Exhibit
10.5


 


SECOND LIEN SECURITY AGREEMENT


 


This SECOND LIEN SECURITY AGREEMENT (this “Security
Agreement”), dated as of April 7, 2010, among SQUARETWO FINANCIAL
CORPORATION, a Delaware corporation (“Issuer”), the Guarantors from time
to time signatory hereto (the “Guarantors” and collectively with Issuer, the “Grantors”
and each a “Grantor”) and U.S. BANK NATIONAL ASSOCIATION, as collateral
agent pursuant to the Indenture (as hereinafter defined), and as a secured
party (in such capacities, “Collateral Agent”).


 


W I T N E S S E T H:


 


WHEREAS, pursuant to the Indenture dated as of the
date hereof by and among Grantors, Collateral Agent and U.S. BANK NATIONAL
ASSOCIATION, in its capacity as Trustee on behalf of the holders of the Notes
(as defined below) (the “Holders”) (as from time to time amended, restated,
supplemented or otherwise modified, the “Indenture”), pursuant to which
Issuer is issuing $290,000,000 aggregate principal amount of 11.625% Senior
Second Lien Notes due 2017 (together with any Additional Notes issued under the
Indenture, the “Notes”);


 


WHEREAS, each Guarantor has agreed to guarantee the
Second Lien Obligations (as hereinafter defined)  pursuant to Article 10 of the Indenture;


 


WHEREAS, from time to time after the date hereof, the
Issuer may, subject to the terms and conditions of the Indenture and the
Security Documents, incur Permitted Additional Pari Passu Obligations
(including Additional Notes issued under the Indenture), that the Issuer
desires to secure with the Collateral on a pari passu basis with the Notes;


 


WHEREAS, each Guarantor has, pursuant to the
Indenture, among other things, unconditionally guaranteed the Second Lien
Obligations (as hereinafter defined);


 


WHEREAS, the Issuer and each Guarantor will receive
substantial benefits from the issuance of the Notes and each is, therefore,
willing to enter into this Security Agreement and in order to induce Collateral
Agent for the benefit of the Secured Parties (as hereinafter defined) to enter
into this Security Agreement;


 


NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:


 


1.                                       DEFINED TERMS.


 


(a)                                  All capitalized
terms used but not otherwise defined herein have the meanings given to them in
the Indenture.


 


(b)                                 All other terms
contained in this Security Agreement, unless the context indicates otherwise,
have the meanings provided for by the UCC to the extent the same are used or
defined therein, including, without limitation, the following terms: 


 

















 


“Accounts”, “Account Debtor”, , “Chattel Paper”, “Commercial
Tort Claim”, “Deposit Account”, “Documents”, “Equipment”, “Fixtures”, “General
Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter
of Credit”, “Letter-of-Credit Rights”,  “Payment
Intangibles”, “Proceeds”, “Record”, “Software”, “Supporting Obligations” and “Tangible
Chattel Paper”.


 


(c)                                   “Additional Pari
Passu Agent” shall mean the Person appointed to act as trustee, agent or
representative for the holders of any Permitted Additional Pari Passu
Obligation pursuant to any Additional Pari Passu Agreement and designated as
such in an Additional Pari Passu Joinder Agreement.


 


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


 


(e)                                  “Additional Pari
Passu Joinder Agreement” shall mean an agreement substantially in the form of
Exhibit G hereto.


 


(f)                                    “Applicable
Authorized Representative” shall mean (i) the Trustee so long as the Obligations
under the Notes and the Indenture constitute Second Lien Obligations hereunder,
and (ii) thereafter, the Additional Pari Passu Agent representing the series of
Indebtedness secured hereby with the greatest outstanding aggregate principal
amount.


 


(g)                                 “Contractual
Obligations” means, as applied to any Person, any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.


 


(h)                                 “Control Agreement”
means a deposit account control agreement by and among the applicable Grantor,
Collateral Agent, Senior Agent (if applicable) and a deposit bank.


 


(i)                                      “Copyright License”
means any and all rights now owned or hereafter acquired by any Grantor under
any written agreement granting any right to such Grantor to use any Copyright
or Copyright registration owned by a third party.


 


(j)                                     “Credit Agreement”
shall mean that certain loan agreement, dated as of the date hereof (as
amended, amended and restated, supplemented or otherwise modified from time to
time) among the Issuer as US Borrower (as such term is defined therein), the
other borrower and guarantors party thereto, the lenders party thereto and the Senior
Agent.


 


(k)                                  “Default” or “Event
of Default” shall mean a “default” or “event of default” under the Indenture or
under any Additional Pari Passu Agreement.


 


(l)                                     “Design” means all
of the following now owned or hereafter acquired by any Grantor: (a) all
industrial designs and intangibles of like nature (whether registered or 


 


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unregistered), now owned or existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all applications
in connection therewith and (b) all reissues, extensions or renewals thereof.


 


(m)                               “Design License”
means rights under any written agreement now owned or hereafter acquired by any
Grantor granting any right to use any Design.


 


(n)                                 “Discharge of Senior
Lien Obligations” shall have the meaning given to the term in the Intercreditor
Agreement.


 


(o)                                  “Excluded Accounts”
has the meaning set forth in Section 5(a)(iii).


 


(p)                                 “Excluded Property”
has the meaning set forth in Section 2(a).


 


(q)                                  “Governmental
Authority” means any federal, provincial, state or municipal court or other
governmental department, commission, board, bureau, agency or instrumentality,
governmental or quasi-governmental, domestic or foreign.


 


(r)                                    “Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of the date
hereof, among the Issuer, the Grantors from time to time party thereto, the
Senior Agent and the Trustee, in its capacity as the Collateral Agent
thereunder, as it may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof.


 


(s)                                  “License” means any
Copyright License, Patent License, Design License, Trademark License or other
license of rights or interests now held or hereafter acquired by any Grantor.


 


(t)                                    “Light Users” means
those attorneys retained by a Grantor to collect an account through legal
action.


 


(u)                                 “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations, properties or financial condition of the Grantors taken as a whole,
(b) the ability of the Grantors, taken as a whole, to perform their
obligations under the Indenture or any Security Document to which they are a
party, (c) the Collateral or Collateral Agent’s Liens, on behalf of the
Collateral Agent and the Secured Parties, on the Collateral or the priority of
such Liens, or (d) the ability of the Collateral Agent or any Secured Party to
enforce or collect any of the Obligations or to exercise the Collateral Agent’s
or any Secured Party’s aggregate rights and remedies under the Indenture and
the Security Documents.


 


(v)                                 “Patent License”
means rights under any written agreement now owned or hereafter acquired by any
Grantor granting any right to such Grantor with respect to any invention on
which a Patent owned by a third party is in existence.


 


(w)                               “Power of Attorney”
shall have the meaning assigned to that term in Section 6(b).


 


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(x)                                   “Proceeds” shall
have the meaning assigned to it under Section 9-102 (64) of the UCC, and in any
event, shall include, but not be limited to, (i) any and all proceeds of any
insurance, indemnity, warranty or guarantee payable to Grantor from time to
time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any person acting under color of Governmental Authority), and (iii) any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral.


 


(y)                                 “Quarterly Date”
means, at any time, the next date on which financial statements are required to
be delivered pursuant to Section 4.18(a) of the Indenture.


 


(z)                                   “Second Lien
Obligations” means any principal, premium, interest (including any interest
accruing subsequent to the filing of a petition in bankruptcy, reorganization
or similar proceeding at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable state, federal or foreign law), penalties, fees, indemnifications,
reimbursements, damages and other liabilities, and guarantees of payment of
such principal, interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities, payable under any of (i) the Indenture, the
Notes (other than any Additional Notes except to the extent constituting
Permitted Additional Pari Passu Obligations) and the Security Documents,
including any fees, expenses, indemnities, payments and other amounts payable
to Collateral Agent and Trustee under the Indenture and the Security Documents,
and (ii) any agreement relating to Permitted Additional Pari Passu Obligations
(including the Indenture with respect to Additional Notes) and other
documentation relating to any other Permitted Additional Pari Passu
Obligations; provided that no obligations in respect of Permitted
Additional Pari Passu Obligations (other than Additional Notes) shall
constitute “Second Lien Obligations” unless the Additional Pari Passu Agent for
the holders of such Permitted Additional Pari Passu Obligations has executed an
Additional Pari Passu Joinder Agreement in the form of Exhibit G hereto
and has become a party to the Intercreditor Agreement.


 


(aa)                             “Secured Parties”
shall mean, collectively, Collateral Agent, the Trustee, the Holders, each
Additional Pari Passu Agent, and each holder of Permitted Additional Pari Passu
Obligations that constitute Second Lien Obligations.


 


(bb)                          “Security Documents”  means the Security Agreement, the Pledge
Agreement, any mortgages, the Intercreditor Agreement and all of the security
agreements, pledges, collateral assignments, deeds of trust, trust deeds or
other instruments evidencing or creating or purporting to create any security
interests in favor of the Collateral Agent for its benefit and for the benefit
of the Trustee and the Holders of the Notes and the holders of any Permitted
Additional Pari Passu Obligations, in all or any portion of the Collateral, as
amended, modified, restated, supplemented or replaced from time to time.


 


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(cc)                            “Senior Agent”
shall mean GMAC Commercial Finance LLC, in its capacity as administrative and
collateral agent under the Credit Agreement and any successor appointed from
time to time as Senior Agent relating to any Senior Lien Obligations.


 


(dd)                          “Senior Claimholder”
shall have the meaning assigned to such term under the Intercreditor Agreement.


 


(ee)                            “Senior Lien
Obligations” shall have the meaning assigned to such term under the
Intercreditor Agreement.


 


(ff)                                “Senior Loan
Document” shall have the meaning assigned to such term under the Intercreditor
Agreement.


 


(gg)                          “Special Power of
Attorney” shall have the meaning assigned to that term in Section 6(b).


 


(hh)                          “Supplement” shall
have the meaning assigned to such term in Section 26 hereof.


 


(ii)                                   “Trademark License”
means rights under any written agreement now owned or hereafter acquired by any
Grantor granting any right to such Grantor to use any Trademark owned by a
third party.


 


(jj)                                  “Uniform Commercial
Code Jurisdiction” means any jurisdiction that has adopted all or substantially
all of Article 9 as contained in the 2005 Official Text of the Uniform
Commercial Code, as recommended by the National Conference of Commissioners on
Uniform State Laws and the American Law Institute, together with any subsequent
amendments or modifications to the Official Text.


 


2.                                       GRANT OF LIEN; RELATIONSHIP TO SENIOR LIEN
OBLIGATIONS.


 


(a)                                  Grant.  To secure the prompt payment, performance and
observance of the Second Lien Obligations, including all renewals, extensions,
restructurings and refinancings of any or all of the Second Lien Obligations,
each Grantor hereby grants to Collateral Agent, for the benefit of Collateral
Agent and the Secured Parties, a continuing security interest in, and lien and
mortgage in and to, all of such Grantor’s personal property and other assets
described below, in each case, whether now owned or existing or hereafter
acquired or arising and regardless of where located (all being collectively
referred to as the “Collateral”) including, without limitation, all:


 


(i)                                     Accounts;


 


(ii)                                  Chattel Paper;


 


(iii)                               Commercial Tort Claims, including those
specified on Schedule 2(a) hereto;


 


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(iv)                              Deposit Accounts, and cash and other monies
and property of such Grantor in the possession or under the control of the
Senior Agent or Collateral Agent, any Senior Claimholder, any participant of
any Senior Claimholder or any Secured Party;


 


(v)                                 Documents;


 


(vi)                              Equipment;


 


(vii)                           Fixtures;


 


(viii)                        General Intangibles (including the Patents,
Trademarks and Copyrights listed on Schedule 4(g) hereto, and all other
Intellectual Property);


 


(ix)                                Licenses;


 


(x)                                   Goods;


 


(xi)                                Instruments;


 


(xii)                             Inventory;


 


(xiii)                          Investment Property;


 


(xiv)                         Letter-of-Credit Rights and Supporting
Obligations;


 


(xv)                            all money, cash or cash equivalents of such
Grantor;


 


(xvi)                         other personal property whether or not subject
to the UCC together with all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the property described above or are otherwise necessary or helpful in the
collection thereof or realization thereon; and


 


(xvii)                      Proceeds and products of all or any of the
property described above;


 


provided, however, that notwithstanding any of
the other provisions set forth in this Section 2, (I) this Security Agreement
shall not constitute a grant of a security interest in, and the Collateral
shall not include, (A) any property to the extent that such grant of a security
interest is (x) prohibited by any requirements of any law, rule or regulation
of a Governmental Authority, or requires a consent not obtained of any
Governmental Authority pursuant to such requirement or (y) prohibited by, or
constitutes a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, license, agreement,
instrument or other document evidencing or giving rise to such property;
provided, further, that the exclusions set forth in clauses (A)(x) and (A)(y)
above shall not apply to Accounts, payment intangibles or to any other category
of Collateral to the extent such requirements of law, rule or regulation or the
term in such contract, license, agreement, instrument or other document
providing for such 


 


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prohibition, breach, default
or termination or requiring such consent is ineffective under applicable law;
(B) Capital Stock in excess of shares representing 100% of the nonvoting
Capital Stock and 65% of the total combined voting power of all classes of
Capital Stock entitled to vote of any Foreign Subsidiary; (C) the Excluded
Accounts; (D) the Capital Stock issued by Collect Air; (E) any “intent to use”
Trademark applications for which a statement of use has not been filed (but
only until such statement is filed); (F) any assets encumbered by the Cargill
Liens as of the date hereof and (G) any “Collateral” as such term is defined in
the Pledge Agreement, including, without limitation, any property of the type
described in Section 2(f) of the Pledge Agreement that, but for the operation
of such Section 2(f) of the Pledge Agreement, would otherwise constitute
Collateral thereunder (any such items described in clauses (A) through (G)
above shall be referred to herein as “Excluded Property”) and (II) the
representations, warranties and covenants in this Security Agreement shall not
apply to (x) any property that is not included in the Collateral and (y) any
matters that are the subject of post-closing obligations so long as the
Grantors are in compliance with such post-closing obligations under the Senior
Loan Documents.


