EX-10.3






Exhibit 10.3




PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT

Dated as of August 28, 2009

among

ALLIED CAPITAL CORPORATION,

as a Grantor,

THE OTHER GRANTORS PARTY HERETO FROM TIME TO TIME,

and

U.S. BANK NATIONAL ASSOCIATION,

as Collateral Agent for the Secured Parties




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ARTICLE I   DEFINIT	 	IONS 1

	 	 	1.1.	 	 	Certain Definitions
	 	 	1	 
	 	1.2.	 	 	Principals of Construction
	 	 	11	 	 	 	 	 	 	 
	ARTICLE II	 	GRANT OF SECURITY INTEREST
	 	 	12	 	 	 	 	 	 	 
	 	2.1.	 	 	Security Interest
	 	 	12	 	 	 	 	 	 	 
	 	2.2.	 	 	Authorization to File Financing Statements
	 	 	13	 	 	 	 	 	 	 
	 	2.3.	 	 	Release of Collateral
	 	 	14	 	 	 	 	 	 	 
	ARTICLE III	 	REPRESENTATIONS AND WARRANTIES
	 	 	14	 	 	 	 	 	 	 
	 	3.1.	 	 	Financing Documents
	 	 	14	 	 	 	 	 	 	 
	 	3.2.	 	 	Title; Authorization; Enforceability; Perfection
	 	 	14	 	 	 	 	 	 	 
	 	3.3.	 	 	Conflicting Legal Requirements and Contracts
	 	 	15	 	 	 	 	 	 	 
	 	3.4.	 	 	Governmental Authority
	 	 	15	 	 	 	 	 	 	 
	 	3.5.	 	 	Grantor Information
	 	 	15	 	 	 	 	 	 	 
	 	3.6.	 	 	Property Locations
	 	 	15	 	 	 	 	 	 	 
	 	3.7.	 	 	No Financing Statements or Control Agreements
	 	 	15	 	 	 	 	 	 	 
	 	3.8.	 	 	Collateral
	 	 	16	 	 	 	 	 	 	 
	 	3.9.	 	 	Deposit, Commodity, and Securities Accounts
	 	 	16	 	 	 	 	 	 	 
	 	3.10.	 	 	Custodial Accounts
	 	 	16	 	 	 	 	 	 	 
	 	3.11.	 	 	Accounts; General Intangibles
	 	 	16	 	 	 	 	 	 	 
	 	3.12.	 	 	Letter of Credit Rights
	 	 	16	 	 	 	 	 	 	 
	 	3.13.	 	 	Instruments; Chattel Paper; Collateral Notes; and Collateral Note Security
	 	 	17	 	 	 	 	 	 	 
	 	3.14.	 	 	Material Agreements
	 	 	17	 	 	 	 	 	 	 
	 	3.15.	 	 	Investment Related Property
	 	 	17	 	 	 	 	 	 	 
	 	3.16.	 	 	Intellectual Property
	 	 	18	 	 	 	 	 	 	 
	 	3.17.	 	 	Consents; Pledge LLC
	 	 	18	 	 	 	 	 	 	 
	 	3.18.	 	 	Real Property
	 	 	19	 	 	 	 	 	 	 
	ARTICLE IV	 	COVENANTS
	 	 	19	 	 	 	 	 	 	 
	 	4.1.	 	 	Financing Documents
	 	 	19	 	 	 	 	 	 	 
	 	4.2.	 	 	General
	 	 	19	 	 	 	 	 	 	 
	 	4.3.	 	 	Perform Obligations
	 	 	21	 	 	 	 	 	 	 
	 	4.4.	 	 	Investment Related Property
	 	 	21	 	 	 	 	 	 	 
	 	4.5.	 	 	Collateral in Trust
	 	 	22	 	 	 	 	 	 	 
	 	4.6.	 	 	Intellectual Property
	 	 	23	 	 	 	 	 	 	 
	 	4.7.	 	 	Collateral Notes and Collateral Note Security
	 	 	24	 	 	 	 	 	 	 
	 	4.8.	 	 	Deposit, Commodity, Securities and Custodial Accounts
	 	 	24	 	 	 	 	 	 	 
	 	4.9.	 	 	Commercial Tort Claims
	 	 	24	 	 	 	 	 	 	 
	 	4.10.	 	 	Letters-of-Credit Rights
	 	 	24	 	 	 	 	 	 	 
	 	4.11.	 	 	Material Agreements
	 	 	25	 	 	 	 	 	 	 
	 	4.12.	 	 	Modification of Accounts
	 	 	25	 	 	 	 	 	 	 
	 	4.13.	 	 	Estoppel and Other Agreements and Matters
	 	 	25	 	 	 	 	 	 	 
	 	4.14.	 	 	Use of Collateral
	 	 	25	 	 	 	 	 	 	 
	 	4.15.	 	 	Insurance
	 	 	25	 	 	 	 	 	 	 
	 	4.16.	 	 	Further Assurances
	 	 	26	 	 	 	 	 	 	 
	 	4.17.	 	 	Additional Grantors
	 	 	26	 	 	 	 	 	 	 
	 	4.18.	 	 	Future Assets of Grantors
	 	 	27	 	 	 	 	 	 	 
	 	4.19.	 	 	Consents; Pledge LLC; Second Tier Collateral; Etc
	 	 	27	 	 	 	 	 	 	 
	 	4.20.	 	 	Real Property; Fixtures
	 	 	28	 	 	 	 	 	 	 
	ARTICLE V	 	RIGHTS AND REMEDIES
	 	 	28	 	 	 	 	 	 	 
	 	5.1.	 	 	Remedies
	 	 	28	 	 	 	 	 	 	 
	 	5.2.	 	 	Grantors’ Obligations Upon a Triggering Event
	 	 	30	 	 	 	 	 	 	 
	 	5.3.	 	 	Condition of Collateral; Warranties
	 	 	30	 	 	 	 	 	 	 
	 	5.4.	 	 	Collection of Receivables
	 	 	30	 	 	 	 	 	 	 
	 	5.5.	 	 	Special Collateral Account
	 	 	30	 	 	 	 	 	 	 
	 	5.6.	 	 	Intellectual Property
	 	 	31	 	 	 	 	 	 	 
	 	5.7.	 	 	Record Ownership of Securities
	 	 	31	 	 	 	 	 	 	 
	 	5.8.	 	 	Investment Related Property
	 	 	31	 	 	 	 	 	 	 
	 	5.9.	 	 	Sales on Credit
	 	 	32	 	 	 	 	 	 	 
	 	5.10.	 	 	Application of Proceeds
	 	 	32	 	 	 	 	 	 	 
	 	5.11.	 	 	Performance
	 	 	32	 	 	 	 	 	 	 
	 	5.12.	 	 	Use and Operation of Collateral
	 	 	32	 	 	 	 	 	 	 
	 	5.13.	 	 	Power of Attorney
	 	 	33	 	 	 	 	 	 	 
	 	5.14.	 	 	Subrogation
	 	 	34	 	 	 	 	 	 	 
	 	5.15.	 	 	Indemnification
	 	 	35	 	 	 	 	 	 	 
	ARTICLE VI	 	GENERAL PROVISIONS
	 	 	35	 	 	 	 	 	 	 
	 	6.1.	 	 	Termination
	 	 	35	 	 	 	 	 	 	 
	 	6.2.	 	 	Joint and Several Obligations of Grantors
	 	 	35	 	 	 	 	 	 	 
	 	6.3.	 	 	NO RELEASE OF GRANTORS
	 	 	35	 	 	 	 	 	 	 
	 	6.4.	 	 	Subordination of Certain Claims
	 	 	36	 	 	 	 	 	 	 
	 	6.5.	 	 	Recovered Payments
	 	 	37	 	 	 	 	 	 	 
	 	6.6.	 	 	No Waiver. Amendments
	 	 	37	 	 	 	 	 	 	 
	 	6.7.	 	 	Specific Performance of Certain Covenants
	 	 	37	 	 	 	 	 	 	 
	 	6.8.	 	 	Survival
	 	 	37	 	 	 	 	 	 	 
	 	6.9.	 	 	Taxes and Expenses
	 	 	37	 	 	 	 	 	 	 
	 	6.10.	 	 	Multiple Counterparts
	 	 	38	 	 	 	 	 	 	 
	 	6.11.	 	 	Parties Bound; Assignment
	 	 	38	 	 	 	 	 	 	 
	 	6.12.	 	 	Governing Law
	 	 	38	 	 	 	 	 	 	 







	 	6.13.	 	JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY TRIAL 39	 





	 	 	 	 	 	 	 	 	 
	 	6.14.	 	 	Notices
	 	 	40	 
	 	6.15.	 	 	Non-Liability of Collateral Agent and Secured Parties
	 	 	41	 
	 	6.16.	 	 	Severability of Provisions
	 	 	42	 
	 	6.17.	 	 	Entirety
	 	 	42	 
	 	6.18.	 	 	Construction
	 	 	42	 
	 	6.19.	 	 	USA Patriot Act
	 	 	42	 
	 	6.20.	 	 	Confidentiality
	 	 	42	 
	 	6.21.	 	 	Intercreditor Agreement
	 	 	43	 






	 	 	 	 	 
	Schedules: 1.1
	 	Senior

3.3

3.5

3.6

3.7

3.8

3.9

3.10

3.11

3.15.1

3.16

3.17.2

3.18
	 	Officers

Conflicting Legal Requirements

Grantor Information

Property Locations

Other Financing Statements

Collateral Descriptions

Securities Accounts, Commodity Accounts and Deposit Accounts

Custodial Account Information

Exceptions

Percentage of Pledged Equity Interests Owned

Intellectual Property

Assets Eligible for but not yet Transferred to a Pledge LLC

Real Property








	 	 	Exhibits: 4.2.2 Form of Asset Report Certificate






	 	 	 	4.6.3(i) Form of Notice of Grant of Security Interest in Copyrights






	 	 	 	4.6.3(ii) Form of Notice of Grant of Security Interest in Trademarks






	 	 	 	4.6.3(iii) Form of Notice of Grant of Security Interest in Patents






	 	4.17	 	Form of Joinder





PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT




THIS PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT (this “Security Agreement”) is executed as of
August 28, 2009, by ALLIED CAPITAL CORPORATION, a Maryland corporation (“Borrower”), each of the
Subsidiaries of Borrower set forth on the signature pages hereof (collectively with Borrower and
any Additional Grantor (as hereafter defined), “Grantors”), and U.S. Bank National Association, a
national banking association, solely in its capacity as collateral agent for the Secured Parties
(as hereafter defined) pursuant to the Intercreditor Agreement (in such capacity as collateral
agent, together with its permitted successors and/or assigns from time to time, “Collateral
Agent”).



RECITALS




WHEREAS, Borrower has entered into that certain Amended and Restated Credit Agreement dated as
of August 28, 2009 (as the same may be further amended, modified, supplemented, renewed, replaced
or restated from time to time, the “Credit Agreement”) among Borrower, Bank of America, N.A., as a
lender and as Administrative Agent (together with its permitted successors and/or assigns, in such
capacity, “Administrative Agent”) for the lenders now or hereafter a party to the Credit Agreement
(together with their respective permitted successors and/or assigns, “Lenders”) and the Lenders
party thereto.



WHEREAS, Borrower has entered into that certain Amended, Restated and Consolidated Note
Agreement dated as of August 28, 2009 (as the same may be amended, modified, supplemented or
restated from time to time the “Note Agreement”) with the Noteholders (as defined in the
Intercreditor Agreement) party to such Note Agreement.



WHEREAS, prior to or concurrently herewith, Collateral Agent, Administrative Agent, the
Lenders, and the Noteholders have executed that certain Intercreditor and Collateral Agency
Agreement dated as of August 28, 2009 (as the same may be amended, modified, supplemented or
restated from time to time, the “Intercreditor Agreement”), which Intercreditor Agreement has been
acknowledged and agreed to by Grantors and Pledge LLC.



WHEREAS, pursuant to and subject to the terms and conditions of the Intercreditor Agreement,
the Secured Parties (i) appointed Collateral Agent to act as agent for the benefit of the Secured
Parties with respect to the Collateral (as hereinafter defined) and (ii) authorized and directed
Collateral Agent to execute the Collateral Documents and perform the duties and obligations
delegated to it pursuant to the terms of the Intercreditor Agreement.



WHEREAS, pursuant to the requirements of the Credit Agreement and the Note Agreement, Grantors
are required to enter into this Security Agreement.



NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in consideration of the mutual covenants and undertakings and the terms and
conditions contained herein, each Grantor and Collateral Agent (for the benefit of the Secured
Parties) hereby agree as follows:



ARTICLE I

DEFINITIONS




1.1. Certain Definitions. Unless otherwise defined herein, or the context hereof
otherwise requires, each term defined in the UCC is used in this Security Agreement with the same
meaning; provided that, if any definition given to such term in Article 9 of the UCC conflicts with
the definition given to such term in any other chapter of the UCC, the Article 9 definition shall
prevail. As used herein, the following terms have the meanings indicated:




Additional Grantor means each additional Person who grants a Lien on any Collateral
after the date hereof in accordance with Section 4.17 hereof.




Administrative Agent has the meaning set forth in the Recitals, together with any other
Person serving in the capacity of administrative agent or similar capacity under the Credit
Agreement.




Affiliate means, (a) as to Borrower and its Consolidated Subsidiaries, any Person
(other than a Consolidated Subsidiary or Portfolio Company) which directly or indirectly, or
through one or more intermediaries controls, is controlled by, or is under common control
with, Borrower and (b) as to any other Person, any other Person which (i) directly or
indirectly, or through one or more intermediaries, controls, or is controlled by, or is
under common control with, such Person, (ii) beneficially owns or holds 5% or more of any
class of the equity interests of such Person entitled to vote or (iii) 5% or more of whose
voting equity interests are beneficially owned or held by such Person. The term “control”
means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of equity
interests, by contract or otherwise, other than, with respect to Borrower and its
Consolidated Subsidiaries, by investment advisory contracts entered into in the ordinary
course of business of Borrower or a Consolidated Subsidiary of Borrower.




Applicable Law means all applicable provisions of constitutions, statutes, rules,
regulations, and orders of all Governmental Authorities and all applicable orders and
decrees of all courts, tribunals, and arbitrators.




Applicable Triggering Event means with respect to the exercise of any specific right,
remedy, or action relating to the Collateral or arising under the Collateral Documents, the
occurrence of a Triggering Event with respect to which Collateral Agent is directed to take
(or forbear from taking) such action or to exercise (or forbear from exercising) such right
or remedy under the Intercreditor Agreement. The words “continuing” or “continuation” or
any derivation thereof, when used with reference to an Applicable Triggering Event, shall
mean that the Triggering Event giving rise to such Applicable Triggering Event is
continuing.




Asset Report Certificate means a certificate duly completed and executed by two (2)
Senior Financial Officers of the Borrower substantially in the form of Exhibit 4.2.2,
together with such changes thereto or departures therefrom as the Collateral Agent (as
directed in accordance with the Intercreditor Agreement) may from time to time reasonably
request.




Bank Loan Documents has the meaning set forth in the Intercreditor Agreement.




Borrower has the meaning set forth in the Preamble.




Business Day means any day other than a Saturday, Sunday, or other day on which banks
in New York City, New York, Boston, Massachusetts and Washington, D.C. are authorized or
required to close.




Capitalized Lease Obligation means indebtedness represented by obligations under a
lease that is required to be capitalized for financial reporting purposes in accordance with
GAAP.




Cash Management Bank has the meaning set forth in the Intercreditor Agreement.




Collateral has the meaning set forth in Section 2.1.




Collateral Agent has the meaning set forth in the Preamble.




Collateral Documents means each security agreement, pledge agreement (including,
without limitation, this Security Agreement), mortgage, deed of trust, control agreement,
assignment and endorsement of insurance, or any other agreement, joinder, ratification, or
document, together with all related Control Agreements, financing statements, and stock and
transfer powers, now or hereafter executed and delivered by a Grantor in connection with the
Financing Documents and intended to create a Lien on any real or personal property in favor
of Collateral Agent (for the benefit of the Secured Parties), as the same may be amended,
supplemented, replaced, modified and restated from time to time in accordance with the terms
of the Financing Documents.




Collateral Notes has the meaning set forth in Section 2.1.2 hereof.




Collateral Note Security has the meaning set forth in Section 2.1.2 hereof.




Collateral Records means books, records, ledger cards, files, correspondence, customer
lists, blueprints, technical specifications, manuals, computer software, computer printouts,
tapes, disks and related data processing software and similar items that at any time
evidence or contain any material information relating to any of the Collateral or are
otherwise reasonably necessary in the collection thereof or realization thereupon.




Collateral Support means all property (real or personal) assigned, hypothecated or
otherwise securing any Collateral and shall include any security agreement or other
agreement granting a Lien or security interest in such real or personal property.




Commodity Account means any “commodity account,” as such term is defined in Section
9.102(a)(14) of the UCC, and all sub-accounts thereof.




Confidential Information has the meaning set forth in Section 6.20 hereof.




Consolidated Subsidiaries means any Subsidiary which is required to be consolidated on
financial statements of Borrower prepared in accordance with GAAP, other than Allied Capital
Beteiligungsberatung GmbH.




Control has the meaning set forth in Sections 7-106, 8-106, 9-104, 9-105, 9-106, or
9-107 of the UCC, as applicable.




