EX-10.2



 





Exhibit 10.2




 





SECURITY AGREEMENT




among




RCN CORPORATION,




CERTAIN SUBSIDIARIES OF RCN CORPORATION




and




DEUTSCHE BANK TRUST COMPANY AMERICAS,

as COLLATERAL AGENT




 






Dated as of May 25, 2007




 






 











 



 


SECURITY AGREEMENT




          SECURITY AGREEMENT, dated as of May 25, 2007, made by each of the undersigned assignors (each,
an “Assignor” and, together with any other entity that becomes an assignor hereunder
pursuant to Section 10.12 hereof, the “Assignors”) in favor of Deutsche Bank Trust Company
Americas, as collateral agent (together with any successor collateral agent, the “Collateral
Agent”), for the benefit of the Secured Creditors (as defined below). Certain capitalized
terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.



W
I T N E S S E
T H:




          WHEREAS, RCN Corporation (the “Borrower”), the lenders from time to time party thereto
(the “Lenders”) and Deutsche Bank Trust Company Americas, as administrative agent (together
with any successor Administrative Agent, the “Administrative Agent”), have entered into a
Credit Agreement, dated as of May 25, 2007 (as amended, modified, restated and/or supplemented from
time to time, the “Credit Agreement”), providing for the making of Loans to, and the
issuance of, and participation in, Letters of Credit for the account of the Borrower, all as
contemplated therein (the Lenders, each Issuing Lender, the Administrative Agent, the Collateral
Agent and each other Agent are herein called the “Lender Creditors”);



          WHEREAS, the Borrower and/or one or more of its Subsidiaries may at any time and from time to
time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective
Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with
such Lender’s or affiliate’s successors and assigns, if any, collectively, the “Other
Creditors” and, together with the Lender Creditors, the “Secured Creditors”);



          WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and
severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations as
described therein;



          WHEREAS, it is a condition precedent to the making of Loans to the Borrower and the issuance
of, and participation in, Letters of Credit for the account of the Borrower under the Credit
Agreement and to the Other Creditors entering into Interest Rate Protection Agreements and Other
Hedging Agreements that each Assignor shall have executed and delivered to the Collateral Agent
this Agreement; and



          WHEREAS, each Assignor will obtain benefits from the incurrence of Loans by the Borrower and
the issuance of, and participation in, Letters of Credit for the account of the Borrower under the
Credit Agreement and the entering into by the Borrower and/or one or more of its Subsidiaries of
Interest Rate Protection Agreements or Other Hedging Agreements and, accordingly, desires to
execute this Agreement in order to satisfy the condition described in the preceding paragraph and
to induce the Lenders to make Loans to the Borrower and issue, and/or









 



Page 2



participate in, Letters of Credit for the account of the Borrower and the Other Creditors to
enter into Interest Rate Protection Agreements or Other Hedging Agreements with the Borrower and/or
one or more of its Subsidiaries;



          NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and
sufficiency of which are hereby acknowledged, each Assignor hereby makes the following
representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and
hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:



ARTICLE I




SECURITY INTERESTS




          1.1 Grant of Security Interests. (a) As security for the prompt and complete
payment and performance when due of all of its Obligations, each Assignor does hereby assign and
transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent, for
the benefit of the Secured Creditors, a continuing security interest in all of the right, title and
interest of such Assignor in, to and under all of the following personal property and fixtures (and
all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each
case whether now existing or hereafter from time to time acquired:




	 	(i)	 	each and every Account;
	 
	 	(ii)	 	all cash and Cash Equivalents;
	 
	 	(iii)	 	the Cash Collateral Account and all monies, securities,
Instruments and other investments deposited in the Cash Collateral Account;
	 
	 	(iv)	 	all Tangible Chattel Paper and all Electronic Chattel Paper;
	 
	 	(v)	 	all Commercial Tort Claims;
	 
	 	(vi)	 	all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including but not limited to all Software, and all Software licensing rights,
all writings, plans, specifications and schematics, all engineering drawings,
customer lists, goodwill and licenses, and all recorded data of any kind or
nature, regardless of the medium of recording;
	 
	 	(vii)	 	Contracts, together with all Contract Rights arising
thereunder;
	 
	 	(viii)	 	all Copyrights;
	 
	 	(ix)	 	all Deposit Accounts and all other demand, deposit, time,
savings, cash management and passbook accounts maintained by such Assignor with
any Person and all monies, securities, Instruments and other investments
deposited in any of the foregoing;










 



Page 3


	 	(x)	 	all Documents;
	 
	 	(xi)	 	all Domain Names;
	 
	 	(xii)	 	all Equipment;
	 
	 	(xiii)	 	all General Intangibles;
	 
	 	(xiv)	 	all Goods;
	 
	 	(xv)	 	all Instruments;
	 
	 	(xvi)	 	all Inventory;
	 
	 	(xvii)	 	all Investment Property;
	 
	 	(xviii)	 	all Letter-of-Credit Rights (whether or not the respective letter of credit
is evidenced by a writing);
	 
	 	(xix)	 	all Marks;
	 
	 	(xx)	 	all Patents;
	 
	 	(xxi)	 	all Permits;
	 
	 	(xxii)	 	all Supporting Obligations;
	 
	 	(xxiii)	 	all Trade Secret Rights; and
	 
	 	(xxiv)	 	all Proceeds and products of any and all of the foregoing and any item
excluded pursuant to the next succeeding sentence (except to the extent such
proceeds would independently be excluded pursuant to said sentence) (all of the
above, the “Collateral”).




Notwithstanding anything to the contrary contained above, in no event shall the Collateral include,
and no Assignor shall be deemed to have granted a security interest (unless and until as further
provided below) in (a) any lease, license, contract, property rights or agreement to which any
Assignor is a party or any of its rights or interests thereunder or property subject thereto if and
for so long as the grant of such security interest shall constitute or result in (i) the
abandonment, invalidation or unenforceability of same or (ii) a breach or termination pursuant to
the terms of, or a default under, any such lease, license, contract, property rights or agreement
(other than to the extent that any such term in the case of preceding clause (i) or (ii), as
applicable) 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 any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity), provided,
however, that
the security interests hereunder shall attach (x) immediately to any portion of such lease,
license, contract, property rights or agreement that does not result in any of the consequences
specified in (i) or (ii) and (y) to any property or assets described above in this clause (a) on
the first date upon








 



Page 4


 which the circumstances described in preceding clauses (i) and/or (ii) (as
relevant) no longer exist with respect thereto, or (b) more than 65% of the Voting Equity Interests
of any Foreign Corporation; provided that each Assignor shall be required to pledge
hereunder 100% of any Non-Voting Equity Interests at any time and from time to time acquired by
such Assignor of any Foreign Corporation.




          (b) The security interest of the Collateral Agent under this Agreement extends to all
Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights,
at any time during the term of this Agreement.



          1.2 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral
Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during
the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require,
demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or
to become due to such Assignor under or arising out of the Collateral, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or take any action or
institute any proceedings which the Collateral Agent may deem to be necessary or advisable to
protect the interests of the Secured Creditors, which appointment as attorney is coupled with an
interest.



ARTICLE II




GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS




          Each Assignor represents, warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:



          2.1 Necessary Filings. All filings, registrations, recordings and other actions
necessary or appropriate to create, preserve and perfect the security interest granted by such
Assignor to the Collateral Agent hereby in respect of the Collateral have been accomplished (or
will be accomplished within ten days after the Initial Borrowing Date or, with respect to Marks,
Patents and Copyrights, within 30 days of the date of the Initial Borrowing Date) and the security
interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral
creates a valid and, together with all such filings, registrations, recordings and other actions, a
perfected security interest therein subject to no Liens (other than Permitted Liens) and is
entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each
case to the extent that the Collateral consists of the type of property in which a security
interest may be perfected by possession or control (within the meaning of the UCC as in effect on
the date hereof in the State of New York), by filing a financing statement under the Uniform
Commercial Code as enacted in
any relevant jurisdiction or by a filing of a Grant of Security Interest in the respective
form attached hereto in the United States Patent and Trademark Office or in the United States
Copyright Office. Each Assignor hereby authorizes the Collateral Agent to make duplicate filings
as if such Assignor is a Transmitting Utility, or alternatively, as if such Assignor is a Person
which is not a Transmitting Utility.









