by Eastman Kodak Company,   a New Jersey corporation (the “Borrower”), and the other Persons listed on   the signature pages hereof, or which at any time execute and deliver a   Security Agreement Supplement in substantially the form attached hereto as   Exhibit C (the Borrower and such Persons so listed being, collectively, the “Grantors”), to   Citicorp USA, Inc., as Agent (in such capacity, together with any successor Agent   appointed pursuant to Article VII of the Credit Agreement (as hereinafter   defined), the “Agent”)   for the Secured Parties (as hereinafter defined).
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    PRELIMINARY STATEMENTS.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (1)          The   Borrower has entered into a Credit Agreement dated as of October 18, 2005   (said Credit Agreement, as it may hereafter be amended, amended and restated,   supplemented or otherwise modified from time to time, being the “Credit Agreement”)   with the Lenders and the Agents (each as defined therein).
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (2)          Each   Grantor is the owner of the shares of stock or other equity interests (the “Initial Pledged Equity”)   set forth opposite such Grantor’s name on and as otherwise described in Part   I of Schedule I hereto and issued by the Persons named therein and of the   indebtedness owed to such Grantor (the “Initial Pledged Debt”) set forth opposite   such Grantor’s name on and as otherwise described in Part II of Schedule I   hereto and issued by the obligors named therein.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (3)          Each   Grantor is the owner of the deposit accounts (the “Pledged Deposit Accounts”)   set forth opposite such Grantor’s name on Schedule II hereto.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
                      (4)          The   Company is the owner of a L/C Cash Deposit Account (as defined in the Credit   Agreement) created in accordance with the Credit Agreement and subject to the   security interest granted under this Agreement on terms and conditions   acceptable to the Agent.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (5)          It   is a condition precedent to the making of Advances and the issuance of   Letters of Credit by the Lenders under the Credit Agreement that the Grantors   shall have granted the security interest contemplated by this Agreement.  Each Grantor will derive substantial   direct or indirect benefit from the transactions contemplated by this   Agreement, the Credit Agreement and the other Loan Documents.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (6)          Terms   defined in the Credit Agreement and not otherwise defined in this Agreement   are used in this Agreement as defined in the Credit Agreement.  Further, unless otherwise defined in this   Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the   UCC (as defined below) are used in this Agreement as such terms are defined   in such Article 8 or 9.  “UCC” means the   Uniform Commercial Code as in effect from time to time in the State of New   York; provided that, if   perfection or the effect of perfection or non perfection or the priority of   the security interest in any Collateral is governed by the Uniform Commercial   Code as in effect in a jurisdiction other than the State of New York, “UCC”
means the   Uniform Commercial Code as in effect from time to time in such other   jurisdiction for purposes of the provisions hereof relating to such   perfection, effect of perfection or non perfection or priority.
  










	
  
                    NOW,   THEREFORE, in consideration of the premises and in order to induce the   Lenders to make Advances and issue Letters of Credit under the Credit   Agreement, each Grantor hereby agrees with the Agent for the ratable benefit   of the Secured Parties as follows:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   1.  Grant of Security.  Each Grantor hereby grants to the Agent,   for the ratable benefit of the Secured Parties, a security interest in such   Grantor’s right, title and interest in and to the following, in each case, as   to each type of property described below, whether now owned or hereafter   acquired by such Grantor, wherever located, and whether now or hereafter   existing or arising, provided, however, in no event shall any lien or   security interest be created in any asset which is, or hereafter becomes, a   “Principal Property” or consists of the capital stock or other equity   interest in an entity which is, or hereafter becomes, a “Restricted   Subsidiary” as such terms are defined in the Indenture (as defined in the   Credit Agreement), and provided,
further, that notwithstanding   anything herein to the contrary, in no event shall the Collateral include or   the security interest granted under this Section 1 hereof attach to: (A) any   assets of any Grantor located outside the United States, (B) any deposit   account for taxes, payroll, employee benefits or similar items and any other   account or financial asset in which such security interest would be unlawful   or in violation of any Plan or employee benefit agreement, (C) any   lease, license, contract, or agreement or other property right (including any   United States of America intent-to-use trademark or service mark   application), to which any Grantor is a party or of any of its rights or   interests thereunder if and for so long as the grant of such security   interest shall constitute or result in:    (x) the abandonment, invalidation, unenforceability or other   impairment of any right, title or interest of any Grantor therein, or (y) in   a breach or termination
pursuant to the terms of, or a default under, any   such lease, license, contract, agreement or other property right, (D) any of   the outstanding capital stock of a CFC in excess of 65% of the voting power   of all classes of capital stock of such CFC entitled to vote, or (E) any real   property or fixture (collectively, the “Collateral”):
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          all   equipment in all of its forms, including, without limitation, all machinery,   tools, motor vehicles, vessels, aircraft and furniture (excepting all   fixtures), and all parts thereof and all accessions thereto, including,   without limitation, computer programs and supporting information that constitute   equipment within the meaning of the UCC (any and all such property being the   “Equipment”);
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          all   inventory in all of its forms, including, without limitation, (i) all raw   materials, work in process, finished goods and materials used or consumed in   the manufacture, production, preparation or shipping thereof, (ii) goods in   which such Grantor has an interest in mass or a joint or other interest or   right of any kind (including, without limitation, goods in which such Grantor   has an interest or right as consignee) and (iii) goods that are returned to   or repossessed or stopped in transit by such Grantor, and all accessions   thereto and products thereof and documents therefor, including, without   limitation, computer programs and supporting information that constitute   inventory within the meaning of the UCC (any and all such property being the   “Inventory”);
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          all   accounts, instruments (including, without limitation, promissory notes),   deposit accounts, general intangibles (including, without limitation, payment   intangibles) and other obligations of any kind owing to Grantors, whether or   not arising out of or in connection with the sale or lease of goods or the   rendering of services and whether or not
  




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earned by performance (any and all such instruments,   deposit accounts, general intangibles and other obligations to the extent not   referred to in clause (d), (e) or (f) below, being the “Receivables”,   subject to restrictions on assignment and/or transfer, and all such   supporting obligations, security agreements, Liens, leases, letters of credit   and other contracts owing to Grantors or supporting the obligations owing to   the Grantors under the Receivables being the “Related Contracts”);
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(d)
  	
  
the following (the “Security Collateral”):
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (i)          the   Initial Pledged Equity and the certificates, if any, representing the Initial   Pledged Equity, and all dividends, distributions, return of capital, cash,   instruments and other property from time to time received, receivable or   otherwise distributed in respect of or in exchange for any or all of the   Initial Pledged Equity and all warrants, rights or options issued thereon or   with respect thereto;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
          (ii)         the   Initial Pledged Debt and the instruments, if any, evidencing the Initial   Pledged Debt, and all interest, cash, instruments and other property from   time to time received, receivable or otherwise distributed in respect of or   in exchange for any or all of the Initial Pledged Debt;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iii)        all   additional shares of stock and other equity interests from time to time   acquired by such Grantor in any manner of the issuers of such Pledged Equity   or of other Material Subsidiaries of such Borrower, provided that not more   than 65% of the equity in any CFC shall be subject to the pledge hereunder   (such shares and other equity interests, together with the Initial Pledged   Equity, being the “Pledged   Equity”), and the certificates, if any, representing such   additional shares or other equity interests, and all dividends,   distributions, return of capital, cash, instruments and other property from   time to time received, receivable or otherwise distributed in respect of or   in exchange for any or all of such shares or other equity interests and all   warrants, rights or options issued thereon or with
respect thereto;
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iv)         all   additional indebtedness from time to time owed to such Grantor (such   indebtedness, together with the Initial Pledged Debt, being the “Pledged Debt”) and   the instruments, if any, evidencing such indebtedness, and all interest,   cash, instruments and other property from time to time received, receivable   or otherwise distributed in respect of or in exchange for any or all of such   indebtedness;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (v)          subject   to restrictions on assignment and/or transfer, all security entitlements or   commodity contracts carried in a securities account or commodity account, all   security entitlements with respect to all financial assets from time to time   credited to the L/C Cash Deposit Account and all financial assets, and all   dividends, distributions, return of capital, interest, cash, instruments and   other property from time to time received, receivable or otherwise   distributed in respect of or in exchange for any or all of such security   entitlements or financial assets and all warrants, rights or options issued   thereon with respect thereto; and
  