Control Agreement means, with respect to any Collateral consisting of Pledged Equity
Interests, Deposit Accounts, Securities Accounts, Commodities Accounts, Custodial Accounts,
electronic chattel paper, and letter-of-credit rights, an agreement evidencing that
Collateral Agent has Control of such Collateral, so long as Collateral Agent is directed to
enter into such Control Agreement pursuant to the Intercreditor Agreement.




Controlled Foreign Corporation means a “controlled foreign corporation” as defined in
the Internal Revenue Code of 1986.




Copyrights means all United States and foreign copyrights (including community
designs), including copyrights in software and databases, and all Mask Works (as defined
under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and,
with respect to any and all of the foregoing: (a) all registrations and applications
therefor, including the registrations and applications referred to on Schedule 3.16, (b) all
extensions and renewals thereof, (c) all rights corresponding thereto throughout the world,
(d) all rights to sue for past, present, and future infringements thereof, and (e) all
products and proceeds of the foregoing, including any income, royalties, and awards and any
claim by any Grantor against third parties for past, present, or future infringement of any
Copyright or any Copyright licensed under any Copyright License.




Copyright Licenses means any and all agreements providing for the granting of any right
in or to Copyrights (whether a Grantor is licensee or licensor thereunder), including each
agreement referred to on Schedule 3.16.




Credit Agreement has the meaning set forth in the Recitals.




Custodial Account means any account maintained by any Grantor with any Custodian,
including those custodial accounts identified on Schedule 3.10, together with all
Instruments, certificates, Pledged Equity Interests, Collateral Notes, Collateral Note
Security, monies, checks, drafts, wire transfer receipts, trust receipts, and other property
deposited therein and all balances therein, and any account which is a replacement or
substitute for any such Custodial Account.




Custodial Collateral means all Collateral (including certain Collateral Notes,
Collateral Note Security, Pledged Equity Interests and Instruments) and proceeds thereof
which are deposited in a Custodial Account maintained with and held by a Custodian that has
entered into a Custody Control Agreement, so long as such Custodian’s books and records
indicate that such Collateral is credited to or recorded in such Custodial Account.




Custodian means a custodian, and its permitted successor and assigns or permitted
designee or nominee, holding any Custodial Collateral in a Custodial Account.




Custody Control Agreement means any Control Agreement entered into by a Custodian, the
applicable Grantor, and Collateral Agent, so long as Collateral Agent is directed to enter
into such Custody Control Agreement pursuant to the Intercreditor Agreement.




Default has the meaning set forth in the Intercreditor Agreement.




Deposit Account Control Agreement means any Control Agreement that establishes Control
with respect to a Deposit Account.




Deposit Accounts means any “deposit account”, as such term is defined in
Section 9.102(a)(29) of the UCC, including those deposit accounts identified on Schedule
3.9, and any account which is a replacement or substitute for any of such accounts, together
with all monies, instruments, certificates, checks, drafts, wire transfer receipts, and
other property deposited therein and all balances therein, but excluding payroll accounts,
special accounts, trust accounts, or escrow accounts maintained by any Grantor in a
fiduciary capacity or as an agent for unrelated third parties or for the benefit of any
Portfolio Company.




Disposition or Dispose has the meaning set forth in the Intercreditor Agreement.




Enforcement Direction has the meaning set forth in the Intercreditor Agreement.




Equity Interests means, with respect to any Person, all of the shares of capital stock
of (or other ownership or profit interests in) such Person, all of the warrants, options or
other rights for the purchase or acquisition from such Person of shares of capital stock of
(or other membership, ownership, or profit interests in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other ownership or
profit interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all of the other
ownership or profit interests in such Person (including partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.




Event of Default has the meaning set forth in the Intercreditor Agreement.




Excess Collateral has the meaning set forth in the definition of “Second Tier
Collateral.”




Excluded Assets means (i) the assets of Grantors, which in accordance with the terms of
the documents (or Applicable Law) which govern such assets and after taking into account the
obligations of Grantors under the Financing Documents, the Collateral Documents and Sections
3.17 and 4.19 hereof are not permitted to be pledged, or otherwise used to secure the
indebtedness of Grantors without having obtained the consent of any third Person, (ii)
assets of a Pledge LLC to the extent permitted by the Financing Documents, (iii) equipment
covered by Capitalized Lease Obligations and assets securing Interest Rate Agreements, to
the extent such Capitalized Lease Obligations or Interest Rate Agreements are permitted
under the Financing Documents, (iv) for the avoidance of doubt, assets of any Portfolio
Company, (v) the assets of Allied Capital Beteiligungsberatung GmbH, (vi) the capital stock
of Allied Capital REIT, Inc., and (vii) such other assets of the Grantors as the Collateral
Agent (as directed in accordance with the Intercreditor Agreement) may agree in writing
shall not constitute Collateral.




Financing Documents has the meaning set forth in the Intercreditor Agreement.




GAAP means generally accepted accounting principles at the time in the United States.




General Intangibles means: (a) any “general intangibles”, as such term is defined in
Section 9.102(a)(42) of the UCC; and (b) all interest rate or currency protection or hedging
arrangements, computer software, computer programs, all Tax refunds and Tax refund claims,
all licenses, permits, concessions, and authorizations, all contract rights, all joint
venture interests, partnership interests, or membership interests that do not constitute a
security, all Material Agreements, and all Intellectual Property (in each case, regardless
of whether characterized as general intangibles under the UCC).




Governmental Approvals means all authorizations, consents, approvals, licenses, and
exemptions of, registrations and filings with, and reports to, all Governmental Authorities.




Governmental Authority means any national, state, or local government (whether domestic
or foreign), any political subdivision thereof or any other governmental,
quasi-governmental, judicial, public, or statutory instrumentality, authority, body, agency,
bureau, or entity (including, without limitation, the Federal Deposit Insurance Corporation,
the Comptroller of the Currency, or the Federal Reserve Board, any central bank, or any
comparable authority) or any arbitrator with authority to bind a party at law.




Grantor’s Knowledge means the actual knowledge of the senior officers set forth on
Schedule 1.1 hereto.




Grantors has the meaning set forth in the Preamble.




Instrument means any “instrument”, as such term is defined in Section 9.102(a)(47) of
the UCC, including the Collateral Notes.




Intellectual Property means, collectively, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, and
the Trade Secret Licenses.




Interest Rate Agreement means any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, foreign exchange contract, currency swap
agreement, repurchase agreement, or other similar contractual agreement or arrangement
entered into for the purpose of protecting against fluctuations in interest rates or in
currency values.




Intercreditor Agreement has the meaning set forth in the Recitals.




Investment means, with respect to any Person, and whether or not such investment
constitutes a controlling interest in such Person, (a) the purchase or other acquisition of
any share of capital stock, evidence of indebtedness, or other security issued by any other
Person; (b) any loan, advance, or extension of credit to, or contribution (in the form of
money or goods) to the capital of, or the acquisition of a sale leaseback asset from and the
lease thereof to, any other Person; (c) any guaranty of the indebtedness of any other
Person; (d) any other investment in any other Person; and (e) any commitment or option to
make an Investment in any other Person.




Investment Related Property means: (a) any “investment property”, as such term is
defined in Section 9.102(a)(49) of the UCC; and (b) all Pledged Equity Interests (regardless
of whether such interest is classified as investment property under the UCC).




LC means the letter(s) of credit issued pursuant to the terms and conditions of the
Credit Agreement or other Bank Loan Documents.




LC Issuer means Bank of America, N.A., its permitted successors as “LC Issuer” under
the Credit Agreement and each other entity that may hereafter be a “LC Issuer” under the
Credit Agreement.




Lenders has the meaning set forth in the Recitals.




Lien means, as applied to the property of any Person, (a) any security interest,
encumbrance, mortgage, deed to secure indebtedness, deed of trust, pledge, lien, charge,
ground lease, or lease constituting a Capitalized Lease Obligation, conditional sale, or
other title retention agreement, or other security title or encumbrance of any kind in
respect of any property of such Person, or upon the income or profits therefrom and (b) any
arrangement, express or implied, under which any property of such Person is transferred,
sequestered, or otherwise identified for the purpose of subjecting the same to the repayment
of indebtedness or performance of any other obligation in priority to the payment of the
general, unsecured creditors of such Person.




Material Adverse Effect means a material adverse effect on (a) the business,
operations, affairs, financial condition, assets or properties of Borrower and its
Consolidated Subsidiaries taken as a whole, or (b) the ability of Borrower to perform its
material obligations under (i) this Security Agreement, (ii) the Note Agreement, (iii) the
Intercreditor Agreement, (iv) the Credit Agreement or (v) the remaining Financing Documents
(taken as a whole for all such remaining Financing Documents), or (c) the validity or
enforceability of (i) this Security Agreement, (ii) the Note Agreement, (iii) the
Intercreditor Agreement, (iv) the Credit Agreement or (v) the remaining Financing Documents
(taken as a whole for all such remaining Financing Documents), or (d) the value of the
Collateral, taken as a whole, or the validity or the perfection of the Security Interest.




Material Agreements means (a) all of Grantors’ rights, titles, and interests in, to,
and under any managing, consulting or servicing contracts or other similar agreements
pursuant to which any Grantor is entitled to be compensated for managing, consulting or
servicing services, in an annual amount in excess of $750,000; (b) any other agreement or
contract that is material to the business operations of Borrower and its Consolidated
Subsidiaries, taken as a whole; (c) all rights of any Grantor to receive moneys due and to
become due under or pursuant to any agreements described in (a) or (b) above; (d) all rights
of Grantors to receive proceeds of any insurance, indemnity, warranty, or guaranty with
respect to any agreements described in (a) or (b) above; (e) all claims of Grantors for
damages arising out of or for breach of or default under any agreements described in (a) or
(b) above; and (f) all rights of Grantors to compel performance and otherwise exercise all
rights and remedies under any agreements described in (a) or (b) above.




Net Proceeds has the meaning set forth in the in the Intercreditor Agreement.




Note Agreement has the meaning set forth in the Recitals.




Noteholders has the meaning set forth in the Intercreditor Agreement.




Notes has the meaning set forth in the Intercreditor Agreement.




Obligor means any Person obligated with respect to any of the Collateral, whether as an
account debtor, obligor on an instrument, issuer of securities, or otherwise.




Patent Licenses means all agreements providing for the granting of any right in or to
Patents (whether a Grantor is licensee or licensor thereunder), including each agreement
referred to on Schedule 3.16.




Patents means all United States and foreign patents, certificates of invention, or
similar industrial property rights, and applications for any of the foregoing, including:
(a) each patent and patent application referred to on Schedule 3.16; (b) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations
thereof; (c) all rights corresponding thereto throughout the world; (d) all inventions and
improvements described therein; (e) all rights to sue for past, present and future
infringements thereof; (f) all licenses, claims, damages, and proceeds of suit arising
therefrom; and (g) all products and proceeds of the foregoing, including any income,
royalties, and awards and any claim by any Grantor against third parties for past, present,
or future infringement of any Patent or any Patent licensed under any Patent License.




Perfection Requirement means, (x) with respect to any Second Tier Collateral, following
the occurrence and during the continuance of an Event of Default, the requirement to perfect
the Liens and Security Interests granted hereunder with respect to such Second Tier
Collateral pursuant to Section 4.19.3, (y) with respect to any Real Property not subject to
Section 4.20, following the occurrence and during the continuance of an Event of Default,
the requirement to grant a mortgage on such Real Property pursuant to Section 4.19.3, and
(z) with respect to any Excess Collateral, the requirement to perfect the Liens and Security
Interests granted hereunder with respect to such Excess Collateral pursuant to Section
4.19.4, in each of cases (x), (y) and (z), within the time frames set forth in Section
4.19.3 and 4.19.4 (as applicable).




Permitted Liens means any Lien that is permitted under both (i) Section 12.8 of the
Note Agreement and (ii) Section 9.3 of the Credit Agreement.




Permitted Preferred Stock means preferred stock that is issued from time to time by a
Subsidiary for the purpose of qualifying such Subsidiary as a real estate investment trust
under Sections 856 through 860 of the Internal Revenue Code and having an aggregate stated
value not exceeding $500,000 at any one time outstanding; provided that, in any event
Permitted Preferred Stock shall not include any voting stock.




Person means an individual, corporation, partnership, limited liability company,
association, trust or unincorporated organization, or a government or any agency or
political subdivision thereof.




Pledge LLC means one or more Wholly Owned Consolidated Subsidiaries of any Grantor,
each of which (i) has title to personal property which would constitute Collateral but for
limitations in the documents which govern such personal property, or has title to real
property, (ii) has no indebtedness outstanding other than (x) indebtedness owing to
Borrower, which has been reflected as intercompany indebtedness on its books and records or
is evidenced by a promissory note and the holder thereof has pledged the same to the
Collateral Agent pursuant to this Security Agreement and any other applicable Collateral
Document, and (y) guaranties of the Senior Secured Obligations, and (iii) has had all of its
Equity Interests owned by its members pledged to the Collateral Agent as Collateral.




Pledged Equity Interests means all Pledged Stock, Pledged LLC Interests, and Pledged
Partnership Interests.




Pledged LLC Interests means all interests owned by a Grantor in any limited liability
company, including all limited liability company interests listed on Schedule 3.8 and the
certificates, if any, representing such limited liability company interests and any interest
of such Grantor on the books and records of such limited liability company or on the books
and records of any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and other property
or proceeds from time to time received, receivable, or otherwise distributed in respect of
or in exchange for any or all of such limited liability company interests.




Pledged Partnership Interests means all interests owned by a Grantor in any general
partnership, limited partnership, limited liability partnership or other partnership,
including all partnership interests listed on Schedule 3.8 and the certificates, if any,
representing such partnership interests and any interest of such Grantor on the books and
records of such partnership or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to time received,
receivable, or otherwise distributed in respect of or in exchange for any or all of such
partnership interests.




Pledged Stock means all shares of capital stock owned by a Grantor, including all
            shares of capital stock described on Schedule 3.8, and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the books of the
issuer of such shares or on the books of any securities intermediary pertaining to such
            shares, and all dividends, distributions, cash, warrants, rights, options, instruments,
securities, and other property or proceeds from time to time received, receivable, or
otherwise distributed in respect of or in exchange for any or all of such shares.




Portfolio Company means any Person that is accounted for under GAAP as a portfolio
Investment of Borrower or a Consolidated Subsidiary of Borrower.




Real Property means any estates or interests in real property held in fee simple now
owned or hereafter acquired by any Grantor or any Subsidiary of any Grantor and the
improvements thereto.




Receivables means the accounts, chattel paper, documents, Investment Related Property,
Instruments, or commercial tort claims, and any other rights or claims to receive money
which are General Intangibles or which are otherwise included as Collateral, together with
all of the applicable Grantor’s rights, if any, in all Collateral Support and Supporting
Obligations related thereto.




Required Noteholders has the meaning set forth in the Intercreditor Agreement.




Required Secured Creditors has the meaning set forth in the Intercreditor Agreement.




Second Tier Collateral means Collateral pledged hereunder to the extent such Collateral
falls below the following minimum thresholds required for perfection: (a) the Deposit
Accounts, Securities Accounts and Custodial Accounts identified on Schedules 3.9 and 3.10 as
“Second Tier Collateral” to the extent that the balance (including any assets held therein)
of such accounts is an amount less than $2,500,000 in the aggregate, (b) items of
Intellectual Property that are valued on the books of Grantors in an amount less than
$2,500,000 in the aggregate, (c) letters of credit with an undrawn amount of less than
$1,000,000 in the aggregate, (d) commercial tort claims where the amount claimed is less
than $1,000,000 in the aggregate, and (e) Vehicles owned by the Grantors with a value in an
amount less than $1,000,000 in the aggregate; provided, that, (x) the Collateral listed in
the foregoing clauses (a)-(e) shall constitute “Second Tier Collateral” solely to the extent
that the total value of such Collateral is less than $10,000,000 in the aggregate, and (y)
to the extent that the value of any such Collateral exceeds (i) $10,000,000 in the
aggregate, or (ii) any of the individual sublimits set forth in the foregoing clauses
(a)-(e), the Collateral with values in excess of such amounts in clauses (i) or (ii) above
(such Collateral, the “Excess Collateral”) shall no longer constitute “Second Tier
Collateral.”




Secured Obligations means the Senior Secured Obligations, whether or not (a) such
Senior Secured Obligations arise or accrue before or after the filing by or against any
Grantor of a petition under the Bankruptcy Code, or any similar filing by or against any
Grantor under the laws of any jurisdiction, or any bankruptcy, insolvency, receivership or
other similar proceeding, (b) such Senior Secured Obligations are allowable under Section
502(b)(2) of the Bankruptcy Code or under any other insolvency proceedings, (c) the right of
payment in respect of such Senior Secured Obligations is reduced to judgment, or (d) such
Senior Secured Obligations are liquidated, unliquidated, similar, dissimilar, related,
unrelated, direct, indirect, fixed, contingent, primary, secondary, joint, several, or joint
and several, matured, disputed, undisputed, legal, equitable, secured, or unsecured.




Secured Parties means the Administrative Agent, the Collateral Agent, the Lenders, the
Noteholders, the LC Issuer, the Cash Management Banks, each co-agent or sub-agent appointed
by the Administrative Agent from time to time pursuant to the Credit Agreement and each
co-agent or sub-agent appointed by the Collateral Agent from time to time under the
Intercreditor Agreement.