 


(b)                                 Setoff.  In addition, to secure the prompt and
complete payment, performance and observance of the Second Lien Obligations and
in order to induce Collateral Agent and the Secured Parties as aforesaid, each
Grantor hereby grants to Collateral Agent, for the benefit of Collateral Agent
and the Secured Parties, a right of setoff, following the occurrence and during
the continuance of an Event of Default against the property of such Grantor
held by Collateral Agent or any Secured Party, consisting of property described
above in Section 2(a) now or hereafter in the possession or custody of
or in transit to Collateral Agent or any Secured Party, for any purpose,
including safekeeping, collection or pledge, for the account of such Grantor,
or as to which such Grantor may have any right or power.


 


(c)                                  Intercreditor
Agreement; Conflicts.  Anything
herein to the contrary notwithstanding, the liens and security interests
granted pursuant to this Security Agreement and the exercise of certain rights
and/or remedies with respect thereto are subject to the provisions of the
Intercreditor Agreement.  In the event of
any conflict between the terms of the Intercreditor Agreement and this Security
Agreement, the terms of the Intercreditor Agreement shall govern and
control.  In the event of any conflict
between the obligations of any Grantor under this Agreement and any agreement
relating to the Senior Lien Obligations, the terms of the agreement relating to
the Senior Lien Obligations shall govern and control.  All references to specific sections of the
Intercreditor Agreement set forth herein shall refer to such sections as in
effect on the date hereof, or as subsequently amended with the consent of the
Grantors.


 


(d)                                 Effect of
Satisfaction of Certain Obligations Under Senior Loan Documents.  Anything herein to the contrary
notwithstanding, prior to the Discharge of Senior Lien Obligations, the
requirements of this Security Agreement to deliver any certificates,
instruments, Documents or other possessory collateral to Collateral Agent,
shall be deemed satisfied if the applicable Grantor complies with the
requirements of the corresponding provisions of the applicable Senior Loan
Document.


 


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3.                                       COLLATERAL AGENT’S AND SECURED PARTIES’
RIGHTS; LIMITATIONS ON COLLATERAL AGENT’S AND SECURED PARTIES’ OBLIGATIONS.


 


(a)                                  It is expressly
agreed by each Grantor that, anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each of its Contractual Obligations and
each of its Licenses to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder to the same extent as
if this Security Agreement and the other Security Documents, the Indenture and
any Additional Pari Passu Agreement had not been executed.  Neither Collateral Agent nor any Secured
Party shall have any obligation or liability under any Contractual Obligations
or License by reason of or arising out of this Security Agreement or the
granting herein of a Lien thereon or the receipt by Collateral Agent or any
Secured Party of any payment relating to any such Contractual Obligations or
License pursuant hereto.  Neither
Collateral Agent nor any Secured Party shall be required or obligated in any
manner to perform or fulfill any of the obligations of any Grantor under or
pursuant to any Contractual Obligations or License, or to make any payment, or
to make any inquiry as to the nature or the sufficiency of any payment received
by it or the sufficiency of any performance by any party under any Contractual
Obligations or License, or to present or file any claims, or to take any action
to collect or enforce any performance or the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.


 


(b)                                 Collateral Agent
may (subject to the terms of the Intercreditor Agreement) at any time after an
Event of Default has occurred and is continuing without prior notice to
Grantors, notify Account Debtors and other Persons obligated on the Collateral
that Collateral Agent has a security interest therein, and that payments in
respect of such Collateral shall be made directly to Collateral Agent.  Upon the request of Collateral Agent,
following the occurrence and during the continuation of an Event of Default,
Grantors shall so notify Account Debtors and other Persons obligated on the
Collateral.  Once any such notice has
been given to any Account Debtor or other Person obligated on the Collateral,
the affected Grantor shall not give any contrary instructions to such Account
Debtor or other Person without Collateral Agent’s prior written consent.


 


(c)                                  Subject to Section
14 hereof, upon election of Collateral Agent at any time while and so long as
an Event of Default and acceleration of the Second Lien Obligations shall be
continuing, Collateral Agent may at any time in Collateral Agent’s own name, in
the name of a nominee of Collateral Agent or in the name of any Grantor
communicate (by mail, telephone, facsimile or otherwise) with Account Debtors,
parties to Contractual Obligations and obligors in respect of Instruments to
verify with such Persons, to Collateral Agent’s satisfaction, the existence,
amount, terms of, and any other matter relating to, Accounts, Instruments,
Chattel Paper and/or Payment Intangibles. 
If an Event of Default and acceleration of the Obligations shall have
occurred and be continuing, each Grantor, at its own expense, shall cause the
independent certified public accountants then engaged by such Grantor to
prepare and deliver to Collateral Agent and each Secured Party at any time and
from time to time promptly upon Collateral Agent’s request the following
reports with respect to such Grantor: (i) a reconciliation of all Accounts;
(ii) an aging of all Accounts; (iii) trial balances; and (iv) a test
verification of such Accounts as Collateral Agent may request.


 


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(d)                                 The Applicable
Authorized Representative shall direct Collateral Agent in exercising any
right, power, discretionary duty or other remedy available to Collateral Agent
under this Security Agreement or any Security Document and the other Secured
Parties shall not have a right to take any actions with respect to the
Collateral.  If Collateral Agent shall
not have received appropriate instruction within 10 days of a request therefor
from the Applicable Authorized Representative (or such shorter period as
reasonably may be specified in such notice or as may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action (subject to the terms of the Intercreditor Agreement) as it
shall deem to be in the best interests of the Secured Parties and Collateral
Agent shall have no liability to any Person for such action or inaction.


 


4.                                       REPRESENTATIONS AND WARRANTIES.  Each
Grantor represents and warrants that as of the Issue Date:


 


(a)                                  Each Grantor has
rights in and the corporate or limited liability company power to transfer each
item of the Collateral upon which it purports to grant a Lien hereunder free
and clear of any and all Liens other than Permitted Liens.


 


(b)                                 No effective security
agreement, financing statement, equivalent security or Lien instrument or
continuation statement covering all or any part of the Collateral is on file or
of record in any public office, except such as may have been filed (i) by any
Grantor or Collateral Agent in favor of Collateral Agent pursuant to this
Security Agreement or the other Security Documents, (ii)  in connection with any other Permitted Liens,
(iii) with respect to the Grantors’ Existing Credit Agreement (provided that
any and all of the filed agreements, financing statements, instruments or
continuation statements referenced in this clause (iii) shall be released on
the Issue Date), and (iv) financing statements filed by purchasers of assets in
respect of assets that are no longer owned by any Grantor.


 


(c)                                  This Security
Agreement is effective to create a valid and continuing Lien on and, upon the
filing of the appropriate financing statements, a perfected Lien in favor of
Collateral Agent, for the benefit of Collateral Agent and the Secured Parties,
on the Collateral (other than Fixtures and Commercial Tort Claims that are not
subject to the requirements of Section 5(a)(vii) hereof) with respect to which
a Lien may be perfected by filing pursuant to the UCC.  Such Lien is enforceable as such as against
any and all creditors of and purchasers from Grantors (other than purchasers
and lessees of Inventory in the ordinary course of business and non-exclusive
licensees of General Intangibles in the ordinary course of business).


 


(d)                                 Schedule 4(d) hereto lists, as
of the Issue Date, (x) all Instruments, Letter of Credit Rights and Chattel
Paper with an aggregate value in excess of $500,000 of each Grantor, other than
Instruments, Letter of Credit Rights and Chattel Paper relating to the Charged-off
Receivables, and (y) all Instruments, Letter of Credit Rights and Chattel Paper
of each Grantor relating to the Charged-off Receivables with an individual
value in excess of $100,000.


 


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(e)                                  Schedule 4(e) hereto sets
forth as of the Issue Date, each Grantor’s name (within the meaning of Section 9-503
of the UCC) as it appears in official filings in the state of its incorporation
or organization, all other names (including trade names, fictitious names and
business names) under which any Grantor currently conducts business, or has at
any time during the past five years conducted business, the name of any entity
which any Grantor has acquired in whole or in part or from whom any Grantor has
acquired a significant amount of assets within the past five years (other than
purchases of assets in the ordinary course of business), the type of entity of
such Grantor (including corporation, partnership, limited partnership or
limited liability company), organizational identification number issued by such
Grantor’s state of incorporation or organization or a statement that no such
number has been issued, such Grantor’s state of incorporation or organization,
the location of such Grantor’s chief executive office, principal place of
business, offices, all warehouses and premises where Collateral is stored or
located (other than any documentation relating to assets that is in the
possession of Franchisees or Light Users in the ordinary course of business), and
the locations of its books and records concerning the Collateral (other than
any books and records relating to assets that is in the possession of
Franchisees or Light Users in the ordinary course of business).  Each Grantor has only one state of incorporation
or organization.


 


(f)                                    Intentionally
Omitted.


 


(g)                                 With respect to the
Intellectual Property included in the Collateral that does not constitute
commercial off-the-shelf software that is generally available to the public:


 


(i)                                     Except as would not reasonably be expected to
have a Material Adverse Effect, each Grantor and each of its Subsidiaries owns,
is licensed to use or otherwise has the right to use, all Intellectual Property
used in or necessary for the conduct of its business as currently conducted;


 


(ii)                                  As of the Issue Date, (A) no Grantor has
any interest in, or title to, any Patent, Trademark or Copyright subject to a
registration or application for a registration, except as set forth in Schedule
4(g) hereto, and (B) no Grantor has any License the absence of which
would reasonably be expected to result in a Material Adverse Effect except as
set forth in Schedule 4(g);


 


(iii)                               Except as would not reasonably be expected to
have a Material Adverse Effect, each of the Patents, Trademarks or Copyrights
are subsisting and have not been adjudged invalid or unenforceable in whole or
in part;


 


(iv)                              To the best of Grantors’ knowledge, each of
the Patents, Trademarks, and Copyrights are valid and enforceable, except to
the extent that the lack of such validity or enforceability would not
reasonably be expected to have a Material Adverse Effect;


 


(v)                                 There is no outstanding claim that the use of
any of the Patents, Trademarks, Copyrights or other Intellectual Property
violates the rights of any 


 


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third
person, which claim would reasonably be expected to have a Material Adverse
Effect;


 


(vi)                              Grantors are the sole and exclusive owners of
the entire and unencumbered right, title and interest in and to each of the
material Patents, Trademarks, Copyrights, and other material Intellectual
Property purported to be owned by it free and clear of any liens, charges and
encumbrances (including without limitation pledges, assignments, licenses,
registered user agreements and covenants by Grantors not to sue third persons),
except for Permitted Liens and the Licenses disclosed on Schedule 4(g) attached
hereto;


 


(vii)                           Except as set forth on Schedule 4(g) or
as permitted under the Indenture and each Additional Pari Passu Agreement,
there are no effective restrictions on any Grantor’s or any of its Subsidiaries’
right to create a Lien in any such Intellectual Property that is material nor
in Collateral Agent’s right to perfect and enforce such Lien; and


 


(viii)                        This Security Agreement is effective to create
a valid and continuing Lien on and, upon filing of appropriate financing
statements, the Second Lien Copyright Assignment of Security (in the form
attached hereto as Exhibit A) with the United States Copyright Office and
filing of the Second Lien Patent Assignment of Security (in the form attached
hereto as Exhibit B) and the Second Lien Trademark Assignment of Security
(in the form attached hereto as Exhibit C) with the United States Patent
and Trademark Office, perfected Liens in favor of Collateral Agent on Patents,
Trademarks, Copyrights, and other Intellectual Property, and such perfected
Liens are enforceable as such as against any and all creditors of and
purchasers from Grantors to the extent such Liens are able to be perfected by
such filings, subject only to the right of holders of Permitted Liens.  Upon filing of the Second Lien Copyright
Assignment of Security with the United States Copyright Office and filing of
the Second Lien Patent Assignment of Security and the Second Lien Trademark
Assignment of Security with the United States Patent and Trademark Office and
the filing of appropriate financing statements, all action necessary to protect
and perfect Collateral Agent’s Lien on Grantors’ Patents, Trademarks and
Copyrights shall have been duly taken.