 



Page 5


          2.2 No Liens. Such Assignor is, and as to all Collateral acquired by it from time to
time after the date hereof such Assignor will be, the owner of all Collateral purported to be owned
by it free from any Lien or other right, title or interest of any Person (other than Permitted
Liens), and such Assignor shall defend such Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the Collateral Agent.



          2.3 Other Financing Statements. As of the date hereof, there is no financing
statement (or similar statement or instrument of registration under the law of any jurisdiction)
covering or purporting to cover any interest of any kind in the Collateral (other than financing
statements filed in respect of Permitted Liens), and so long as the Termination Date has not
occurred, such Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing statements filed or to be
filed in respect of and covering the security interests granted hereby by such Assignor or in
connection with Permitted Liens.



          2.4 Chief Executive Office, Record Locations. The chief executive office of such
Assignor is, on the date of this Agreement, located at the address indicated on Annex A hereto for
such Assignor. During the period of the four calendar months preceding the date of this Agreement,
the chief executive office of such Assignor has not been located at any address other than that
indicated on Annex A in accordance with the immediately preceding sentence, in each case unless
each such other address is also indicated on Annex A hereto for such Assignor.



          2.5 Location of Inventory and Equipment. All Inventory and Equipment held on the
date hereof, or held at any time during the four calendar months prior to the date hereof, by each
Assignor is located at one of the locations shown on Annex B hereto for such Assignor.



          2.6 Legal Names; Type of Organization (and Whether a Registered Organization);
Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto;
etc. The exact legal name of each Assignor, the type of organization of such Assignor, whether
or not such Assignor is a Registered Organization, the jurisdiction of organization of such
Assignor, such Assignor’s Location and the organizational identification number (if any) of such
Assignor is listed on Annex C hereto for such Assignor. Such Assignor
shall not change its legal name, its type of organization, its status as a Registered
Organization (in the case of a Registered Organization), its jurisdiction of organization, its
Location, or its organizational identification number (if any) from that used on Annex C hereto,
except that any such changes shall be permitted (so long as not in violation of the applicable
requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered
Organization ceasing to constitute same or (y) such Assignor changing its jurisdiction of
organization or Location from the United States or a State thereof to a jurisdiction of
organization or Location, as the case may be, outside the United States or a State thereof) if (i)
it shall have given to the Collateral Agent not less than 15 days’ prior written notice of each
change to the information listed on Annex C (as adjusted for any subsequent changes thereto
previously made in accordance with this sentence), together with a supplement to Annex C which
shall correct all information contained therein for such Assignor, and (ii) in connection with the
respective such change or changes, it shall have taken all action reasonably requested by the
Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral
intended to be granted









 



Page 6



hereby at all times fully perfected and in full force and effect. In
addition, to the extent that such Assignor does not have an organizational identification number on
the date hereof and later obtains one, such Assignor shall promptly thereafter notify the
Collateral Agent of such organizational identification number and shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full
force and effect.



          2.7 Trade Names; Etc. Such Assignor does not have or operate in any jurisdiction
under, and in the preceding five years has not had or operated in any jurisdiction under, any trade
names, fictitious names or other names except its legal name as specified in Annex C and such other
trade or fictitious names as are listed on Annex D hereto for such Assignor. Such Assignor shall
not assume or operate in any jurisdiction under any new trade, fictitious or other name until (i)
it shall have given to the Collateral Agent not less than 15 days’ written notice of its intention
so to do, clearly describing such new name and the jurisdictions in which such new name will be
used and providing such other information in connection therewith as the Collateral Agent may
reasonably request and (ii) with respect to such new name, it shall have taken all action
reasonably requested by the Collateral Agent to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully perfected and in full
force and effect.



          2.8 Certain Significant Transactions. During the one year period preceding the date
of this Agreement, no Person shall have merged or consolidated with or into any Assignor, and no
Person shall have liquidated into, or transferred all or substantially all of its assets to, any
Assignor, in each case except as described in Annex E hereto. With respect to any transactions so
described in Annex E hereto, the respective Assignor shall have furnished such information with
respect to the Person (and the assets of the Person and locations thereof) which merged with or
into or consolidated with such Assignor, or was liquidated into or transferred all or substantially
all of its assets to such Assignor, and shall have furnished to the Collateral Agent such UCC lien
searches as may have been requested with respect to such Person and its assets, to establish that
no security interest
(excluding Permitted Liens) continues perfected on the date hereof with respect to any Person
described above (or the assets transferred to the respective Assignor by such Person), including
without limitation pursuant to Section 9-316(a)(3) of the UCC.



          2.9 Non-UCC Property. At any time and from time to time, promptly (and in any event
within 15 days) following the request of the Collateral Agent or the Required Secured Creditors,
the Assignors shall provide the Collateral Agent a reasonably detailed list (which includes
reasonable estimates of the fair market value (as determined by the Assignors in good faith)) of
all property owned by all of the Assignors of the types described in clauses (1), (2) and (3) of
Section 9-311(a) of the UCC. At any time that the fair market value (as determined by the Borrower
or Collateral Agent in good faith or as shown in any list delivered pursuant to the immediately
preceding sentence) of the property owned by all of the Assignors of the types described in clauses
(1), (2) and (3) of Section 9-311(a) of the UCC exceeds $2,000,000, the Assignors shall, but only
upon the written request of the Required Secured Creditors or the Collateral Agent, within 60 days
of such request (or such longer period as the Required Secured Creditors or the Collateral Agent
may agree to in writing) take such actions (at their own cost and expense) as may be required under
the respective United States, State or other laws









 



Page 7



referenced in Section 9-311(a) of the UCC to
perfect the security interests granted herein in any Collateral where the filing of a financing
statement does not perfect the security interest in such property in accordance with the provisions
of Section 9-311(a) of the UCC.



          2.10 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, such Assignor
does not own, or expect to acquire, any property which constitutes, or would constitute,
As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such
Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such
Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall
describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and the locations
thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the
Collateral Agent to perfect the security interest of the Collateral Agent therein.



          2.11 Collateral in the Possession of a Bailee. If any Inventory or other Goods are
at any time in the possession of a bailee, such Assignor shall promptly notify the Collateral Agent
thereof and, if requested by the Collateral Agent, shall use its commercially reasonable efforts to
promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory
to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral
Agent and shall act upon the instructions of the Collateral Agent, without the further consent of
such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not
give any such instructions unless an Event of Default has occurred and is continuing or would occur
after taking into account any action by the respective Assignor with respect to any such bailee.



          2.12 Recourse. This Agreement is made with full recourse to each Assignor and
pursuant to and upon all the warranties, representations, covenants and agreements on the part of
such Assignor contained herein, in the Secured Debt Agreements and otherwise in writing in
connection herewith or therewith.



ARTICLE III




SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;

INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL




          3.1 Additional Representations and Warranties. As of the time when each of its
material Accounts arises, each Assignor shall be deemed to have represented and warranted that each
such Account, and all records, papers and documents relating thereto (if any) are genuine and what
they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the
knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the
account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out
of the performance of labor or services or the sale or lease and delivery of the merchandise listed
therein, or both, (ii) will be the only original writings evidencing and embodying such obligation
of the account debtor named therein (other than copies created for general accounting purposes),
(iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in
accordance with their respective terms, and (iv) will be in compliance and will conform in all
material respects with all applicable federal, state and local laws and applicable laws of any
relevant foreign jurisdiction.