Securities Account means any “securities account”, as such term is defined in
Section 8.501(a) of the UCC, and all sub-accounts thereof.




Securities Account Control Agreement means any Control Agreement that establishes
Control with respect to a Securities Account.




Securities Act means, collectively, the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder




Security Interest means the security interest granted and the pledge and assignment
made under Section 2.1.




Senior Financial Officer means the chief financial officer, chief operating officer,
chief accounting officer, treasurer or controller of the Borrower.




Senior Secured Obligations has the meaning set forth in the Intercreditor Agreement.




Special Collateral Account has the meaning set forth in the Intercreditor Agreement.




Special Event of Default has the meaning set forth in the Intercreditor Agreement.




Subsidiary means, for any Person, any corporation, partnership, limited liability
company, or other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority of the board
of directors or other Persons performing similar functions of such corporation, partnership,
limited liability company, or other entity (without regard to the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such Person or one
or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such
Person. Notwithstanding the foregoing, for purposes hereof, no Portfolio Company shall be
deemed a “Subsidiary” of Borrower or any of its Subsidiaries.




Supporting Obligations means all “supporting obligations” as defined in
Section 9.102(a)(77) of the UCC.




Taxes means, for any Person, taxes, assessments, duties, imposts, or other governmental
charges, deductions, withholdings, or levies imposed upon such Person, its income, or any of
its properties, franchises, or assets, and all liabilities with respect thereto.




Trademark Licenses means any and all agreements providing for the granting of any right
in or to Trademarks (whether a Grantor is licensee or licensor thereunder), including each
agreement referred to on Schedule 3.16.




Trademarks means all United States and foreign trademarks, trade names, corporate
names, company names, business names, fictitious business names, Internet domain names,
service marks, certification marks, collective marks, logos, other source or business
identifiers, designs and general intangibles of a like nature, all registrations and
applications for any of the foregoing, including: (a) the registrations and applications
referred to on Schedule 3.16; (b) all extensions or renewals of any of the foregoing;
(c) all of the goodwill of the business connected with the use of and symbolized by the
foregoing; (d) the right to sue for past, present and future infringement or dilution of any
of the foregoing or for any injury to goodwill; and (e) all products and proceeds of the
foregoing, including any income, royalties, and awards and any claim by any Grantor against
third parties for past, present, or future infringement of any Trademark or any Trademark
licensed under any Trademark License.




Trade Secret Licenses means any and all agreements providing for the granting of any
right in or to Trade Secrets (whether a Grantor is licensee or licensor thereunder),
including each agreement referred to on Schedule 3.16.




Trade Secrets means all trade secrets and all other confidential or proprietary
information and know-how, whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating, or
referring in any way to such Trade Secret, including: (a) the right to sue for past, present
and future misappropriation or other violation of any Trade Secret; and (b) all products and
proceeds of the foregoing, including any income, royalties, and awards and any claim by any
Grantor against third parties for past, present, or future infringement of any Trade Secrets
or any Trade Secrets licensed under any Trade Secret License.




Triggering Event means the occurrence and continuance of an Event of Default and the
provision of an Enforcement Direction by the requisite Secured Parties permitted in
accordance with the Intercreditor Agreement, directing Collateral Agent to take (or forbear
from taking) certain actions or to exercise (or to forbear from exercising) certain rights
or remedies. The words “continuing” or continuation” or any derivation thereof, when used
with reference to a Triggering Event, shall mean either that the Event of Default giving
rise to such Triggering Event shall be continuing, or that the applicable Enforcement
Direction by the requisite Secured Parties has not been fully carried out and has not been
rescinded, or both.




Vehicles means all automobiles, trucks, truck tractors, trailers, semi-trailers, or
other motor vehicles or rolling stock.




Wholly Owned means, when used in connection with any Subsidiary, any corporation,
partnership, limited liability company, or other entity of which all of the equity
securities or other ownership interests (other than Permitted Preferred Stock and, in the
case of a corporation, directors’ qualifying shares) are so owned or controlled.




UCC and Uniform Commercial Code each means the Uniform Commercial Code as adopted in
the applicable jurisdiction from time to time.



1.2. Principals of Construction. References in this Security Agreement to “Sections,”
“Exhibits,” and “Schedules” are to sections, exhibits, and schedules in this Security Agreement
unless otherwise indicated. References in this Security Agreement to any document, instrument, or
agreement (a) shall include all exhibits, schedules, and other attachments thereto, (b) shall
include all documents, instruments, or agreements issued or executed in replacement thereof, to the
extent permitted hereby, and (c) shall mean such document, instrument, or agreement, or replacement
or predecessor thereto, as amended, supplemented, restated, or otherwise modified from time to time
to the extent permitted hereby and by any applicable Financing Document and in effect at any given
time. Wherever from the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and plural, and pronouns stated in the masculine, feminine, or
neuter gender shall include the masculine, the feminine and the neuter. Any reference herein to
any Person shall be construed to include such Person’s successors and assigns. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. Furthermore, any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing, or interpreting such law, and any reference to any
law or regulation shall, unless otherwise specified, refer to such law or regulation as amended,
modified, or supplemented from time to time. Titles and captions of sections, subsections, and
clauses in this Security Agreement are for convenience only, and neither limit nor amplify the
provisions of this Security Agreement.



ARTICLE II

GRANT OF SECURITY INTEREST




2.1. Security Interest. To secure the prompt and complete payment and performance of
the Secured Obligations when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code or any similar
provisions of other Applicable Law), each Grantor hereby grants (subject to the last paragraph of
this Section 2.1) to Collateral Agent (for the benefit of the Secured Parties) a continuing
security interest in, a Lien upon, and a right of set off against, and hereby pledges, collaterally
transfers and assigns to Collateral Agent (for the benefit of the Secured Parties) as security, all
personal property of such Grantor, whether now owned or hereafter acquired or existing, and
wherever located (together with all other collateral security for the Secured Obligations at any
time granted to or held or acquired by or under the Control of Collateral Agent, collectively, the
“Collateral”), including:




2.1.1. All personal property and fixture property of every kind and nature including,
without limitation, all accounts, chattel paper (whether tangible or electronic), goods
(including inventory), equipment (and any accessions thereto), software (specifically
including, but not limited to, all accounting software), Instruments, investment property,
documents, Deposit Accounts, Securities Accounts, Commodities Accounts, Custodial Accounts,
money, commercial tort claims, letter-of-credit rights, supporting obligations, Tax refunds,
and General Intangibles (including payment intangibles);




2.1.2. All promissory notes and other Instruments payable to any Grantor, including,
without limitation, all inter-company notes from Subsidiaries and those set forth on
Schedule 3.8 (“Collateral Notes”) and all Liens under all present and future loan
agreements, security agreements, pledge agreements, deeds of trust, mortgages, guarantees,
or other documents assuring or securing payment of or otherwise evidencing the Collateral
Notes (“Collateral Note Security”);



	 	 	 
	2.1.3.

2.1.4.

2.1.5.

2.1.6.
	 	All Material Agreements;

All Investment Related Property;

All Intellectual Property;

All Vehicles;








2.1.7. All present and future distributions, income, increases, profits, combinations,
reclassifications, improvements, and products of, accessions, attachments, and other
additions to, tools, parts, and equipment used in connection with, and substitutes and
replacements for, all or part of the Collateral described above;




2.1.8. All present and future security for the payment to any Grantor of any of the
Collateral described above and goods which gave or will give rise to any such Collateral or
are evidenced, identified, or represented therein or thereby;




2.1.9. All products and proceeds of the Collateral listed above (including, but not
limited to, all claims to items referred to in the Collateral listed above) and (x) all
claims of any Grantor against third parties for (i) loss of, damage to, or destruction of,
and (ii) payments due or to become due under leases, rentals and hires of, any or all of the
Collateral listed above and (y) proceeds payable under, or unearned premiums with respect
to, policies of insurance in whatever form; and




2.1.10. To the extent not otherwise included above, all Collateral Records and
Supporting Obligations relating to any of the foregoing.



Notwithstanding anything herein to the contrary, in no event shall the Security Interest granted in
this Section 2.1 attach to, or the term “Collateral” be deemed to include, any of the Excluded
Assets; provided that, if such Excluded Assets are being excluded as a result of the grant of any
security interest therein being prohibited by the documents governing or creating such interest,
such Excluded Assets (or proceeds thereof) shall not be excluded and shall constitute “Collateral”
to the extent that any consent or waiver to such prohibition has been obtained or any such
prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408, or 9-409 of the
UCC (or any successor provision or provisions) of the jurisdiction the UCC of which would govern
such determination (unless the application of Sections 9-406, 9-407, 9-408, or 9-409 of the UCC
would automatically result in (x) additional affirmative obligations on the part of any Grantor or
(y) the granting of rights and remedies not previously held to, or exercise of rights or remedies
not previously entitled to be exercised by, third parties, in which event such assets shall remain
“Excluded Assets”) or any other Applicable Law (including the Bankruptcy Code) or principles of
equity. In addition, the Collateral shall not include the outstanding capital stock of a
Controlled Foreign Corporation in excess of 65% of the voting power of all classes of capital stock
of such Controlled Foreign Corporation entitled to vote; provided that immediately upon the
amendment of the Internal Revenue Code to allow the pledge of a greater percentage of the voting
power of capital stock in a Controlled Foreign Corporation without adverse Tax consequences, the
Collateral shall include, and the Security Interest shall attach to, such greater percentage of
capital stock of each Controlled Foreign Corporation. Furthermore, notwithstanding any contrary
provision, each Grantor agrees that, if, but for the application of this Section 2.1, granting a
security interest in the Collateral would constitute a fraudulent conveyance under 11 U.S.C. § 548
or a fraudulent conveyance or transfer under any state fraudulent conveyance, fraudulent transfer,
or similar Law in effect from time to time (each a “fraudulent conveyance”), then, to the extent
permitted by Applicable Law, the Security Interest remains enforceable to the maximum extent
possible without causing such Security Interest to be a fraudulent conveyance, and this Security
Agreement is automatically amended to carry out the intent of this sentence.



2.2. Authorization to File Financing Statements. Each Grantor shall have filed,
caused to be filed or authorized the filing of 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, or (ii) as being of an equal or lesser scope or with greater detail,
and (b) contain any other information required by subchapter E of Article 9 of the UCC for the
sufficiency or filing office acceptance of any financing statement or amendment, including
(A) whether such Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor and (B) in the case of a financing statement filed as
a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates. Each Grantor agrees to
furnish any such information reasonably requested by Collateral Agent (as directed in accordance
with the Intercreditor Agreement), promptly upon request, that is necessary to effectuate the
provisions of this Section 2.2. Any failure to file any initial financing statements or amendments
thereto shall not impair the validity or enforceability of this Security Agreement against the
Grantors. From time to time thereafter, the Grantors shall file, cause to be filed or authorize
the filing of such financing statements and shall file, cause to be filed or authorize the filing
of such continuation statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Collateral Agent and Secured Parties
under this Security Agreement in the Collateral and in the proceeds thereof. To the extent any
Grantor files any financing statements in respect of the Collateral, such Grantor shall deliver (or
cause to be delivered) to the Collateral Agent file stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing. In the event that
the Grantor fails to perform its obligations under this subsection, the Collateral Agent may do so,
in each case at the expense of the Grantor.



2.3. Release of Collateral. No Collateral shall be released from the Security
Interest except in accordance with the terms, conditions and procedures set forth in Section 3.4 of
the Intercreditor Agreement. The Collateral Agent shall release its Lien on Collateral to the
extent required by Section 3.4 of the Intercreditor Agreement.



ARTICLE III

REPRESENTATIONS AND WARRANTIES




Each Grantor represents and warrants to Collateral Agent and the Secured Parties that:



3.1. Financing Documents. Each representation and warranty in the Financing Documents
(other than this Security Agreement) to which such Grantor is a party that is by its terms
applicable to such Grantor or its assets or operations, is true and correct in all material
respects (except to the extent already qualified by materiality, in which case such representation
and warranty shall be true and correct in all respects) as of the date hereof (except to the extent
such representation or warranty relates solely to an earlier date, in which case such
representation and warranty shall have been true and correct on and as of such earlier date).



3.2. Title; Authorization; Enforceability; Perfection. (a) Each Grantor has good and
valid rights in and title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder, to each Grantor’s Knowledge, free and clear of all Liens except for
Permitted Liens, and has all necessary power and authority to grant to Secured Party the Security
Interest in such Collateral; (b) the execution and delivery by each Grantor of this Security
Agreement has been duly authorized, and this Security Agreement constitutes a legal, valid, and
binding obligation of such Grantor and creates a Security Interest enforceable against such Grantor
in all now owned and hereafter acquired Collateral except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors’ rights generally; (c) (i) upon the filing of all UCC financing
statements naming each Grantor as “debtor” and Secured Party as “secured party” and describing the
Collateral in the filing offices set forth opposite such Grantor’s name on Schedule 3.5 hereof,
(ii) upon delivery of all Instruments, chattel paper, certificated Pledged Equity Interests, and
Collateral Notes (in each case, unless constituting Second Tier Collateral or Excluded Assets) to
Collateral Agent, or if delivered to a Custodian for deposit in a Custodial Account, upon execution
of a Custody Control Agreement establishing Collateral Agent’s Control with respect to any such
Custodial Accounts, (iii) upon sufficient identification of commercial tort claims (unless
constituting Second Tier Collateral or Excluded Assets), (iv) upon execution of a Control Agreement
establishing Collateral Agent’s Control with respect to any Deposit Account, Securities Account,
Commodity Account, Custodial Account, or uncertificated Pledged Equity Interest (in each case,
unless constituting Second Tier Collateral or Excluded Assets), (v) upon consent of the issuer or
any nominated Person with respect to letter of credit rights (unless constituting Second Tier
Collateral or Excluded Assets), and (vi) to the extent not subject to Article 9 of the UCC, upon
recordation of the Security Interests granted hereunder in Intellectual Property (unless
constituting Second Tier Collateral or Excluded Assets) in the applicable intellectual property
registries, including the United States Patent and Trademark Office and the United States Copyright
Office, the Security Interests granted to Collateral Agent hereunder constitute valid and perfected
(other than in respect of Collateral constituting Second Tier Collateral or Excluded Assets) Liens
(and to each Grantor’s Knowledge, first priority Liens, subject in the case of priority only to
Permitted Liens).



3.3. Conflicting Legal Requirements and Contracts. Except as set forth on Schedule
3.3, neither the execution and delivery by any Grantor of this Security Agreement, the creation and
perfection of the Security Interest in the Collateral, nor compliance by such Grantor with the
terms and provisions hereof will (a) violate (i) any legal requirement binding on such Grantor,
(ii) such Grantor’s organizational documents, or (iii) to such Grantor’s Knowledge, the provisions
of any indenture, instrument, or agreement to which such Grantor is a party or is subject, or by
which it, or its property, is bound; or (b) to such Grantor’s Knowledge, conflict with or
constitute a default under, or result in the creation or imposition of any Lien pursuant to, the
terms of any such indenture, instrument, or agreement (other than any Lien of a Secured Party),
which in the case of clauses (a)(i), (a)(iii) or (b), would reasonably be expected to have a
Material Adverse Effect.



3.4. Governmental Authority. To each Grantor’s Knowledge, after reasonable inquiry,
no authorization, approval, or other action by, and no notice to or filing with, any Governmental
Authority is required for the pledge by any Grantor of the Collateral pursuant to this Security
Agreement or for the execution, delivery, or performance of this Security Agreement by any Grantor
(other than the filing of financing statements on Form UCC-1 as provided for herein).



3.5. Grantor Information. Each Grantor’s exact legal name, jurisdiction of
organization, type of entity, state issued organizational identification number, and the location
of its principal place of business or chief executive office are disclosed on Schedule 3.5; no
Grantor has any other places of business except those set forth on Schedule 3.5. No Grantor has
done in the last five (5) years, or currently does, business under any other name (including any
trade-name or fictitious business name) except for those names set forth on Schedule 3.5. Except as
provided on Schedule 3.5, no Grantor has changed its name, jurisdiction of organization, principal
place of business, or chief executive office (or principal residence if such Grantor is a natural
Person) or its corporate structure in any way (e.g., by merger, consolidation, change in corporate
form or otherwise) within the past five (5) years.



3.6. Property Locations. The location of each Grantor’s books and records are located
solely at the locations described on Schedule 3.6 (provided that duplicate copies may be located at
other locations).



3.7. No Financing Statements or Control Agreements. Other than the financing
statements and Control Agreements with respect to this Security Interest, there are no other
Control Agreements or to each Grantor’s Knowledge, financing statements covering any Collateral,
other than those evidencing Permitted Liens and those financing statements set forth on Schedule
3.7 hereto.



3.8. Collateral. Schedule 3.8 lists all Pledged Equity Interests, Collateral Notes,
Collateral Note Security (which for purposes of this Schedule 3.8 shall include only the documents
evidencing loans or other indebtedness owed to a Grantor to the extent not evidenced by a
Collateral Note), commercial tort claims, Material Agreements, and all letters of credit rights, in
which any Grantor has any right, title, or interest (other than Second Tier Collateral and Excluded
Assets), and is true, correct and complete in all material respects. All information supplied by
any Grantor to Collateral Agent or any Secured Party with respect to any of the Collateral (in each
case taken as a whole with respect to any particular Collateral) is true, correct, and complete in
all material respects. Schedule 3.8 lists all Excluded Assets, and is true, correct and complete
in all material respects.