 


(h)                                 Intentionally
Omitted.


 


(i)                                     Intentionally
Omitted.


 


(j)                                     Except for matters
disclosed on Schedule 2(a), no Grantor owns any Commercial Tort Claims
with a value that such Grantor reasonably expects to exceed $500,000.


 


(k)                                  Schedule 4(k) sets forth,
the account numbers and locations of all Deposit Accounts or other bank
accounts of each Grantor.


 


11

















 


(l)                                     Except as disclosed
on Schedule 4(l) and other than any documentation relating to
Charged-Off Receivables that is in the possession of Franchisees or Light Users
in the ordinary course of business, as of the Issue Date, none of the
Collateral is in the possession of any consignee, bailee, warehouseman, agent
or processor.


 


(m)                               Intentionally
Omitted.


 


(n)                                 None of the
Collateral (x) constituting Charged-off Receivables or the proceeds
therefrom or (y) with a value in excess of $500,000, is of a type in which
Liens may be registered, recorded or filed under, or notice thereof given
under, any federal statute or regulation except, with respect to clauses (x) and
(y) above, for Collateral described on Schedule 4(g) hereto
and other registered Intellectual Property.


 


(o)                                 Each Grantor shall,
promptly upon providing notice to the Senior Agent pursuant to the Senior Loan
Documents (or, if the Discharge of the Senior Lien Obligations shall have
occurred, promptly upon acquisition thereof) notify Collateral Agent in writing
upon acquiring any interest hereafter in the Collateral constituting any other
Collateral with a value in excess of $500,000 (other than registered
Intellectual Property), that is of a type where a Lien may be registered,
recorded of filed under, or notice thereof given under, any federal statute or
regulation.


 


5.                                       COVENANTS.  Each
Grantor covenants and agrees with Collateral Agent, for the benefit of
Collateral Agent and the Secured Parties:


 


(a)                                  Further Assurances;
Letters of Credit.


 


(i)                                     Generally. At any time and from time to time, upon the
reasonable written request of Collateral Agent and at the sole expense of each
Grantor, such Grantor shall (subject to the terms of the Intercreditor
Agreement) promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as Collateral Agent may
reasonably request to obtain the full benefits of this Security Agreement and
of the rights and powers herein granted, including (A) using its
commercially reasonable efforts to secure all consents and approvals necessary
for the assignment to or for the benefit of Collateral Agent of any License or
Contractual Obligations held by such Grantor and to enforce the security
interests granted hereunder; and (B) filing any financing or continuation
statements under the UCC with respect to the Liens granted hereunder or under
any other Security Document or Additional Pari Passu Agreement as to those
relevant jurisdictions that are not Uniform Commercial Code Jurisdictions;
provided, however, prior to the Discharge of Senior Lien Obligations, Grantors
shall not be required to obtain third party consents or approvals with respect
to assets included or to be included in the Collateral if such Grantor is not
required to obtain such third party consents or approvals pursuant to the
Senior Loan Documents.


 


(ii)                                  Organizational, Name or Location Changes. Each Grantor will give Collateral Agent
prompt written notice of any (1) change of name of any 


 


12

















 


Grantor,
(2) changes in any Grantor’s state or other jurisdiction of organization
or its organizational identification number, or (3) reincorporation or
reorganization of a Grantor under the laws of any jurisdiction other than the
jurisdiction in which it is incorporated or organized as of the Issue Date.  In connection with and as a condition to
taking any action described above, each Grantor shall take all necessary action
to maintain the continued perfection and priority of the liens created
hereunder in the Collateral, including any actions that may be reasonably
requested by Collateral Agent.


 


(iii)                               Deposit Accounts. Prior to the Discharge of Senior Lien
Obligations, each Grantor shall obtain a Control Agreement with each bank or
financial institution holding a Deposit Account for such Grantor Party (other
than any payroll, employee benefit and similar trust accounts and other than
trust accounts pursuant to which any Grantor receives collections on behalf of
third parties, each such account, an “Excluded Account”) in respect of which a
Control Agreement is obtained in favor of the Senior Agent; provided, however,
that the failure of any Grantor to obtain any Control Agreement otherwise
required by this clause (iii) solely as a result of Collateral Agent’s
refusal to execute a Control Agreement which is substantially similar to the
Control Agreement executed by the Senior Agent, shall not result in a breach of
obligations of such Grantor under this clause (iii).  Following the Discharge of Senior Lien
Obligations, each Grantor shall use commercially reasonable efforts to obtain a
Control Agreement from each bank or financial institution maintaining a Deposit
Account for such Grantor (other than with respect to Excluded Accounts).  In connection with any Control Agreements,
Collateral Agent agrees that, (A) notwithstanding anything to the contrary
in any Control Agreement, it shall not deliver a notice of springing dominion
or similar notice to the bank or financial institution thereunder unless an
Event of Default shall have occurred and be continuing and (B) it shall
promptly (and in any event, within 5 Business Days after a written request
therefor) execute any proposed amendment, modification, termination,
restatement, replacement or waiver of any Control Agreement to which it is a
party in respect of which the Senior Agent has approved a corresponding
amendment, modification, termination restatement, replacement or waiver subject
to the terms and conditions of Section 5.3(d) of the Intercreditor
Agreement and to the extent required thereunder.


 


(iv)                              Letters of Credit. If any Grantor becomes the beneficiary of a
letter of credit with a term of six (6) months or more and a face amount
in excess of $500,000, such Grantor shall, promptly upon delivering notice
thereof to the Senior Agent pursuant to the Senior Loan Documents (or, if the
Discharge of the Senior Lien Obligations shall have occurred,  not later than the next Quarterly Date),
notify Collateral Agent thereof and, if requested by Collateral Agent following
the Discharge of Senior Lien Obligations, use commercially reasonable efforts
to enter into a tri party agreement with Collateral Agent and the issuer and/or
confirmation bank with respect to Letter-of-Credit Rights assigning such
Letter-of-Credit Rights to Collateral Agent and to amend such letter of credit
to provide that all payments thereunder shall be made by wire transfer or
deposit to a 


 


13

















 


deposit
account subject to a Control Agreement in favor of Collateral Agent, all in
form and substance reasonably satisfactory to Collateral Agent.


 


(v)                                 [Intentionally Omitted]


 


(vi)                              Financing Statements. Each Grantor hereby irrevocably authorizes
Collateral Agent at any time and from time to time to file in any filing office
in any Uniform Commercial Code Jurisdiction any initial financing statements
and amendments thereto that (a) indicate the Collateral (i) as all
assets of such Grantor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the UCC of such jurisdiction, or (ii) as being of an equal or lesser
scope or with greater detail, and (b) contain any other information
required by part 5 of Article 9 of the UCC for the sufficiency or filing
office acceptance of any financing statement or amendment, including (i) whether
such Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor, and (ii) in the case of a
financing statement filed as a fixture filing, a sufficient description of real
property to which the Collateral relates. 
Each Grantor agrees to furnish any such information to Collateral Agent
promptly upon request.  Each Grantor also
ratifies its authorization for Collateral Agent to have filed in any Uniform
Commercial Code Jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof. 
Notwithstanding the foregoing, if reasonably requested by any Grantor in
writing, Collateral Agent shall make or authorize Grantor to make as may be
reasonably requested to evidence that the security interests hereunder do not
attach to any property that constitutes Excluded Property (solely to the extent
that and so long as, such property constitutes Excluded Property).  Notwithstanding the foregoing authorizations,
in no event shall the Collateral Agent be obligated to prepare or file any
financing statements whatsoever, or to maintain the perfection of the security
interest granted hereunder.  Each Grantor
agrees to prepare, record and file, at its own expense, financing statements
(and continuation statements when applicable) under the UCC with respect to the
Collateral now existing or hereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect and maintain perfected the Collateral to the extent required
hereunder, and to deliver a filed stamped copy of each such financing statement
or other evidence of filing to the Collateral Agent.  Neither the Trustee nor the Collateral Agent
shall be under any obligation whatsoever to file any such financing or
continuation statements or to make any other filing under the UCC in connection
with this Security Agreement.


 


(vii)                           Commercial Tort Claims. Each Grantor shall, promptly upon providing
notice to the Senior Agent pursuant to the Senior Loan Documents (or, if the
Discharge of the Senior Lien Obligations shall have occurred,  promptly, and in any event within ten (10) Business
Days after obtaining knowledge that the same is acquired by it), notify
Collateral Agent of any commercial tort claim (as defined in the UCC) acquired
by it that is reasonably anticipated to result in a recovery in excess of
$500,000 and unless otherwise consented by Collateral 


 


14

















 


Agent,
such Grantor shall enter into a Supplement granting to Collateral Agent a Lien
in such commercial tort claim.


 


(b)                                 Intentionally
Omitted.


 


(c)                                  Covenants Regarding
Patents, Trademarks, Copyrights and Licenses.


 


(i)                                     Intentionally Omitted.


 


(ii)                                  Each Grantor shall, promptly upon delivering
notice thereof to the Senior Agent pursuant to the Senior Loan Documents (or,
if the Discharge of the Senior Lien Obligations shall have occurred, not later
than the next Quarterly Date), notify Collateral Agent in writing if either
itself or through any agent, employee, licensee or designee, filed an
application for the registration of any material Patent, Trademark or Copyright
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency, and, to the extent Grantor is required
to do so pursuant to the Senior Loan Documents (or, following the Discharge of
Senior Lien Obligations, upon request of the Collateral Agent), such Grantor
shall (subject to the terms of the Intercreditor Agreement), execute and
deliver Patent Assignments of Security, Copyright Assignments of Security or
Trademark Assignments of Security, as applicable, to evidence Collateral Agent’s
Lien on such Patent, Trademark or Copyright, and the General Intangibles of
such Grantor relating thereto or represented thereby.


 


(iii)                               Intentionally Omitted.


 


(iv)                              Intentionally Omitted.


 


(v)                                 Grantors will not amend, modify, terminate or
waive any provision of any License in any manner which would reasonably be
expected to result in a Material Adverse Effect.


 


(vi)                              Subject to the terms of the Intercreditor
Agreement, each Grantor shall use its commercially reasonable efforts, if
requested by Collateral Agent, to obtain any consents, waivers or agreements
necessary to enable Collateral Agent to exercise remedies hereunder and under
the other Security Documents, the Indenture and any Additional Pari Passu
Agreements with respect to any material Intellectual Property and any of such
Grantor’s other rights under any material General Intangibles, including such
Grantor’s rights as a licensee of computer software; provided, however, that
the requirements of this clause (vi) shall not include an obligation to
enter into an escrow or similar arrangement with respect to the eAGLE Software;
provided, however, that prior to the Discharge of Senior Lien
Obligations, no Grantor shall be required to take any such action requested by
the Collateral Agent if the corresponding action under the Senior Loan
Documents has not been required or taken thereunder.


 


15

















 


(vii)                           Grantors will continue to use for the duration
of this Security Agreement, proper statutory notice, where appropriate, in
connection with its use of the Patents, Trademarks, Copyrights, and other
Intellectual Property to the extent that failure to do so would be reasonably
expected to have a Material Adverse Effect.


 


(d)                                 Covenants regarding
eAGLE System.  In the
event that all or any portion of the eAGLE System is comprised of registered
Patents, Trademarks or Copyrights owned by any Grantor, the applicable Grantor
shall, promptly upon providing notice to the Senior Agent pursuant to the
Senior Loan Documents (or, if the Discharge of the Senior Lien Obligations
shall have occurred, promptly), notify Collateral Agent and (subject to the
terms of the Intercreditor Agreement) take all actions reasonably required to
assure that Collateral Agent has a duly perfected security interest therein; provided,
however, that prior to the Discharge of Senior Lien Obligations, no
Grantor shall be required to take any action that is not required by the Senior
Agent or under the terms of the Senior Loan Documents.