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          (vi)          subject   to restrictions on assignment and/or transfer, all other investment property   (including, without limitation, all (A) securities, whether certificated or   uncertificated, (B) security entitlements, (C) securities accounts, (D)   commodity contracts and (E) commodity accounts, but excluding any equity   interest in any Affiliate excluded from the Pledged Equity in which such   Grantor has now, or acquires from time to time hereafter, any right, title or   interest in any manner, and the certificates or instruments, if any,   representing or evidencing such investment property, and all dividends,   distributions, return of capital, interest, cash, instruments and other   property from time to time received, receivable or otherwise distributed in   respect of or in exchange for any or all of such investment property and all
warrants, rights or options issued thereon or with respect thereto;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          subject   to restrictions on assignment and/or transfer, each Hedge Agreement to which   such Grantor is now or may hereafter become a party, in each case as such   agreements may be amended, amended and restated, supplemented or otherwise   modified from time to time (collectively, the “Assigned Agreements”), including,   without limitation, (i) all rights of such Grantor to receive moneys due and   to become due under or pursuant to the Assigned Agreements, (ii) all rights   of such Grantor to receive proceeds of any insurance, indemnity, warranty or   guaranty with respect to the Assigned Agreements, (iii) claims of such Grantor   for damages arising out of or for breach of or default under the Assigned   Agreements and (iv) the right of such Grantor to terminate the Assigned   Agreements, to perform thereunder and
to compel performance and otherwise   exercise all remedies thereunder (all such Collateral being the “Agreement Collateral”);
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (f)          the   following (collectively, the “Account Collateral”):
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (i)          the   Pledged Deposit Accounts, the L/C Cash Deposit Account and all funds and   financial assets from time to time credited thereto (including, without   limitation, all cash equivalents), and all certificates and instruments, if   any, from time to time representing or evidencing the Pledged Deposit   Accounts or the L/C Cash Deposit Account;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
          (ii)         all   promissory notes, certificates of deposit, checks and other instruments from   time to time delivered to or otherwise possessed by the Agent for or on   behalf of such Grantor in substitution for or in addition to any or all of the   then existing Account Collateral; and
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iii)        all   interest, dividends, distributions, cash, instruments and other property from   time to time received, receivable or otherwise distributed in respect of or   in exchange for any or all of the then existing Account Collateral; and
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (g)          the   following (collectively, the “Intellectual Property Collateral”):
  



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          (i)          all   patents, patent applications, utility models and statutory invention   registrations, all inventions claimed or disclosed therein and all   improvements thereto, other than those patents and related rights currently   contemplated to be sold by the Company or any other Grantor listed on   Schedule IV attached hereto (“Patents”);
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (ii)         all   trademarks, service marks, domain names, trade dress, logos, designs,   slogans, trade names, business names, corporate names and other source   identifiers, whether registered or unregistered, together, in each case, with   the goodwill symbolized thereby (“Trademarks”);
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iii)        all   copyrights, including, without limitation, copyrights in computer software,   internet web sites and the content thereof, whether registered or   unregistered (“Copyrights”);   all confidential and proprietary information, including, without limitation,   know-how, trade secrets, manufacturing and production processes and   techniques, inventions, research and development information, databases and   data, including, without limitation, technical data, financial, marketing and   business data, pricing and cost information, business and marketing plans and   customer and supplier lists and information (collectively, “Trade Secrets”),   and all other intellectual, industrial and intangible property of any type,   including, without limitation, industrial designs and mask works;


	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iv)         except   as set forth above, all registrations and applications for registration for   any of the foregoing, including, without limitation, those registrations and   applications for registration, together with all reissues, divisions,   continuations, continuations-in-part, extensions, renewals and reexaminations   thereof;
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (v)          subject   to restrictions on assignment and/or transfer, all agreements, permits,   consents, orders and franchises relating to the license, development, use or   disclosure of any of the foregoing to which such Grantor, now or hereafter,   is a party or a beneficiary (“IP Agreements”); and
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (vi)         subject   to restrictions on assignment and/or transfer, any and all claims for damages   and injunctive relief for past, present and future infringement, dilution,   misappropriation, violation, misuse or breach with respect to any of the   foregoing, with the right, but not the obligation, to sue for and collect, or   otherwise recover, such damages;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
          (h)          all   proceeds of, collateral for, income, royalties and other payments now or   hereafter due and payable with respect to, and supporting obligations   relating to, any and all of the Collateral (including, without limitation,   proceeds, collateral and supporting obligations that constitute property of   the types described in clauses (a) through (g) of this Section 1) and, to the   extent not otherwise included, all (A) payments under insurance (whether or   not the Agent is the loss payee thereof), or any indemnity, warranty or   guaranty, payable by reason of loss or damage to or otherwise with respect to   any of the foregoing Collateral, and (B) cash.
  




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                    Section   2.  Security for Obligations. This Agreement secures, in the case of   each Grantor, the payment of all obligations of such Grantor and the   Subsidiaries of the Company now or hereafter existing under the Loan   Documents, all agreements and other documents relating to any treasury   management services provided by any of the Lenders and their Affiliates to   the Company and any of its Subsidiaries, all agreements evidencing any other   obligations of the Company and any of its Subsidiaries owing to any of the   Lenders and their Affiliates including, without limitation, all letters of   credit issued by any of the Lenders and their Affiliates for the benefit of   the Company or any of its Subsidiaries, all Hedge Agreements entered into   with the Company or any of its Subsidiaries by any of the Lenders and
their   Affiliates, and each agreement or instrument delivered by any Grantor or   Subsidiary of the Company pursuant to any of the foregoing, as the same may   be amended from time to time in accordance with the provisions thereof (“Secured Agreements”),   whether direct or indirect, absolute or contingent, and whether for   principal, reimbursement obligations, interest, fees, premiums, penalties,   indemnifications, contract causes of action, costs, expenses or otherwise   (all such obligations being the “Secured Obligations”) owing to the Agent,   the Lenders and their respective Affiliates that are party to any Secured   Agreement (the “Secured   Parties”).  Without limiting   the generality of the foregoing, this Agreement secures, as to each Grantor,   the payment of all amounts that constitute part of the Secured Obligations   and would be owed by such Grantor or Subsidiary of the Company, as   applicable, to any
Secured Party under the Loan Documents or Secured   Agreements but for the fact that they are unenforceable or not allowable due   to the existence of a bankruptcy, reorganization or similar proceeding   involving any of the Loan Parties and other Subsidiaries of the Company.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   3.  Grantors Remain Liable.  Anything herein to the contrary   notwithstanding, (a) each Grantor shall remain liable under the contracts and   agreements included in such Grantor’s Collateral to perform all of its duties   and obligations thereunder to the extent set forth therein to the same extent   as if this Agreement had not been executed, (b) the exercise by the Agent of   any of the rights hereunder shall not release any Grantor from any of its   duties or obligations under the contracts and agreements included in the   Collateral and (c) no Secured Party shall have any obligation or liability   under the contracts and agreements included in the Collateral by reason of   this Agreement or any other Loan Document, nor shall any Secured Party be   obligated to perform any of the obligations or duties of any
Grantor   thereunder or to take any action to collect or enforce any claim for payment   assigned hereunder.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   4.  Delivery and Control of   Security Collateral.  (a) All   certificates or instruments representing or evidencing existing Security   Collateral shall be delivered to and held by or on behalf of the Agent   pursuant hereto and shall be in suitable form for transfer by delivery, or   shall be accompanied by duly executed instruments of transfer or assignment   in blank, all in form and substance reasonably satisfactory to the Agent   except to the extent that such transfer or assignment is (x) prohibited by   applicable law or (y) subject to certain corporate actions by the holders or   issuers of non-US Initial Pledged Equity which have not occurred as of the   Effective Date and governmental approvals or consents to pledge or transfer   with respect to non-US Material Subsidiaries which have not yet been obtained
as to which Grantor shall use commercially reasonable effects to complete as   soon as practicable after the date hereof.
  



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                    (b)          With   respect to any Security Collateral representing interest in Material Subsidiaries   in which any Grantor has any right, title or interest and that constitutes an   uncertificated security, such Grantor will use commercially reasonable   efforts to cause the issuer thereof to agree in an authenticated record with   such Grantor and the Agent that, upon notice from the Agent that an Event of   Default has occurred and is continuing, such issuer will comply with   instructions with respect to such security originated by the Agent without   further consent of such Grantor, such authenticated record to be in form and   substance reasonably satisfactory to the Agent.  Upon the request of the Agent upon the occurrence and during   the continuance of an Event of Default, each
Grantor will notify each issuer   of other Security Collateral as provided in Section 4(e) below.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (c)          With   respect to any securities or commodity account, any Security Collateral that   constitutes a security entitlement as to which the financial institution   acting as Agent hereunder is not the securities intermediary, upon the   request of the Agent upon the occurrence and during the continuance of an   Event of Default the relevant Grantor will use its commercially reasonable   efforts to cause the securities intermediary with respect to such security or   commodity account or security entitlement to identify in its records the   Agent as the entitlement holder thereof.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (d)          Upon   the request of Agent upon the occurrence and during the continuance of an   Event of Default, each Grantor shall cause the Security Collateral to be   registered in the name of the Agent or such of its nominees as the Agent   shall direct, subject only to the revocable rights specified in Section   12(a).  In addition, the Agent shall   have the right upon the occurrence and during the continuance of an Event of   Default to convert Security Collateral consisting of financial assets   credited to any securities account or the L/C Cash Deposit Account to   Security Collateral consisting of financial assets held directly by the Agent,   and to convert Security Collateral consisting of financial assets held   directly by the Agent to Security Collateral consisting of
financial assets   credited to any securities or commodity account or the L/C Cash Deposit   Account.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (e)          Upon   the request of the Agent upon the occurrence and during the continuance of an   Event of Default, each Grantor will notify each issuer of Security Collateral   granted by it hereunder that such Security Collateral is subject to the security   interest granted hereunder.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   5.  Maintaining the Account   Collateral.  So long as any   Advance or any other payment obligation of any Loan Party of which the   Company has notice under any Loan Document shall remain unpaid, any Letter of   Credit shall be outstanding or any Lender shall have any Commitment:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          Upon   request of the Agent made upon the occurrence and during the continuance of   an Event of Default, each Grantor will promptly enter into an agreement with   the financial institution holding the Pledged Account pursuant to which such   financial institution shall agree with such Grantor and the Agent to, upon   notice from the Agent, comply with instructions originated by the Agent directing   the disposition of funds in such deposit account without the further consent   of such Grantor, such agreement to be in form and substance reasonably   satisfactory to the Agent (a “Deposit Account Control Agreement”), and instruct   each Person obligated at any time to make any payment to such Grantor for any   reason (an “Obligor”)   to make such payment to such a Pledged Deposit Account or the L/C
Cash   Deposit Account.
  