 



Page 8


          3.2 Maintenance of Records. Each Assignor will keep and maintain at its own cost and
expense accurate records of its Accounts and Contracts, including, but not limited to, originals of
all documentation (including each Contract) with respect thereto, records of all payments received,
all credits granted thereon, all merchandise returned and all other dealings therewith, and such
Assignor will make the same available on such Assignor’s premises to the Collateral Agent for
inspection, at such Assignor’s own cost and expense, at any and all reasonable times upon prior
notice to such Assignor and otherwise in accordance with the Credit Agreement. Upon the occurrence
and during the continuance of an Event of Default and at the request of the Collateral Agent, such
Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and
Contract Rights (including, without limitation, all documents evidencing the Accounts and all
Contracts) and such books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by such Assignor). Upon the occurrence and
during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor
shall legend, in form and manner satisfactory to the Collateral Agent, the Accounts and the
Contracts, as well as books, records and documents (if any) of such Assignor evidencing or
pertaining to such Accounts and Contracts with an appropriate reference to the fact that such
Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has
a security interest therein.



          3.3 Direction to Account Debtors; Contracting Parties; etc. Upon the occurrence and
during the continuance of an Event of Default, if the Collateral Agent so directs any Assignor,
such Assignor agrees (x) to cause all payments on account of the Accounts and Contracts to be made
directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly
notify the obligors with respect to any Accounts and/or under any Contracts to make payments with
respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may
enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the
amount of payment thereof, in the same manner and to the same extent as such Assignor. Without
notice to or assent by any Assignor, the Collateral Agent may, upon the occurrence and during the
continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in,
the Cash Collateral Account toward the payment of the Obligations in the manner provided in Section
7.4 of this Agreement. The reasonable costs and expenses of collection (including reasonable
attorneys’ fees), whether incurred by an Assignor or the Collateral Agent, shall be borne by the
relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the
preceding clause (y) to the relevant Assignor, provided that (x) the failure by the
Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or
the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall
be required if an Event of Default of the type described in Section 10.05 of the Credit Agreement
has occurred and is continuing.



          3.4 Modification of Terms; etc. Except in accordance with such Assignor’s ordinary
course of business and consistent with reasonable business judgment or as permitted by Section 3.5,
no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any
Contract, or modify any material term thereof or make any material adjustment with respect thereto,
or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Account or Contract, or interest therein, without the
prior written consent of the Collateral Agent. No Assignor will do anything to impair the rights
of the Collateral Agent in the Accounts or Contracts.









 



Page 9


          3.5 Collection. Each Assignor shall endeavor in accordance with reasonable business
practices to cause to be collected from the account debtor named in each of its Accounts or obligor
under any Contract, as and when due (including, without limitation, amounts which are delinquent,
such amounts to be collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Account or Contract, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance of such Account or
under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and
during the continuation of an Event of Default, any Assignor may allow in the ordinary course of
business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or
renewal of the time or times of payment, or settlement for less than the total unpaid balance,
which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a
refund or credit due as a result of returned or damaged merchandise
or improperly performed services or for other reasons which such Assignor finds appropriate in
accordance with reasonable business judgment. The reasonable costs and expenses (including,
without limitation, reasonable attorneys’ fees) of collection, whether incurred by an Assignor or
the Collateral Agent, shall be borne by the relevant Assignor.



          3.6 Instruments. If any Assignor owns or acquires any Instrument in excess of
$100,000 constituting Collateral (other than checks and other payment instruments received and
collected in the ordinary course of business), such Assignor will within 10 Business Days notify
the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such
Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent.



          3.7 Assignors Remain Liable Under Accounts. Anything herein to the contrary
notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and
perform all of the conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral
Agent nor any other Secured Creditor shall have any obligation or liability under any Account (or
any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by
the Collateral Agent or any other Secured Creditor of any payment relating to such Account pursuant
hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement
giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency
of any payment received by them or as to the sufficiency of any performance by any party under any
Account (or any agreement giving rise thereto), to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may have been assigned to
them or to which they may be entitled at any time or times.



          3.8 Assignors Remain Liable Under Contracts. Anything herein to the contrary
notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and
perform all of the conditions and obligations to be observed and performed by them thereunder, all
in accordance with and pursuant to the terms and provisions of each Contract. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or
any other Secured Creditor of any payment relating to such Contract pursuant hereto, nor shall









 



Page 10



the
Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the
obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to
present or file any claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to them or to which they may be entitled at any time or
times.



          3.9 Deposit Accounts; Etc.
(a) No Assignor maintains, or at any time after the date of this Agreement shall establish or
maintain, any demand, time, savings, passbook or similar account, except for such accounts
maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in
accordance with Section 9-304 of the UCC) is within a State of the United States. Annex
F hereto accurately sets forth, as of the date of this Agreement, for each Assignor, each Deposit
Account maintained by such Assignor (including a description thereof and the respective account
number), the name of the respective bank with which such Deposit Account is maintained, and the
jurisdiction of the respective bank with respect to such Deposit Account. For each Deposit Account
(other than the Cash Collateral Account, any other Deposit Account maintained with the Collateral
Agent and, subject to the terms contained in the definition thereof, any Designated Account), the
respective Assignor shall cause the bank with which the Deposit Account is maintained to execute
and deliver to the Collateral Agent, within 45 days after the date of this Agreement (as such date
may be extended by the Collateral Agent) or, if later, at the time of the establishment of the
respective Deposit Account, a “control agreement” in the form of Annex G hereto (appropriately
completed), with such changes thereto as may be acceptable to the Collateral Agent. If any bank
with which a Deposit Account is maintained refuses to, or does not, enter into such a “control
agreement”, then the respective Assignor shall promptly (and in any event within 45 days after the
date of this Agreement or, if later, 30 days after the establishment of such account) close the
respective Deposit Account and transfer all balances therein to the Cash Collateral Account or
another Deposit Account meeting the requirements of this Section 3.9. If any bank with which a
Deposit Account is maintained refuses to subordinate all its claims, subject to customary
exceptions, with respect to such Deposit Account to the Collateral Agent’s security interest
therein on terms satisfactory to the Collateral Agent, then the Collateral Agent, at its option,
may (x) require that such Deposit Account be terminated in accordance with the immediately
preceding sentence or (y) agree to a “control agreement” without such subordination, provided that
in such event the Collateral Agent may at any time, at its option, subsequently require that such
Deposit Account be terminated (within 30 days after notice from the Collateral Agent, as such date
may be extended by the Collateral Agent).



          (b) After the date of this Agreement, no Assignor shall establish any new demand, time,
savings, passbook or similar account, except for Deposit Accounts established and maintained with
banks and meeting the requirements of preceding clause (a). At the time any such Deposit Account
is established, the appropriate “control agreement” shall be entered into in accordance with the
requirements of preceding clause (a) and the respective Assignor shall furnish to the Collateral
Agent a supplement to Annex F hereto containing the relevant information with respect to the
respective Deposit Account and the bank with which same is established.









 



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          3.10 Letter-of-Credit Rights. If any Assignor is at any time a beneficiary under a
letter of credit with a stated amount of $1,000,000 or more, such Assignor shall promptly notify
the Collateral Agent thereof and, at the request of the Collateral Agent, such Assignor shall,
pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, use
its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under
such letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary
of such letter of credit, with the Collateral
Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are
to be applied as provided in this Agreement after the occurrence and during the continuance of an
Event of Default.



          3.11 Commercial Tort Claims. All Commercial Tort Claims of each Assignor in
existence on the date of this Agreement are described in Annex H hereto. If any Assignor shall at
any time after the date of this Agreement acquire a Commercial Tort Claim in an amount (taking the
greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of
$1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing
signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent
in such writing a security interest therein and in the proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral
Agent.