 


(e)                                  Covenants Regarding
Equipment.  Each
Grantor shall, promptly upon delivering notice thereof to the Senior Agent
pursuant to the Senior Loan Documents (or, if the Discharge of the Senior Lien
Obligations shall have occurred,  not
later than the next Quarterly Date), notify Collateral Agent in writing in the
event that such Grantor obtains any Equipment covered by any certificate of
title with a value in excess of $500,000 individually or $2,500,000 in the
aggregate.  Following the Discharge of
Senior Lien Obligations, upon request of Collateral Agent, each Grantor shall
promptly deliver to Collateral Agent any and all certificates of title,
applications for title or similar evidence of ownership of all of such
Equipment and shall cause Collateral Agent to be named as lienholder on any
such certificate of title or other evidence of ownership.


 


(f)                                    Covenants Regarding
Documents, Instruments, Chattel Paper and Investment Property.  Each Grantor shall, promptly upon delivering
notice to the Senior Agent pursuant to the Senior Loan Documents (or, if the
Discharge of the Senior Lien Obligations shall have occurred, not later the
next Quarterly Date following the acquisition thereof), notify Collateral Agent
of the existence of all Collateral consisting of negotiable Documents,
certificated and uncertificated securities, Instruments, and Chattel
Paper, each with a value in excess of $500,000 on an individual basis.
Following the Discharge of Senior Lien Obligations, each Grantor shall (i) promptly
deliver to Collateral Agent all such Collateral consisting of negotiable
Documents, certificated securities and Instruments with a value in excess of
$500,000 on an individual basis (in each case, accompanied by stock powers,
allonges or other instruments of transfer executed in blank), (ii) in the
case of any Investment Property constituting uncertificated securities with a
value in excess of $500,000 on an individual basis, use commercially reasonable
efforts to obtain from any issuers of such Investment Property, for the benefit
of Collateral Agent, written confirmation of Collateral Agent’s Control over
such Investment Property upon terms and conditions reasonably satisfactory to
Collateral Agent and (iii) in the case of any Tangible Chattel Paper with
an a value in excess of $500,000 on an individual basis, promptly deliver to
Collateral Agent all such Collateral consisting of Tangible Chattel Paper with
a value in excess of $500,000 on an individual 


 


16

















 


basis duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to Collateral Agent.


 


(g)                                 Additional
Collateral Creation and Perfection Actions.  Each Grantor agrees that, in the event any
Grantor takes any action to grant or perfect a Lien in favor of the Senior
Agent or any holder of a Senior Lien Obligation in any property (other than
Excluded Property) of such Grantor, such Grantor shall promptly notify the
Collateral Agent of such action and shall also take such action to grant or
perfect a Lien (subject to the Intercreditor Agreement) in favor of the
Collateral Agent to secure the Second Lien Obligations without request of the
Collateral Agent, provided, however, that in no event shall this
clause (g) have the effect of requiring any Grantor to (i) obtain
Control Agreements with respect to any Deposit Accounts that are not required
to be subject to a Control Agreement pursuant to Section 5(a)(iii) hereof,
(ii) take actions with respect to Letters of Credit that are not required
pursuant to Section 5(a)(iv) prior to the Discharge of the First Lien
Obligations, (iii) take actions with respect to Equipment subject to a
certificate of title that are not required pursuant to Section 5(e) prior
to the Discharge of the First Lien Obligations, (iv) deliver possession of
any Collateral to the Collateral Agent in respect of which possession is
delivered to the Senior Agent or (v) unless otherwise expressly provided
in this Security Agreement, take actions that are not necessary to perfect any
such Lien in favor of the Collateral Agent.


 


(h)                                 Indemnification.


 


(i)                                     In any suit, proceeding or action brought by
Collateral Agent or any Secured Party relating to any Collateral for any sum
owing with respect thereto or to enforce any rights or claims with respect
thereto, each Grantor will save, indemnify and keep Collateral Agent and the
Secured Parties harmless from and against all expense (including reasonable
attorneys’ fees and expenses), loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the Account Debtor or other Person obligated on the Collateral, arising out
of a breach by such Grantor of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to, or in favor
of, such obligor or its successors from such Grantor, except in the case of
Collateral Agent or any Secured Party, to the extent such expense, loss, or
damage is attributable to the gross negligence or willful misconduct of
Collateral Agent or such Secured Party as determined by a court of competent
jurisdiction.  All such obligations of
each Grantor shall be and remain enforceable against and only against Grantors
and shall not be enforceable against Collateral Agent or any Secured Party.


 


(ii)                                  In addition, with respect to Intellectual
Property, each Grantor assumes all responsibility and liability arising from
the use of the Trademarks, Patents, Copyrights and other Intellectual Property,
and each Grantor hereby indemnifies and holds Collateral Agent and the Secured
Parties harmless from and against any claim, suit, loss, damage or expense
(including reasonable attorneys’ fees) arising out of such Grantor’s operations
of Grantor’s business from the use of the Trademarks, Patents, Copyrights or
other Intellectual Property.  


 


17

















 


In
any suit, proceeding or action brought by Collateral Agent or any Secured Party
under any License for any sum owing thereunder, or to enforce any provisions of
such License, Grantors will indemnify and keep Collateral Agent and the Secured
Parties harmless from and against all expense, loss or damage suffered by
reason of any defense, set off, counterclaim, recoupment or reduction or
liability whatsoever of the obligee thereunder, arising out of a breach of
Grantors of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such obligee or
its successors from any Grantor, and all such obligations of Grantors shall be
and remain enforceable against and only against Grantors and shall not be
enforceable against Collateral Agent or any Secured Party.


 


(i)                                     Intentionally
Omitted.


 


(j)                                     Limitation on Liens
on Collateral.  Each
Grantor will not create, permit or suffer to exist, and will take commercially
reasonable efforts to defend the Collateral against, and take such other action
as is necessary to remove any Lien on the Collateral, except Permitted Liens,
and will defend (subject to the terms of the Intercreditor Agreement) the
rights of Collateral Agent and the Secured Parties in and to any of such
Grantor’s rights under the Collateral against the claims and demands of all
Persons whomsoever.


 


(k)                                  Limitations on
Disposition.  No Grantor
will sell, license, lease, transfer or otherwise dispose of any of the
Collateral, except as permitted by the Indenture and each Additional Pari Passu
Agreement.


 


(l)                                     Intentionally
Omitted.


 


(m)                               Intentionally
Omitted.


 


(n)                                 Intentionally
Omitted.


 


(o)                                 Intentionally
Omitted.


 


(p)                                 Terminations;
Amendments.  Each
Grantor acknowledges that, except as provided in Section 5(a)(vi), it is
not authorized to file any financing statement or amendment or termination
statement with respect to any financing statement without the prior written
consent of Collateral Agent and agrees that it will not do so without the prior
written consent of Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
the UCC.


 


(q)                                 Authorized
Terminations.  Collateral
Agent will promptly deliver to Grantors for filing or authorize Grantors to
prepare and file termination statements and releases in accordance with Section 12.03
of the Indenture and Section 5.1 of the Intercreditor Agreement.


 


18

















 


(r)                                    Post-Closing
Obligations.


 


(i)                                     Within sixty (60) days of the Issue Date or
such longer time as may be agreed to by Senior Agent, Collateral Agent shall
have received (x) a lender’s loss payable endorsement naming Collateral Agent
as a lender loss payee with respect to each property insurance policy of Issuer
and its Subsidiaries and (y) an endorsement to each general liability
policy of Issuer and its Subsidiaries, naming Collateral Agent as an additional
insured with respect to such general liability policy, each in form and
substance reasonably satisfactory to Collateral Agent.


 


(ii)                                  Within thirty (30) days of the Issue Date or
such longer time as may be agreed to by Senior Agent, Collateral Agent shall
have received evidence that each of Borrower’s Trademarks and Copyrights set
forth on Schedule 4(g) have been registered with the United States Patent
and Trademark Office and the United States Copyright Office, as applicable,
under Issuer’s legal name, each in form and substance reasonably satisfactory
to Senior Agent.


 


(iii)                               Within five (5) Business Days of the
Issue Date or such longer time as may be agreed to by Senior Agent, Senior
Agent shall have received each of the original stock certificates and limited
liability company certificates listed on Schedule 5(r).


 


6.                                       COLLATERAL AGENT’S APPOINTMENT AS
ATTORNEY-IN-FACT.


 


(a)                                  Each Grantor hereby
irrevocably constitutes and appoints Collateral Agent and any officer or agent
thereof (subject to the terms of the Intercreditor Agreement), with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time in Collateral Agent’s discretion,
but subject to Section 6(d), for the purposes of carrying out the terms of
this Security Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement, including, without
limitation the power to modify this Security Agreement by amending Schedule
4(g) to include any future Patents, Trademarks or Copyrights
(including registrations or applications appurtenant thereto) covered by this
Security Agreement.


 


(b)                                 On the Issue Date
each Grantor shall execute and deliver to Collateral Agent (i) a power of
attorney (the “General Power of Attorney”) substantially in the form attached
hereto as Exhibit D and (ii) each Grantor that owns any
Intellectual Property as of the Closing Date, shall execute and deliver to
Collateral Agent a special power of attorney (the “Special Power of Attorney”)
substantially in the form attached hereto as Exhibit E
(collectively, the “Power of Attorney”).


 


(c)                                  The power of
attorney granted pursuant to the Power of Attorney (subject to the terms of the
Intercreditor Agreement) is a power coupled with an interest and shall be
irrevocable for the term hereof.  The
powers conferred on Collateral Agent, for the benefit of Collateral Agent and
the Secured Parties, under the Power of Attorney are 


 


19

















 


solely to protect Collateral Agent’s interests (for
the benefit of Collateral Agent and the Secured Parties) in the Collateral and
shall not impose any duty upon Collateral Agent or any Secured Party to
exercise any such powers.


 


(d)                                 Collateral Agent
agrees that (i) except for the powers granted in clause (h) of the
General Power of Attorney, it shall not exercise any power or authority granted
under the Power of Attorney, Special Power of Attorney or clause (a) above
unless an Event of Default has occurred and is continuing, and (ii) Collateral
Agent shall (subject to the terms of the Intercreditor Agreement) account for
any moneys received by Collateral Agent in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney, provided  that
neither Collateral Agent nor any Secured Party shall have any duty as to any
Collateral except as provided herein with respect to Collateral in its
possession or under its control, and Collateral Agent and the Secured Parties
shall be accountable only for amounts they actually receive as a result of the
exercise of such powers.  NONE OF
COLLATERAL AGENT, SECURED PARTIES OR THEIR RESPECTIVE AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO
GRANTORS FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR
OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE TO THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES.


 


7.                                       REMEDIES; RIGHTS UPON DEFAULT.


 


(a)                                  Subject to the
terms of the Intercreditor Agreement, in addition to all other rights and
remedies granted to it under this Security Agreement, the Indenture, the Notes,
the Security Documents, any Additional Pari Passu Agreement and under any other
instrument or agreement securing, evidencing or relating to any of the Second
Lien Obligations (but subject to the terms of such instruments of agreements),
if any Event of Default shall have occurred and be continuing, Collateral Agent
may exercise all rights and remedies of a secured party under the UCC.  Without limiting the generality of the
foregoing, each Grantor expressly agrees that in any such event Collateral
Agent, without demand of performance or other demand, advertisement or notice
of any kind (except the notice specified below of time and place of public or
private sale) to or upon any Grantor or any other Person (all and each of which
demands, advertisements and notices are hereby expressly waived to the maximum
extent permitted by the UCC and other applicable law), may (subject to the
terms of the Intercreditor Agreement) forthwith enter upon the premises of any
Grantor where any Collateral is located through self-help, without judicial
process, without first obtaining a final judgment or giving any Grantor or any
other Person notice and opportunity for a hearing on Collateral Agent’s claim
or action and may collect, receive, assemble, process, appropriate and realize
upon the Collateral, or any part thereof, and may (subject to the terms of the
Intercreditor Agreement) forthwith sell, lease, license, assign, give an option
or options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at a public or private sale or sales, at any exchange at such prices as it may
deem acceptable, for cash or on credit or for future delivery without


 


20














 


assumption of any credit risk.  Collateral Agent or any Secured Party shall
have the right upon any such public sale or sales and, to the extent permitted
by law, upon any such private sale or sales, to purchase for the benefit of
Collateral Agent and the Secured Parties, the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which equity of
redemption each Grantor hereby releases. 
Subject to the terms of the Intercreditor Agreement, such sales may be
adjourned and continued from time to time with or without notice.  Collateral Agent shall have the right to
conduct such sales on Grantors’ premises or elsewhere and shall have the right
to use Grantors’ premises without charge for such time or times as Collateral
Agent deems necessary or advisable.