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          (b)          Upon   notice from the Agent that an Event of Default has occurred and is   continuing, each Grantor agrees to terminate any or all Pledged Deposit   Accounts and Deposit Account Control Agreements upon request by the Agent.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          The   Agent may, at any time and without notice to, or consent from, the Grantor,   transfer, or direct the transfer of, funds from the Pledged Deposit Accounts   or the L/C Cash Deposit Account to satisfy the Grantor’s obligations under   the Loan Documents if an Event of Default shall have occurred and be continuing.  As soon as reasonably practicable after   any such transfer, the Agent agrees to give written notice thereof to the   applicable Grantor.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   6.  Representations and Warranties.  Each Grantor represents and warrants as   follows:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          Such   Grantor’s exact legal name, chief executive office, type of organization,   jurisdiction of organization and organizational identification number as of   the date hereof is set forth in Schedule V hereto.  Within the twelve months preceding the date hereof, such   Grantor has not changed its name, chief executive office, type of   organization, jurisdiction of organization or organizational identification   number from those set forth in Schedule V hereto except as set forth in Schedule   VI hereto.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
          (b)          Such   Grantor is the legal and beneficial owner of the Collateral granted or   purported to be granted by it free and clear of any Lien, claim, option or   right of others, except for the security interest created under this   Agreement or Liens permitted under the Credit Agreement (other than pursuant   to Section 5.02(a)(vii) of the Credit Agreement).  No effective financing statement or other instrument similar in   effect covering all or any part of such Collateral or listing such Grantor or   any trade name of such Grantor as debtor is on file in any recording office,   except such as may exist on the date of this Agreement, have been filed in   favor of the Agent relating to the Loan Documents or are otherwise permitted under   the Credit Agreement.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          All   Equipment of such Grantor having a value in excess of $10,000,000 and   Inventory of such Grantor having a value in excess of $10,000,000 as of the   date hereof is located at the places specified therefor in Schedule VIII  and Schedule IX hereto, respectively.  Such Grantor has exclusive possession and   control of its Inventory, other than Inventory stored at any leased premises   or warehouse.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
          (d)          None   of the Receivables or Agreement Collateral is evidenced by a promissory note   or other instrument in excess of $10,000,000 that has not been delivered to   the Agent.  All such Receivables or   Agreement Collateral valued in excess of $10,000,000 is listed on Schedule   III attached hereto.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          All   Security Collateral consisting of certificated securities and instruments   with an aggregate fair market value in excess of $10,000,000 for all such   Security Collateral of the Grantors have been delivered to the Agent.
  




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          (f)          If   such Grantor is an issuer of Security Collateral, such Grantor confirms that   it has received notice of the security interest granted hereunder.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (g)          The   Pledged Equity pledged by such Grantor hereunder has been duly authorized and   validly issued and is fully paid and non assessable.  The Pledged Debt pledged by such Grantor   hereunder has been duly authorized, authenticated or issued and delivered, is   the legal, valid and binding obligation of the issuers thereof and, if  evidenced by any promissory notes, such   promissory notes have been delivered to the Agent, and is not in default.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (h)          The   Initial Pledged Equity pledged by such Grantor constitutes, as of the date   hereof, 65% of the issued and outstanding equity interests of the issuers   thereof indicated on Part I of Schedule I hereto.  The Initial Pledged Debt constitutes all of the outstanding   Debt for Borrowed Money owed to such Grantor by the issuers thereof.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
          (i)          Such   Grantor has no investment property with a market value in excess of   $10,000,000 as of the date hereof, other than the investment property listed   on Part III of Schedule I hereto.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (j)          The   Assigned Agreements to which such Grantor is a party have been duly   authorized, executed and delivered by such Grantor and, to such Grantor’s   knowledge, any material Assigned Agreements are in full force and effect and   are binding upon and enforceable against all parties thereto in accordance   with their terms.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (k)          Such   Grantor has no material deposit accounts subject to the grant or security in   Section 1 of this Agreement as of the date hereof, other than the Pledged   Deposit Accounts listed on Schedule II hereto.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (l)          Such   Grantor is not a beneficiary or assignee under any letter of credit with a   stated amount in excess of $10,000,000 and issued by a United States   financial institution as of the date hereof, other than the letters of credit   described in Schedule VII hereto.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (m)          This   Agreement creates in favor of the Agent for the benefit of the Secured   Parties a valid security interest in the Collateral granted by such Grantor   under this Agreement, securing the payment of the Secured Obligations except   to the extent that control or possession by the Agent is required for the   creation of the security interest; all filings and other actions necessary to   perfect the security interest in the Collateral granted by such Grantor have   been duly made or taken and are in full force and effect other than (i)   actions necessary to obtain control of Collateral as provided in Sections   9-104, 9-105, 9-106 and 9-107 of the UCC; (ii) actions necessary to perfect   the Agent’s security interest with respect to Collateral evidenced by a   certificate of title or Collateral consisting of vessels or aircraft; and
(iii) actions necessary to transfer and prior approval of or filings with any   governmental entity required in connection with any interest in Pledged   Equity; provided however, that   the Agent will receive a security interest, but not a first priority security   interest, in (1) Collateral consisting of any securities or commodity   account, (2) Account Collateral maintained with a financial institution other   than the Agent, (3) assets
  



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encumbered by Liens on the date of this Agreement,   (4) Collateral evidenced by a certificate of title or consisting of vessels   or aircraft, (5) collateral subject to Liens permitted by the terms of the   Credit Agreement, (6) Collateral with an aggregate book value of less than   $10,000,000 and (7) other Collateral to the extent consented to by Agent and   approved by the Required Lenders (collectively, the “Specified Collateral”).
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (n)          No   authorization or approval or other action by, and no notice to or filing   with, any governmental authority or regulatory body or any other third party   is required for (i) the grant by such Grantor of the security interest   granted hereunder or for the execution, delivery or performance of this   Agreement by such Grantor, (ii) the perfection or maintenance of the security   interest created hereunder (including the first priority nature of such   security interest in Collateral other than the Specified Collateral), except   for (A) the filing of financing and continuation statements under the UCC,   which financing statements have been duly filed and are in full force and   effect, (B) the recordation of the Intellectual Property Security Agreement   with respect to certain registered copyrights attached thereto has been   delivered
for recording and is in full force and effect, and the actions   described in Section 4 with respect to the Security Collateral, (C) subject   to certain corporations actions by the holders or issuers of Non-U.S. Initial   Pledged Equity which have not occurred as of the Effective Date, necessary to   transfer or assign and (D) the governmental filings required to be made or   approvals obtained prior to the creation of security interest in any Pledged   Equity issued by a non-US Person and any filings or approvals require prior   to realizing on any such Pledged Equity, (E) the control of certain assets as   provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC, or (F) the   exercise by the Agent of its voting or other rights provided for in this   Agreement or the remedies in respect of the Collateral pursuant to this   Agreement, except as set forth above and as may be required in connection   with the disposition of any portion of the Security Collateral by laws   affecting the offering
and sale of securities generally.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (o)          The   Inventory that has been produced or distributed by such Grantor has been   produced in compliance with all requirements of applicable law except where   the failure to so comply would not have a Material Adverse Effect.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (p)          As   to itself and its Intellectual Property Collateral:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (i)          To   the Company’s knowledge, the operation of such Grantor’s business as   currently conducted or as contemplated to be conducted and the use of the   Intellectual Property Collateral in connection therewith do not conflict   with, infringe, misappropriate, dilute, misuse or otherwise violate the intellectual   property rights of any third party.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (ii)         Such   Grantor is the exclusive owner of all right, title and interest in and to   Patents, Trademarks and Copyrights contained in the Intellectual Property   Collateral, except as set forth in Schedule IV hereto with respect to   co-ownership of certain Patents, and such Grantor is entitled to use all such   Intellectual Property Collateral in accordance with applicable law, subject   to the terms of the IP Agreements.
  