          3.12 Chattel Paper. Upon the request of the Collateral Agent made at any time or
from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all
Electronic Chattel Paper held or owned by such Assignor. Furthermore, if requested by the
Collateral Agent, each Assignor shall promptly take all actions which are reasonably practicable so
that the Collateral Agent has “control” of all Electronic Chattel Paper in accordance with the
requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 10
days) following any request by the Collateral Agent, deliver all of its Tangible Chattel Paper to
the Collateral Agent.



          3.13 Further Actions. Each Assignor will, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and take such further
steps, including any and all actions as may be necessary or required under the Federal Assignment
of Claims Act, relating to its Accounts, Contracts, Instruments and other property or rights
covered by the security interest hereby granted, as the Collateral Agent may reasonably require.



ARTICLE IV




SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES




          4.1 Additional Representations and Warranties. Each Assignor represents and warrants
that it is the true and lawful owner of all right, title and interest in and to the registered
Marks and Domain Names listed in Annex I hereto for such Assignor and that said listed Marks and
Domain Names include all United States marks and applications for United States marks









 



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owned or
purported to be owned by such Assignor registered in the United States Patent and Trademark Office,
as well as all Domain Names that
such Assignor owns or purports to own as of the date hereof. Each Assignor represents and
warrants that it owns, is licensed to use or otherwise has the right to use any trademarks, service
marks or other indicia of origin, including trade dress, and any Internet domain names, that it
uses. Each Assignor further warrants that it has no knowledge of any third party claim received by
it that any aspect of such Assignor’s present or contemplated business operations infringes or will
infringe any trademark, service mark or trade name of any other Person other than as could not,
either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Each Assignor represents and warrants that the registrations of Marks listed in Annex I hereto are
valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party
claim that any of said registrations is invalid or unenforceable, and is not aware that there is
any reason that any of said registrations is invalid or unenforceable, and is not aware that there
is any reason that any of said applications will not mature into registrations, other than as could
not, either individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of an Event of Default, any document which may be
required by the United States Patent and Trademark Office or similar registrar in order to effect
an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record
the same.



          4.2 Licenses and Assignments. Except as otherwise permitted by the Secured Debt
Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark or Domain
Name absent prior written approval of the Collateral Agent.



          4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify
the Collateral Agent in writing of the name and address of, and to furnish such pertinent
information that may be available with respect to, any party who such Assignor believes is, or is
likely to be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to
any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse
Effect, or with respect to any party claiming that such Assignor’s use of any Mark or Domain Name
material to such Assignor’s business violates in any material respect any property right of that
party. Each Assignor further agrees to prosecute diligently in accordance with reasonable business
practices any Person infringing any Mark or Domain Name in any manner that could reasonably be
expected to have a Material Adverse Effect.



          4.4 Preservation of Marks and Domain Names. Each Assignor agrees to use its Marks
and Domain Names which are material to such Assignor’s business in interstate commerce during the
time in which this Agreement is in effect and to take all such other actions as are reasonably
necessary to preserve such Marks as trademarks or service marks under the laws of the United States
(other than any such Marks which Assignor reasonably determines are no longer used or useful in its
business or operations).



          4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently
process all documents reasonably required to maintain all Mark and/or Domain Name registrations,
including but not limited to affidavits of use and applications for renewals of registration in the
United States Patent and Trademark Office for all of its material registered









 



Page 13



Marks, and shall pay
all fees and disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of all administrative
and judicial remedies without prior written consent of the Collateral Agent (other than with
respect to registrations and applications deemed by such Assignor in its reasonable business
judgment to be no longer prudent to pursue).



          4.6 Future Registered Marks and Domain Names. If any Mark registration is issued
hereafter to any Assignor as a result of any application now or hereafter pending before the United
States Patent and Trademark Office or any Domain Name is registered by Assignor, within 60 days of
receipt of such certificate or similar indicia of ownership, such Assignor shall deliver to the
Collateral Agent a copy of such registration certificate or similar indicia of ownership, and a
grant of a security interest in such Mark and/or Domain Name, to the Collateral Agent and at the
expense of such Assignor, confirming the grant of a security interest in such Mark and/or Domain
Name to the Collateral Agent hereunder, the form of such security to be substantially in the form
of Annex L hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.



          4.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral
Agent may, by written notice to the relevant Assignor, take any or all of the following actions:
(i) declare the entire right, title and interest of such Assignor in and to each of the Marks and
Domain Names, together with all trademark rights and rights of protection to the same, vested in
the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title
and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to
in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain
Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the
right to carry on the business and use the assets of such Assignor in connection with which the
Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event
such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever,
directly or indirectly, and such Assignor shall execute such further documents that the Collateral
Agent may reasonably request to further confirm this and to transfer ownership of the Marks or
Domain Names and registrations and any pending trademark applications in the United States Patent
and Trademark Office or applicable Domain Name registrar to the Collateral Agent.



ARTICLE V




SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS




          5.1 Additional Representations and Warranties. Each Assignor represents and warrants
that it is the true and lawful owner of all rights in (i) the Trade Secret Rights, (ii) all right,
title and interest in and to the Patents listed in Annex J hereto for such Assignor and that said
Patents include all the United States patents and applications for United States patents that such
Assignor owns as of the date hereof and (iii) all right, title and interest in and to the
registered Copyrights listed in Annex K hereto for such Assignor and that said Copyrights include
all the United States copyrights registered with the United States Copyright Office and









 



Page 14



applications to United States copyrights that such Assignor owns as of the date hereof. Each
Assignor further warrants that it has no knowledge of any third party claim that any aspect of such
Assignor’s present or contemplated business operations infringes or will infringe any patent of any
other Person or such Assignor has misappropriated any trade secret or proprietary information
which, either individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. Each Assignor represents and warrants that the Patents listed in Annex J hereto
are valid, subsisting, have not been canceled and that such Assignor is not aware of any
third-party claim that any of said Patents are invalid or unenforceable, and is not aware that
there is any reason that any of said Patents are invalid or unenforceable, and is not aware that
there is any reason that any of said Patent applications will not mature into issued Patents. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the
occurrence and during the continuance of any Event of Default, any document which may be required
by the United States Patent and Trademark Office or the United States Copyright Office in order to
effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to
record the same.



          5.2 Licenses and Assignments. Except as otherwise permitted by the Secured Debt
Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or
Copyright absent prior written approval of the Collateral Agent.



          5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish
the Collateral Agent in writing with all pertinent information available to such Assignor with
respect to any infringement, contributing infringement or active inducement to infringe or other
violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice of
any Patent or use of any Copyright violates any property right of a third party, or with respect to
any misappropriation of any Trade Secret Right or any claim that practice of any Trade Secret Right
violates any property right of a third party, in each case, in any manner which, either
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
Each Assignor further agrees, absent direction of the Collateral Agent to the contrary, to
diligently prosecute, in accordance with its reasonable business judgment, any Person infringing
any Patent or Copyright or any Person misappropriating any Trade Secret Right, in each case to the
extent
that such infringement or misappropriation, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.



          5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required to maintain in force its rights under each
Patent or Copyright, absent prior written consent of the Collateral Agent (other than any such
Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable
business judgment to no longer be useful in its business or operations).



          5.5 Prosecution of Patent Applications. At its own expense, each Assignor shall
diligently prosecute all material applications for the United States Patents listed in Annex J
hereto, in each case for such Assignor and shall not abandon any such application prior to
exhaustion of all administrative and judicial remedies (other than applications that are deemed by
such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the
Assignor’s business), absent written consent of the Collateral Agent.









 



Page 15


          5.6 Other Patents and Copyrights. Within 30 days of the acquisition or issuance of a
United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of
filing of an application for a United States Patent or Copyright, the relevant Assignor shall
deliver to the Collateral Agent a copy of said Copyright or Patent, or certificate or registration
of, or application therefor, as the case may be, with a grant of a security interest as to such
Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such
Assignor, confirming the grant of a security interest, the form of such grant of a security
interest to be substantially in the form of Annex M or N hereto, as appropriate, or in such other
form as may be reasonably satisfactory to the Collateral Agent.