 


If any Event of Default shall have occurred and be
continuing, each Grantor further agrees, at Collateral Agent’s request, to
assemble the Collateral and make it available to Collateral Agent at a place or
places designated by Collateral Agent which are reasonably convenient to
Collateral Agent and Grantors, whether at Grantors’ premises or elsewhere.  Subject to the terms of the Intercreditor
Agreement, until Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, Collateral Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for
the purpose of preserving Collateral or its value or for any other purpose
deemed appropriate by Collateral Agent. 
Collateral Agent shall not have any obligation to Grantors to maintain
or preserve the rights of Grantors as against third parties with respect to any
Collateral while such Collateral is in the possession of Collateral Agent.  Subject to the terms of the Intercreditor
Agreement, Collateral Agent may, if it so elects, seek the appointment of a
receiver or keeper to take possession of Collateral and to enforce any of
Collateral Agent’s remedies (for the benefit of Collateral Agent and the
Secured Parties), with respect to such appointment without prior notice or
hearing as to such appointment.  Subject
to the terms of the Intercreditor Agreement, Collateral Agent shall apply the
net proceeds of any such collection, recovery, receipt, appropriation, realization
or sale as set forth in Section 24, and only after so paying over such net
proceeds, and after the payment by Collateral Agent of any other amount
required by any provision of law, need Collateral Agent account for the
surplus, if any, to Grantors.  To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against Collateral Agent or any Secured Party arising out
of the repossession, retention or sale of the Collateral except to the extent
that such arise out of the gross negligence or willful misconduct of Collateral
Agent or such Secured Party as determined by a court of competent
jurisdiction.  Each Grantor agrees that
ten (10) days prior notice by Collateral Agent of the time and place of
any public sale or of the time after which a private sale may take place is
reasonable notification of such matters. 
Grantors shall remain liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all Second Lien Obligations,
including any attorneys’ fees and other expenses incurred by Collateral Agent
or any Secured Party to collect such deficiency.


 


(b)           Except as otherwise specifically
provided herein, each Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral.


 


(c)           To the extent that applicable law
imposes duties on Collateral Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and 


 


21

















 


agrees that it is not commercially unreasonable for
Collateral Agent (i) to fail to incur expenses reasonably deemed
significant by Collateral Agent to prepare Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or
other finished products for disposition, (ii) to fail to obtain third
party consents for access to Collateral to be disposed of, or to obtain or, if
not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (iii) to fail to exercise collection remedies against Account
Debtors or other Persons obligated on Collateral or to remove Liens on or any
adverse claims against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (vi) to
contact other Persons, whether or not in the same business as Grantors, for expressions
of interest in acquiring all or any portion of such Collateral, (vii) to
hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (viii) to
dispose of Collateral by utilizing internet sites that provide for the auction
of assets of the types included in the Collateral or that have the reasonable
capacity of doing so, or that match buyers and sellers of assets, (ix) to
dispose of assets in wholesale rather than retail markets, (x) to disclaim
disposition warranties, such as title, possession or quiet enjoyment, (xi) to
purchase insurance or credit enhancements to insure Collateral Agent against
risks of loss, collection or disposition of Collateral or to provide to
Collateral Agent a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Collateral Agent,
to obtain the services of other brokers, investment bankers, consultants and
other professionals to assist Collateral Agent in the collection or disposition
of any of the Collateral.  Each Grantor
acknowledges that the purpose of this Section 7(c) is to provide
non-exhaustive indications of what actions or omissions by Collateral Agent
would not be commercially unreasonable in Collateral Agent’s exercise of
remedies against the Collateral and that other actions or omissions by
Collateral Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this Section 7(c).  Without limitation upon the foregoing,
nothing contained in this Section 7(c) shall be construed to grant
any rights to Grantors or to impose any duties on Collateral Agent that would
not have been granted or imposed by this Security Agreement or by applicable law
in the absence of this Section 7(c).


 


(d)           Neither Collateral Agent nor the
Secured Parties shall be required to make any demand upon, or pursue or exhaust
any of their rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Second Lien Obligations or to pursue or exhaust any of their rights or remedies
with respect to any Collateral therefor or any direct or indirect guarantee
thereof.  Neither Collateral Agent nor
the Secured Parties shall be required to marshal the Collateral or any
guarantee of the Second Lien Obligations or to resort to the Collateral or any
such guarantee in any particular order, and all of its and their rights
hereunder or under any other Security Document or Additional Pari Passu
Agreement shall be cumulative.  To the
extent it may lawfully do so, each Grantor absolutely and irrevocably waives
and relinquishes the benefit and advantage of, and covenants not to assert
against Collateral Agent or any Secured Party, any valuation, stay,
appraisement, extension, 


 


22

















 


redemption or similar laws and any and all rights
or defenses it may have as a surety now or hereafter existing which, but for
this provision, might be applicable to the sale of any Collateral made under
the judgment, order or decree of any court, or privately under the power of
sale conferred by this Security Agreement, or otherwise.


 


8.             GRANT OF LICENSE TO USE
INTELLECTUAL PROPERTY.  Solely for
the purpose of enabling Collateral Agent to exercise rights and remedies under Section 7
hereof (including, without limiting the terms of Section 7 hereof, in
order to take possession of, hold, preserve, process, assemble, prepare for
sale, market for sale, sell, monitor, collect or otherwise dispose of
Collateral), effective upon the occurrence and during the continuance of an
Event of Default and at such time as Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to
Collateral Agent, for the benefit of Collateral Agent and the Secured Parties
(subject to the terms of the Intercreditor Agreement), the nonexclusive right
and license (exercisable without payment of royalty or other compensation to
Grantors) to use all Intellectual Property now owned or hereafter acquired by
such Grantor, and wherever the same may be located, and including in such
license access to all material media in which any of the material licensed
items may be recorded or stored and to all material computer software and
programs used for the compilation or printout thereof, and in any case to the
extent that it is permitted to do so under applicable law and, with respect to
Licenses, to the extent it is permitted to do so under contractual obligations.


 


9.             LIMITATION ON COLLATERAL AGENT’S
AND SECURED PARTIES’ DUTY IN RESPECT OF SECURITY AGREEMENT COLLATERAL.  Collateral Agent and each Secured Party shall
use reasonable care with respect to the Collateral in its possession or under
its control.  Neither Collateral Agent
nor any Secured Party shall have any other duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee
of Collateral Agent or such Secured Party, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto.


 


10.           REINSTATEMENT.  This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by
or against any Grantor for liquidation or reorganization, should any Grantor
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantor’s assets, and shall continue to be effective or
be reinstated, as the case may be, if and to the extent at any time payment and
performance of the Second Lien Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Second Lien Obligations, whether as
a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though
such payment or performance had not been made. 
In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Second Lien Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.


 


11.           NOTICES.  Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give and serve upon any other party any communication with respect to this
Security Agreement, each such notice, demand, request, consent, approval,
declaration or other 


 


23

















 


communication shall be in
writing and shall be given in the manner, and deemed received, as provided for
in the Indenture. Any notice to an Additional Pari Passu Agent shall be given
at its address set forth in the Additional Pari Passu Joinder Agreement or set
forth in any subsequent notice from such Additional Pari Passu Agent to the
parties hereto.


 


12.           SEVERABILITY.  Whenever possible, each provision of this
Security Agreement shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement.  This Security
Agreement is to be read, construed and applied together with the Indenture, any
Additional Pari Passu Agreement and the other Security Documents which, taken
together, set forth the complete understanding and agreement of Collateral
Agent, the Secured Parties and Grantors with respect to the matters referred to
herein and therein.


 


13.           NO WAIVER; AMENDMENTS, CUMULATIVE
REMEDIES.  Neither Collateral Agent
nor any Secured Party shall by any act, delay, omission or otherwise be deemed
to have waived any of its rights or remedies hereunder, and no waiver shall be
valid unless in writing, signed by Collateral Agent and then only to the extent
therein set forth.  A waiver by
Collateral Agent of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which Collateral Agent would
otherwise have had on any future occasion. 
No failure to exercise nor any delay in exercising on the part of
Collateral Agent or any Secured Party, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.  The rights and remedies hereunder provided
are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights and remedies provided by law.  Except for waivers, amendments, alterations
and modifications effected by the operation of Section 5.3(d) of the
Intercreditor Agreement, none of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument
in writing, duly executed by Collateral Agent and Grantors.


 


14.           LIMITATION BY LAW.  All rights, remedies and powers provided in
this Security Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the
provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Security
Agreement invalid, unenforceable, in whole or in part, or not entitled to be
recorded, registered or filed under the provisions of any applicable law.


 


15.           TERMINATION OF THIS SECURITY
AGREEMENT; PARTIAL LIEN RELEASE.  The
Liens securing the Notes, will, automatically and without the need for any
further action by any Person be released, in whole or in part, as provided in Section 8.03
of the Indenture and Section 5.1 of the Intercreditor Agreement.  The Liens securing the Permitted Additional
Pari Passu Obligations of any series will be released, in whole or in part, as
provided in the Additional Pari Passu Agreement governing such obligations. In
connection with any such release, (i) any Collateral then in the custody
of the Collateral Agent or its nominee shall be re-


 


24

















 


delivered to the Issuer as
soon as practicable and (ii) the Collateral Agent shall take such other
actions as may be reasonably requested by any Grantor to evidence such release
at the expense of such Grantor.


 


16.           SUCCESSORS AND ASSIGNS.  This Security Agreement and all obligations
of Grantors hereunder shall be binding upon the successors and assigns of
Grantors (including any debtor-in-possession on behalf of Grantors) and shall,
together with the rights and remedies of Collateral Agent, for the benefit of
Collateral Agent and the Secured Parties, hereunder, inure to the benefit of
Collateral Agent and the Secured Parties, all future holders of any instrument
evidencing any of the Second Lien Obligations and their respective successors
and assigns.  No sales of participations,
other sales, assignments, transfers or other dispositions of any agreement
governing or instrument evidencing the Second Lien Obligations or any portion
thereof or interest therein shall in any manner impair the Lien granted to
Collateral Agent, for the benefit of Collateral Agent and the Secured Parties,
hereunder.  No Grantor may assign, sell,
hypothecate or otherwise transfer any interest in or obligation under this
Security Agreement.


 


17.           COUNTERPARTS.  This Security Agreement may be authenticated
in any number of separate counterparts, each of which shall collectively and
separately constitute one agreement. 
This Security Agreement may be authenticated by manual signature,
facsimile or, if approved in writing by Collateral Agent, electronic means, all
of which shall be equally valid.


 


18.           GOVERNING LAW.  THIS SECURITY AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.  EACH GRANTOR HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW
YORK, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN GRANTORS, COLLATERAL AGENT AND SECURED PARTIES PERTAINING TO THIS
SECURITY AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT, PROVIDED, THAT COLLATERAL AGENT, SECURED PARTIES AND GRANTORS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE NEW YORK COUNTY, AND, PROVIDED, FURTHER, NOTHING
IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.  EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY SUCH ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM  NON
CONVENIENS.  EACH GRANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
GRANTORS AT THE ADDRESS SET FORTH IN THE INDENTURE AND THAT SERVICE SO MADE 


 


25

















 


SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR FIVE (5) DAYS AFTER DEPOSIT
IN THE U.S. MAILS, PROPER POSTAGE PREPAID.


 


19.           WAIVER OF JURY TRIAL.  BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS.  THEREFORE, TO ACHIEVE
THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, AMONG COLLATERAL AGENT, SECURED PARTIES, AND GRANTORS ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
IN CONNECTION WITH, THIS SECURITY AGREEMENT OR THE TRANSACTIONS RELATED HERETO.


 


20.           SECTION TITLES.  The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.


 


21.           NO STRICT CONSTRUCTION.  The parties hereto have participated jointly
in the negotiation and drafting of this Security Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Security Agreement shall be construed as
if drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any provisions of this Security Agreement.


 


22.           ADVICE OF COUNSEL.  Each of the parties represents to each other
party hereto that it has discussed this Security Agreement and, specifically,
the provisions of Section 18 and Section 19, with its
counsel.


 


23.           BENEFIT OF SECURED PARTIES.  All Liens granted or contemplated hereby
shall be for the benefit of Collateral Agent individually and Collateral Agent
for the benefit of the Secured Parties, and all proceeds or payments realized
from Collateral in accordance herewith shall be applied (subject to the terms
of the Intercreditor Agreement) to the Second Lien Obligations in accordance
with Section 24.