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          (iii)        The   Intellectual Property Collateral set forth on Schedule IV hereto includes all   of the registered patents, patent applications, domain names, trademark   registrations and applications, copyright registrations and applications   owned by such Grantor as of the date set forth therein.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (iv)         The   issued Patents and registered Trademarks contained in the Intellectual   Property Collateral have not been adjudged invalid or unenforceable in whole   or part, and to the knowledge of the Company, are valid and enforceable,   except to the extent Grantor has ceased use of any such registered   Trademarks.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (v)          Such   Grantor has made or performed all filings, recordings and other acts and has   paid all required fees and taxes, as deemed necessary by Grantor in its   reasonable business discretion, to maintain and protect its interest in each   and every material item of Intellectual Property Collateral owned by such   Grantor in full force and effect.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
          (vi)         No   claim has been asserted and is pending by any Person challenging or   questioning the use of any Intellectual Property Collateral or the validity   of effectiveness of any such Intellectual Property Collateral, nor does the   Company know of any valid basis for any such claim, except, in either case,   for such claims that in the aggregate are not reasonably expected to have a   Material Adverse Effect.  The use of   such Intellectual Property Collateral by the Company and its Subsidiaries   does not infringe on the rights of any Person, except for such claims and   infringements that, in the aggregate, are not reasonably expected to have a   Material Adverse Effect.  The   consummation of the transactions contemplated by the Loan Documents will not   result in the termination or impairment of any of the Intellectual Property
Collateral.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (vii)        With   respect to each IP Agreement: (A) to the knowledge of the Company, such IP   Agreement is valid and binding and in full force and effect; (B) such IP   Agreement will not cease to be valid and binding and in full force and effect   on terms identical to those currently in effect as a result of the rights and   interest granted herein, nor will the grant of such rights and interest   constitute a breach or default under such IP Agreement or otherwise give any   party thereto a right to terminate such IP Agreement; (C) such Grantor has   not received any notice of termination or cancellation under such IP   Agreement within the six months immediately preceding the date of this   Security Agreement; (D) within the six months immediately preceding the date   of this Security Agreement, such Grantor has not received any notice of a
breach or default under such IP Agreement, which breach or default has not been   cured; and (E) neither such Grantor nor, to such Grantor’s knowledge, any   other party to such IP Agreement is in breach or default thereof in any   material respect, and no event has occurred that, with notice or lapse of   time or both, would constitute such a breach or default or permit termination   or modification under such IP Agreement, in each case except as would not   reasonably be expected to have a Material Adverse Effect.
  



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          (viii)        To   the Company’s knowledge, none of the material Trade Secrets of such Grantor   has been used, divulged, disclosed or appropriated to the detriment of such   Grantor for the benefit of any other Person other than such Grantor within   the past two years.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   7.  Further Assurances.  (a) Each Grantor agrees that from time to   time, in accordance with the terms of this Agreement at the expense of such   Grantor and at the reasonable request of the Agent, such Grantor will   promptly execute and deliver, or otherwise authenticate, all further   instruments and documents, and take all further action that may be reasonably   necessary or desirable, or that the Agent may reasonably request, in order to   perfect and protect any pledge or security interest granted or purported to   be granted by such Grantor hereunder or to enable the Agent to exercise and   enforce its rights and remedies hereunder with respect to any Collateral of   such Grantor.  Without limiting the   generality of the foregoing, each Grantor will, at the reasonable request of   the Agent, promptly with
respect to the Collateral of such Grantor:  (i) mark conspicuously each document   included in Inventory, each chattel paper included in Receivables each   Assigned Agreement and, at the request of the Agent, each of its records   pertaining to such Collateral with a legend, in form and substance reasonably   satisfactory to the Agent, indicating that such document, Assigned Agreement   or Collateral is subject to the security interest granted hereby; (ii) if any   such Collateral shall be evidenced by a promissory note or other instrument   or chattel paper, deliver and pledge to the Agent hereunder such note or   instrument or chattel paper duly indorsed and accompanied by duly executed   instruments of transfer or assignment, all in form and substance reasonably   satisfactory to the Agent; (iii) file such financing or continuation   statements, or amendments thereto, and such other instruments or notices, as   may be reasonably necessary or desirable, or as the Agent may reasonably   request,
in order to perfect and preserve the security interest granted or   purported to be granted by such Grantor hereunder; (iv) at the request of the   Agent, take all action to ensure that the Agent’s security interest is noted   on any certificate of title related to any Collateral evidenced by a   certificate of title; and (v) deliver to the Agent evidence that all other   actions that the Agent may deem reasonably necessary or desirable in order to   perfect and protect the security interest granted or purported to be granted   by such Grantor under this Agreement has been taken.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Each   Grantor hereby authorizes the Agent to file one or more financing or   continuation statements, and amendments thereto, including, without   limitation, one or more financing statements indicating that such financing   statements cover all assets or all personal property (or words of similar   effect) of such Grantor in the United States other than assets now or   hereafter constituting Principal Properties or the equity of Restricted   Subsidiaries, or any real property or fixtures, regardless of whether any   particular asset described in such financing statements falls within the   scope of the UCC.  A photocopy or   other reproduction of this Agreement shall be sufficient as a financing   statement where permitted by law.    Each Grantor ratifies its authorization
for the Agent to have filed   such financing statements, continuation statements or amendments filed prior   to the date hereof.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (c)          Each   Grantor will furnish to the Agent from time to time statements and schedules   further identifying and describing the Collateral of such Grantor and such   other reports in connection with such Collateral as the Agent may reasonably   request, all in reasonable detail.
  



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                    Section   8.  As to Equipment and Inventory.  (a)  Each Grantor will keep its Equipment having a value in excess   of $10,000,000 and Inventory having a value in excess of $10,000,000 (other   than Inventory sold in the ordinary course of business) at the places   therefor specified in Schedule VIII and Schedule IX, respectively, or, upon   30 days’ prior written notice to the Agent, at such other places designated   by such Grantor in such notice.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Each   Grantor will pay promptly when due all property and other taxes, assessments   and governmental charges or levies imposed upon, and all claims (including,   without limitation, claims for labor, materials and supplies) against, its   Equipment and Inventory, except to the extent payment thereof is not required   by Section 5.01(b) of the Credit Agreement.    In producing its Inventory, each Grantor will comply with all   requirements of applicable law, except where the failure to so comply will   not have a Material Adverse Effect.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   9.  Insurance.  (a)    Each Grantor will, at its own expense, maintain or cause to be   maintained, insurance with respect to its Equipment and Inventory in such   amounts, against such risks, in such form and with such insurers, as shall be   customary for similar businesses of the size and scope of the Company on a   consolidated basis, provided however that the Grantor may self insure to the   extent consistent with prudent business practice.  Each policy of each Grantor for liability insurance shall   provide for all losses to be paid on behalf of the Agent and such Grantor as   their interests may appear, and each policy for property damage insurance shall   provide for all losses, except for losses of less than $25,000,000 per   occurrence, to be paid directly to the Agent.  So long as no Event of
Default shall have occurred and be   continuing, all property damage insurance payments received by the Agent in   connection with any loss, damage or destruction of Inventory will be released   by the Agent to the applicable Grantor.    Each such policy shall in addition (i) name such Grantor and the Agent   as insured parties thereunder (without any representation or warranty by or   obligation upon the Agent) as their interests may appear, (ii) provide that   there shall be no recourse against the Agent for payment of premiums or other   amounts with respect thereto and (iii) provide that at least 10 days’ prior   written notice of cancellation or of lapse shall be given to the Agent by the   insurer.  Each Grantor will, if so   requested by the Agent, deliver to the Agent certificates of insurance   evidencing such insurance and, as often as the Agent may reasonably request,   a report of a reputable insurance broker or the insurer with respect to such   insurance.  Further,
each Grantor   will, at the request of the Agent, duly execute and deliver instruments of   assignment of such insurance policies to comply with the requirements of   Section 1(h) and cause the insurers to acknowledge notice of such assignment.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Reimbursement   under any liability insurance maintained by any Grantor pursuant to this   Section 9 may be paid directly to the Person who shall have incurred damages   covered by such insurance.  In case of   any loss involving damage to Equipment or Inventory when subsection (c) of   this Section 9 is not applicable, the applicable Grantor, to the extent   determined to be in the business interest of such Grantor, will make or cause   to be made the necessary repairs to or replacements of such Equipment or   Inventory, and any proceeds of insurance properly received by or released to   such Grantor shall be used by such Grantor, except as otherwise required   hereunder or by the Credit Agreement, to pay or as reimbursement for the   costs of such repairs or replacements or, if
such Grantor determines not to   repair or replace such Equipment or Inventory, shall prepay the principal   amount of the Comprehensive Guaranteed Obligations in the manner and in the   amount required by Section 2.10(b) of the Credit Agreement to the same extent   as if such insurance proceeds constituted Net Cash Proceeds.
  