3.9. Deposit, Commodity, and Securities Accounts. Schedule 3.9 identifies all Deposit
Accounts, Commodity Accounts, and Securities Accounts constituting Collateral and the institutions
holding such accounts and whether any such account constitutes Second Tier Collateral. Each
Grantor is the sole account holder of each such account, and such Grantor has not consented to, and
is not otherwise aware of, any Person (other than Collateral Agent and the financial institution
maintaining such account) having Control over, or any other interest in (other than Permitted
Liens), any such account or the property credited thereto. The Control Agreement for each Deposit
Account, Commodity Account, and Securities Account (other than accounts constituting Second Tier
Collateral) is in full force and effect and is sufficient to create a valid, perfected and to each
Grantor’s Knowledge, first priority security interest in favor of Collateral Agent in and to each
such Deposit Account, Commodity Account, and Securities Account, subject to Permitted Liens.



3.10. Custodial Accounts. (a) Schedule 3.10 accurately lists all Custodial Accounts
maintained by each Grantor and identifies (i) the institutions serving as Custodian therefor and
(ii) whether any such account constitutes Second Tier Collateral. (b) Schedule 3.10 accurately
lists the Custodial Collateral on deposit in each Custodial Account listed therein as of the date
listed therein. (c) Each Grantor is the sole account holder of each Custodial Account maintained
by such Grantor, and has not consented to, and is not otherwise aware of any Person (other than
Collateral Agent and the financial institution maintaining such account) having Control over any
such account or Custodial Collateral deposited and maintained therein. (d) To each Grantor’s
Knowledge, all Custodial Collateral on deposit in any Custodial Account is indicated on such
Custodian’s books as being credited to or recorded in such Custodial Account. The Custody Control
Agreement for each Custodial Account (other than any such account constituting Second Tier
Collateral) is in full force and effect and is sufficient to create a valid, perfected and to each
Grantor’s Knowledge, first priority security interest in favor of Collateral Agent in the Custodial
Account and the Custodial Collateral held by the respective Custodian of such Custodial Account,
subject to the Permitted Liens.



3.11. Accounts; General Intangibles. To each Grantor’s Knowledge, all Collateral that
is accounts, contract rights, chattel paper, Collateral Notes, Collateral Note Security,
Instruments, payment intangibles, or General Intangibles is free from any claim for credit,
deduction, or allowance of an Obligor and free from any claim, deduction, allowance, defense,
condition, dispute, setoff, or counterclaim, except, in each case, any such claim, deduction,
allowance, defense, condition, dispute, setoff, or counterclaim that arise in the ordinary course
of business and do not materially impair the value of the Collateral, taken as a whole, or as set
forth on Schedule 3.11.



3.12. Letter of Credit Rights. All letters of credit to which any Grantor has rights
are listed on Schedule 3.8 (other than those constituting Second Tier Collateral), and with respect
to any such letter of credit (other than those constituting Second Tier Collateral), such Grantor
has entered into a tri-party agreement with Collateral Agent and the issuer or confirming bank with
respect to such letter-of-credit rights, assigning such letter-of-credit rights to Collateral Agent
and directing all payments thereunder to Collateral Agent (to be applied to the Secured
Obligations), subject to the terms and conditions of such agreement, all in form and substance
reasonably satisfactory to Collateral Agent (to be determined in accordance with the terms of the
Intercreditor Agreement).



3.13. Instruments; Chattel Paper; Collateral Notes; and Collateral Note Security. All
chattel paper and Instruments constituting Collateral, including the Collateral Notes, have been
delivered to Collateral Agent or, in the case of the Custodial Collateral, to a Custodian (which
has executed and delivered a Custody Control Agreement to Collateral Agent), together with
corresponding endorsements duly executed by the appropriate Grantor in favor of Collateral Agent,
and such endorsements have been duly and validly executed and are binding and enforceable against
such Grantor in accordance with their terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or
limiting creditors’ rights generally.



3.14. Material Agreements. All Material Agreements to which any Grantor is a party
are set forth on Schedule 3.8. True and correct copies of all such Material Agreements have been
furnished or made available to Collateral Agent. To each applicable Grantor’s Knowledge, each
Material Agreement is in full force and effect. Except as set forth on Schedule 3.8, no Material
Agreement prohibits collateral assignment or pledge or requires consent of or notice to any Person
in connection with the collateral assignment or pledge to Collateral Agent hereunder, other than
those that have been received on or prior to the date hereof.



3.15. Investment Related Property.




3.15.1. Schedule 3.8 sets forth all of the Pledged Stock, Pledged LLC Interests, and
Pledged Partnership Interests owned by any Grantor, and, to each Grantor’s Knowledge, such
Pledged Equity Interests constitute the percentage categories of voting ownership set forth
in Schedule 3.15.1 of (i) issued and outstanding shares of stock, (ii) membership interests,
(iii) partnership interests, or (iv) beneficial interest, of the respective issuers thereof
indicated on Schedule 3.15.1.




3.15.2. Each Grantor is the record and beneficial owner of the Pledged Equity
Interests, owned by it, to each Grantor’s Knowledge, free of all Liens, rights, or claims of
other Persons other than Permitted Liens, and, in the case of Pledged Equity Interests
issued by a Consolidated Subsidiary and owned by such Grantor, to each Grantor’s Knowledge
there are no outstanding warrants, options, or other rights to purchase, or shareholder,
voting trust or similar agreements outstanding with respect to, or property that is
convertible into, or that requires the issuance or sale of, any such Pledged Equity
Interests, except as set forth on Schedule 3.11.




3.15.3. No consent of any Person including any other general or limited partner, any
other member of a limited liability company, any other shareholder, or any other trust
beneficiary is necessary in connection with the creation or perfection of the Security
Interest in any Pledged Equity Interests, other than (i) such consents as have been obtained
and are in full force and effect and (ii) Excluded Assets, so long as each Grantor is in
compliance with Sections 3.17 and 4.19.




3.15.4. To each Grantor’s Knowledge, none of the Pledged LLC Interests or Pledged
Partnership Interests are or represent interests in issuers that (a) are registered as
investment companies or (b) are dealt in or traded on securities exchanges or markets.




3.15.5. Except as otherwise set forth on Schedule 3.11, all of the Pledged LLC
Interests issued by a Consolidated Subsidiary and owned by a Grantor are or represent
interests in issuers that have not opted to be treated as securities under the uniform
commercial code of any jurisdiction.




3.15.6. (a) With the exception of the Custodial Collateral, each Grantor has delivered
to Collateral Agent all stock certificates or other instruments or documents representing or
evidencing the Pledged Equity Interests, together with corresponding assignment or transfer
powers duly executed in blank by such Grantor, and such powers have been duly and validly
executed and are binding and enforceable against such Grantor in accordance with their
terms, except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally; and (b) to the extent such Pledged Equity Interests are uncertificated or
constitute Custodial Collateral, each Grantor has taken all actions necessary to establish
Collateral Agent’s Control over such Pledged Equity Interests (other than with respect to
clause (a) and (b), Pledged Equity Interests constituting Second Tier Collateral or Excluded
Assets).



3.16. Intellectual Property.




3.16.1. To each Grantor’s Knowledge, all of the Intellectual Property is subsisting,
valid, and enforceable. The information contained on Schedule 3.16 is true, correct, and
complete in all material respects. All issued Patents, Patent Licenses, Trademarks,
Trademark Licenses, Copyrights, Copyright Licenses, and Trade Secret Licenses of each
Grantor are identified on Schedule 3.16.




3.16.2. To each Grantor’s Knowledge, each of the Patents and Trademarks identified on
Schedule 3.16 has been properly registered with the United States Patent and Trademark
Office and each of the Copyrights identified on Schedule 3.16 has been properly registered
with the United States Copyright Office.



3.17. Consents; Pledge LLC.




3.17.1. Consents. Each Grantor has used, and shall continue to use, subject to
the provisions contained in this Section 3.17, commercially reasonable efforts to obtain the
consent or approval of, or other action by, all third parties required to permit Grantors to
subject all of their respective assets to the Lien and Security Interest of this Security
Agreement and the other Collateral Documents; provided, however, that Grantors shall not be
obligated to obtain consents or approvals in respect of assets (a) where the value of such
assets would not reasonably justify the burden, costs and expenses necessary to obtain such
consent or approval; in making such a determination, Grantors may take into account the cost
or charges imposed by such third parties (on any Grantor or any entity in which any Grantor
has an Investment) to grant any such consent or approval or take such other action and/or
any undue burden, or (b) which in the reasonable judgment of Grantors cannot be pledged, or
as to which the consent to pledge cannot be sought, without substantially impairing the
value of the asset or the ability of Grantors to manage the asset in the ordinary course of
its business; provided further that, nothing shall be deemed a waiver of any rights Secured
Parties may have to assert Liens or security interests in any such assets or proceeds
thereof to the extent permitted pursuant to Sections 9-406, 9-407, 9-408, or 9-409 of the
UCC (or any successor provision or provisions) of the jurisdiction the UCC of which would
govern such determination (unless the application of Sections 9-406, 9-407, 9-408, or 9-409
of the UCC would automatically result in (x) additional affirmative obligations on the part
of any Grantor or (y) the granting of rights and remedies not previously held to, or
exercise of rights or remedies not previously entitled to be exercised by, third parties, in
which event such assets shall remain “Excluded Assets”) or any other Applicable Law
(including the Bankruptcy Code) or principles of equity.




3.17.2. Pledge LLC. Without limiting the obligations of any Grantor set forth
in this Section 3.17, to the extent that any personal property of any Grantor cannot be
pledged as Collateral on account of contractual limitations applicable to such property but
may be transferred to a Pledge LLC, such personal property has been transferred to a Pledge
LLC, other than the personal property listed on Schedule 3.17.2. All membership interests
in such Pledge LLC have been pledged to Collateral Agent, creating a perfected, and to each
Grantor’s Knowledge, first priority, Lien and Security Interest therein, subject to
Permitted Liens.



3.18. Real Property. Schedule 3.18 attached hereto sets forth all Real Property owned
in fee simple by Grantors as of the date hereof.



The failure of any of these representations or warranties or any description of Collateral
therein to be accurate or complete shall not impair the Security Interest in any such Collateral.



ARTICLE IV

COVENANTS




From and after the date of this Security Agreement and until the Secured Obligations are paid
in full, all LCs have expired, been cancelled or cash collateralized in an amount equal to 100% of
the undrawn amount thereof, and this Security Agreement is irrevocably terminated:



4.1. Financing Documents. Each Grantor shall in all material respects comply with,
perform, and be bound by all covenants and agreements in the Financing Documents that are
applicable to it, its assets, or its operations, each of which is hereby ratified and confirmed.



4.2. General.




4.2.1. Inspection; Records and Reports. Borrower (for itself and on behalf of
each of its Consolidated Subsidiaries) will in all material respects keep accurate and
complete records of the Collateral (including proceeds), and these records will reflect all
material facts known to such Grantor concerning the Collateral. Borrower (for itself and on
behalf of each of its Consolidated Subsidiaries) shall maintain, at the address set forth on
Schedule 3.6 as the location of the books and records, a current record of where Grantors’
material Collateral is located, permit representatives of Collateral Agent or Secured
Parties at any time during normal business hours, upon reasonable notice, to inspect and
make abstracts from such records (provided, that so long as no Event of Default shall have
occurred and be continuing, Grantors shall not be obligated to reimburse Collateral Agent
for more than two (2) such inspections during any calendar year), and furnish to Collateral
Agent, at such intervals as Collateral Agent may reasonably request, such documents, lists,
descriptions, certificates, and other information as may be necessary or proper to keep
Collateral Agent informed with respect to the identity, location, status, condition, and
value of the Collateral. In addition, from time to time at the request of Collateral Agent
or any Secured Party, Grantors shall deliver to Collateral Agent such information regarding
each Grantor as Collateral Agent may reasonably request.




4.2.2. Asset Report Certificate. Within ten (10) Business Days after the end
of each calendar month, Borrower (for itself and on behalf of each of its Consolidated
Subsidiaries) shall deliver to Collateral Agent an Asset Report Certificate, which lists on
the attachments thereto: (i) all Dispositions made by Borrower and its Consolidated
Subsidiaries during the immediately preceding calendar month, (ii) the amount and type of
Net Proceeds received by Borrower and its Consolidated Subsidiaries in connection with each
such Disposition, (iii) the amount of any mandatory prepayments using such Net Proceeds
pursuant to Section 10 of the Note Agreement and Section 2.6 of the Credit Agreement, (iv)
any Investment Related Property, Collateral Notes or Collateral Note Security (which for
such purpose shall only include the documents evidencing loans or other Indebtedness owing
to a Grantor to the extent not evidenced by a Collateral Note) transferred to or from a
Pledge LLC during the immediately preceding calendar month and copies of any notices
delivered or consents obtained with respect thereto, if any, (v) any Investment Related
Property or Collateral Note Security re-characterized as “Pledged” or “Unpledged” by
Borrower during the immediately preceding calendar month, and (vi) any new Investment
Related Property, Collateral Notes or Collateral Note Security (which for such purpose shall
only include the documents evidencing loans or other Indebtedness owing to a Grantor to the
extent not evidenced by a Collateral Note) acquired by any Grantor during the immediately
preceding calendar month, together with a certification as to whether any such asset
constitutes Custodial Collateral or Excluded Assets. Collateral Agent shall forward any
Asset Report Certificate to such other parties as required pursuant to the terms of the
Intercreditor Agreement. The delivery of the Asset Report Certificate and other documents
and information to Collateral Agent shall not constitute constructive notice of any
information contained therein or determinable from information contained therein.




4.2.3. Financing Statements and Other Actions; Defense of Title. Each Grantor
will deliver to Collateral Agent all financing statements and execute and deliver Control
Agreements and other documents and take such other actions as may from time to time be
reasonably requested by Collateral Agent in order to maintain (a) the priority status of and
(b) perfected security interest in (and, in the case of Investment Related Property,
Custodial Collateral, Deposit Accounts, Commodity Accounts, Securities Accounts, Custodial
Accounts, letter-of-credit-rights, and electronic chattel paper, Control of) such Collateral
(other than Second Tier Collateral that is not subject to a Perfection Requirement), now
owned or hereafter acquired. Each Grantor will take any and all actions reasonably
necessary to defend title to the Collateral (other than Second Tier Collateral that is not
subject to a Perfection Requirement) against all Persons and to defend the Security Interest
and the priority thereof against any Lien not expressly permitted hereunder.




4.2.4. Disposition of Collateral. No Grantor will Dispose of the Collateral to
the extent prohibited by the Credit Agreement or the Note Agreement.




4.2.5. Liens. No Grantor will create, incur, or suffer to exist, and shall
defend Grantor’s rights in the Collateral and the Security Interest against, any Lien on the
Collateral except (a) the security interest created by this Security Agreement, and (b)
Permitted Liens.




4.2.6. Change in Location, Jurisdiction of Organization, or Name. No Grantor
will (a) maintain records relating to the Receivables at a location other than at the
location specified on Schedule 3.6 (provided that duplicate copies may be located at other
locations), (b) maintain a place of business at a location other than a location specified
on Schedule 3.6, (c) change its name or taxpayer identification number, (d) change its
mailing address, or (e) change its jurisdiction of organization, in each case unless such
Grantor shall have given Collateral Agent not less than thirty (30) days’ prior written
notice thereof. Prior to making any of the foregoing changes, each Grantor shall execute
and deliver all such additional documents and perform all additional acts as Collateral
Agent or the Secured Parties may reasonably request in order to continue or maintain the
existence and priority of the Security Interest.




4.2.7. Notices. Each Grantor will promptly notify Collateral Agent of (a)  any
claim, action, or proceeding affecting title to any part of the Collateral or the Security
Interest, which in each case could reasonably be expected to have a Material Adverse Effect,
and, at the request of Collateral Agent (as directed in accordance with the Intercreditor
Agreement), appear in and defend, at such Grantor’s expense, any such action or proceeding,
(b) any damage to or loss of Collateral that could reasonably be expected to have a Material
Adverse Effect, and (c) the occurrence of any other event or condition (including, without
limitation, matters as to Lien priority) that could reasonably be expected to have a
material adverse effect on the Collateral (taken as a whole) or the Security Interest on the
Collateral (taken as a whole).




4.2.8. Other Financing Statements. No Grantor will authorize any other
financing statement naming it as debtor covering any portion of the Collateral, other than
financing statements evidencing the Security Interest granted hereunder and Permitted Liens.




4.2.9. Compliance with Agreements. Each Grantor shall comply with all
mortgages, deeds of trust, Instruments, and other agreements binding on its properties or
business, except for such non-compliance that could not reasonably be expected to have a
Material Adverse Effect.



4.3. Perform Obligations. Notwithstanding anything to the contrary contained herein,
(a) the execution and delivery of this Security Agreement shall not affect each Grantor’s liability
or obligations under its contracts, agreements, documents, and instruments included in the
Collateral to the extent set forth therein, (b) the exercise by Collateral Agent of any of its
rights or remedies hereunder shall not release any Grantor from any of its duties or obligations
under the contracts, agreements, documents, and instruments included in the Collateral, and (c)
none of Collateral Agent or the Secured Parties shall have any indebtedness, liability, or
obligation under any of the contracts, agreements, documents, and instruments included in such
Collateral by reason of the execution and delivery of this Security Agreement, and none of
Collateral Agent or the Secured Parties shall be obligated to perform any of the obligations or
duties of any Grantor thereunder (unless such Secured Party has foreclosed on such Collateral) or
to take any action to collect or enforce any claim for payment assigned hereunder.