          5.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral
Agent may, by written notice to the relevant Assignor, take any or all of the following actions:
(i) declare the entire right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the Collateral Agent for the benefit of the Secured Creditors, in which event
such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of
the Secured Creditors, in which case the Collateral Agent shall be entitled to exercise the power
of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized
and to record said absolute assignment with the applicable agency; (ii) take and practice or sell
the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor
shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and
such Assignor shall execute such further documents as the Collateral Agent may reasonably request
further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.



ARTICLE VI




PROVISIONS CONCERNING ALL COLLATERAL




          6.1 Protection of Collateral Agent’s Security. Except as otherwise permitted by the
Secured Debt Agreements, each Assignor will do nothing to impair the rights of the Collateral Agent
in the Collateral. Each Assignor will at all times maintain insurance, at such Assignor’s own
expense to the extent and in the manner provided in the Secured Debt Agreements. Except to the
extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to
the terms of the Secured Debt Agreements, the Collateral Agent shall, at the time any proceeds of
such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way
be affected or diminished by reason of the fact that such Collateral may be lost, destroyed,
stolen, damaged or for any reason whatsoever unavailable to such Assignor.



          6.2 Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor
agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with
respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt
in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the
Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).









 



Page 16


          6.3 Additional Information. Each Assignor will, at its own expense, from time to
time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 days
after its receipt of the respective request) furnish to the Collateral Agent such information with
respect to the Collateral (including the identity of the Collateral or such components thereof as
may have been requested by the Collateral Agent, the value and location of such Collateral, etc.)
as may be requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees
that it shall promptly (and in any event within 10 days after its receipt of the respective
request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be
reasonably requested by the Collateral Agent.



          6.4 Further Actions. Each Assignor will, at its own expense and upon the reasonable
request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements,
transfer endorsements, certificates, reports and other assurances or instruments and take such
further steps relating to the Collateral and other property or rights covered by the security
interest
hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to
perfect, preserve or protect its security interest in the Collateral.



          6.5 Financing Statements. Each Assignor agrees to authorize and deliver to the
Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent,
as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or
desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable,
perfected security interest in the Collateral as provided herein and the other rights and security
contemplated hereby. Each Assignor will pay any applicable filing fees, recordation taxes and
related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent
to file any such financing statements without the signature of such Assignor where permitted by law
(and such authorization includes describing the Collateral as “all assets” of such Assignor).



ARTICLE VII




REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT




          7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if
any Event of Default shall have occurred and be continuing, then and in every such case, the
Collateral Agent, in addition to any rights now or hereafter existing under the other provisions of
this Agreement, shall have all rights as a secured creditor under any UCC, and such additional
rights and remedies to which a secured creditor is entitled under the laws in effect in all
relevant jurisdictions and may:




     (i) personally, or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from such Assignor or any other Person who then has
possession of any part thereof with or without notice or process of law, and for that
purpose may enter upon such Assignor’s premises where any of the Collateral is located









 



Page 17



and
remove the same and use in connection with such removal any and all services, supplies, aids
and other facilities of such Assignor;




     (ii) instruct the obligor or obligors on any agreement, instrument or other obligation
(including, without limitation, the Accounts and the Contracts) constituting the Collateral
to make any payment required by the terms of such agreement, instrument or other obligation
directly to the Collateral Agent and may exercise any and all remedies of such Assignor in
respect of such Collateral;




     (iii) instruct all banks which have entered into a control agreement with the
Collateral Agent to transfer all monies, securities and instruments held by such depositary
bank to the Cash Collateral Account;




     (iv) sell, assign or otherwise liquidate any or all of the Collateral or any part
thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or
otherwise liquidate any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation;




     (v) take possession of the Collateral or any part thereof, by directing such Assignor
in writing to deliver the same to the Collateral Agent at any reasonable place or places
designated by the Collateral Agent, in which event such Assignor shall at its own expense:




     (x) forthwith cause the same to be moved to the place or places so
designated by the Collateral Agent and there delivered to the Collateral
Agent;




     (y) store and keep any Collateral so delivered to the Collateral Agent
at such place or places pending further action by the Collateral Agent as
provided in Section 7.2 hereof; and




     (z) while the Collateral shall be so stored and kept, provide such
security and maintenance services as shall be reasonably necessary to
protect the same and to preserve and maintain it in good condition;









 



Page 18



     (vi) subject to any exclusive license issued prior to the Event of Default, license or
sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents
or Copyrights included in the Collateral for such term and on such conditions and in such
manner as the Collateral Agent shall in its sole judgment determine; provided in the case
of Marks to the maintenance of quality standards, not less than comparable to the standards
in place at the time of the Event of Default;




     (vii) apply any monies constituting Collateral or proceeds thereof in accordance with
the provisions of Section 7.4; and




     (viii) take any other action as specified in clauses (1) through (5), inclusive, of
Section 9-607 of the UCC;


it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence
of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor
of said obligation. By accepting the benefits of this Agreement and each other Security Document,
the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security
Document may be enforced only by the action of the Collateral Agent acting upon the instructions of
the Required Secured Creditors and that no other Secured Creditor shall have any right individually
to seek to enforce or to enforce this Agreement or to realize upon the security to be granted
hereby, it being understood and agreed that such rights and remedies may be exercised by the
Collateral Agent or the holders of at least a majority of the outstanding Other Obligations, as the
case may be, for the benefit of the Secured Creditors upon the terms of this Agreement and the
other Security Documents. Furthermore, each Assignor agrees to, upon the occurrence and
continuance of an Event of Default, use its commercially reasonable efforts to assist the
Collateral Agent in obtaining any approvals or assignments or licenses from any relevant
Governmental Authority that may be necessary for the exercise of the rights and remedies of the
Collateral Agent with respect to the Collateral.




          7.2 Remedies; Disposition of the Collateral. If any Event of Default shall have
occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or
pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the
Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more
contracts or as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at such place or places
and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of
applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased
or otherwise disposed of, in the condition in which the same existed when taken by the Collateral
Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral
Agent shall determine to be commercially reasonable. Any such sale, lease or other disposition may
be effected by means of a public disposition or private disposition, effected in accordance with
the applicable requirements (in each case if and to the extent applicable) of Sections 9-610
through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to
the respective disposition. The Collateral Agent may, without notice or publication, adjourn any
public or
private disposition or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the disposition, and such disposition may be made









 



Page 19



at any time or place to
which the disposition may be so adjourned. To the extent permitted by any such requirement of law,
the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the
purchase price by crediting Obligations against the purchase price) of the Collateral or any item
thereof, offered for disposition in accordance with this Section 7.2 without accountability to the
relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make
disposition of the Collateral within a period of time which does not permit the giving of notice to
the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only
such notice of disposition as shall be required by such applicable law. Each Assignor agrees to
do or cause to be done all such other acts and things as may be reasonably necessary to make such
disposition or dispositions of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at such Assignor’s expense.



          7.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:




     (i) all damages occasioned by such taking of possession or any such disposition except
any damages which are the direct result of the Collateral Agent’s gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision);




     (ii) all other requirements as to the time, place and terms of sale or other
requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and




     (iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law in order to prevent or delay the
enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof,
and each Assignor, for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.


Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral
shall operate to divest all right, title, interest, claim and demand, either at law or in equity,
of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such
Assignor.