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                      (c)          So   long as no Event of Default shall have occurred and be continuing, all   insurance payments received by the Agent in connection with any loss, damage   or destruction of any Inventory or Equipment will be released by the Agent to   the applicable Grantor.  Upon the   occurrence and during the continuance of any Event of Default, all insurance   payments in respect of such Equipment or Inventory shall be paid to the Agent   and shall, in the Agent’s sole discretion, (i) be released to the applicable   Grantor for the repair, replacement or restoration thereof, (ii) be held as   additional Collateral hereunder or applied as specified in Section 19(b) or   (iii) be released to prepay the principal amount of the Comprehensive
Guaranteed Obligations in the manner and in the amount required by Section   2.10(b) of the Credit Agreement to the same extent as if such insurance   payments constituted Net Cash Proceeds.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   10.  Post-Closing Changes;   Collections on Assigned Agreements and Receivables. (a)    No Grantor will change its name, type of organization, jurisdiction of   organization or organizational identification number from those set forth in   Schedule V of this Agreement without first giving at least 15 Business Days   prior written notice to the Agent and taking all action reasonably required   by the Agent for the purpose of perfecting or protecting the security   interest granted by this Agreement.    Each Grantor will hold and preserve its records relating to the   Collateral, including, without limitation, the Assigned Agreements and   Related Contracts, and will permit representatives of the Agent at any time   during normal business hours to inspect and make abstracts from such records   and other
documents to the extent provided in Section 5.01(e) of the Credit   Agreement.  If any Grantor does not   have an organizational identification number and later obtains one, it will   forthwith notify the Agent of such organizational identification number.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Except   as otherwise provided in this subsection (b), each Grantor will continue to   collect, at its own expense, all amounts due or to become due such Grantor   under the Assigned Agreements and Receivables.  In connection with such collections, such Grantor may take   (and, at the Agent’s direction, will take) such action as such Grantor or the   Agent may deem necessary or advisable to enforce collection of the Assigned   Agreements and Receivables; provided,   however, that the Agent shall   have the right at any time, upon the occurrence and during the continuance of   an Event of Default and upon written notice to such Grantor of its intention   to do so, to notify the Obligors under any Assigned Agreements and   Receivables of the assignment of such
Assigned Agreements to the Agent and to   direct such Obligors to make payment of all amounts due or to become due to   such Grantor thereunder directly to the Agent and, upon such notification and   at the expense of such Grantor, to enforce collection of any such Assigned   Agreements and Receivables, to adjust, settle or compromise the amount or   payment thereof, in the same manner and to the same extent as such Grantor   might have done, and to otherwise exercise all rights with respect to such   Assigned Agreements and Receivables, including, without limitation, those set   forth in Section 9-607 of the UCC.    After receipt by any Grantor of the notice from the Agent referred to   in the proviso to the preceding sentence, (i) all amounts and proceeds   (including, without limitation, instruments) received by such Grantor in   respect of the Assigned Agreements and Receivables of such Grantor shall be   received in trust for the benefit of the Secured Parties, shall be segregated   from
other funds of such Grantor and shall be forthwith paid over to the   Agent in the same form as so received (with any necessary
  



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indorsement) to be deposited in the L/C Cash Deposit   Account and either (A) released to such Grantor so long as no Event of   Default shall have occurred and be continuing or (B) if any Event of Default   shall have occurred and be continuing, applied as provided in Section 19(b)   of this Agreement or to prepay the Comprehensive Guaranteed Obligations in   the manner and in the amount required by Section 2.10(b) of the Credit   Agreement to the same extent as if such payments constituted Net Cash   Proceeds and (ii) such Grantor will not adjust, settle or compromise the   amount or payment of any Receivable or amount due on any Assigned Agreement,   release wholly or partly any Obligor thereof or allow any credit or discount   thereon other than credits or discounts given in the ordinary course of   business.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   11.  As to Intellectual Property   Collateral.  (a)    With respect to each item of its Intellectual Property Collateral   material to the business of the Company and its Subsidiaries, each Grantor   agrees to take, at its expense, all commercially reasonable steps as   determined in Grantor’s reasonable discretion, including, without limitation,   in the U.S. Patent and Trademark Office, the U.S. Copyright Office and any   other governmental authority, to (i) maintain the validity and enforceability   of such Intellectual Property Collateral and maintain such Intellectual   Property Collateral in full force and effect, and (ii) pursue the   registration and maintenance (in accordance with the exercise of such Grantor’s   reasonable business discretion) of each 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, 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, infringement and misappropriation proceedings, in each case   except where the failure to so file, register or maintain is not reasonably   likely to have a Material Adverse Effect.    No Grantor shall, without the written consent of the Agent, which   shall not be unreasonably withheld or delayed,
discontinue use of or   otherwise abandon any such material Intellectual Property Collateral, or   abandon any right to file an application for patent, trademark, or copyright,   unless such Grantor shall have determined that such use or the pursuit or   maintenance of such Intellectual Property Collateral is no longer necessary   or desirable in the conduct of such Grantor’s business and that the loss   thereof would not be reasonably likely to have a Material Adverse Effect.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Until   the termination of the Credit Agreement, each Grantor agrees to provide,   annually to the Agent an updated Schedule of its Patents, Trademarks and   registered Copyrights.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (c)          In   the event that any Grantor becomes aware that any item of the Intellectual   Property Collateral is being infringed or misappropriated by a third party,   such Grantor shall take such commercially reasonable actions determined in   its reasonable discretion, at its expense, to protect or enforce such   Intellectual Property Collateral, including, without limitation, suing for   infringement or misappropriation and for an injunction against such   infringement or misappropriation.
  




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                      (d)          Each   Grantor shall take all reasonable steps which it deems appropriate under the   circumstances to preserve and protect each item of its material Trademarks   included in the Intellectual Property Collateral, including, without   limitation, maintaining substantially the quality of any and all products or   services used or provided in connection with any of the Trademarks,   consistent with the general quality of the products and services as of the   date hereof, and taking all steps reasonably necessary to ensure that all   licensed users of any of the Trademarks use such consistent standards of   quality.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (e)          With   respect to its Intellectual Property Collateral, upon the reasonable request   of Agent made upon the occurrence and during the continuance of an Event of   Default, each Grantor agrees to execute or otherwise authenticate an   agreement, in substantially the form set forth in Exhibit A hereto or   otherwise in form and substance satisfactory to the Agent (an “Intellectual Property Security   Agreement”), for recording the security interest granted   hereunder to the Agent in such Intellectual Property Collateral with the U.S.   Patent and Trademark Office, the U.S. Copyright Office, and any other   governmental authorities necessary to perfect the security interest hereunder   in such Intellectual Property Collateral.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
                      (f)          Upon   the occurrence of and during the continuance of an Event of Default, each   entity which executes a Security Agreement Supplement as Grantor shall   execute and deliver to the Agent with such written notice, or otherwise   authenticate, an agreement substantially in the form of Exhibit B hereto or   otherwise in form and substance satisfactory to the Agent (an “IP Security Agreement Supplement”)   covering such Intellectual Property, which IP Security Agreement Supplement   shall be recorded with the U.S. Patent and Trademark Office, the U.S.   Copyright Office and any other governmental authorities necessary to perfect   the security interest hereunder in such Intellectual Property.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   12.  Voting Rights; Dividends; Etc.  (a)    So long as no Default under Section 6.01(a) or (f) of the Credit   Agreement shall have occurred and be continuing:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          Each   Grantor shall be entitled to exercise any and all voting and other consensual   rights pertaining to the Security Collateral of such Grantor or any part   thereof for any purpose.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)          Each   Grantor shall be entitled to receive and retain any and all dividends,   interest and other distributions paid in respect of the Security Collateral   of such Grantor if and to the extent that the payment thereof is not   otherwise prohibited by the terms of the Loan Documents; provided, however, that any and all dividends, interest and other   distributions paid or payable in the form of instruments or certificates in   respect of, or in exchange for, any Security Collateral, shall be promptly   delivered to the Agent to hold as Security Collateral and shall, if received   by such Grantor, be received in trust for the benefit of the Secured Parties,   be segregated from the other property or funds of such Grantor and be   promptly delivered to the Agent as Security Collateral in the same form as so   received (with any
necessary indorsement).
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (iii)          The   Agent will execute and deliver (or cause to be executed and delivered) to   each Grantor all such proxies and other instruments as such Grantor may   reasonably request for the purpose of enabling such Grantor to exercise the   voting and other rights that it is entitled to exercise pursuant to paragraph   (i) above and to receive the dividends or interest payments that it is   authorized to receive and retain pursuant to paragraph (ii) above.
  