4.4. Investment Related Property.




4.4.1. Each Grantor will deliver to Collateral Agent: (i) all stock certificates or
other instruments, or documents representing or evidencing any Investment Related Property
constituting part of the Collateral (except in the case of Custodial Collateral, in which
case such Custodial Collateral shall be delivered to a Custodian that has executed and
delivered to Collateral Agent a Custody Control Agreement), together with corresponding
undated assignment or transfer powers duly executed in blank by Grantor (which powers have
been duly and validly executed and are binding and enforceable against Grantor in accordance
with their terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally) or (ii) to the extent any such Investment Related Property is
uncertificated and credited to a Securities Account or Custodial Account (and is not already
subject to a Control Agreement), a Control Agreement entered into with the related
securities intermediary or Custodian, as applicable.




4.4.2. Certificated Interests. No Grantor shall vote to enable or take any
other action to cause any issuer of any Pledged Partnership Interests or Pledged LLC
Interests which are not securities (for purposes of the UCC) on the date hereof to elect or
otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as securities for purposes of the UCC; provided, however,
notwithstanding the foregoing, if any issuer of any Pledged Partnership Interests or Pledged
LLC Interests takes any such action, such Grantor shall promptly after obtaining knowledge
thereof notify Collateral Agent in writing of any such election or action and, in such
event, shall use its commercially reasonable efforts taking into account the considerations
specified in Section 4.19 to establish Collateral Agent’s Control thereof.




4.4.3. Changes in Capital Structure of Issuers. Without the prior written
consent of Collateral Agent, no Grantor shall vote to enable or take any other action to
cause or permit any issuer of any Pledged Equity Interest to merge or consolidate (except to
the extent expressly permitted hereunder) unless all the outstanding capital stock or other
Equity Interests of the surviving or resulting corporation, limited liability company,
partnership, or other entity which is issued to any Grantor is, upon such merger or
consolidation, pledged and perfected hereunder.




4.4.4. Consent of Grantor. Each Grantor consents to the grant by each other
Grantor of the Security Interest in all Investment Related Property to Collateral Agent and,
without limiting the foregoing, following the occurrence of an Applicable Triggering Event
(subject to Applicable Law), consents to the transfer of any Pledged Partnership Interest
and any Pledged LLC Interest to Collateral Agent or its nominee and to the substitution of
Collateral Agent or its nominee as a partner in any partnership or as a member in any
limited liability company with all the rights and powers related thereto.




4.4.5. Voting of Pledged Equity Interests. Prior to the occurrence of an
Applicable Triggering Event, each Grantor is entitled to exercise all voting rights and
receive all dividends and distributions pertaining to any Pledged Equity Interests;
provided, however, that no vote shall be cast or consent, waiver, or ratification given or
action taken without the prior written consent of Collateral Agent which would (x) violate
any provision of this Security Agreement or any other Financing Document or (y) amend,
modify, or waive any term, provision, or condition of the certificate of incorporation,
bylaws, certificate of formation, or other charter document, or other agreement relating to,
evidencing, providing for the issuance of, or securing any Collateral, which amendment,
modification, or waiver could be reasonably expected to have the effect of restricting the
grant of the Security Interest in or Lien on such Collateral. After the occurrence and
during the continuation of an Applicable Triggering Event, Collateral Agent may, at its
option, and with two (2) Business Days’ prior notice to any Grantor, exercise all voting
rights or take any other action with respect to any Pledged Equity Interests, but under no
circumstances is Collateral Agent obligated by the terms of this Security Agreement to
exercise such rights. To this end, if Collateral Agent duly exercises its right to vote any
of such Pledged Equity Interests, each Grantor hereby irrevocably constitutes and appoints
Collateral Agent the proxy and attorney-in-fact of such Grantor, with full power of
substitution, to vote, and to act with respect to, any and all Pledged Equity Interests
standing in the name of such Grantor or with respect to which such Grantor is entitled to
vote and act, subject to the agreement that such proxy may be exercised only if an
Applicable Triggering Event has occurred and is continuing. The proxy herein granted is
coupled with an interest, is irrevocable, and shall continue until the termination of this
Security Agreement pursuant to Section 6.1.



4.5. Collateral in Trust. Each Grantor will hold in trust for Collateral Agent all
Collateral that is chattel paper, Instruments, Collateral Notes, Investment Related Property in
certificated form, or documents at any time received by Grantor, endorse each such Instrument to
the order of Collateral Agent (but the failure of the same to be so endorsed shall not impair the
Security Interest thereon), and promptly deliver same to Collateral Agent (except where the same
are required or permitted to be delivered to a Custodian, in which case such Collateral shall be
delivered to a Custodian that has executed and delivered a Custody Control Agreement to Collateral
Agent).




4.5.1. Control. Each Grantor will execute all documents and take any action
reasonably required in order for Collateral Agent to obtain Control with respect to
Collateral (other than Second Tier Collateral that is not subject to a Perfection
Requirement) consisting of Commodities Accounts, Securities Accounts, Deposit Accounts,
Custodial Accounts and Custodial Collateral, uncertificated Investment Related Property, and
“letter-of-credit rights”, and electronic chattel paper. If any Grantor at any time holds
or acquires an interest in any electronic chattel paper or any “transferable record,” as
that term is defined in the federal Electronic Signatures in Global and National Commerce
Act, or in the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify Collateral Agent thereof and shall promptly
take the appropriate action to vest in Collateral Agent control under the UCC of such
electronic chattel paper or control under the federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, the Uniform Electronic Transactions Act, as so
in effect in such jurisdiction, of such transferable record.



4.6. Intellectual Property.




4.6.1. Additional Intellectual Property. Each Grantor shall give Collateral
Agent prompt written notice if such Grantor shall obtain rights to or become entitled to the
benefit of any Intellectual Property not identified on Schedule 3.16 (other than Second Tier
Collateral that is not subject to a Perfection Requirement). Each Grantor shall execute and
deliver any and all documents and shall provide to Collateral Agent an officer’s certificate
confirming that such execution and delivery are appropriate and complete to evidence
Collateral Agent’s lien on such Intellectual Property.




4.6.2. Obligation upon Default. After the occurrence and during the
continuation of an Applicable Triggering Event, each Grantor shall use its reasonable
efforts to obtain any consents, waivers, or agreements necessary to enable Collateral Agent
to exercise its rights and remedies with respect to the Intellectual Property.




4.6.3. Intellectual Property Filings. Other than with respect to Intellectual
Property that constitutes Second Tier Collateral (to the extent not subject to a Perfection
Requirement), in order to facilitate filings with the United States Patent and Trademark
Office and the United States Copyright Office, each Grantor shall execute and deliver to
Collateral Agent one or more (i) Notice of Grant of Security Interest in Copyrights in the
form of Exhibit 4.6.3(i), (ii) Notice of Grant of Security Interest in Trademarks in the
form of Exhibit 4.6.3(ii), or (iii) Notice of Grant of Security Interest in Patents in the
form of Exhibit 4.6.3(iii) to further evidence Collateral Agent’s Lien on such Grantor’s
Patents, Trademarks, or Copyrights, and the General Intangibles of such Grantor relating
thereto or represented thereby.




4.6.4. Intellectual Property Applications. Other than with respect to
Intellectual Property that constitutes Second Tier Collateral (to the extent not subject to
a Perfection Requirement), in no event shall any Grantor, either itself or through any
agent, employee, licensee, or designee, file an application for the registration of any
Copyright with the United States Copyright Office without giving Collateral Agent prior
written notice thereof or any Patent or Trademark with the United States Patent and
Trademark Office without giving Collateral Agent written notice thereof promptly thereafter.



4.7. Collateral Notes and Collateral Note Security. After the occurrence and during
the continuation of an Applicable Triggering Event, without the prior written consent of Collateral
Agent, no Grantor may, except in the ordinary course of business consistent with prudent business
practices and industry standards, vote to enable or take any other action to cause (i) the
modification or substitution of, any Collateral Note or any document evidencing the Collateral Note
Security or (ii) release any Collateral Note Security (other than as permitted (or not expressly
prohibited) by the Intercreditor Agreement or as required by the terms of such Collateral Note
Security).



4.8. Deposit, Commodity, Securities and Custodial Accounts. With respect to any
Deposit Account, Commodity Account, Securities Account or Custodial Account (other than Second Tier
Collateral that is not subject to a Perfection Requirement), each Grantor shall (a) maintain such
accounts at the institutions described on Schedule 3.9 (and Schedule 3.10 in the case of Custodial
Accounts) or such additional institutions as to which such Grantor has complied with clause (b)
hereof; and (b) deliver to each depository bank and security intermediary (or Custodian, in the
case of a Custodial Account), a Control Agreement (or in the case of a Custodial Account, a Custody
Control Agreement), with respect to each such account and obtain the execution of such Control
Agreements or Custody Control Agreements, as the case may be. Without Collateral Agent’s consent,
no Grantor shall hereafter establish any additional Deposit Accounts, Securities Accounts,
Commodities Accounts, or Custodial Accounts, unless such accounts are subject to Collateral Agent’s
exclusive Control. Furthermore, no Grantor shall hereafter transfer any Collateral Notes,
Collateral Note Security, Pledged Equity Interests or Instruments from a Custodial Account subject
to a Custody Control Agreement to a Custodial Account not subject to a Custody Control Agreement.
For the avoidance of doubt, the foregoing sentence only limits transfers of Collateral Notes,
Collateral Note Security, Pledged Equity Interests or Instruments to a Custodial Account not
subject to a Custody Control Agreement and does not limit the removal of such assets from a
Custodial Account in connection with a release of the Lien with respect to such assets that is
permitted under the Financing Documents. With respect to each Custodial Account of a Grantor
(including Custodial Accounts in respect of Excluded Assets, Second Tier Collateral and Excess
Collateral), such Grantor shall promptly deliver, or cause to be promptly delivered, to Collateral
Agent upon receipt thereof, the monthly statement prepared by the Custodian with respect to such
Custodial Account. With respect to each Custodial Account held by a Pledge LLC, the Borrower shall
promptly deliver, or cause to be promptly delivered, to Collateral Agent upon receipt thereof by
such Pledge LLC, the monthly statement prepared by the Custodian with respect to such Custodial
Account.



4.9. Commercial Tort Claims. If any Grantor at any time holds or acquires a
commercial tort claim (other than Second Tier Collateral that is not subject to a Perfection
Requirement), such Grantor shall (a) as promptly as practicable forward to Collateral Agent written
notification of any and all commercial tort claims, including any and all actions, suits, and
proceedings before any court or Governmental Authority by or affecting such Grantor; and (b)
execute and deliver such statements, documents, and notices and do and cause to be done all such
things as may be reasonably required by Collateral Agent (as directed in accordance with the
Intercreditor Agreement), or required by Applicable Law, including all things which may from time
to time be necessary under the UCC to fully create, preserve, perfect, and protect the priority of
the Security Interest in any commercial tort claims.



4.10. Letters-of-Credit Rights. If any Grantor is at any time a beneficiary under a
letter of credit (other than Second Tier Collateral that is not subject to a Perfection
Requirement) now or hereafter issued in favor of any Grantor, such Grantor shall promptly notify
Collateral Agent thereof in writing and such Grantor shall enter into a tri-party agreement with
Collateral Agent and the issuer or confirming bank with respect to such letter-of-credit rights,
assigning such letter-of-credit rights to Collateral Agent and directing all payments thereunder to
Collateral Agent (to be applied to the Secured Obligations), subject to the terms and conditions of
such agreement, all in form and substance reasonably satisfactory to Collateral Agent (to be
determined in accordance with the terms of the Intercreditor Agreement).



4.11. Material Agreements. Except in the ordinary course of business, consistent with
prudent business practices, each Grantor shall (i) promptly perform, observe, and otherwise comply,
in all material respects, with each covenant, agreement, requirement, and condition set forth in
the Material Agreements; and (ii) do or cause to be done all things reasonably necessary to keep
the Material Agreements in full force and effect and the rights of Grantors and Collateral Agent
thereunder unimpaired in all material respects.



4.12. Modification of Accounts. Except in the ordinary course of business consistent
with prudent business practices and industry standards and so long as an Applicable Triggering
Event has occurred and is continuing, no Grantor shall (i) grant any extension of time for any
payment with respect to any of the accounts, (ii) compromise, compound, or settle any of the
accounts for less than the full amount thereof, (iii) release, in whole or in part, any Person
liable for payment of any of the accounts, (iv) allow any credit or discount for payment with
respect to any account other than trade discounts granted in the ordinary course of business,
(v) release any Lien or guaranty securing any account, or (vi) modify or substitute, or permit the
modification or substitution of, any contract to which any of the Collateral which is accounts
relates.



4.13. Estoppel and Other Agreements and Matters. Upon the request of the Collateral
Agent, each Grantor shall either (i) deliver to Collateral Agent, with respect to each location of
such Grantor’s books and records, a landlord subordination, access and estoppel certificate, in
form and substance reasonably acceptable to the Collateral Agent (to be determined in accordance
with the terms of the Intercreditor Agreement), executed by the applicable landlord and landlord’s
mortgagee (if any), or (ii) move such Grantor’s books and records (or accurate and up-to-date
copies thereof) to a location with respect to which Collateral Agent has previously received
delivery of a landlord subordination, access and estoppel certificate, executed by the applicable
landlord and landlord’s mortgagee; provided that, with respect to the property located at 1919
Pennsylvania Avenue, N.W., Washington, D.C. 20006, Borrower shall use commercially reasonably
efforts to deliver within 45 days of the date hereof an executed landlord subordination agreement
in form and substance reasonably satisfactory to the Administrative Agent and Required Noteholders.



4.14. Use of Collateral. No Grantor shall use any of the Collateral, or permit the
same to be used, for any unlawful purpose.



4.15. Insurance. Each Grantor will bear the full risk of loss from any loss of any
nature whatsoever with respect to the Collateral. At its own cost and expense, each Grantor shall
(i) keep all its insurable properties and properties in which such Grantor has an interest (other
than properties owned by Portfolio Companies) insured against the hazards of fire, flood, sprinkler
leakage, those hazards covered by extended coverage insurance, and such other hazards, and for such
amounts, as is customary in the case of companies engaged in businesses similar to such Grantor’s,
including, public and product liability insurance, worker’s compensation, insurance against
larceny, embezzlement or other criminal misappropriation of such Grantor’s officers and employees,
and business interruption insurance; (ii) furnish Collateral Agent with (x) copies of all policies
and evidence of the maintenance of such policies at least thirty (30) days before any expiration
date, and (y) appropriate loss payable endorsements, naming Collateral Agent as loss payee and
providing that, as to Collateral Agent, the insurance coverage shall not be impaired or invalidated
by any act or neglect of such Grantor and the insurer will provide Collateral Agent with at least
thirty (30) days notice prior to cancellation. Following the occurrence and during the continuance
of an Applicable Triggering Event, Collateral Agent may require each Grantor to instruct the
insurance carriers that in the event of any loss thereunder, the carriers shall make payment for
such loss to Collateral Agent and not to Grantor and Collateral Agent jointly. All loss recoveries
received by Collateral Agent upon any such insurance, following the occurrence and during the
continuance of an Applicable Triggering Event, shall be applied to the Secured Obligations by
Collateral Agent in accordance with the terms of the Intercreditor Agreement, and any deficiency
thereon shall be paid by Grantors to Collateral Agent, on demand.



4.16. Further Assurances. At Grantors’ expense, each Grantor agrees, subject to the
provisions of Section 4.19, (i) to file or cause to be filed such applications and take such other
actions as Collateral Agent (as directed in accordance with the Intercreditor Agreement) may
reasonably request to obtain the consent or approval of any Governmental Authority to Collateral
Agent’s rights hereunder in or with respect to the Collateral or the Collateral Documents (other
than Second Tier Collateral that is not subject to a Perfection Requirement), including, without
limitation, the right to sell all the Collateral after the occurrence of an Applicable Triggering
Event, without additional consent or approval from such Governmental Authority (and, because each
Grantor agrees that Collateral Agent’s remedies at law for failure of Grantors to comply with this
provision would be inadequate and that such failure would not be adequately compensable in damages,
each Grantor agrees that its covenants in this provision may be specifically enforced); (ii) from
time to time promptly execute and deliver to Collateral Agent all such other assignments,
certificates, supplemental documents, and financing statements, and do all other acts or things as
Collateral Agent may reasonably request in order to more fully create, evidence, perfect, continue,
and preserve the priority of the Security Interest on the Collateral (other than Second Tier
Collateral that is not subject to a Perfection Requirement) and to carry out the provisions of this
Security Agreement; and (iii) to pay all filing fees in connection with any financing,
continuation, or termination statement or other instrument with respect to the Security Interests.