          7.4 Application of Proceeds. (a) All moneys collected by the Collateral Agent (or,
to the extent the Pledge Agreement or any other Security Document requires proceeds of collateral
under such other Security Document to be applied in accordance with the provisions of









 



Page 20



this
Agreement, the Pledgee or Collateral Agent under such other Security Document) upon any sale or
other disposition of the Collateral, together with all other moneys received by the Collateral
Agent hereunder, shall be applied as follows:




     (i) first, to the payment of all amounts owing the Collateral Agent of the type
described in clauses (iii), (iv) and (v) of the definition of “Obligations”;




     (ii) second, to the extent proceeds remain after the application pursuant to
the preceding clause (i), to the payment of all amounts owing to any Agent of the type
described in clauses (v) and (vi) of the definition of “Obligations”;




     (iii) third, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) and (ii), an amount equal to the outstanding Primary Obligations
shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each
Secured Creditor receiving an amount equal to its outstanding Primary Obligations or, if the
proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share of
the amount remaining to be distributed;




     (iv) fourth, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding
Secondary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e)
hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all such Secondary
Obligations, its Pro Rata Share of the amount remaining to be distributed; and




     (v) fifth, to the extent proceeds remain after the application pursuant to the
preceding clauses (i) through (iv), inclusive, and following the termination of this
Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.



          (b) For purposes of this Agreement, (x) “Pro Rata Share” shall mean, when calculating
a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage)
equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s
Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is
the then outstanding amount of all Primary Obligations or Secondary Obligations, as the case may
be, (y) “Primary Obligations” shall mean (i) in the case of the Credit Document
Obligations, all principal of, premium, fees and interest on, all Loans, all Unpaid Drawings, the
Stated Amount of all outstanding Letters of Credit and all Fees and (ii) in the case of the Other
Obligations, all amounts due under each Interest Rate Protection Agreement and each Other Hedging
Agreement with an Other Creditor (other than indemnities, fees (including, without limitation,
attorneys’ fees) and similar obligations and liabilities) and (z) “Secondary Obligations”
shall mean all Obligations other than Primary Obligations.



          (c) When payments to Secured Creditors are based upon their respective Pro Rata Shares, the
amounts received by such Secured Creditors hereunder shall be applied (for purposes of making
determinations under this Section 7.4 only) (i) first, to their Primary Obligations and (ii)
second, to their Secondary Obligations. If any payment to any Secured Creditor of









 



Page 21



its Pro Rata
Share of any distribution would result in overpayment to such Secured Creditor, such excess amount
shall instead be distributed in respect of the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose
Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to
receive an amount equal to such excess amount multiplied by a fraction the numerator of which is
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured
Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations,
as the case may be, of all Secured Creditors entitled to such distribution.



          (d) Each of the Secured Creditors, by their acceptance of the benefits hereof and of the other
Security Documents, agrees and acknowledges that if the Lender Creditors receive a distribution on
account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement
(which shall only occur after all outstanding Revolving Loans under the Credit Agreement and Unpaid
Drawings have been paid in full), such amounts shall be paid to the Administrative Agent under the
Credit Agreement and held by it, for the equal and ratable benefit of the Lender Creditors, as cash
security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts
are held as cash security pursuant to the immediately preceding sentence, then upon the termination
of all outstanding Letters of Credit under the Credit Agreement, and after the application of all
such cash security to the repayment of all Obligations owing to the Lender Creditors after giving
effect to the termination of all such Letters of Credit, if there remains any excess cash, such
excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution
in accordance with Section 7.4(a) hereof.



          (e) All payments required to be made hereunder shall be made (x) if to the Lender Creditors,
to the Administrative Agent for the account of the Lender Creditors and (y) if to the Other
Creditors, to the trustee, paying agent or other similar representative (each, a
“Representative”) for the Other Creditors or, in the absence of such a Representative,
directly to the Other Creditors.



          (f) For purposes of applying payments received in accordance with this Section 7.4, the
Collateral Agent shall be entitled to rely upon (i) the Administrative Agent and (ii) the
Representative or, in the absence of such a Representative, upon the Other Creditors for a
determination (which the Administrative Agent, each Representative and the Other Creditors agree
(or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary
Obligations and Secondary Obligations owed to the Lender Creditors or the Other Creditors, as the
case may be. Unless it has received written notice from a Lender Creditor or an Other Creditor to
the contrary, the Administrative Agent and each Representative, in furnishing information pursuant
to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to
assume that no Secondary Obligations are outstanding. Unless it has written notice from an Other
Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume
that no Interest Rate Protection Agreements or Other Hedging Agreements are in existence.



          (g) It is understood that the Assignors shall remain jointly and severally liable to the
extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate
amount of the Obligations.









 



Page 22


          7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically
given to the Collateral Agent shall be in addition to every other right, power and remedy
specifically given to the Collateral Agent under this Agreement, the other Secured Debt Agreements
or now or hereafter existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised from time to time
or simultaneously and as often and in such order as may be deemed expedient by the Collateral
Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning
of the exercise of one shall not be deemed a waiver of the right to exercise any other or others.
No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and
no renewal or extension of any of the Obligations shall impair any such right, power or remedy or
shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof.
No notice to or demand on any Assignor in any case shall entitle it to any other or further notice
or demand in similar or other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without notice or demand. In
the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and
shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable
expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such
judgment.



          7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have
instituted any proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and
in every such case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and all rights, remedies
and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.



ARTICLE VIII




INDEMNITY




          8.1 Indemnity. (a) Each Assignor jointly and severally agrees to indemnify,
reimburse and hold the Collateral Agent, each other Secured Creditor and their respective
successors, assigns, employees, affiliates and agents (hereinafter in this Section 8.1 referred to
individually as “Indemnitee,” and collectively as “Indemnitees”) harmless from any
and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and
all costs, expenses or disbursements (including reasonable attorneys’ fees and expenses) (for
the purposes of this Section 8.1 the foregoing are collectively called “expenses”) of whatsoever
kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement or any other
document executed in connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the enforcement of any of the
terms of, or the preservation of any rights under any thereof, or in any way relating to or arising
out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease,
financing, possession, operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects,









 



Page 23



whether or not discoverable);
provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses,
damages or liabilities to the extent caused by the gross negligence or willful misconduct of such
Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable
decision). Each Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action, suit or judgment, the
relevant Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees
to use its best efforts to promptly notify the relevant Assignor of any such assertion of which
such Indemnitee has knowledge.



          (b) Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly
and severally, to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and
expenses of whatever kind or nature incurred in connection with the creation, preservation or
protection of the Collateral Agent’s Liens on, and security interest in, the Collateral, including,
without limitation, all fees and taxes in connection with the recording or filing of instruments
and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of
the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral
Agent’s interest therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the Collateral.



          (c) Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees,
jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any
loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence
of or growing out of any misrepresentation by any Assignor in this Agreement, any other Secured
Debt Agreement or in any writing contemplated by or made or delivered by any Assignor pursuant to
or in connection with this Agreement or any other Secured Debt Agreement.



          (d) If and to the extent that the obligations of any Assignor under this Section 8.1 are
unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under applicable law.









 



Page 24


          8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations
secured by the Collateral. The indemnity obligations of each Assignor contained in this Article
VIII shall continue in full force and effect notwithstanding the full payment of all of the other
Obligations and notwithstanding the full payment of all the Notes issued, and Loans made, under the
Credit Agreement, the termination of all Letters of Credit issued under the Credit Agreement, the
termination of all Interest Rate Protection Agreements and Other Hedging Agreements entered into
with the Other Creditors and the payment of all other Obligations and notwithstanding the discharge
thereof and the occurrence of the Termination Date.



ARTICLE IX




DEFINITIONS




          The following terms shall have the meanings herein specified. Such definitions shall be
equally applicable to the singular and plural forms of the terms defined.



          “Account” shall mean any “account” as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York, and in any event shall include, but
shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by
performance, (i) for property that has been or is to be sold, leased, licensed, assigned or
otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of
insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v)
for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or
other contract, (vii) arising out of the use of a credit or charge card or information contained on
or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or
sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the
game by a State or governmental unit of a State. Without limiting the foregoing, the term
“account” shall include all Health-Care-Insurance Receivables.



          “Administrative Agent” shall have the meaning provided in the recitals of this
Agreement.