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                    (b)          Upon   the occurrence and during the continuance of a Default under Section 6.01(a)   or (f) of the Credit Agreement:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          All   rights of each Grantor (x) to exercise or refrain from exercising the voting   and other consensual rights that it would otherwise be entitled to exercise   pursuant to Section 12(a)(i) shall, upon notice to such Grantor by the Agent,   cease and (y) to receive the dividends, interest and other distributions that   it would otherwise be authorized to receive and retain pursuant to Section   12(a)(ii) shall automatically cease, and all such rights shall thereupon   become vested in the Agent for the benefit of the Secured Parties, which   shall thereupon have the sole right to exercise or refrain from exercising   such voting and other consensual rights and to receive and hold as Security   Collateral such dividends, interest and other distributions.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)          All   dividends, interest and other distributions that are received by any Grantor   contrary to the provisions of paragraph (i) of this Section 12(b) shall be   received in trust for the benefit of the Secured Parties, shall be segregated   from other funds of such Grantor and shall be promptly paid over to the Agent   as Security Collateral in the same form as so received (with any necessary   indorsement).
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   13.  As to the Assigned Agreements.  (a)    Each Grantor will at its expense:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (i)          perform   and observe all terms and provisions of the Assigned Agreements to be   performed or observed by it to the extent consistent with its past practice   or reasonable business judgment, maintain the Assigned Agreements to which it   is a party in full force and effect, enforce the Assigned Agreements to which   it is a party in accordance with the terms thereof and take all such action   to such end as may be requested from time to time by the Agent; and
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (ii)          furnish   to the Agent promptly upon receipt thereof copies of all notices of defaults   in excess of $50,000,000 received by such Grantor under or pursuant to the   Assigned Agreements to which it is a party, and from time to time (A) furnish   to the Agent such information and reports regarding the Assigned Agreements   and such other Collateral of such Grantor as the Agent may reasonably request   and (B) upon request of the Agent, make to each other party to any Assigned   Agreement to which it is a party such demands and requests for information   and reports or for action as such Grantor is entitled to make thereunder.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Each   Grantor hereby consents on its behalf and on behalf of its Subsidiaries to   the assignment and pledge to the Agent for benefit of the Secured Parties of   each Assigned Agreement to which it is a party by any other Grantor   hereunder.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
                      (c)          Each   Grantor agrees, upon the reasonable request of Agent, to instruct each other   party to each Assigned Agreement to which it is a party, that all payments   due or to become due under or in connection with such Assigned Agreement will   be made directly to a Pledged Deposit Account.
  




17








	
  
                    (d)          All   moneys received or collected pursuant to subsection (c) above shall be (i)   released to the applicable Grantor on the terms set forth in Section 5 so   long as no Event of Default shall have occurred and be continuing or (ii) if   any Event of Default shall have occurred and be continuing, applied as   provided in Section 19(b).
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   14.  As to Letter-of-Credit Rights.  (a)    Except as otherwise permitted by the Credit Agreement and this   Agreement, each Grantor, by granting a security interest in its Receivables   consisting of letter-of-credit rights to the Agent, hereby assigns to the   Agent such rights (including its contingent rights) to the proceeds of all   Related Contracts consisting of letters of credit of which it is or hereafter   becomes a beneficiary or assignee.    Upon request of the Agent, each Grantor will promptly use commercially   reasonable efforts to cause the issuer of each letter-of-credit with a stated   amount in excess of $10,000,000 and each nominated person (as defined in   Section 5-102 of the UCC) (if any) with respect thereto to consent to such   assignment of the proceeds thereof pursuant to a consent
in form and   substance reasonably satisfactory to the Agent and deliver written evidence   of such consent to the Agent.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Upon   the occurrence and during the continuance of an Event of Default, each   Grantor will, promptly upon request by the Agent, (i) notify (and such   Grantor hereby authorizes the Agent to notify) the issuer and each nominated   person with respect to each of the Related Contracts consisting of letters of   credit that the proceeds thereof have been assigned to the Agent hereunder   and any payments due or to become due in respect thereof are to be made   directly to the Agent or its designee and (ii) arrange for the Agent to   become the transferee beneficiary of letter of credit.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   15.  Transfers and Other Liens;   Additional Shares.  (a)  Each Grantor agrees that it will not (i)   sell, assign or otherwise dispose of, or grant any option with respect to,   any of the Collateral, other than (A) sales, assignments and other   dispositions of Collateral, and options relating to Collateral, in the   ordinary course of business as currently conducted, (B) sales, assignments   and other dispositions of, and options relating to, Collateral listed on   Schedule X hereto, (C) sell, assign or dispose of Collateral as permitted   under the terms of the Credit Agreement, provided that sales,   assignments and other dispositions of Collateral to Subsidiaries that are not   Loan Parties shall be for fair value determined in accordance with generally   accepted accounting principles, and such
proceeds shall consist of cash (C)   shall be sold at fair market value and for consideration consisting of cash   and, to the extent that such cash proceeds exceed $50,000,000 in any fiscal   year, such excess shall be used to prepay the principal amount of the   Comprehensive Guaranteed Obligations in the manner and in the amount required   by Section 2.10(b) of the Credit Agreement to the same extent as if such cash   proceeds constituted Net Cash Proceeds and (D) to any other Grantor, or (ii)   create or suffer to exist any Lien upon or with respect to any of the   Collateral of such Grantor except for the pledge, assignment and security   interest created under this Agreement and Liens permitted under the Credit   Agreement.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Subject   to the terms of the Credit Agreement and this Agreement, each Grantor agrees   that it will (i) cause each issuer of the Pledged Equity pledged by such   Grantor not to issue any equity interests or other securities in addition to   or in substitution for the Pledged
  




18








	
  
Equity issued by such issuer except to such Grantor   or its Affiliates, and (ii) pledge hereunder, promptly upon its acquisition   (directly or indirectly) thereof, any and all additional equity interests or   other securities as required by Section 5.01(i) of the Credit Agreement from   time to time acquired by such Grantor in any manner.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
                      Section   16.  Agent Appointed Attorney in   Fact.  Each Grantor hereby   irrevocably appoints the Agent such Grantor’s attorney-in-fact, with full   authority in the place and stead of such Grantor and in the name of such   Grantor or otherwise, from time to time, upon the occurrence and during the   continuance of an Event of Default, in the Agent’s discretion, to take any   action and to execute any instrument that the Agent may deem necessary or   advisable to accomplish the purposes of this Agreement, including, without   limitation:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          to   obtain and adjust insurance required to be paid to the Agent pursuant to   Section 9,
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (b)          to   ask for, demand, collect, sue for, recover, compromise, receive and give   acquittance and receipts for moneys due and to become due under or in respect   of any of the Collateral,
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (c)          to   receive, indorse and collect any drafts or other instruments, documents and   chattel paper, in connection with clause (a) or (b) above, and
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          to   file any claims or take any action or institute any proceedings that the   Agent may deem necessary or desirable for the collection of any of the   Collateral or otherwise to enforce compliance with the terms and conditions   of any Assigned Agreement or the rights of the Agent with respect to any of   the Collateral.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   17.  Agent May Perform.  If any Grantor fails to perform any   agreement contained herein, the Agent may, but without any obligation to do   so, upon notice to the Company of at least five Business Days in advance and   if the Company fails to cure within such period, itself perform, or cause   performance of, such agreement, and the expenses of the Agent incurred in   connection therewith shall be payable by such Grantor under Section 20.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   18.  The Agent’s Duties.  (a)    The powers conferred on the Agent hereunder are solely to protect the   Secured Parties’ interest in the Collateral and shall not impose any duty   upon it to exercise any such powers.    Except for the safe custody of any Collateral in its possession and   the accounting for moneys actually received by it hereunder, the Agent shall   have no duty as to any Collateral, as to ascertaining or taking action with   respect to calls, conversions, exchanges, maturities, tenders or other   matters relative to any Collateral, whether or not any Secured Party has or   is deemed to have knowledge of such matters, or as to the taking of any   necessary steps to preserve rights against any parties or any other rights   pertaining to any Collateral.  The   Agent shall be
deemed to have exercised reasonable care in the custody and   preservation of any Collateral in its possession if such Collateral is   accorded treatment substantially equal to that which it accords its own   property.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
           (b)          
Anything contained herein to the contrary   notwithstanding, the Agent may from time to time, when the Agent deems it to   be necessary, appoint one or more of its Affiliates (or, with the consent of   the Company, any other Persons) subagents (each a “Subagent”) for the




19








	
  