4.17. Additional Grantors. Within ten (10) days after the time that any Person (other
than a Pledge LLC) becomes a Consolidated Subsidiary, (i) Grantors shall cause such Consolidated
Subsidiary to become a party to this Security Agreement and to pledge a valid and perfected Lien
and Security Interest in all of its real and personal property, whether tangible or intangible,
pursuant to a joinder agreement attached hereto as Exhibit 4.17, (other than real and personal
property which constitute Excluded Assets (subject to the right of the Secured Parties to assert
Liens or security interests in any such assets or proceeds thereof to the extent permitted pursuant
to Sections 9-406, 9-407, 9-408, or 9-409 of the UCC (or any successor provision or provisions) of
the jurisdiction the UCC of which would govern such determination (unless the application of
Sections 9-406, 9-407, 9-408, or 9-409 of the UCC would automatically result in (x) additional
affirmative obligations on the part of any Grantor or (y) the granting of rights and remedies not
previously held to, or exercise of rights or remedies not previously entitled to be exercised by,
third parties, in which event such assets shall remain “Excluded Assets”) or any other Applicable
Law (including the Bankruptcy Code) or principles of equity), and with respect to perfection, other
than Second Tier Collateral that is not subject to a Perfection Requirement, (ii) 100% of such
Consolidated Subsidiary’s Equity Interests (65% in the case of any Controlled Foreign Corporation,
provided that, immediately upon the amendment of the Internal Revenue Code to allow the pledge of a
greater percentage of the voting power of capital stock in a Controlled Foreign Corporation without
adverse Tax consequences, the Collateral shall include, and the Security Interest shall attach to,
such greater percentage of capital stock of each Controlled Foreign Corporation) shall be pledged
hereunder and under the Collateral Documents, and (iii) Collateral Agent shall receive such board
resolutions, officer’s certificates, corporate and other documents, and opinions of counsel (which
may be issued by in-house counsel of Borrower) as Collateral Agent shall reasonably request from
such Grantor in connection with the actions described in clauses (i) and (ii) preceding.



4.18. Future Assets of Grantors. Each Grantor shall use commercially reasonable
efforts to ensure that the documents which govern its future Investments do not restrict the
ability of such Grantor to subject any such Investment to the Lien and Security Interest of this
Security Agreement and the other Collateral Documents; provided, however, that the foregoing shall
not be deemed to preclude Grantor from making an Investment as to which the governing documents
contain such a restriction. Without limiting the obligations of Grantor set forth above or in
Section 14.19, to the extent that any asset of a Grantor cannot be pledged as Collateral on account
of contractual limitations applicable to such property, then such asset shall be an Excluded Asset
and promptly conveyed to a Pledge LLC (in accordance with Section 4.19.2), if such conveyance is
permitted by the governing documents.



4.19. Consents; Pledge LLC; Second Tier Collateral; Etc.




4.19.1. Consents. Each Grantor shall use, subject to the provisions contained
in this Section 4.19, commercially reasonable efforts to obtain the consent or approval of,
or other action by, all third parties required to permit Grantors to subject all of their
respective assets (including the Excluded Assets) to the Lien and Security Interest of this
Security Agreement and the other Collateral Documents; provided, however, that Grantor shall
not be obligated to obtain consents or approvals in respect of assets (a) where the value of
such assets would not reasonably justify the burden, costs and expenses necessary to obtain
such consent or approval; in making such determination, Grantor may take into account the
cost or charges imposed by such third parties (on any Grantor or any entity in which any
Grantor has an Investment) to grant any such consent or approval or take such other action
and/or any undue burden, or (b) which in the reasonable judgment of Grantor cannot be
pledged, or as to which the consent to pledge cannot be sought, without substantially
impairing the value of the asset or the ability of Grantor to manage the asset in the
ordinary course of its business; provided further that, nothing shall be deemed a waiver of
any rights Secured Parties may have to assert Liens or security interests in any such assets
or proceeds thereof to the extent permitted pursuant to Sections 9-406, 9-407, 9-408, or
9-409 of the UCC (or any successor provision or provisions) of the jurisdiction the UCC of
which would govern such determination (unless the application of Sections 9-406, 9-407,
9-408, or 9-409 of the UCC would automatically result in (x) additional affirmative
obligations on the part of any Grantor or (y) the granting of rights and remedies not
previously held to, or exercise of rights or remedies not previously entitled to be
exercised by, third parties, in which event such assets shall remain “Excluded Assets”) or
any other Applicable Law (including the Bankruptcy Code) or principles of equity.




4.19.2. Pledge LLC. Without limiting the obligations of each Grantor set forth
in this Section 4.19, to the extent that any personal property of a Grantor cannot be
pledged as Collateral on account of contractual limitations applicable to such property but
may be transferred to a Pledge LLC, such personal property shall be promptly transferred to
a Pledge LLC, and all membership interests in such Pledge LLC shall be pledged to Collateral
Agent, creating a perfected, and to each Grantor’s Knowledge, first priority, Lien and
Security Interest therein, subject to Permitted Liens; provided that, any personal property
listed on Schedule 3.17.2 as of the date hereof shall not be required to be transferred to a
Pledge LLC pursuant to the requirements of this Section 4.19.2, unless such personal
property is still owned by a Grantor as of October 31, 2009 (and not subject to a contract
of sale therefor as of such date), in which case, any such property shall be transferred to
a Pledge LLC within two (2) Business Days following such date.




4.19.3. Second Tier Collateral; Real Property. After the occurrence and during
the continuance of an Event of Default, each Grantor shall take such actions as requested by
Collateral Agent (acting at the direction of the Required Secured Creditors) to, within ten
(10) Business Days after such request, (a) perfect the Lien and Security Interest granted
hereunder with respect to any Second Tier Collateral and (b) grant a mortgage on any Real
Property that is not otherwise subject to the requirements of Section 4.20. For the
avoidance of doubt, so long as no Event of Default has occurred and is continuing, each
Grantor shall have no obligation to take any actions to perfect the Lien and Security
Interest granted hereunder with respect to any Second Tier Collateral or grant any mortgages
with respect to Real Property (except to the extent required in Section 4.20).




4.19.4. Excess Collateral. Each Grantor covenants and agrees that if it
becomes aware of any Excess Collateral, it will (a) promptly (and in any event within three
(3) Business Days) notify Collateral Agent of such Excess Collateral, and (b) take all
actions reasonably necessary to perfect the Lien and Security Interest granted hereunder
with respect to any Excess Collateral within 20 days (or such later date as may be agreed by
Collateral Agent).




4.19.5. Excluded Assets. To the extent a Grantor obtains any consents or
approvals or other actions by third parties in respect of any Excluded Assets in accordance
with Section 4.19.1 hereof, (x) Grantor shall, within two (2) Business Days, (i) provide
copies of any such consents or approvals to Collateral Agent, and (ii) take such actions as
are reasonably necessary to perfect the Lien and Security Interest granted hereunder with
respect to such assets, including, if such assets are held by a Custodian, transferring (or
causing such Custodian to transfer) such assets to a Custodial Account subject to a Custody
Control Agreement, and (y) such assets shall no longer constitute “Excluded Assets”.



4.20. Real Property; Fixtures. Each Grantor covenants and agrees that within two (2)
Business Days following its acquisition after the date hereof of any fee interest in Real Property
with an appraised value greater than or equal to $5,000,000, it will promptly notify Collateral
Agent of the acquisition of such Real Property. To the extent that such Grantor holds such Real
Property for forty-five (45) days following the acquisition date thereof, Grantor covenants and
agrees that, within seventy-five (75) days following the acquisition date of such Real Property,
Grantor will grant to Collateral Agent, for the benefit of the Secured Parties, a mortgage on each
fee interest in such Real Property and shall deliver such other documentation and opinions, in form
and substance reasonably satisfactory to Collateral Agent (to be determined in accordance with the
terms of the Intercreditor Agreement), in connection with the grant of such mortgage as Collateral
Agent or the Secured Parties may reasonably request, including title insurance policies, financing
statements, fixture filings and environmental audits and such Grantor shall pay all recording
costs, intangible taxes and other normal and customary fees and costs (including reasonable
attorneys’ fees and expenses) incurred in connection therewith. Each Grantor acknowledges and
agrees that, to the extent permitted by Applicable Law, all of its Collateral shall remain personal
property regardless of the manner of its attachment or affixation to Real Property.



ARTICLE V

RIGHTS AND REMEDIES




5.1. Remedies. On and after the occurrence and during the continuance of a Triggering
Event, Collateral Agent may exercise any and all of the following rights and remedies as directed
in the applicable Enforcement Direction of the requisite Secured Parties (as are specified in the
Intercreditor Agreement) received by Collateral Agent:




5.1.1. Contractual Remedies. Those rights and remedies provided in this
Security Agreement or any other Financing Document.




5.1.2. Legal Remedies. Those rights and remedies available to a secured party
under the UCC (whether or not the UCC applies to the affected Collateral) or under any other
Applicable Law (including any law governing the exercise of a bank’s right of setoff or
bankers’ lien) when a debtor is in default under a security agreement, including applying by
appropriate judicial proceedings for the appointment of a receiver for all or any part of
the Collateral (and Grantors hereby consent to such appointment).




5.1.3. Disposition of Collateral. Without notice, except as specifically
provided in Section 5.2.3 or elsewhere herein or in any other Financing Document or under
Applicable Law, sell, lease, assign, grant an option, or options to purchase or otherwise
dispose of the Collateral or any part thereof in one or more parcels at public or private
sale or at any broker’s board or on any securities exchange, for cash, on credit or for
future delivery, and upon such other terms as Collateral Agent may deem commercially
reasonable. Neither Collateral Agent’s compliance with any applicable state or federal law
in the conduct of such sale, nor its disclaimer of any warranties relating to the
Collateral, shall be considered to affect the commercial reasonableness of such sale. Each
Grantor hereby waives (to the extent permitted by Applicable Law) all rights of redemption,
stay, and/or appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.




5.1.4. Distributions. Cause all payments and distributions made to any Grantor
upon or with respect to the Collateral to be paid or delivered to Collateral Agent, and each
Grantor agrees to take all such action appropriate to cause all such payments and
distributions to be made to Collateral Agent. Further, Collateral Agent shall have the
right, at any time after the occurrence and during the continuance of an Applicable
Triggering Event, to notify and direct any issuer to thereafter make all payments,
dividends, and any other distributions payable in respect thereof directly to Collateral
Agent. Any and all money and other property paid over to or received by Collateral Agent
hereunder shall be retained by Collateral Agent as additional Collateral hereunder and may
be applied in accordance with Section 5.10.




5.1.5. Control. Collateral Agent shall have the right, pursuant to the
applicable Control Agreement or Custody Control Agreement, to notify and direct each
Custodian and each institution in which any Grantor maintains a Deposit Account, Commodities
Account, or Securities Account to, unless otherwise notified by Collateral Agent, thereafter
take all instructions with respect thereto solely from Collateral Agent, to hold the
Custodial Account and the Custodial Collateral, and each Deposit Account, Commodities
Account, and Securities Account (together with all monies, Instruments, certificates,
checks, drafts, wire transfer receipts, trust receipts, securities, Investments, or other
assets therein) solely for the benefit of Collateral Agent, and thereafter to make any
payments and any other distributions payable in respect thereto directly to Collateral
Agent, and to provide all statements or reports to Collateral Agent relative to such
Custodial Accounts, Deposit Accounts, Commodities Accounts, and Securities Accounts. Each
such Custodian and institution shall be fully protected in relying on the written statement
of Collateral Agent that it then holds a Security Interest which entitles it to exercise
Control over such assets. Any and all money and other property paid over to or received by
Collateral Agent hereunder shall be retained by Collateral Agent as additional Collateral
hereunder and may be applied in accordance with Section 5.10.




5.1.6. Use of Premises. Subject to the terms of any applicable lease,
Collateral Agent shall be entitled to occupy and use any premises owned or leased by any
Grantor where any of the Collateral or any records relating to the Collateral are located
until the Secured Obligations are paid in full or the Collateral is removed therefrom,
whichever first occurs, without any obligation to pay such Grantor for such use and
occupancy.



5.2. Grantors’ Obligations Upon a Triggering Event.




5.2.1. Assembly of Collateral. Upon the request of Collateral Agent, on and
after the occurrence and during the continuance of a Triggering Event, each Grantor will
assemble and make available to Collateral Agent the Collateral and all records relating
thereto at Borrower’s offices in Washington, D.C.




5.2.2. Secured Party Access. Upon the request of Collateral Agent, on and
after the occurrence and during the continuance of a Triggering Event, and subject to the
terms of any applicable lease, each Grantor will permit Collateral Agent, by Collateral
Agent’s representatives and agents, to enter any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are located, to take
possession of all or any part of the Collateral and to remove all or any part of the
Collateral.




5.2.3. Notice of Disposition of Collateral. Any notice of the time and place
of any public sale or the time after which any private sale or other disposition of all or
any part of the Collateral may be made shall be deemed reasonable if made in accordance with
Applicable Law. Collateral Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. Subject to the
provisions of Applicable Law, Collateral Agent may postpone or cause the postponement of the
sale of all or any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, to the extent permitted by Applicable Law,
be made at the time and place to which the sale was postponed, or Collateral Agent may
further postpone such sale by announcement made at such time and place.



5.3. Condition of Collateral; Warranties. Collateral Agent has no obligation to
clean-up or otherwise prepare the Collateral for sale. Collateral Agent may sell the Collateral
without giving any warranties as to the Collateral. Collateral Agent may specifically disclaim any
warranties of title or the like. This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.



5.4. Collection of Receivables. Upon the occurrence and during the continuance of an
Applicable Triggering Event, Collateral Agent may at any time, by giving Grantors written notice,
elect to require that the Receivables be paid directly to Collateral Agent. In such event, each
Grantor shall, and shall permit Collateral Agent to, promptly notify the Obligors with respect to
the Receivables of Collateral Agent’s interest therein and direct such Obligors to make payment of
all amounts then or thereafter due under the Receivables directly to Collateral Agent. Upon
receipt of any such notice from Collateral Agent, each Grantor shall thereafter hold in trust for
Collateral Agent, all amounts and proceeds received by it with respect to the Receivables and
immediately and at all times thereafter deliver to Collateral Agent all such amounts and proceeds
in the same form as so received, whether by cash, check, draft or otherwise, with any necessary
endorsements. Collateral Agent shall hold and apply funds so received as provided by the terms of
Section 5.10.



5.5. Special Collateral Account. Upon the occurrence and during the continuance of an
Applicable Triggering Event, Collateral Agent shall have, and each Grantor hereby grants to
Collateral Agent, the right and authority to transfer all funds on deposit in the Deposit Accounts,
Securities Accounts, Custodial Accounts and Commodities Accounts to the Special Collateral Account,
and no disbursements or withdrawals shall be permitted to be made by any Grantor from such Special
Collateral Account except as expressly permitted pursuant to the terms and conditions of the
Intercreditor Agreement. Such Special Collateral Account shall be subject to the Security Interest
herein created, and each Grantor hereby grants a security interest to Collateral Agent (for the
benefit of Secured Parties) in and to, such Special Collateral Account and all monies, checks,
drafts, and other items ever received by Grantor for deposit therein. Furthermore, Collateral
Agent shall have the right, at any time in its discretion during the continuance of an Applicable
Triggering Event (or with respect to clause (ii) below, upon the occurrence and during the
continuance of a Special Event of Default), without notice to any Grantor, (i) to transfer to or to
register in the name of Collateral Agent or nominee thereof, in accordance with Applicable Law, any
certificates of deposit or deposit instruments, Instruments, Investments, or Investment Related
Property constituting Deposit Accounts, Securities Accounts, or Commodities Accounts and shall have
the right to exchange such certificates or instruments representing Deposit Accounts for
certificates or instruments of smaller or larger denominations, in accordance with Applicable Law,
and (ii) to take and apply against the Secured Obligations any and all funds then or thereafter on
deposit in the Special Collateral Account or otherwise constituting Deposit Accounts in accordance
with the terms and conditions of the Intercreditor Agreement.



5.6. Intellectual Property. For purposes of enabling Collateral Agent to exercise its
rights and remedies under this Security Agreement and enabling Collateral Agent to enjoy the full
benefits of the Collateral, effective upon the occurrence and during the continuance of an
Applicable Triggering Event each Grantor hereby grants to Collateral Agent an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to such Grantor)
to make, have made, use, sell, invent, reproduce, distribute, display and perform publicly, create
derivative works, perform by means of digital transmission, license, or sublicense any of the
Intellectual Property. During the continuation of an Applicable Triggering Event, each Grantor
shall provide Collateral Agent with reasonable access to all media in which any of the Intellectual
Property may be recorded or stored and all computer programs used for the completion or printout
thereof. This license shall also inure to the benefit of all successors, assigns, and transferees
of Collateral Agent. After the occurrence and during the continuance of an Applicable Triggering
Event, Collateral Agent may require that each Grantor assign all of its right, title, and interest
in and to the Intellectual Property or any part thereof to Collateral Agent or such other Person as
Collateral Agent may designate pursuant to documents reasonably satisfactory to the Collateral
Agent.



5.7. Record Ownership of Securities. After the occurrence and during the continuance
of an Applicable Triggering Event, Collateral Agent may, in accordance with Applicable Law, have
any Pledged Equity Interests or other Investment Related Property that is in the possession of
Collateral Agent, or its nominee or nominees, registered in its name, or in the name of its nominee
or nominees, as Collateral Agent; and, as to any Pledged Equity Interest or other Investment
Related Property so registered, Collateral Agent shall (if applicable) execute and deliver (or
cause to be executed and delivered) to the applicable Grantor all such proxies, powers of attorney,
dividend coupons or orders, and other documents as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise any voting rights and powers which it is entitled to
exercise under this Security Agreement or to receive any dividends and other distributions and
payments in respect of such Collateral or proceeds thereof which it is authorized to receive and
retain under this Security Agreement.