 


24.           APPLICATION OF PROCEEDS.  Subject to the terms of the Intercreditor
Agreement, the proceeds received by the Collateral Agent in respect of any sale
of, collection from or other realization upon all or any part of the Pledged
Collateral pursuant to the exercise by the Collateral Agent of its remedies
shall be applied, together with any other sums then held by the Collateral
Agent pursuant to this Security Agreement, pro rata to the Secured Parties in
proportion to the unpaid amounts of Second Lien Obligations with such proceeds
applied (i) as among the Holders, as set forth in the Indenture and (ii) as
among the holders of the Permitted 


 


26

















 


Additional Pari Passu
Obligations (other than the Additional Notes), as set forth in the applicable
Additional Pari Passu Agreement.  In
making the determination and allocations required by this Section 24, the
Collateral Agent may conclusively rely upon information supplied by (i) the
Trustee as to the amounts of unpaid principal and interest and other amounts
outstanding with respect to the Notes and (ii) the applicable Additional
Pari Passu Agent as to the amounts of unpaid principal and interest and other
amounts outstanding with respect to such Permitted Additional Pari Passu
Obligations and the Collateral Agent shall have no liability to any of the
Secured Parties for actions taken in reliance on such information; provided
that nothing in this sentence shall prevent any Grantor from contesting any
amounts claimed by any Secured Party in any information so supplied.  All distributions made by the Collateral
Agent pursuant to this Section 24 shall be (subject to any decree of any
court of competent jurisdiction) final (absent manifest error), and the
Collateral Agent shall have no duty to inquire as to the application by the
Trustee, or an Additional Pari Passu Agent of any amounts distributed to such
Person.  If, despite the provisions of
this Security Agreement, any Secured Party shall receive any payment or other
recovery in excess of its portion of payments on account of the Second Lien
Obligations to which it is then entitled in accordance with this Security
Agreement, such Secured Party shall hold such payment or other recovery in
trust for the benefit of all Secured Parties hereunder for distribution in
accordance with this Section 24.


 


25.           PERMITTED ADDITIONAL PARI PASSU
OBLIGATIONS.  On or after the Issue
Date, the Issuer may from time to time designate additional obligations as
Permitted Additional Pari Passu Obligations by delivering to Collateral Agent,
the Trustee and each Additional Pari Passu Agent (a) a certificate signed
by the chief financial officer of the Issuer (i) identifying the
obligations so designated and the aggregate principal amount or face amount
thereof, stating that such obligations are designated as “Permitted Additional
Pari Passu Obligations” for purposes hereof, (ii) representing that such
designation complies with the terms of the Indenture and each then existing
Additional Pari Passu Agreement, (iii) specifying the name and address of
the Additional Pari Passu Agent for such obligations (if other than the
Trustee) and (iv) stating that no Default or Event of Default exists; (b) except
in the case of Additional Notes, a fully executed Additional Pari Passu Joinder
Agreement (in the form attached as Exhibit G hereto), (c) an
Officers’ Certificate to the effect that the designation of such obligations as
“Permitted Additional Pari Passu Obligations” does not violate the terms of the
Indenture and each then existing Additional Pari Passu Agreement (upon which
Collateral Agent may conclusively rely) and (d) evidence that the
Additional Pari Passu Agent for the applicable series of Permitted Additional
Pari Passu Obligations has entered into an agency agreement with Collateral
Agent that is acceptable to Collateral Agent, acting in its sole discretion.


 


26.           SUPPLEMENTS; JOINDER.  In the event that any Grantor is required to
deliver a supplement pursuant to Section 5(a)(vii), or any Person becomes
required at any time to become a Grantor under this Security Agreement pursuant
to the requirements of the Indenture, this Security Agreement, or the
Intercreditor Agreement, the relevant Grantor or Person shall do so by
delivering an appropriately completed Supplement, substantially in the form of Exhibit F
attached hereto (a “Supplement”) or in such other form as may be reasonably
required to satisfy the applicable requirements of the Indenture, this
Agreement, and the Intercreditor Agreement.


 


[Signature Page Follows]


 


27

















 


IN WITNESS WHEREOF, each of the parties hereto has
caused this Security Agreement to be executed and delivered by its duly
authorized officer as of the date first set forth above.


 


	
   

  	
  SQUARETWO FINANCIAL CORPORATION, as

  
	
   

  	
  Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: Paul A. Larkins

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  HEALTHCARE FUNDING SOLUTIONS, LLC

  
	
   

  	
  CACH, LLC

  
	
   

  	
  CACV OF COLORADO, LLC

  
	
   

  	
  ORSA, LLC

  
	
   

  	
  CANDEO, LLC

  
	
   

  	
  AUTUS, LLC

  
	
   

  	
  CACH OF NJ, LLC

  
	
   

  	
  CACV OF NEW JERSEY, LLC

  
	
   

  	
  COLLECT AMERICA OF CANADA, LLC, as Grantors

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: Paul A. Larkins

  
	
   

  	
   

  	
  Title:   Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SQUARETWO FINANCIAL COMMERCIAL FUNDING CORPORATION

  
	
   

  	
  REFINANCE AMERICA, LTD., as Grantors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Good

  
	
   

  	
   

  	
  Name: Thomas G. Good

  
	
   

  	
   

  	
  Title:   Secretary

  



 

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Dunn

  
	
   

  	
   

  	
  Name: Robert J. Dunn

  
	
   

  	
   

  	
  Title:   Vice President

  



 

















 


SCHEDULE 2(a)


 


COMMERCIAL TORT CLAIMS


 


Commercial Tort Claims:


 


None.


 

















 


SCHEDULE 4(d)


 


INSTRUMENTS, CHATTEL PAPER

AND

LETTER OF CREDIT RIGHTS


 


Instruments:


 


1.  Notes issued by Franchisees as set forth
below:


 


	
   

  	
   

  	
  Original

  	
   

  	
  Maturity

  	
   

  	
  Current

  Balance as of

  	
   

  	
   

  	
   

  
	
  Franchise Name

  	
   

  	
  Note

  	
   

  	
  Date

  	
   

  	
  2/28/10

  	
   

  	
  No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Superlative Bis, LLC

  	
   

  	
  $

  	
  124,842.28

  	
   

  	
  11/05/11

  	
   

  	
  $

  	
  103,839.67

  	
   

  	
  N-0102

  	
   

  
	
  Landmark Collections

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  02/16/12

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  N-0096

  	
   

  
	
  Primo Professionals, Inc

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  04/05/12

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  N-0098

  	
   

  
	
  Jerry M Mims

  	
   

  	
  $

  	
  38,124.60

  	
   

  	
  11/01/09

  	
   

  	
  $

  	
  34,088.28

  	
   

  	
  N-0078

  	
   

  
	
  Bronson & Migliaccio

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  11/05/13

  	
   

  	
  $

  	
  366,666.72

  	
   

  	
  N-0108

  	
   

  
	
  Daniels & Norelli

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  03/21/13

  	
   

  	
  $

  	
  240,468.01

  	
   

  	
  N-0113

  	
   

  
	
  Primo Professionals, Inc

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  06/05/13

  	
   

  	
  $

  	
  97,500.00

  	
   

  	
  N-0114

  	
   

  
	
  Graline Financial Services

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  11/05/10

  	
   

  	
  $

  	
  150,000.00

  	
   

  	
  N-0118

  	
   

  
	
  Advantage Business Services

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  01/05/11

  	
   

  	
  $

  	
  41,666.68

  	
   

  	
  N-0121

  	
   

  
	
  P Scott Lowery, PC

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  08/05/10

  	
   

  	
  $

  	
  41,666.69

  	
   

  	
  N-0122

  	
   

  
	
  LMM Management (Landis)

  	
   

  	
  $

  	
  50,000.00

  	
   

  	
  09/05/10

  	
   

  	
  $

  	
  25,000.04

  	
   

  	
  N-0123

  	
   

  
	
  Collect Southeast LLC

  	
   

  	
  $

  	
  44,866.92

  	
   

  	
  09/05/11

  	
   

  	
  $

  	
  33,650.22

  	
   

  	
  N-0124

  	
   

  
	
  CMMM Inc (Mandarich)

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  10/05/10

  	
   

  	
  $

  	
  14,583.35

  	
   

  	
  N-0125

  	
   

  
	
  Superlative Bis, LLC

  	
   

  	
  $

  	
  51,281.16

  	
   

  	
  07/05/10

  	
   

  	
  $

  	
  27,034.30

  	
   

  	
  N-0126

  	
   

  
	
  Prime Collect (Clark)

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  10/05/10

  	
   

  	
  $

  	
  25,000.00

  	
   

  	
  N-0127

  	
   

  
	
  Primo Professionals, Inc

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
   

  	
   

  	
  $

  	
  75,000.00

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Notes Receivable

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,676,163.96

  	
   

  	
   

  	
   

  



 


Letter of Credit Rights:


 


None.


 


Chattel Paper:


 


None.


 














 


SCHEDULE 4(e)


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL


AND RECORDS CONCERNING GRANTORS’ COLLATERAL


 


	
  Name of Grantor

  	
   

  	
  Other Names

  	
   

  	
  Type of Entity

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office & Principal

  Place of Business

  	
   

  	
  Corporate

  Offices

  	
   

  	
  Organizational

  ID Number

  
	
  SquareTwo Financial Corporation

  	
   

  	
  Collect America, Ltd.

  	
   

  	
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  2389683

  
	
  CA Holding, Inc.

  	
   

  	
   

  	
   

  	
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  3972812

  
	
  SquareTwo Financial Commercial Funding Corporation

  	
   

  	
  Collect America Commercial Services, Inc.  

  

  Guardian Financial Corporation

  	
   

  	
  Corporation

  	
   

  	
  Delaware

  	
   

  	
  16011 College Boulevard  Suite 101  Lenexa,
  Kansas 66219

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  3921804

  
	
  ReFinance America, Ltd.

  	
   

  	
   

  	
   

  	
  Corporation

  	
   

  	
  Nevada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  C18309-1996

  
	
  CACV of Colorado, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20021053155

  
	
  CACV of New Jersey, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20041156077

  
	
  Collect America of Canada, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051038054

  



 

















 


	
  Name of Grantor

  	
   

  	
  Other Names

  	
   

  	
  Type of Entity

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office & Principal

  Place of Business

  	
   

  	
  Corporate

  Offices

  	
   

  	
  Organizational

  ID Number

  
	
  CACH, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051120495

  
	
  CACH of NJ, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051152993

  
	
  Healthcare Funding Solutions, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20051211589

  
	
  Orsa, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20061446586

  
	
  Candeo, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20061446551

  
	
  Autus, LLC

  	
   

  	
   

  	
   

  	
  Limited Liability Company

  	
   

  	
  Colorado

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  Same

  	
   

  	
  20061446524

  
	
  SquareTwo Financial Canada Corporation

  	
   

  	
  CA Acquisition Company

  	
   

  	
  Corporation

  	
   

  	
  Nova Scotia, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  3097616

  Canada Business Number  

  85548 0174

  
	
  CCL Financial Inc.

  	
   

  	
  Collect Canada, Ltd.

   

  Collections Institute of Canada Ltd.

   

  Agence De Recouvrement CCL Financier

  	
   

  	
  Corporation

  	
   

  	
  Ontario, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  001170695

  



 

















 


	
  Name of Grantor

  	
   

  	
  Other Names

  	
   

  	
  Type of Entity

  	
   

  	
  Jurisdiction of

  Organization

  	
   

  	
  Chief Executive

  Office & Principal

  Place of Business

  	
   

  	
  Corporate

  Offices

  	
   

  	
  Organizational

  ID Number

  
	
   

  	
   

  	
  Agence De Recouvrement Collection Agency

   

  Agence De Recouvrement CIC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Credit Resources Limited

  	
   

  	
   

  	
   

  	
  Corporation

  	
   

  	
  Ontario, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  2063817

  
	
  Metropolitan Legal Administration Services Inc.

  	
   

  	
  1437227 Ontario Limited

  	
   

  	
  Corporation

  	
   

  	
  Ontario, Canada

  	
   

  	
  1310 Kerrisdale Boulevard  Suite 200  Newmarket,
  ON, Canada

  	
   

  	
  4340 S. Monaco, Second Floor Denver, CO 80237

  	
   

  	
  1437227

  



 


Recently acquired entities:


 


Impulse Marketing Group, LLC., AmeriPromotion, LLC,
Bigelow, LLC, Chocolate Punch, LLC, Digital Masters, LLC, Ecaddie, LLC,
Eclipse, LLC, eHanover, LLC,  Email
hello, LLC, Extract, LLC, Govault, LLC, Preference Networks, LLC, Rackorib,
LLC, Tango Telco, LLC, Telway Online, LLC, Vigorous, LLC, and Webexpo, LLC were
acquired on November 21, 2006 and subsequently dissolved after the sale of
all of their assets on December 29, 2008.


 


Depot Tech, LLC was acquired on or around October 26,
2007 and subsequently dissolved after the sale of all of its assets on December 29,
2008.


 


Warehouses:


None.


 

















 


Other Premises at which Collateral is Stored or
Located:


 


None.


 


Locations of Records Concerning Collateral:


 


All records concerning Collateral are located at the
Chief Executive Office and Corporate Office each Grantor.