Agent hereunder with respect to all or any part of   the Collateral.  In the event that the   Agent so appoints any Subagent with respect to any Collateral, (i) the   assignment and pledge of such Collateral and the security interest granted in   such Collateral by each Grantor hereunder shall be deemed for purposes of   this Security Agreement to have been made to such Subagent, in addition to   the Agent, for the ratable benefit of the Secured Parties, as security for   the Secured Obligations of such Grantor, (ii) such Subagent shall   automatically be vested, in addition to the Agent, with all rights, powers,   privileges, interests and remedies of the Agent hereunder with respect to   such Collateral, and (iii) the term “Agent,” when used herein in relation to   any rights, powers, privileges, interests and remedies of the Agent with   respect to such Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take   any action with respect to any such Collateral unless and except to the   extent expressly authorized in writing by the Agent.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   19.  Remedies.  If any Event of Default shall have   occurred and be continuing and such Event of Default has resulted in the   acceleration of the Secured Obligations, which acceleration has not been   rescinded or otherwise terminated:
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (a)          The   Agent may exercise in respect of the Collateral, in addition to other rights   and remedies provided for herein or otherwise available to it, all the rights   and remedies of a secured party upon default under the UCC (whether or not   the UCC applies to the affected Collateral) and also may:  (i) require each Grantor to, and each   Grantor hereby agrees that it will at its expense and upon request of the   Agent forthwith, assemble all or part of the Collateral as directed by the   Agent and make it available to the Agent at a place and time to be designated   by the Agent that is reasonably convenient to both parties; (ii) without   notice except as specified below, sell the Collateral or any part thereof in   one or more parcels at public or private sale, at any of the Agent’s offices   or elsewhere, for cash, on credit or
for future delivery, and upon such other   terms as the Agent may deem commercially reasonable; (iii) occupy, consistent   with Section 5.01(e) of the Credit Agreement, on a non-exclusive basis any   premises owned or 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; and (iv) 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, including, without   limitation, (A) any and all rights of such Grantor to demand or otherwise   require payment of any amount under, or performance of any provision of, the   Assigned Agreements, the Receivables and the other Collateral, (B) withdraw,   or cause or direct the withdrawal, of all funds with respect to the Account   Collateral, and (C) exercise all other
rights and remedies with respect to   the Assigned Agreements, the Receivables and the other Collateral, including,   without limitation, those set forth in Section 9-607 of the UCC.  Each Grantor agrees that, to the extent   notice of sale shall be required by law, at least ten days’ notice to such   Grantor of the time and place of any public sale, or of the time after which   any private sale is to be made shall constitute reasonable notification.  The Agent shall not be obligated to make   any sale of Collateral regardless of notice of sale having been given.  The Agent may adjourn any public or   private sale from time to time by announcement at the time and place fixed   therefor, and such sale may, without further notice, be made at the time and   place to which it was so adjourned.
  



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          (b)          Any   cash held by or on behalf of the Agent and all cash proceeds received by or   on behalf of the Agent in respect of any sale of, collection from, or other   realization upon all or any part of the Collateral may, in the discretion of   the Agent, be held by the Agent as collateral for, and/or then or at any time   thereafter shall be applied (after payment of any amounts payable to the   Agent pursuant to Section 20) in whole or in part by the Agent for the   ratable benefit of the Secured Parties against, all or any part of the   Secured Obligations, in the following manner:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (i)          first, paid to the Agent for any amounts   then owing to the Agent in its capacity as such pursuant to Section 9.04 of   the Credit Agreement or otherwise under the Loan Documents; and
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
          (ii)          second, ratably (A) paid to the Secured   Parties for any amounts then owing to them, in their capacities as such,   under the Secured Agreements (other than in respect of undrawn Letters of   Credit) ratably in accordance with the amounts then owing to the Secured   Parties, and (B) deposited as Collateral in the L/C Cash Deposit Account as   required by Section 6.02 of the Credit Agreement.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
Any surplus of such cash or cash proceeds held by or   on the behalf of the Agent and remaining after payment in full of all the   Secured Obligations shall be paid over to the applicable Grantor or to   whomsoever may be lawfully entitled to receive such surplus.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
          (c)          All   payments received by any Grantor under or in connection with any Assigned   Agreement or otherwise in respect of the Collateral shall be received in   trust for the benefit of the Agent, shall be segregated from other funds of   such Grantor and shall be forthwith paid over to the Agent in the same form   as so received (with any necessary indorsement).
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (d)          Subject   to the provisions of Section 9.05 of the Credit Agreement, the Agent may,   without notice to any Grantor except as required by law and at any time or   from time to time, charge, set off and otherwise apply all or any part of the   Secured Obligations against any funds held with respect to the Account   Collateral or in any other deposit account.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
          (e)          In   the event of any sale or other disposition of any of the Intellectual   Property Collateral of any Grantor, the goodwill symbolized by any Trademarks   subject to such sale or other disposition shall be included therein, and such   Grantor shall supply to the Agent or its designee, to the extent practicable,   such Grantor’s know-how and expertise, and documents and things relating to   any Intellectual Property Collateral subject to such sale or other   disposition, and such Grantor’s customer lists and other records and   documents relating to such Intellectual Property Collateral and to the   manufacture, distribution, advertising and sale of products and services of   such Grantor.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (f)          In   each case under this Agreement in which the Agent takes any action with   respect to the Collateral, including proceeds, the Agent shall provide to the   Company such records and information regarding the possession, control, sale   and any receipt of amounts with respect to such Collateral as may be   reasonably requested by the Company as a basis for the preparation of the   company’s financial statements in accordance with GAAP.
  




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                    Section   20.  Indemnity and Expenses.  (a)    Each Grantor agrees to indemnify, defend and save and hold harmless   each Secured Party and each of their Affiliates and their respective   officers, directors, employees, trustees, agents and advisors (each, an “Indemnified Party”)   from and against, and shall pay on demand, any and all claims, damages,   losses, liabilities and expenses (including, without limitation, reasonable   fees and expenses of counsel) that may be incurred by or asserted or awarded   against any Indemnified Party, in each case arising out of or in connection   with or resulting from this Agreement (including, without limitation,   enforcement of this Agreement), except to the extent such claim, damage,   loss, liability or expense is found in a final, non-appealable judgment
by a   court of competent jurisdiction to have resulted from such Indemnified   Party’s gross negligence or willful misconduct.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Each   Grantor will upon demand pay to the Agent the amount of any and all   reasonable expenses, including, without limitation, the reasonable fees and   expenses of its counsel and of any experts and agents, that the Agent may   incur in connection with (i) the custody, preservation, use or operation of,   or the sale of, collection from or other realization upon, any of the   Collateral of such Grantor, (ii) the exercise or enforcement of any of the   rights of the Agent or the other Secured Parties hereunder or (iii) the   failure by such Grantor to perform or observe any of the provisions hereof.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   21.  Amendments; Waivers; Additional   Grantors; Etc.  (a)  No amendment or waiver of any provision of   this Agreement, and no consent to any departure by any Grantor herefrom,   shall in any event be effective unless the same shall be in writing and   signed by the Agent and, with respect to any amendment, the Company on behalf   of the Grantors, and then such waiver or consent shall be effective only in   the specific instance and for the specific purpose for which given.  No failure on the part of the Agent or any   other Secured Party to exercise, and no delay in exercising any right   hereunder, shall operate as a waiver thereof; nor shall any single or partial   exercise of any such right preclude any other or further exercise thereof or   the exercise of any other right.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (b)          Upon   the execution and delivery by any Person of a security agreement supplement   in substantially the form of Exhibit C hereto (each a “Security Agreement Supplement”),   such Person shall be referred to as an “Additional Grantor” and shall be and become   a Grantor hereunder, and each reference in this Agreement and the other Loan   Documents to “Grantor” shall also mean and be a reference to such Additional   Grantor, each reference in this Agreement and the other Loan Documents to the   “Collateral” shall also mean and be a reference to the Collateral granted by   such Additional Grantor and each reference in this Agreement to a Schedule   shall also mean and be a reference to the schedules attached to such
Security   Agreement Supplement.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    Section   22.  Confidentiality; Notices;   References.  (a)  The confidentiality provisions of Section   9.08 of the Credit Agreement shall apply to all information received by the   Agent or any Lender under this Agreement.
  