5.8. Investment Related Property. Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities laws, Collateral Agent
may be compelled, with respect to any sale of all or any part of the Investment Related Property
conducted without prior registration or qualification of such Investment Related Property under the
Securities Act and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges
that any such private sale may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such circumstances, each
Grantor agrees that Collateral Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Investment Related Property for the period of time necessary to
permit the issuer thereof to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer would, or should,
agree to so register it. Upon the occurrence and during the continuance of an Applicable
Triggering Event, Collateral Agent may exercise its right to sell any or all of the Investment
Related Property, and upon written request, each Grantor shall and shall use its commercially
reasonable efforts to cause, each issuer of any Investment Related Property to be sold hereunder,
from time to time to furnish to Collateral Agent all such information as Collateral Agent may
reasonably request in order to determine the number and nature of interest, shares, or other
instruments included in the Investment Related Property which may be sold by Collateral Agent in
exempt transactions under the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder. In case of any sale of all or any part of the Investment Related
Property on credit or for future delivery, such Collateral so sold may be retained by Collateral
Agent until the selling price is paid by the purchaser thereof, but Collateral Agent shall not
incur any liability in case of the failure of such purchaser to take up and pay for such assets so
sold and in case of any such failure, such Collateral may again be sold upon like notice.
Collateral Agent, instead of exercising the power of sale herein conferred upon them, may proceed
by a suit or suits at law or in equity to foreclose security interests created hereunder and sell
such Investment Related Property, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.



5.9. Sales on Credit. If Collateral Agent sells any of the Collateral upon credit,
Grantors will be credited only with payments actually made by the purchaser, received by the
Collateral Agent, and applied to the indebtedness of the purchaser. In the event the purchaser
fails to pay for the Collateral, Collateral Agent may resell the Collateral and Grantors shall be
credited with the proceeds of the sale.



5.10. Application of Proceeds. Collateral Agent shall apply the proceeds of any sale
or other disposition of the Collateral in accordance with the terms and conditions of the
Intercreditor Agreement. Any surplus remaining shall be delivered to Grantors or as a court of
competent jurisdiction may direct. If the proceeds of any sale or disposition are insufficient to
pay the Secured Obligations in full, Grantors shall remain liable for any deficiency and the
reasonable fees of any attorneys employed by Collateral Agent or Secured Parties to collect.



5.11. Performance. If any Grantor fails to pay when due all Taxes on any of the
Collateral in the manner required by this Security Agreement, the other Collateral Documents and
any applicable Financing Document, or fails to preserve the Security Interest in any of the
Collateral, or fails to keep the Collateral insured as required by this Security Agreement, or
otherwise fails to perform any of its obligations under this Security Agreement, the other
Collateral Documents, or any applicable Financing Document with respect to the Collateral, then
Collateral Agent may, at its option, but without being required to do so, pay such Taxes, prosecute
or defend any suits in relation to the Collateral, or insure and keep insured the Collateral in any
amount deemed appropriate by Collateral Agent, or take all other action which any Grantor is
required, but has failed or refused, to take under this Security Agreement and the other Collateral
Documents. Each Grantor shall, jointly and severally, reimburse Collateral Agent for any amounts
paid by Collateral Agent pursuant to this Section 5.11. Each Grantor’s obligation to reimburse
Collateral Agent pursuant to the preceding sentence shall be a Secured Obligation payable on
demand.



5.12. Use and Operation of Collateral. Should any Collateral come into the possession
of Collateral Agent, Collateral Agent may use or operate such Collateral for the purpose of
preserving it or its value pursuant to the order of a court of appropriate jurisdiction or in
accordance with any other rights held by Collateral Agent in respect of such Collateral. Each
Grantor covenants to promptly reimburse and pay to Collateral Agent, at Collateral Agent’s request,
the amount of all reasonable expenses (including, without limitation, the cost of any insurance and
payment of Taxes or other charges) incurred by Collateral Agent in connection with its custody and
preservation of Collateral, and all such expenses, costs, Taxes, and other charges shall be payable
by Grantors to Collateral Agent upon demand and shall become part of the Secured Obligations.
However, the risk of accidental loss or damage to, or diminution in value of, Collateral is on
Grantors (unless Grantors no longer hold title to such Collateral), and Collateral Agent shall have
no liability whatsoever for failure to obtain or maintain insurance, nor to determine whether any
insurance ever in force is adequate as to amount or as to the risks insured. With respect to
Collateral that is in the possession of Collateral Agent, Collateral Agent shall have no duty to
fix or preserve rights against prior parties to such Collateral and shall not be liable for any
failure to use diligence to collect any amount payable in respect of such Collateral, but shall be
liable only to account to Grantors for what it may actually collect or receive thereon. The
provisions of this Section 5.12 are applicable whether or not a Triggering Event exists.



5.13. Power of Attorney. Each Grantor hereby irrevocably constitutes and appoints
Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the name of such Grantor or in
its own name, to take, upon the occurrence and during the continuation of a Triggering Event, any
and all action and to execute any and all documents and instruments which Collateral Agent at any
time and from time to time deems reasonably necessary to accomplish the purposes of this Security
Agreement and, without limiting the generality of the foregoing, each Grantor hereby gives
Collateral Agent the power and right on behalf of such Grantor and in its own name to do any of the
following after the occurrence and during the continuation of a Triggering Event, without notice to
or the consent of Grantor:




5.13.1. to transfer any and all funds on deposit in the Deposit Accounts to the Special
Collateral Account as set forth herein;




5.13.2. to receive, endorse, and collect any drafts or other instruments or documents
in connection with the exercise of any rights or remedies pursuant to this Security
Agreement;




5.13.3. to use the Intellectual Property or to grant or issue any exclusive or
non-exclusive license under the Intellectual Property to anyone else, and to perform any act
necessary for the Collateral Agent to assign, pledge, convey, or otherwise transfer title in
or dispose of the Intellectual Property to any other Person;




5.13.4. to demand, sue for, collect, or receive, in the name of the applicable Grantor
or in its own name, any money or property at any time payable or receivable on account of or
in exchange for any of the Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, documents of title or any other instruments for the
payment of money under the Collateral or any policy of insurance;




5.13.5. to pay or discharge Taxes, Liens, or other encumbrances levied or placed on or
threatened against the Collateral;




5.13.6. to notify post office authorities to change the address for delivery of each
Grantor to an address designated by Collateral Agent and to receive, open, and dispose of
mail addressed to any Grantor; and




5.13.7. (a) to direct account debtors and any other parties liable for any payment
under any of the Collateral to make payment of any and all monies 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 monies, claims, and other amounts due and to become
due at any time in respect of or arising out of any Collateral; (c) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, proxies, stock powers, verifications, and notices in
connection with accounts and other documents relating to the Collateral; (d) to commence and
prosecute any suit, action, or proceeding 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; (e) to defend any suit, action, or proceeding brought against any
Grantor with respect to any Collateral; (f) to settle, compromise, or adjust any suit,
action, or proceeding described above and, in connection therewith, to give such discharges
or releases; (g) to exchange any of the Collateral for other property upon any merger,
consolidation, reorganization, recapitalization, or other readjustment of the issuer thereof
and, in connection therewith, deposit any of the Collateral with any committee, depositary,
transfer agent, registrar, or other designated agency upon such terms as Collateral Agent
may determine; (h) to add or release any guarantor, indorser, surety, or other party to any
of the Collateral; (i) to renew, extend, or otherwise change the terms and conditions of any
of the Collateral; (j) to endorse the applicable Grantor’s name on all applications,
documents, papers, and instruments necessary or desirable in order for Collateral Agent to
use or maintain any of the Intellectual Property; (k) to make, settle, compromise or adjust
any claims under or pertaining to any of the Collateral (including claims under any policy
of insurance); (l) to execute (if necessary) on behalf of each Grantor any financing
statements or continuation statements with respect to the Security Interests created hereby,
and to do any and all acts and things to protect and preserve the Collateral, including,
without limitation, the protection and prosecution of all rights included in the Collateral;
and (m) to sell, transfer, pledge, convey, 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 and
Grantors’ expense, at any time, or from time to time, all acts and things which Collateral
Agent deems necessary to protect, preserve, maintain, or realize upon the Collateral and
Collateral Agent’s security interest therein.



This power of attorney is a power coupled with an interest and shall be irrevocable until this
Security Agreement is terminated in accordance with Section 6.1. Collateral Agent shall be under
no duty to exercise or withhold the exercise of any of the rights, powers, privileges, and options
expressly or implicitly granted to Collateral Agent in this Security Agreement, and shall never be
liable for any failure to do so or any delay in doing so. None of Collateral Agent nor any Person
designated by Collateral Agent shall be liable for any act or omission or for any error of judgment
or any mistake of fact or law except for their willful misconduct, gross negligence, or violation
of law as determined by a court of competent jurisdiction in a final and nonappealable judgment.
This power of attorney is conferred on Collateral Agent solely to protect, preserve, maintain, and
realize upon its Security Interest in the Collateral. Collateral Agent shall not be responsible
for any decline in the value of the Collateral and shall not be required to take any steps to
preserve rights against prior parties or to protect, preserve, or maintain any Lien given to secure
the Collateral. Each Grantor ratifies and approves all acts of such attorney in the absence of its
willful misconduct, gross negligence, or knowing or willful violation of law.



5.14. Subrogation. If any of the Secured Obligations are given in renewal or
extension or applied toward the payment of indebtedness secured by any Lien, Collateral Agent and
Secured Parties shall be, and each is hereby, subrogated to all of the rights, titles, interests,
and Liens securing the indebtedness so renewed, extended, or paid.



5.15. Indemnification. Each Grantor hereby assumes all liability for the Collateral,
for the Security Interest, and for any use, possession, maintenance, and management of, all or any
of the Collateral, including, without limitation, any Taxes arising as a result of, or in
connection with, the transactions contemplated herein, and agrees to assume liability for, and to
jointly and severally indemnify and hold Collateral Agent and each Secured Party harmless from and
against, any and all claims, causes of action, or liability, for injuries to or deaths of Persons
and damage to property, howsoever arising from or incident to such use, possession, maintenance,
and management, whether such Persons be agents or employees of Grantor or of third parties, or such
damage be to property of Grantor or of others, and any actual or alleged presence or release of
hazardous materials on or from any property owned or operated by any Grantor or any of its
Subsidiaries or any environmental liability related in any way to any Grantor or any of its
Subsidiaries. Each Grantor agrees to jointly and severally indemnify, save, and hold Collateral
Agent and each Secured Party harmless from and against, and covenants to defend Collateral Agent
and each Secured Party against, any and all losses, damages, claims, costs, penalties, liabilities,
and expenses (collectively, “Claims”), including, without limitation, court costs and reasonable
attorneys’ fees, and any of the foregoing arising from the negligence of Collateral Agent and each
Secured Party, or any of their respective officers, employees, agents, advisors, or
representatives, howsoever arising or incurred because of, incident to, or with respect to
Collateral or any use, possession, maintenance, or management thereof; provided, however, that the
indemnity set forth in this Section 5.15 will not apply to Claims caused by the gross negligence or
willful misconduct of Collateral Agent or any Secured Party or any of its officers, employees,
agents, advisors, or representatives, as determined by a court of competent jurisdiction in a final
and nonappealable judgment.



ARTICLE VI

GENERAL PROVISIONS




6.1. Termination. This Security Agreement shall continue in effect (notwithstanding
the fact that from time to time there may be no Secured Obligations outstanding) until all of the
Secured Obligations have been paid in full in cash and performed in full, no commitments of any
Secured Party which would give rise to any Secured Obligations are outstanding under the applicable
Financing Documents and any outstanding LC’s have been cash collateralized in an amount equal to
100.0% of the undrawn amount of such LC’s upon terms satisfactory to the Administrative Agent;
provided that the termination of this Security Agreement under this Section 6.1 is subject to
Section 6.5.



6.2. Joint and Several Obligations of Grantors.




6.2.1. Each Grantor is accepting joint and several liability hereunder with other
Persons that have executed or will execute a Security Agreement in consideration of the
financial accommodation to be provided by the holders of the Secured Obligations, for the
mutual benefit, directly and indirectly, of each Grantor and in consideration of the
undertakings of each Grantor to accept joint and several liability for the obligations of
each of them.




6.2.2. Each Grantor jointly and severally hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with
the other Grantors with respect to the payment and performance of all of the Secured
Obligations, it being the intention of the parties hereto that all the Secured Obligations
shall be the joint and several obligations of each Grantor without preferences or
distinction among them.



6.3. NO RELEASE OF GRANTORS. THE OBLIGATIONS OF GRANTORS UNDER THIS SECURITY
AGREEMENT SHALL NOT BE REDUCED, LIMITED OR TERMINATED, NOR SHALL GRANTORS BE DISCHARGED FROM ANY
OBLIGATION HEREUNDER, FOR ANY REASON WHATSOEVER (other than pursuant to Section 6.1) including (and
whether or not the same shall have occurred or failed to occur once or more than once and whether
or not Grantors shall have received notice thereof): (i) the taking or accepting of any other
security or assurance for any or all of the Secured Obligations; (ii) any release, surrender,
exchange, subordination, or loss of any security or assurance at any time existing in connection
with any or all of the Secured Obligations; (iii) the modification of, amendment to, or waiver of
compliance with any terms of any of the Financing Documents or any other Collateral Documents
without the notification or consent of any Grantor, except as required therein (the right to such
non-excepted notification or consent being herein specifically waived by each Grantor); (iv) the
insolvency, bankruptcy, or lack of corporate or trust power of any party at any time liable for the
payment of any or all of the Secured Obligations, whether now existing or hereafter occurring; (v)
any renewal, extension, or rearrangement of the payment of any or all of the Secured Obligations,
either with or without notice to or consent of any Grantor, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by Collateral Agent or any Secured Party to
any Grantor; (vi) any neglect, delay, omission, failure, or refusal of Collateral Agent or any
Secured Party to take or prosecute any action in connection with any other agreement, document,
guaranty, or instrument evidencing, securing, or assuring the payment of all or any of the Secured
Obligations; (vii) any failure of Collateral Agent or any Secured Party to notify any Grantor of
any renewal, extension, or assignment of the Secured Obligations or any part thereof, or the
release of any Collateral or other security, or of any other action taken or refrained from being
taken by Collateral Agent or any Secured Party against any Grantor or any new agreement between or
among Collateral Agent or one or more Secured Parties and any Grantor, it being understood that
except as expressly provided herein or in any other Financing Document or pursuant to Applicable
Law, neither Collateral Agent nor any Secured Party shall be required to give Grantors any notice
of any kind under any circumstances whatsoever with respect to or in connection with the Secured
Obligations, including notice of acceptance of this Security Agreement or any Collateral ever
delivered to or for the account of Collateral Agent hereunder; (viii) the illegality, invalidity,
or unenforceability of all or any part of the Secured Obligations against any party obligated with
respect thereto by reason of the fact that the Secured Obligations, or the interest paid or payable
with respect thereto, exceeds the amount permitted by Applicable Law, the act of creating the
Secured Obligations, or any part thereof, is ultra vires, or the officers, partners, or trustees
creating same acted in excess of their authority, or for any other reason; (ix) if any payment by
any party obligated with respect thereto is held to constitute a preference under Applicable Laws
or for any other reason Collateral Agent or any Secured Party is required to refund such payment or
pay the amount thereof to someone else; or (x) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT
OR CIRCUMSTANCE THAT (a) VARIES THE RISK OF GRANTORS UNDER THIS SECURITY AGREEMENT OR (b) BUT FOR
THE PROVISIONS HEREOF, WOULD, AS A MATTER OF APPLICABLE LAW OR EQUITY, OPERATE TO REDUCE, LIMIT OR
TERMINATE THE OBLIGATIONS OF GRANTORS HEREUNDER OR DISCHARGE GRANTORS FROM ANY OBLIGATION
HEREUNDER.



6.4. Subordination of Certain Claims. Any and all rights and claims of Grantors
against Borrower or against any other Person or property, arising by reason of any payment by any
Grantors to any Secured Party pursuant to the provisions, or in respect, of this Security Agreement
shall be subordinate, junior and subject in right of payment to the prior payment in full in cash
of all Secured Obligations, and until such time, Grantors defer all rights of subrogation,
contribution, or any similar right and until such time agree not to enforce any such right or
remedy Grantors may now or hereafter have against Borrower, any endorser, or any other Grantor of
all or any part of the Secured Obligations and any right to participate in, or benefit from, any
security given to Collateral Agent to secure any of the Secured Obligations. All Liens and
security interests of Grantors, whether now or hereafter arising and howsoever existing, in assets
of Grantors or any assets securing the Secured Obligations shall be and hereby are subordinated to
the rights and interests of Collateral Agent and in those assets until the prior final payment in
full in cash of all Secured Obligations. Notwithstanding the foregoing, the Grantors shall not be
prevented from paying amounts owing amongst themselves in the ordinary course of their business.
If any amount shall be paid to Grantors contrary to the provisions of this Section 6.4 at any time
when any of the Secured Obligations shall not have been paid in full in cash, such amount shall be
held in trust for the benefit of Collateral Agent and shall forthwith be turned over to Collateral
Agent in kind in the form received (duly endorsed if necessary) to be credited and applied against
the Secured Obligations, whether matured or unmatured, in accordance with the terms of the
Financing Documents.