          “Agreement” shall mean this Security Agreement as the same may be amended, modified,
restated and/or supplemented from time to time in accordance with its terms.



          “As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Assignor” shall have the meaning provided in the first paragraph of this Agreement.



          “Borrower” shall have the meaning provided in the recitals of this Agreement.









 



Page 25


          “Cash Collateral Account” shall mean a cash collateral account maintained with, and in
the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors.



          “Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York. Without limiting the
foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all
Electronic Chattel Paper.



          “Class” shall have the meaning provided in Section 10.2 of this Agreement.



          “Collateral” shall have the meaning provided in Section 1.1(a) of this Agreement.



          “Collateral Agent” shall have the meaning provided in the first paragraph of this
Agreement.



          “Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Contract Rights” shall mean all rights of any Assignor under each Contract,
including, without limitation, (i) any and all rights to receive and demand payments under any or
all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts
and (iii) any and all other rights, interests and claims now existing or in the future arising in
connection with any or all Contracts.



          “Contracts” shall mean all contracts between any Assignor and one or more additional
parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging
Agreements, licensing agreements and any partnership agreements, joint venture agreements and
limited liability company agreements).



          “Copyrights” shall mean any United States or foreign copyright now or hereafter owned
by any Assignor, including any registrations of any copyrights in the United States Copyright
Office or any foreign equivalent office, as well as any application for a copyright registration
now or hereafter made with the United States Copyright Office or any foreign equivalent office by
any Assignor.



          “Credit Agreement” shall have the meaning provided in the recitals of this Agreement.



          “Credit Document Obligations” shall have the meaning provided in the definition of
“Obligations” in this Article IX.



          “Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Designated Accounts” shall mean those Deposit Accounts set forth on Part B of Annex F
hereto; provided that at such time as any Designated Account shall cease to secure









 



Page 26



exclusively the obligations described therein with respect to such Designated Account, the
respective Assignor shall promptly (and in any event within three Business Days) provide the
Collateral Agent with written notice thereof, and the Collateral Agent, at its option, may require
that such Assignor cause the institution with which such Designated Account is maintained to
execute and deliver to the Collateral Agent within 45 days a “control agreement” as described in
Section 3.9 hereof or otherwise to comply with the requirements of said Section with respect to
such Designated Account.



          “Documents” shall mean “documents” as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.



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



          “Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Equipment” shall mean any “equipment” as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York, and in any event shall
include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles
now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of
any of the foregoing and all accessions thereto, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed thereto.



          “Event of Default” shall mean any Event of Default under, and as defined in, the
Credit Agreement and shall in any event include, without limitation, any payment default on any of
the Obligations after the expiration of any applicable grace period.



          “General Intangibles” shall mean “general intangibles” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as
in effect on the date hereof in the State of New York.



          “Health-Care-Insurance Receivable” shall mean any “health-care-insurance receivable”
as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State
of New York.



          “Indemnitee” shall have the meaning provided in Section 8.1(a) of this Agreement.



          “Instrument” shall mean “instruments” as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.



          “Inventory” shall mean merchandise, inventory and goods, and all additions,
substitutions and replacements thereof and all accessions thereto, wherever located, together with









 



Page 27



all goods, supplies, incidentals, packaging materials, labels, materials and any other items
used or to be used in manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all products and
proceeds of whatever sort and wherever located, any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall
specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York.



          “Investment Property” shall mean “investment property” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Lender Creditors” shall have the meaning provided in the recitals of this Agreement.



          “Lenders” shall have the meaning provided in the recitals of this Agreement.



          “Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of New York.



          “Location” of any Assignor shall mean such Assignor’s “location” as determined
pursuant to Section 9-307 of the UCC.



          “Marks” shall mean all right, title and interest in and to any trademarks, service
marks, trade names, trade dress, logos, fictitious business names, and other business identifiers,
including the goodwill of the business of such Assignor associated with each of the foregoing, now
held or hereafter acquired by any Assignor, the right to sue for past or future infringement
thereof and including any registration or application for registration or renewals thereof of any
trademarks and service marks now held or hereafter acquired by any Assignor, which are registered
or filed in the United States Patent and Trademark Office or the equivalent thereof in any state of
the United States or any equivalent foreign office or agency.



          “Material Adverse Effect” shall mean a material adverse effect on the business,
property, assets, liabilities (actual or contingent), operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole.



          “Obligations” shall mean and include, as to any Assignor, all of the following:




     (i) the full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, principal, premium, interest (including, without limitation, all interest that
accrues after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate
provided for in the respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding), reimbursement obligations under Letters of
Credit, fees, costs and indemnities) of such Assignor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection with, the Credit
Agreement and the other Credit Documents to which such Assignor is a party (including,









 



Page 28



without limitation, in the event such Assignor is a Guarantor, all such obligations,
liabilities and indebtedness of such Assignor under its Guaranty) and the due performance
and compliance by such Assignor with all of the terms, conditions and agreements contained
in the Credit Agreement and in such other Credit Documents (all such obligations,
liabilities and indebtedness under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Interest Rate Protection Agreements or Other
Hedging Agreements, being herein collectively called the “Credit Document
Obligations”);




     (ii) the full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of
any Assignor at the rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding) owing by such Assignor
to the Other Creditors, now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Protection Agreement or Other Hedging Agreement, whether
such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or
hereinafter arising (including, without limitation, in the case of an Assignor that is a
Guarantor, all obligations, liabilities and indebtedness of such Assignor under its Guaranty
in respect of the Interest Rate Protection Agreements and Other Hedging Agreements), and the
due performance and compliance by such Assignor with all of the terms, conditions and
agreements contained in each such Interest Rate Protection Agreement and Other Hedging
Agreement (all such obligations, liabilities and indebtedness under this clause (ii) being
herein collectively called the “Other Obligations”);




     (iii) any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;




     (iv) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and
(ii) above, after an Event of Default shall have occurred and be continuing, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys’ fees and court costs;




     (v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 8.1 of this Agreement; and




     (vi) all amounts owing by any Assignor to any Agent pursuant to any of the Credit
Documents in its capacity as such;


it being acknowledged and agreed that the “Obligations” shall include extensions of credit of the
types described above, whether outstanding on the date of this Agreement or extended from time to
time after the date of this Agreement.










 



Page 29




          “Other Creditors” shall have the meaning provided in the recitals of this Agreement.




          “Other Obligations” shall have the meaning provided in the definition of “Obligations”
in this Article IX.




          “Patents” shall mean any patent in or to which any Assignor now or hereafter has any
right, title or interest therein, and any divisions, continuations (including, but not limited to,
continuations-in-parts) and improvements thereof, including the right to sue for any past or future
infringement thereof, as well as any application for a patent now or hereafter made by any
Assignor.




          “Permits” shall mean, to the extent permitted to be assigned by the terms thereof or
by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations
of or from any governmental authority or agency.




          “Primary Obligations” shall have the meaning provided in Section 7.4(b) of this
Agreement.




          “Pro Rata Share” shall have the meaning provided in Section 7.4(b) of this Agreement.




          “Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial
Code as in effect in the State of New York on the date hereof and, in any event, shall also
include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any
Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure
or forfeiture of all or any part of the Collateral by any governmental authority (or any person
acting under color of governmental authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.




          “Registered Organization” shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York.




          “Representative” shall have the meaning provided in Section 7.4(e) of this Agreement.




          “Required Secured Creditors” shall mean (i) at any time when any Credit Document
Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required
Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders)
and (ii) at any time after all of the Credit Document Obligations have been paid in full and all
Commitments under the Credit Agreement have been terminated and no further Commitments may be
provided thereunder, the holders of a majority of the Other Obligations.




          “Requisite Creditors” shall have the meaning provided in Section 10.2 of this
Agreement.










 



Page 30




          “Secondary Obligations” shall have the meaning provided in Section 7.4(b) of this
Agreement.