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                    (b)          All   notices and other communications provided for hereunder shall be delivered as   provided in Section 9.02 of the Credit Agreement.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
                    (c)          The   definitions of certain terms used in this Agreement are set forth in the   following locations:
  





	
  
Account Collateral
  	
  
Section 1(f)
  
	
  Agreement
  	
  
Preamble
  
	
  
Agreement Collateral
  	
  
Section 1(e)
  
	
  
Assigned Agreements
  	
  
Section 1(e)
  
	
  
Borrower
  	
  
Preamble
  
	
  
Collateral
  	
  
Section 1
  
	
  
Copyrights
  	
  
Section 1 (g)(iii)
  
	
  
Credit Agreement
  	
  
Recitals A(1)
  
	
  
Deposit Account Control Agreement
  	
  
Section 5(a)
  
	
  
Equipment
  	
  
Section 1(a)
  
	
  
Grantor, Grantors
  	
  
Preamble
  
	
  
Initial Pledged Equity
  	
  
Recitals A(2)
  
	
  Initial Pledged Debt
  	
  
Recitals A(2)
  
	
  
Intellectual Property Collateral
  	
  
Section 1(g)
  
	
  
Inventory
  	
  
Section 1(b)
  
	
  
IP Agreements
  	
  
Section 1(g)(v)
  
	
  
Obligor
  	
  
Section 5(a)
  
	
  
Patents
  	
  
Section 1(g)(i)
  
	
  
Pledged Debt
  	
  
Section 1(d)(iv)
  
	
  
Pledged Deposit Accounts
  	
  
Recitals A(3)
  
	
  
Pledged Equity
  	
  
Section 1(d)(iii)
  
	
  
Receivables
  	
  
Section 1(c)
  
	
  Related Contracts
  	
  
Section 1(c)
  
	
  
Secured Agreements
  	
  
Section 2
  
	
  
Secured Obligations
  	
  
Section 2
  
	
  
Secured Parties
  	
  
Section 2
  
	
  
Security Collateral
  	
  
Section 1(d)
  
	
  
Specified Collateral
  	
  
Section 6(m)
  
	
  
Trademarks
  	
  
Section 1(g)(iii)
  
	
  
Trade Secrets
  	
  
Section 1(g)(iii)
  
	
  
UCC
  	
  
Recitals A(6)
  




                    Section 23.  Continuing Security Interest; Assignments Under the Credit Agreement.  This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Secured Obligations, (ii) the Termination Date and (iii) the termination or expiration of all Letters of Credit, (b) be binding upon each Grantor, its successors and assigns and (c) inure, together with the rights and remedies of the Agent hereunder, to the benefit of the Secured Parties and their respective successors, permitted transferees and permitted assigns.  Without limiting the


23









generality of the foregoing clause (c), to the extent permitted in Section 9.07 of the Credit Agreement, any Lender may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement (including, without limitation, all or any portion of its Commitments, the Advances owing to it and the Note or Notes, if any, held by it) to any permitted transferee, and such permitted transferee shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise.


                    Section 24.  Release; Termination.  (a)  Upon any sale, lease, transfer or other disposition of any item of Collateral of any Grantor in accordance with the terms of the Loan Documents, or upon any Subsidiary ceasing to be a Material Subsidiary, the security interests granted under this Agreement by such Grantor shall immediately terminate and automatically be released and Agent will promptly deliver at the Grantor’s request to such Grantor all certificates representing any Pledged Equity released and all notes and other instruments representing any Pledged Debt, Receivables or other Collateral, and Agent will, at such Grantor’s expense, promptly execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence the release of such item of Collateral from the assignment and
security interest granted hereby; provided, however, that (i) no such documents shall be required unless such Grantor shall have delivered to the Agent, at least five Business Days prior to the date such documents are required by Grantor, a written request for release describing the item of Collateral and the consideration to be received in the sale, transfer or other disposition and any expenses in connection therewith, together with a form of release for execution by the Agent and a certificate of such Grantor to the effect that the transaction is in compliance with the Loan Documents and (ii) the proceeds of any such sale, lease, transfer or other disposition required to be applied, or any payment to be made in connection therewith, in accordance with Section 2.10(b) of the Credit Agreement shall, to the extent so required, be paid or made to, or in accordance with the instructions of, the Agent when and as required under Section 2.10(b) of the Credit Agreement.


                    (b)          Upon the latest of (i) the payment in full in cash of the Advances and each other payment obligation of any Loan Party of which the Company has knowledge under any Loan Document, (ii) the Termination Date and (iii) the termination or expiration of all Letters of Credit, the pledge and security interest granted hereby shall terminate immediately and automatically and all rights to the Collateral shall revert to the applicable Grantor and the Agent will promptly deliver to Grantors all certificates representing any Pledged Equity or Pledged Debt, Receivables or other Collateral.  Upon any such termination, the Agent will, at the applicable Grantor’s expense, promptly execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such
termination.


                    Section 25.  Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of an original executed counterpart of this Agreement.


                    Section 26.  Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.


24









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


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25








	
  
 
  	
  
EASTMAN KODAK COMPANY
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
/s/ William G. Love
  
	
  
 
  	
  
 
  	
  


  
	
  
 
  	
  
Title:
  	
  
Treasurer
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
KODAK AVIATION LEASING LLC
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
/s/ William G. Love
  
	
  
 
  	
  
 
  	
  


  
	
  
 
  	
  
Title:
  	
  
Manager
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
EASTMAN KODAK COMPANY
  
	
  
 
  	
  
ALGOTEC INC.
  
	
  
 
  	
  
BREMSON INC.
  
	
  
 
  	
  
CADI ACQUISITION CORP.
  
	
  
 
  	
  
CINESITE, INC.
  
	
  
 
  	
  
CREO AMERICAS CREDIT, LLC
  
	
  
 
  	
  
CREO AMERICAS, INC.
  
	
  
 
  	
  
CREO LATIN AMERICA, INC.
  
	
  
 
  	
  
CREO MANUFACTURING AMERICA LLC
  
	
  
 
  	
  
CREO SEATTLE, INC.
  
	
   
  	
  
CUSTOMERFIRST SERVICE & SUPPORT, INC.
  
	
  
 
  	
  
EASTMAN GELATINE CORPORATION
  
	
  
 
  	
  
EASTMAN KODAK INTERNATIONAL CAPITAL COMPANY, INC.
  
	
  
 
  	
  
EK FUNDING, LLC
  
	
  
 
  	
  
ENCAD, INC.
  
	
  
 
  	
  
EVENT IMAGING SOLUTIONS, INC.
  
	
  
 
  	
  
FAR EAST DEVELOPMENT, LTD.
  










	
  
 
  	
  
FPC, INC.
  
	
   
  	
  
KGI HOLDINGS, INC.
  
	
  
 
  	
  
KODAK (NEAR EAST), INC.
  
	
  
 
  	
  
KODAK AMERICAS, LTD.
  
	
  
 
  	
  
KODAK GLOBAL IMAGING, INC.
  
	
  
 
  	
  
KODAK GRAPHICS HOLDINGS, INC.
  
	
  
 
  	
  
KODAK IMAGING NETWORK, INC.
  
	
  
 
  	
  
KODAK INTERNATIONAL MANAGEMENT CORP.
  
	
  
 
  	
  
KODAK NOVA SCOTIA HOLDING COMPANY, INC.
  
	
  
 
  	
  
KODAK REALTY, INC.
  
	
  
 
  	
  
KODAK VERSAMARK, INC.
  
	
   
  	
  
KPG HOLDING COMPANY, INC.
  
	
  
 
  	
  
LASER EDIT, INC.
  
	
  
 
  	
  
LASER-PACIFIC MEDIA CORPORATION
  
	
  
 
  	
  
LUMISYS HOLDING CO.
  
	
  
 
  	
  
NEXPRESS SOLUTIONS, INC.
  
	
  
 
  	
  
OREX COMPUTED RADIOGRAPHY U.S., INC.
  
	
  
 
  	
  
PACIFIC VIDEO, INC.
  
	
  
 
  	
  
PAKON, INC.
  
	
  
 
  	
  
PRACTICEWORKS, INC.
  
	
  
 
  	
  
PRACTICEWORKS SYSTEMS, LLC
  
	
   
  	
  
QUALEX INC.
  
	
  
 
  	
  
QUALEX CARIBE CORP.
  
	
  
 
  	
  
QUALEX PHOTOFINISHING LABS INC.
  
	
  
 
  	
  
SOFTDENT, LLC
  
	
  
 
  	
  
TROPHY DENTAL, INC.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
By
  	
  
/s/ William G. Love
  
	
  
 
  	
  
 
  	
  


  
	
  
 
  	
  
Title:
  	
  
Treasurer
  










	
  
 
  	
  
CREO C.C. (USA) LLC
  
	
  
 
  	
  
DUTCH DENTAL PARTNERS I, LLC
  
	
  
 
  	
  
DUTCH DENTAL PARTNERS II, LLC
  
	
  
 
  	
  
DUTCH DENTAL PARTNERS III, LLC
  
	
  
 
  	
  
IMIP LLC
  
	
  
 
  	
  
KPG USA HOLDINGS LLC
  
	
  
 
  	
  
KODAK PANAMA, LTD.
  
	
  
 
  	
  
KODAK PHILIPPINES LTD.
  
	
   
  	
  KODAK POLYCHROME GRAPHICS LLC
  
	
   
  	
  KODAK PORTUGUESA LIMITED
  
	
   
  	
  NPEC INC.
  
	
   
  	
  TECH SERVICES INTERNATIONAL LLC
  
	
   
  	
   
  	
   
  
	
   
  	
  By
  	
  /s/ William G. Love
  
	
   
  	
   
  	
  


  
	
   
  	
  Title:
  	
  Authorized Signatory