6.5. Recovered Payments. The Secured Obligations shall be deemed not to have been
paid, observed or performed, and Grantors’ obligations under this Security Agreement in respect
thereof shall continue and not be discharged, to the extent that any payment, observance, or
performance thereof by any Grantor is recovered from or paid over by or for the account of
Collateral Agent for any reason, including as a preference or fraudulent transfer or by virtue of
any subordination (whether present or future or contractual or otherwise) of the Secured
Obligations, whether such recovery or payment over is effected by any judgment, decree or order of
any court or governmental agency, by any plan of reorganization or by settlement or compromise by
Collateral Agent or Secured Parties (whether or not consented to by Grantors) of any claim for any
such recovery or payment over. Each Grantor hereby expressly waives the benefit of any applicable
statute of limitations and agrees that it shall be liable hereunder whenever such a recovery or
payment over occurs.



6.6. No Waiver. Amendments. To the fullest extent permitted by Applicable Law,
Grantor waives (i) any right to require Collateral Agent or any Secured Party to proceed against
any other Person, to exhaust its rights in Collateral, or to pursue any other right which
Collateral Agent or any Secured Party may have; (ii) with respect to the Secured Obligations,
presentment and demand for payment, protest, notice of protest and nonpayment, and notice of the
intention to accelerate; and (iii) all rights of marshaling in respect of any and all of the
Collateral. No delay or omission of Collateral Agent to exercise any right or remedy granted under
this Security Agreement shall impair such right or remedy or be construed to be a waiver of any
Event of Default, or an acquiescence therein, and any single or partial exercise of any such right
or remedy shall not preclude any other or further exercise thereof or the exercise of any other
right or remedy. This Security Agreement may not be amended, waived, modified, or changed except
as set forth in Section 6.4 of the Intercreditor Agreement and then only to the extent in such
writing specifically set forth. All rights and remedies contained in this Security Agreement or
afforded by Applicable Law shall be cumulative and all shall be available to Collateral Agent until
the Secured Obligations have been paid in full.



6.7. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees
that a breach of any of the covenants contained in Sections 4.2.3, 4.5, 5.4, 5.5, 5.6, 5.10, or
5.11, will cause irreparable injury to Collateral Agent and Secured Parties, that Collateral Agent
and Secured Parties have no adequate remedy at law in respect of such breaches and therefore
agrees, without limiting the right of Collateral Agent or Secured Parties to seek and obtain
specific performance of other obligations of such Grantor contained in this Security Agreement,
that the covenants of such Grantor contained in the Sections referred to in this Section 6.7 shall
be specifically enforceable against such Grantor.



6.8. Survival. All representations and warranties of each Grantor contained in this
Security Agreement shall survive the execution and delivery of this Security Agreement. Without
prejudice to the survival of any other obligation of each Grantor hereunder, the obligations of
each Grantor under Sections 6.9 and 5.15 shall survive termination of this Security Agreement.



6.9. Taxes and Expenses. Any Taxes (including income Taxes but excluding income and
franchise taxes of Collateral Agent and Secured Parties) payable or ruled payable by federal or
state authority in respect of this Security Agreement shall be paid by each Grantor, together with
interest and penalties, if any. Grantors shall jointly and severally reimburse Collateral Agent
for any and all reasonable out-of-pocket expenses (including reasonable attorneys’, auditors’ and
accountants’ fees) paid or incurred by Collateral Agent in connection with the preparation,
execution, delivery, and administration, of this Security Agreement and, subject to any limitations
set forth in Section 4.2.1, in the audit, analysis, administration, collection, preservation or
sale of the Collateral (including the expenses and charges associated with any periodic or special
audit of the Collateral). In addition, Grantors shall be jointly and severally obligated to pay
all of the reasonable costs and expenses incurred by Collateral Agent, including reasonable
attorneys’ fees and court costs, in obtaining or liquidating the Collateral, in enforcing payment
of the Secured Obligations, or in the prosecution or defense of any action or proceeding by or
against Secured Party or any Grantor concerning any matter arising out of or connected with this
Security Agreement, any Collateral or the Secured Obligations, including any of the foregoing
arising in, arising under or related to a case under any bankruptcy, insolvency, or similar law.
Any and all costs and expenses incurred by each Grantor in the performance of actions required
pursuant to the terms hereof shall be borne solely by such Grantor.



6.10. Multiple Counterparts. This Security Agreement has been executed in a number of
identical counterparts, each of which shall be deemed an original for all purposes and all of which
constitute, collectively, one agreement; but, in making proof of this Security Agreement, it shall
not be necessary to produce or account for more than one such counterpart. Any signature delivered
by facsimile or electronic mail shall be deemed to be an original signature hereto and shall be
admissible into evidence for all purposes.



6.11. Parties Bound; Assignment. This Security Agreement shall be binding on each
Grantor and each Grantor’s successors and assigns and shall inure to the benefit of Collateral
Agent and Secured Parties and their respective successors and assigns.




6.11.1. Collateral Agent is the agent for each Secured Party, the Security Interest and
all rights granted to Collateral Agent hereunder or in connection herewith are for the
benefit of each Secured Party, and Collateral Agent may, subject to the terms and conditions
of the Intercreditor Agreement, without the joinder of any Secured Party, exercise any and
all rights in favor of Collateral Agent or Secured Parties hereunder, including, without
limitation, conducting any foreclosure sales hereunder, and executing full or partial
releases hereof, amendments or modifications hereto, or consents or waivers hereunder. The
rights of each Secured Party vis-à-vis Collateral Agent and each other Secured Party are
subject to the Intercreditor Agreement and may (to the extent permitted under the
Intercreditor Agreement) be subject to one or more separate agreements between or among such
parties, but no Grantor need inquire about any such agreement or be subject to any terms
thereof unless such Grantor specifically joins therein; and consequently, except as may be
expressly provided therein, no Grantor nor any Grantor’s successors or assigns shall be
entitled to any benefits or provisions of any such separate agreements or be entitled to
rely upon or raise as a defense, in any manner whatsoever, the failure or refusal of any
party thereto to comply with the provisions thereof except to the extent the Borrower’s
consent is expressly required under the Intercreditor Agreement to consent to certain
amendments thereunder.




6.11.2. No Grantor may, without the prior written consent of Collateral Agent and
Secured Parties, assign any of its rights, duties, or obligations hereunder.



6.12. Governing Law. This Security Agreement has been entered into pursuant to
Sections 5-1401 and 5-1402 of the New York General Obligations Law and the applicable federal laws
of the United States of America. The laws of the State of New York and of the United States of
America shall govern the rights and duties of the parties to this Security Agreement and the
validity, construction, enforcement, and interpretation of this Security Agreement, except to the
extent that the laws of another jurisdiction govern the creation, perfection, validity, or
enforcement of Liens under this Security Agreement.



6.13. JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY TRIAL.




6.13.1. Each Grantor and each other party hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State Court or Federal Court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Security Agreement or the other Collateral Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State Court or, to the extent
permitted by law, in such Federal Court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in
this Security Agreement shall affect any right that Collateral Agent or any Secured Party
may otherwise have to bring any action or proceeding relating to this Security Agreement or
the other Collateral Documents against grantors or their respective properties in the courts
of any United States jurisdiction.




6.13.2. Each party hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Security Agreement or the other Collateral Documents in any New York State
or Federal Court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.




6.13.3. Each Grantor and each other party hereto consents to service of
process in the manner provided for notices in Section 6.14.1. Nothing in this Security
Agreement will affect the right of any party to this Security Agreement to serve process in
any other manner permitted by applicable law.




6.13.4. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by Applicable Law, any right it may have to a trial by jury in any legal
proceeding directly or indirectly arising out of or relating to this Security Agreement or
any other Collateral Document or the transactions contemplated hereby or thereby (whether
based on contract, tort or any other theory). Each party hereto (a) certifies that no
representative, agent or attorney of any other person has represented, expressly or
otherwise, that such other person would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced
to enter into this security agreement and the other collateral documents by, among other
things, the mutual waivers and certifications in this Section 6.13.4.



6.14. Notices.




6.14.1. General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by facsimile
transmission). All such written notices shall be mailed by registered or certified mail,
faxed, or delivered to the applicable address, facsimile number, or (subject to Section
6.14.2 below) electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows (or, as to each party at such other address as shall be designated by
such party in a written notice to the other parties delivered in compliance with this
Section 6.14):




(i) If to any Grantor:




c/o Allied Capital Corporation


1919 Pennsylvania Avenue, N.W.


Washington, DC 20006-3434


Attention: Penni F. Roll, Chief Financial Officer


Telephone/Telecopy: (202) 721-6192




with a copy to:




c/o Allied Capital Corporation


1919 Pennsylvania Avenue, N.W.


Washington, DC 20006-3434


Attention: Alexander D. Fine, Executive Vice President


Telephone/Telecopy: (202) 721-6101




with a further copy to:



	 	 	 
	(ii)
	 	Dickstein Shapiro LLP

1825 Eye Street, N.W.

Washington, D.C. 20006

Attention: Howard S. Jatlow

Telecopy: (202) 379-9276

If to Collateral Agent:








U.S. Bank National Association


One Federal Street, Third Floor


Boston, MA 02110



	 	 	 	 	 
	Attention: Ralph J. Creasia, Jr., Vice President
	 	 	ALLIED CAPITAL LENDERS AND NOTEHOLDERS

	Telecopy:(866) 832-3895	 	 
	Telephone: (617) 603-6517	 	 
	Email:	 	ralph.creasia@usbank.com

	 	 	with a copy to:

	 	

	 	 	Nixon Peabody LLP

100 Summer Street

Boston, MA 02110-2131

Attention:

Telecopy:

Telephone:

	 	





Amelia Charamba, Esq.

866-244-1527

617-345-1041







Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent by
telecopier shall be deemed to have been given when sent (except that, if not given
during normal business hours for the recipient, shall be deemed to have been given
at the opening of business on the next Business Day for the recipient). Notices
delivered through electronic communications to the extent provided in Section 6.14.2
below, shall be effective as provided in such Section 6.14.2.




6.14.2. Electronic Communications. Any party hereunder may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications. Unless the receiving
party otherwise prescribes, (a) notices and other communications sent to an e-mail address
shall be deemed received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available, return e-mail
or other written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next Business Day for
the recipient, and (b) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (a) of notification that such notice or
communication is available and identifying the website address therefor.



6.15. Non-Liability of Collateral Agent and Secured Parties. None of Collateral Agent
or any Secured Party shall have any fiduciary responsibilities to any Grantor; and no provision in
this Security Agreement or in any of the other Collateral Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any fiduciary duty owing by
Collateral Agent or any Secured Party to any other Secured Party, any Grantor, or any Subsidiary of
any Grantor. None of Collateral Agent or any Secured Party undertakes any responsibility to any
Grantor to review or inform any Grantor of any matter in connection with any phase of any Grantor’s
business or operations. Subject to the terms of the Intercreditor Agreement, the Collateral Agent
shall not be responsible for the existence, genuineness or value of any of the Collateral or for
the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on its part hereunder
for the validity or sufficiency of the Collateral or any agreement or assignment contained therein,
for the validity of the title of the Grantor to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Collateral Agent is hereby authorized and directed to execute
and deliver the other Collateral Documents to which it is a party and all other documents and
instruments delivered in connection therewith on or about the date hereof. In performing under the
Collateral Documents, the Collateral Agent shall have all such rights, protections and immunities
granted it under the Intercreditor Agreement in respect of the Collateral Documents. Subject to
the terms of the Intercreditor Agreement, the Collateral Agent shall have no obligation to perform
or exercise any discretionary act.



6.16. Severability of Provisions. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only
to the extent of such prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions or affecting the validity or enforceability of such provision
in any other jurisdiction.



6.17. Entirety. The rights and obligations of Grantors, Collateral Agent, and the
Secured Parties shall be determined solely from written agreements, documents, and instruments, and
any prior oral agreements between such parties are superseded by and merged into such writings.
This Security Agreement (as amended in writing from time to time) and the other written Financing
Documents and Collateral Documents, including, without limitation, the Intercreditor Agreement,
executed by any Grantor and, as applicable, any of Collateral Agent or any Secured Party (together
with all commitment letters and fee letters only as they relate to the payment of fees after the
date hereof) represent the final agreement between Grantors, Collateral Agent, and the Secured
Parties, and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements by such parties. There are no unwritten oral agreements between such parties.



6.18. Construction. Collateral Agent and each Grantor acknowledge that each of them
has had the benefit of legal counsel of its own choice and has been afforded an opportunity to
review this Security Agreement and the other Collateral Documents with its legal counsel and that
this Security Agreement and the other Collateral Documents shall be construed as if jointly drafted
by Collateral Agent and Grantors.



6.19. USA Patriot Act. Each of the Secured Parties that is subject to the Act (as
hereinafter defined) and Collateral Agent (for itself and not on behalf of any Secured Party)
hereby notifies each Grantor that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies Grantors, which information includes the name and address of
Grantors and other information that will allow such Collateral Agent or each Secured Party, as
applicable, to identify Grantor in accordance with the Act. Each Grantor shall, promptly following
a request for information by Collateral Agent or any Secured Party, provide all documentation and
other information that Collateral Agent or any such Secured Party requests in order to comply with
its ongoing obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the Act.



6.20. Confidentiality.




6.20.1. Collateral Agent will maintain the confidentiality of Confidential Information
in accordance with its standard procedures adopted by Collateral Agent to protect
confidential information of third parties delivered to Collateral Agent, provided that
Collateral Agent may deliver or disclose Confidential Information to (i) its Affiliates and
to its and their directors, trustees, officers, employees, agents and attorneys (to the
extent such disclosure reasonably relates to the administration of this Security Agreement
or the Intercreditor Agreement), (ii) its financial advisors and other professional advisors
who agree to hold confidential the Confidential Information substantially in accordance with
the terms of this Section 6.20, (iii) any Secured Party, (iv) any Person that is a
prospective assignee of Collateral Agent (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this Section
6.20), (v) any federal or state regulatory authority having jurisdiction over Collateral
Agent, or (vi) any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order applicable to
Collateral Agent, (x) in response to any subpoena or other legal process, (y) in connection
with any litigation to which Collateral Agent is a party or (z) if an Event of Default has
occurred and is continuing, to the extent Collateral Agent may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under this Security Agreement, the Intercreditor
Agreement, or any other Collateral Document.




6.20.2. For the purposes of this Section 6.20, “Confidential Information” means
information delivered to Collateral Agent by or on behalf of Borrower or a Consolidated
Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this
Security Agreement, provided that such term does not include information that (a) was
publicly known or otherwise known to Collateral Agent prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by Collateral Agent or
any Person acting on Collateral Agent’s behalf, or (c) otherwise becomes known to Collateral
Agent other than through disclosure by the Borrower or a Consolidated Subsidiary.



6.21. Intercreditor Agreement. It is expressly understood, agreed and acknowledged
that certain definitions, remedies, procedures and other provisions hereof are described by way of
cross reference to the Intercreditor Agreement, and the parties hereto agree that (i) the
definitions of “Affiliate”, “Bank Loan Documents”, “Cash Management Bank”, “Default”, “Disposition”
or “Dispose”, “Enforcement Direction”, “Event of Default”, “Financing Documents”, “Notes”, “Net
Proceeds”, “Noteholders”, “Required Noteholders”, “Required Secured Creditors”, “Senior Secured
Obligations” “Special Collateral Account” and “Special Event of Default” contained in Section 1 of
the Intercreditor Agreement and (ii) the provisions of Sections 3.4 and 6.4 of the Intercreditor
Agreement may not be modified or amended without the Grantors’ prior written consent. Any changes
to such definitions or Sections without the Grantors’ prior written consent shall not be effective
against the Grantors, and this Security Agreement shall be interpreted as if such amendments,
modifications or other changes had not been made.



[Remainder of Page Intentionally Blank.

Signature Page to Follow.]




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




GRANTOR:




ALLIED CAPITAL CORPORATION, a Maryland corporation




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





A.C. CORPORATION, a Delaware corporation




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





ALLIED CAPITAL HOLDINGS LLC, a Delaware limited




liability company




By: Allied Capital Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





ALLIED CAPITAL REIT, INC., a Maryland corporation




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





ACGP I, LLC, a Delaware limited liability company




By: A.C. Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer




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ACKB LLC, a Delaware limited liability company




By: A.C. Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





ACSM LLC, a Delaware limited liability company




By: A.C. Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





AC FINANCE LLC, a Delaware limited liability company




By: A.C. Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





A.C. MANAGEMENT SERVICES, LLC, a Delaware limited




liability company




By: A.C. Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





ALLIED CAPITAL PROPERTY LLC, a Delaware limited




liability company




By: Allied Capital REIT, Inc., its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer





AMP ADMIN LLC, a Delaware limited liability company




By: A.C. Corporation, its sole member




By: /s/ Penni F. Roll

Name: Penni F. Roll

Title: Chief Financial Officer




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COLLATERAL AGENT:




U.S. BANK NATIONAL ASSOCIATION, a national banking




association, solely in its capacity as Collateral
Agent




By: /s/ Ralph J. Creasia, Jr.

Name: Ralph J. Creasia, Jr.

Title:  Vice President





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