 

















 


SCHEDULE 4(g)


 


INTELLECTUAL PROPERTY


 


Patents:


 


None.


 


Trademarks:


 


	
  Serial

  Number

  	
   

  	
  Reg. Number

  	
   

  	
  Word Mark

  	
   

  	
  Owner

  	
   

  	
  Jurisdiction

  
	
  75109744

  	
   

  	
  2055196

  	
   

  	
  Collect America (Typed Drawing)

  	
   

  	
  Collect America, Ltd.

  (n/k/a SquareTwo Financial Corporation)

  	
   

  	
  USPTO

  
	
  75109743

  	
   

  	
  2077288

  	
   

  	
  Collect America (Eagle Design Plus Words, Letters
  and/or Numbers)

  	
   

  	
  Collect America, Ltd.

  (n/k/a SquareTwo Financial Corporation)

  	
   

  	
  USPTO

  
	
  74526997

  	
   

  	
  2030606

  	
   

  	
  Collect America (Typed Drawing)

  	
   

  	
  Collect America, Ltd.

  (n/k/a SquareTwo Financial Corporation)

  	
   

  	
  USPTO

  



 


Copyrights:


 


	
  Owner

  	
   

  	
  Copyright

  	
   

  	
  Country

  	
   

  	
  Registration 

  No.

  	
   

  	
  Registration Date

  
	
  Collect America, Ltd. (n/k/a SquareTwo
  Financial Corporation)

  	
   

  	
  Success Through America’s Recovery Specialists (STARS)-Client

  	
   

  	
  U.S.

  	
   

  	
  TX 4-926-335

  	
   

  	
  January 19, 1999

  
	
   

  	
  Supplement

  	
   

  	
  U.S.

  	
   

  	
  TX 5-130-092

  	
   

  	
  February 07, 2000

  
	
  Collect America, Ltd. (n/k/a SquareTwo
  Financial Corporation)

  	
   

  	
  Success Through America’s Recovery Specialists (STARS)-Server

  	
   

  	
  U.S.

  	
   

  	
  TX 889-233

  	
   

  	
  January 19, 1999

  
	
   

  	
  Supplement

  	
   

  	
  U.S.

  	
   

  	
  TX 937-910

  	
   

  	
  February 07, 2000

  



 


Material Licenses:


 


None.


 


Restrictions:


 


None.


 

















 


SCHEDULE 4(k)


 


DEPOSIT ACCOUNTS


 


	
  Title

  	
   

  	
  Bank

  	
   

  	
  Location

  	
   

  	
  Acct #

  
	
  SquareTwo Financial Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768746

  
	
  Legal Cost ZBA

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768803

  
	
  Payroll

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768761

  
	
  West Healthcare Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152308789899

  
	
  Hilco Receivables Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152308789881

  
	
  North Carolina Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152308791317

  
	
  Collect America Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768795

  
	
  Trust Refund ZBA

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768811

  
	
  Jefferson Capital Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768753

  
	
  Midland Credit Mgt Trust

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768829

  
	
  Sales/Recourse account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768779

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CACH, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307771948

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CACV of Colorado, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307771930

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SquareTwo Financial Commercial Funding
  Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521700

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521726

  
	
  Payroll account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521718

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521684

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521692

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Healthcare Funding Solutions, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521684

  
	
  Trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152304521692

  



 

















 


	
  Title

  	
   

  	
  Bank

  	
   

  	
  Location

  	
   

  	
  Acct #

  
	
  ReFinance America, Ltd.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768852

  
	
  RLLP trust account

  	
   

  	
  US Bank

  	
   

  	
  Denver

  	
   

  	
  152307768860

  



 

















 


SCHEDULE 4(l)


 


BAILEES


 


Collateral in the possession of a consignee, bailee,
warehouseman, agent or processor:


 


None.


 

















 


SCHEDULE 5(r)


1.


 


	
  Pledgor

  	
   

  	
  Name of Issuing

  Corporation

  	
   

  	
  Number of

  Shares

  	
   

  	
  Certificate No.

  
	
  CA
  Holding, Inc.

  	
   

  	
  SquareTwo
  Financial Corporation

  	
   

  	
  1,000

  	
   

  	
  1437-3

  
	
  Collect America
  of Canada, LLC

  	
   

  	
  SquareTwo
  Financial Canada Corporation

  	
   

  	
  22,750

  	
   

  	
  4

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  SquareTwo
  Financial 

  Commercial Funding Corporation

  	
   

  	
  720

  400

  680

  148

  	
   

  	
  1

  11

  12

  13

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  ReFinance
  America, Ltd

  	
   

  	
  50

  	
   

  	
  1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  Collect
  America of Canada, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  Healthcare
  Funding Solutions, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  CACH, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  SquareTwo
  Financial Corporation

  	
   

  	
  CACV of
  Colorado, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  CACH, LLC

  	
   

  	
  CACH of
  NJ, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  
	
  CACV of
  Colorado, LLC

  	
   

  	
  CACV of
  New Jersey, LLC

  	
   

  	
  100%

  	
   

  	
  R-1

  



 














 


EXHIBIT A


 


SECOND LIEN COPYRIGHT ASSIGNMENT
OF SECURITY


 


WHEREAS, [NAME OF GRANTOR] a [corporation][limited
liability company] formed under the laws of [                              ],
located at [                              ]
(the “Grantor”) is the owner of all right, title and interest in and to the
United States copyrights and associated United States copyright registrations
and applications for registration set forth under Grantor’s name in Schedule
A  attached hereto (the, “Copyrights”);


 


WHEREAS, Grantor is obligated to U.S. BANK NATIONAL
ASSOCIATION (“Collateral Agent”) and various other secured parties
(collectively, the “Secured Parties”) and pursuant to (i) the Indenture,
dated as of April 7, 2010, among U.S. BANK NATIONAL ASSOCIATION as Trustee,
Collateral Agent, the Secured Parties, Grantor and the other credit parties
named therein and (ii) a certain Second Lien Security Agreement, dated the
date hereof, among Grantor, other parties named therein and Collateral Agent
(as each may be amended, modified, restated or supplemented from time to time,
collectively, the “Agreements”); and


 


WHEREAS, pursuant to the Agreements, Grantor is
granting to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in the security interest in and lien upon
the copyrights and copyright registrations and applications therefor described
above.


 


NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Grantor does hereby assign unto Collateral
Agent for its benefit and for the ratable benefit of the Secured Parties and
grant to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in and to the Copyrights, and the copyright
registrations and applications therefor, which assignment and security interest
shall secure all the Second Lien Obligations as defined in the Agreements and
in accordance with the terms and provisions thereof.


 


Grantor expressly acknowledges and affirms that the
rights and remedies of Collateral Agent and the Secured Parties with respect to
the assignment and security interest granted hereby are more fully set forth in
the Agreements.


 


Exhibit A - 1

















 


IN WITNESS WHEREOF, the undersigned have executed this
Grant as of the      day of                         ,
2010.


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit A - 2

















 


	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


 


	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                         
2010, before me personally came               ,
to me known, who, being by me duly sworn, did depose and say that he is                 
of U.S. BANK NATIONAL ASSOCIATION, the financial institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said financial institution .


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


Exhibit A - 3

















 


SCHEDULE A


 


Schedule A to a Second Lien Copyright Assignment of
Security dated                     
    , 2010, by and between Grantor and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent


 




	
  TITLE

  	
   

  	
  REGISTRATION NUMBER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  






 


Exhibit A - 4

















 


EXHIBIT B


 


SECOND LIEN PATENT ASSIGNMENT OF
SECURITY


 


WHEREAS, [NAME OF GRANTOR], a [corporation][limited
liability company] formed under the laws of [                              ],
located at [                              ]
(“Grantor”), owns the patents and patent applications shown in the attached Schedule
A (the “Patents”), for which there are recordings or applications in the
United States Patent and Trademark Office under the numbers shown in the
attached Schedule A; and


 


WHEREAS, Grantor is obligated to U.S. BANK NATIONAL
ASSOCIATION (“Collateral Agent”) and various other secured parties
(collectively, the “Secured Parties”) and pursuant to (i) the Indenture,
dated as of April 7, 2010, among U.S. BANK NATIONAL ASSOCIATION as
Trustee, Collateral Agent, the Secured Parties, Grantor and the other credit
parties named therein and (ii) a certain Second Lien Security Agreement,
dated the date hereof, among Grantor, other parties named therein and
Collateral Agent (as each may be amended, modified, restated or supplemented
from time to time, collectively, the “Agreements”); and


 


WHEREAS, pursuant to the Agreements, Grantor is
granting to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in the Patents, all proceeds thereof, all
rights corresponding thereto and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof, and the recordings and
applications therefore.


 


NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Grantor does hereby assign unto
Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties and grant to Collateral Agent for its benefit and for the ratable
benefit of the Secured Parties a security interest in and to the Patents, and
recordings and applications therefor, which assignment and security interest
shall secure all the Second Lien Obligations as defined in the Agreements and
in accordance with the terms and provisions thereof.


 


Grantor expressly acknowledges and affirms that the
rights and remedies of Collateral Agent and the Secured Parties with respect to
the assignment and security interest granted hereby are more fully set forth in
the Agreements.


 


Dated:                            
        , 2010


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit B - 1

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit B - 2

















 


	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


 


	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


 


On this      day of                         
2010, before me personally came               ,
to me known, who, being by me duly sworn, did depose and say that he is                 
of U.S. BANK NATIONAL ASSOCIATION, the financial institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said financial institution .


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


Exhibit B - 3

















 


SCHEDULE A


 


Schedule A to a Second Lien Patent Assignment of
Security dated                     
    , 2010, by and between Grantor and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent.


 




	
  APPLICATION

  	
   

  	
  ISSUE OR

  	
   

  	
   

  
	
  OR PATENT NO.

  	
   

  	
  FILING DATE

  	
   

  	
  TITLE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


Exhibit B - 4

















 


EXHIBIT C


 


SECOND LIEN TRADEMARK ASSIGNMENT
OF SECURITY


 


WHEREAS, [NAME OF GRANTOR] a [corporation][limited
liability company] formed under the laws of [                              ],
located at [                                ]
(“Grantor”), has adopted, used and is using the marks shown in the attached Schedule
A (the “Marks”), for which there are registrations or applications in the
United States Patent and Trademark Office under the numbers shown in the
attached Schedule A; and


 


WHEREAS, Grantor is obligated to U.S. BANK NATIONAL
ASSOCIATION (“Collateral Agent”) and various other secured parties
(collectively, the “Secured Parties”) and pursuant to (i) the Indenture,
dated as of April 7, 2010, among U.S. BANK NATIONAL ASSOCIATION as
Trustee, Collateral Agent, the Secured Parties, Grantor and the other credit
parties named therein and (ii) a certain Second Lien Security Agreement,
dated the date hereof, among Grantor, other parties named therein and
Collateral Agent (as each may be amended, modified, restated or supplemented
from time to time, collectively, the “Agreements”); and


 


WHEREAS, pursuant to the Agreements, Grantor is
granting to Collateral Agent for its benefit and for the ratable benefit of the
Secured Parties a security interest in the Marks, the goodwill of the business
symbolized by the Marks, and the registrations and applications therefor.


 


NOW, THEREFORE, for good and valuable consideration,
receipt of which is hereby acknowledged, Grantor does hereby assign unto
Collateral Agent for its benefit and for the ratable benefit of the Secured
Parties and grant to Collateral Agent for its benefit and for the ratable
benefit of the Secured Parties a security interest in and to the Marks,
together with the goodwill of the business symbolized by the Marks, and
registrations and applications therefor, which assignment and security interest
shall secure all the Second Lien Obligations as defined in the Agreements and
in accordance with the terms and provisions thereof.


 


Grantor expressly acknowledges and affirms that the
rights and remedies of Collateral Agent and the Secured Parties with respect to
the assignment and security interest granted hereby are more fully set forth in
the Agreements.


 


Dated:                              
        , 2010


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit C - 1

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit C - 2

















 


	
  STATE OF

  	
  ) 

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


 


	
  STATE OF

  	
  ) 

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                         
2010, before me personally came               ,
to me known, who, being by me duly sworn, did depose and say that he is                 
of U.S. BANK NATIONAL ASSOCIATION, the financial institution described in and
which executed the foregoing instrument; and that he signed his name thereto by
order of the board of directors of said financial institution .


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


Exhibit C - 3

















 


SCHEDULE A


 


Schedule A to a Second Lien Trademark Assignment of
Security dated                     
    , 2010, by and between Grantor and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent.


 


 




	
  REGISTRATION
  NO. OR

  APPLICATION NO.

  	
   

  	
  REGISTRATION OR

  FILING DATE

  	
   

  	
  MARK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  






 


Exhibit C - 4














 


EXHIBIT D


 


POWER OF ATTORNEY


 


This Power of Attorney is executed and delivered by
[NAME OF GRANTOR], a [                            ]
[corporation][limited liability company] (“Grantor”) to U.S. BANK
NATIONAL ASSOCIATION (“Attorney”), as collateral agent for its benefit
and the benefit of the Secured Parties under a Security Agreement, dated as of
the date hereof, and other related documents (the “Security Documents”).  No person to whom this Power of Attorney is
presented, as authority for Attorney to take any action or actions contemplated
hereby, shall be required to inquire into or seek confirmation from Grantor as
to the authority of Attorney to take any action described below, or as to the
existence of or fulfillment of any condition to this Power of Attorney, which
is intended to grant to Attorney unconditionally the authority to take and
perform the actions contemplated herein, and Grantor irrevocable waives any
right to commence any suit or action, in law or equity, against any person or
entity which acts in reliance upon or acknowledges the authority granted under
this Power of Attorney.  The power of
attorney granted hereby is coupled with an interest, and may not be revoked or
canceled by Grantor without Attorney’s written consent.


 


Grantor hereby irrevocably constitutes and appoints
Attorney (and all officers, employees or agents designated by Attorney), with
full power of substitution, as Grantor’s true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Grantor and in
the name of Grantor or in its own name, from time to time in Attorney’s
discretion, to take any and all appropriate action and to execute and deliver
any and all documents and instruments which may be necessary to accomplish the
purposes of the Security Documents and, without limiting the generality of the
foregoing, Grantor hereby grants to Attorney the power and right, on behalf of
Grantor, without notice to or assent by Grantor, and subject to the terms of
the Security Agreement at any time, to do the following: (a) change the mailing
address of Grantor, open a post office box on behalf of Grantor, open mail for
Grantor, and ask, demand, collect, give acquittances and receipts for, take
possession of, endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with any property of Grantor; (b)
effect any repairs to any asset of Grantor, or continue to obtain any insurance
and pay all or any part of the premiums therefor and costs thereof, and make,
settle and adjust all claims under such policies of insurance, and make all
determinations and decisions with respect to such policies; (c) pay or
discharge any taxes, liens, security interests, or other encumbrances levied or
placed on or threatened against Grantor or its property; (d) defend any suit,
action or proceeding brought against Grantor if Grantor does not defend such
suit, action or proceeding or if Attorney reasonably believes that Grantor is
not pursuing such defense in a manner that will maximize the recovery to
Attorney, and settle, compromise or adjust any suit, action, or proceeding
described above and, in connection therewith, give such discharges or releases
as Attorney may deem reasonably appropriate; (e) file or prosecute any claim,
litigation, suit or proceeding in any court of competent jurisdiction or before
any arbitrator, or take any other action otherwise deemed appropriate by
Attorney for the purpose of collecting any and all such moneys due to Grantor
whenever payable and to enforce any other right in respect of Grantor’s
property; (f) cause the


 


Exhibit D - 1

















 


certified public accountants then engaged by Grantor
to prepare and deliver to Attorney at any time and from time to time, promptly
upon Attorney’s request, the following reports: (1) a reconciliation of all
accounts; (2) an aging of all accounts, (3) trial balances and (4) test
verifications of such accounts as Attorney may request; (g) communicate in its
own name with any party to any Contract with regard to the assignment of the
right, title and interest of such Grantor in and under the Contractual
Obligations and other matters relating thereto; (h) to file such financing
statements with respect to the Security Agreement, with or without Grantor’s
signature, or to file a photocopy of the Security Agreement in substitution for
a financing statement, as the Attorney may deem appropriate and to execute in
Grantor’s name such financing statements and amendments thereto and
continuation statements which may require Grantor’s signature; and (i) execute,
in connection with sale provided for in any Security Document, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral and to otherwise direct such sale or resale, all as
though Attorney were the absolute owner of the property of Grantor for all
purposes, and to do, at Attorney’s option and Grantor’s expense, at any time or
from time to time, all acts and other things that Attorney reasonably deems
necessary to perfect, preserve, or realize upon Grantor’s property or assets
and Attorney’s Liens thereon, all as fully and effectively as Grantor might
do.  Grantor hereby ratifies, to the
extent permitted by law, all that said Attorney shall lawfully do or cause to
be done by virtue hereof.


 


IN WITNESS WHEREOF, this Power of Attorney is executed
by Grantor pursuant to the authority of its board of directors/members this       
day                         
of 2010.


 


	
   

  	
  GRANTOR

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit D - 2

















 


	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


Exhibit D - 3

















 


EXHIBIT E


 


SPECIAL POWER OF ATTORNEY


 


 


	
  STATE OF

  	
  )

  
	
   

  	
  )            ss.:

  
	
  COUNTY OF

  	
  )

  



 


KNOW ALL MEN BY THESE PRESENTS, that [NAME OF
GRANTOR], a [corporation][limited liability company] formed under the laws of
the State of [                        ],
with its principal office at [                                                              ]
(“Grantor”), pursuant to a Second Lien Security Agreement (as amended,
modified, restated or supplemented from time to time, the “Security Agreement”),
hereby appoints and constitutes U.S. BANK NATIONAL ASSOCIATION, with offices at
950 17th Street, Denver, Colorado 80202 (the “Collateral Agent”), its true and
lawful attorney, with full power of substitution, and with full power and
authority to perform the following acts on behalf of Grantor with respect to
Intellectual Property and any License (as described in the Security Agreement)
(the “Collateral”):


 


1)             To
ask, demand, collect, receive and give acquittances and receipts for any and
all moneys due and to become due under any License and, in the name of Grantor
or its own name or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under any License and to file any claim or to take any other action
or proceeding in any court of law or equity or otherwise deemed appropriate by
Collateral Agent for the purpose of collecting any and all such moneys due
under any License whenever payable;


 


2)             To
pay or discharge taxes, liens, security interests or other encumbrances levied
or placed on or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to pay all or
any part of the premiums therefor and the costs thereof; and


 


3)             (A)
To direct any party liable for any payment under any of the Licenses to make
payment of any and all moneys due and to become due thereunder directly to
Collateral Agent or as Collateral Agent shall direct; (B) to receive payment of
and receipt for any and all moneys, claims and other amounts due and to become
due at any time in respect of or arising out of any Collateral; (C) to commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (D) to defend any
suit, action or proceeding brought against Grantor with respect to any
Collateral; (E) to settle, compromise, or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as Collateral Agent may deem appropriate; and (F) generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though Collateral Agent were the
absolute owner thereof for all purposes, and to do, at Collateral Agent’s
option all acts and things which Collateral Agent deems necessary to


 


Exhibit E - 1

















 


protect, preserve or realize upon the Collateral and
Collateral Agent’s security interest therein, in order to effect the intent of
this Security Agreement, all as fully and effectively as Grantor might do.


 


4)             Assign,
sell or otherwise dispose of all right, title and interest of Grantor in and to
the Patents, Trademarks and Copyrights listed on Schedule 4(g) of the
Security Agreement, the patents, trademarks and copyrights which are added to
the same subsequent hereto, and all registrations and recordings thereof, and
all pending applications therefor, recording, registering and filing of, or
accomplishing any other formality with respect to the foregoing, and executing
and delivering any and all agreements, documents, instruments of assignment or
other papers necessary or advisable to effect such purpose;


 


5)             Execute
any and all documents, statements, certificates or other papers necessary or
advisable in order to obtain the purposes described above as Collateral Agent
may in its sole discretion determine.


 


This power of attorney is made pursuant to the
Security Agreement and may not be revoked until the payment in full of all
Second Lien Obligations (as defined in the Security Agreement) and the
irrevocable termination of the Security Agreement.


 


Dated:                          
    , 2010


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Exhibit E - 2

















 


	
  STATE OF

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF

  	
  )

  



 


On this      day of                       ,
2010, before me personally came                 ,
to me known, who, being by me duly sworn, did depose and say that he is the                       
of [NAME OF GRANTOR], the corporation/limited liability company described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the directors/members of said corporation/limited liability
company.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


Exhibit E - 3

















 


EXHIBIT F


 


FORM OF SUPPLEMENT


 


This SUPPLEMENT, dated [mm/dd/yy], is delivered by
[NAME OF GRANTOR] (“Grantor”) pursuant to the Second Lien Security Agreement,
dated as of April 7, 2010 (as it may be from time to time amended, restated,
modified or supplemented, the “Security Agreement”), among SQUARETWO FINANCIAL
CORPORATION, the other Guarantors from time to time signatory thereto, and U.S.
BANK NATIONAL ASSOCIATION, as Collateral Agent. 
Capitalized terms used herein not otherwise defined herein shall have
the meanings ascribed thereto in the Security Agreement.


 


[Grantor hereby confirms the grant to Collateral Agent
set forth in the Security Agreement of, and does hereby grant to Collateral
Agent, a security interest in all of Grantor’s right, title and interest in and
to all Collateral to secure the Second Lien Obligations, in each case whether now
or hereafter existing or in which Grantor now has or hereafter acquires an
interest and wherever the same may be located. 
Grantor represents and warrants that the attached [Supplements to
Schedules](1) accurately and completely set forth all additional information
required pursuant to the Security Agreement and hereby agrees that such
Supplements to Schedules shall constitute part of the Schedules to the Security
Agreement.](2)


 


IN WITNESS WHEREOF, Grantor has caused this Supplement
to be duly executed and delivered by its duly authorized officer as of
[mm/dd/yy].


 


	
   

  	
  [NAME OF GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 






(1)     Attach
supplements to the relevant schedules of the Security Agreement.


 


(2)     Form
may be adjusted or replaced with the approval of the Agent as may be
appropriate to address the requirements of the Security Agreement or other
applicable Loan Documents pursuant to which the Supplement is being delivered.


 


Exhibit F - 1

















 


EXHIBIT G


 


ADDITIONAL PARI PASSU JOINDER
AGREEMENT


 


The undersigned is the agent for Persons wishing to
become “Secured Parties” (the “New Secured Parties”) under the Second Lien
Security Agreement, dated as of April 7, 2010 (as amended and/or supplemented,
the “Security Agreement” (terms used without definition herein have the
meanings assigned to such terms by the Security Agreement)) among SquareTwo
Financial Corporation, the other Grantors party thereto and U.S. BANK NATIONAL
ASSOCIATION, as Collateral Agent (the “Agent”), the Second Lien Pledge
Agreement, dated as of April 7, 2010 (as amended and/or supplemented, the “Pledge
Agreement”) among SquareTwo Financial Corporation, the other Pledgors party
thereto and U.S. BANK NATIONAL ASSOCATION, as Collateral Agent (the “Agent”)
and the other Security Documents.


 


In consideration of the foregoing, the undersigned
hereby:


 


(i)            represents
that the Additional Pari Passu Agent has been authorized by the New Secured
Parties to become a party to the Security Agreement and the Pledge Agreement on
behalf of the New Secured Parties under that [DESCRIBE OPERATIVE AGREEMENT]
(the “New Secured Obligations”) and to act as the Additional Pari Passu Agent
for the New Secured Parties hereunder;


 


(ii)           acknowledges
that the New Secured Parties have received a copy of the Security Agreement and
the Pledge Agreement;


 


(iii)          irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Security Agreement, the Pledge Agreement
and the other Security Documents as are delegated to the Agent by the terms
thereof, together with all such powers as are reasonably incidental thereto;
and


 


(iv)          accepts
and acknowledges the terms of Agreement applicable to it and the New Secured
Parties and agrees to serve as Additional Pari Passu Agent for the New Secured
Parties with respect to the New Secured Obligations and agrees on its own
behalf and on behalf of the New Secured Parties to be bound by the terms of the
Security Agreement, the Pledge Agreement and the other Security Documents
applicable to holders of Obligations, with all the rights and obligations of a
Secured Party thereunder and bound by all the provisions thereof as fully as if
it had been a Secured Party on the effective date of the Security Agreement and
the effective date of the Pledge Agreement.


 


The name and address of the representative are as
follows:


 


[name and address of Additional
Pari Passu Agent]


 


Exhibit G - 1

















 


Section 13.08 of the Indenture is incorporated herein,
mutatis mutandis, as if a part hereof.


 


IN WITNESS WHEREOF, the undersigned has caused this
Additional Pari Passu Joinder Agreement to be duly executed by its authorized
officer as of the           
day of                   ,
20    .


 


	
   

  	
  [NAME]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


AGREED TO AND ACCEPTED:


 


The Collateral Agent hereby acknowledges its
acceptance of this Additional Pari Passu Joinder Agreement and agrees to act as
Collateral Agent for the New Secured Parties, subject to the terms
of the [agency agreement, dated as of                                 ].


 


	
  U.S. Bank National Association, as Collateral Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


Exhibit G - 2