          “Secured Creditors” shall have the meaning provided in the recitals of this Agreement.




          “Secured Debt Agreements” shall mean and include this Agreement, the other Credit
Documents and the Interest Rate Protection Agreements and Other Hedging Agreements entered into
with an Other Creditor.




          “Software” shall mean “software” as such term is defined in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.




          “Supporting Obligations” shall mean any “supporting obligation” as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York,
now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event,
shall include, but shall not be limited to, all of such Assignor’s rights in any Letter-of-Credit
Right or secondary obligation that supports the payment or performance of, and all security for,
any Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property.




          “Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of New York.




          “Termination Date” shall have the meaning provided in Section 10.8(a) of this
Agreement.




          “Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New York.




          “Trade Secrets” shall mean any secretly held existing engineering or other data,
information, production procedures and other know-how relating to the design, manufacture,
assembly, installation, use, operation, marketing, sale and/or servicing of any products or
business of an Assignor worldwide whether written or not.




          “Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it
holds.




          “Transmitting Utility” shall have the meaning given such term in Section 9-102(a)(80)
of the UCC.




          “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the
relevant jurisdiction.




ARTICLE X




MISCELLANEOUS










 



Page 31


          10.1 Notices. Except as otherwise specified herein, all notices, requests, demands
or other communications to or upon the respective parties hereto shall be sent or delivered by
mail, telegraph, telex, telecopy, cable or courier service and all such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except that notices and communications
to the Collateral Agent or any Assignor shall not be effective until received by the Collateral
Agent or such Assignor, as the case may be. All notices and other communications shall be in
writing and addressed as follows:




	 	 	 	 	 
	 

	 	(a)
	 	if to any Assignor, c/o:
	 
	 	 	 	 
	 

	 	 	 	c/o RCN Corporation
	 

	 	 	 	196 Van Buren Street
	 

	 	 	 	Herndon, VA 20170
	 

	 	 	 	Attention: Edward O’Hara
	 

	 	 	 	Telephone No.: (703) 434-8249
	 

	 	 	 	Telecopier No.: (703) 434-8437
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	RCN Corporation
	 

	 	 	 	196 Van Buren Street
	 

	 	 	 	Herndon, VA 20170
	 

	 	 	 	Attention: Benjamin R. Preston
	 

	 	 	 	Telephone No.: (703) 434-8440
	 

	 	 	 	Telecopier No.: (703) 434-8461
	 
	 	 	 	 
	 

	 	(b)
	 	if to the Collateral Agent, at:
	 
	 	 	 	 
	 

	 	 	 	60 Wall Street
	 

	 	 	 	New York, New York 10005
	 

	 	 	 	Attention: Anca Trifan
	 

	 	 	 	Telephone No.: (212) 250-6142
	 

	 	 	 	Telecopier No.: (212) 797-5692







     (c) if to any Lender Creditor (other than the Collateral Agent), at such address as
such Lender Creditor shall have specified in the Credit Agreement;




     (d) if to any Other Creditor, at such address as such Other Creditor shall have
specified in writing to each Assignor and the Collateral Agent;


or at such other address or addressed to such other individual as shall have been furnished in
writing by any Person described above to the party required to give notice hereunder.




          10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.12, none of the
terms and conditions of this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly affected thereby









 



Page 32



(it being
understood that the addition or release of any Assignor hereunder shall not constitute a change,
waiver, discharge or termination affecting any Assignor other than the Assignor so added or
released) and the Collateral Agent (with the written consent of the Required Secured Creditors);
provided, however, that any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like
or similar manner) also shall require the written consent of the Requisite Creditors of such
affected Class. For the purpose of this Agreement, the term “Class” shall mean each class
of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other Obligations. For the
purpose of this Agreement, the term “Requisite Creditors” of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent
provided in Section 13.12 of the Credit Agreement, each of the Lenders), and (y) with respect to
the Other Obligations, the holders of at least a majority of the aggregate notional amount of all
Other Obligations outstanding from time to time.



          10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain
in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege
under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to
or modification of any Secured Debt Agreement or any security for any of the Obligations; whether
or not such Assignor shall have notice or knowledge of any of the foregoing.



          10.4 Successors and Assigns. This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or
termination as set forth in Section 10.8, (ii) be binding upon each Assignor, its successors and
assigns; provided, however, that no Assignor shall assign any of its rights or
obligations hereunder without the prior written consent of the Collateral Agent (with the prior
written consent of the Required Secured Creditors), and (iii) inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other
Secured Creditors and their respective successors, transferees and assigns. All agreements,
statements, representations and warranties made by each Assignor herein or in any certificate or
other instrument delivered by such Assignor or on its behalf under this Agreement shall be
considered to have been relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation
made by the Secured Creditors or on their behalf.



          10.5 Headings Descriptive. The headings of the several sections of this Agreement
are inserted for convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.



          10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a)
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS









 



Page 33



AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH
CASE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
ASSIGNOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH ASSIGNOR HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH ASSIGNOR, AND
AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS
JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS
ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY
INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS
AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.



          (b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.



          (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.



          10.7 Assignor’s Duties. It is expressly agreed, anything herein contained to the
contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations,
if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or arising out of this









 



Page 34



Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or
fulfill any of the obligations of any Assignor under or with respect to any Collateral.



          10.8 Termination; Release. (a) After the Termination Date, this Agreement shall
terminate (provided that all indemnities set forth herein including, without limitation, in Section
8.1 hereof, shall survive such termination) and the Collateral Agent, at the request and expense of
the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or
instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging
the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty) such of the Collateral
as may be in the possession of the Collateral Agent and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this Agreement,
“Termination Date” shall mean the date upon which the Total Commitment under the Credit
Agreement has been terminated and all Interest Rate Protection Agreements and Other Hedging
Agreements entered into with any Other Creditor have been terminated, no Note under the Credit
Agreement is outstanding and all Loans thereunder have been repaid in full, all Letters of Credit
issued under the Credit Agreement have been terminated and all Obligations then due and payable
have been paid in full.



          (b) In the event that any part of the Collateral is sold or otherwise disposed of (to a Person
other than a Credit Party) (x) at any time prior to the time at which all Credit Document
Obligations have been paid in full and all Commitments and Letters of Credit under the Credit
Agreement have been terminated, in connection with a sale or disposition permitted by Section 9.02
of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all
the Lenders if required by Section 13.12 of the Credit Agreement) or (y) at any time thereafter, to
the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y),
the proceeds of such sale or disposition (or from such release) are applied in accordance with the
terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the
extent required to be so applied, the Collateral Agent, at the request and expense of such
Assignor, will duly release from the security interest created hereby (and will
execute and deliver such documentation, including termination or partial release statements
and the like in connection therewith) and assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as is then being (or
has been) so sold or otherwise disposed of, or released, and as may be in the possession of the
Collateral Agent and has not theretofore been released pursuant to this Agreement. Furthermore,
upon the release of any Subsidiary Guarantor from the Subsidiaries Guaranty in accordance with the
provisions thereof, such Assignor (and the Collateral at such time assigned by the respective
Assignor pursuant hereto) shall be released from this Agreement.



          (c) If the Borrower designates any of its Subsidiaries as an Unrestricted Subsidiary in
accordance with Section 8.17 of the Credit Agreement, then the Collateral Agent, at the request and
expense of the Borrower, shall release from the security interest created hereby the Collateral
owned by such Unrestricted Subsidiary (and will execute and deliver such documentation, including
termination or partial release statements and the like in connection therewith) and shall assign,
transfer and deliver to such Unrestricted Subsidiary (without recourse and without any
representation or warranty) such Collateral as may be in the possession of the Collateral Agent and
has not theretofore been released pursuant to this Agreement.










 



Page 35



          (d) At any time that an Assignor desires that the Collateral Agent take any action to
acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8(a),
(b) or (c), such Assignor shall deliver to the Collateral Agent a certificate signed by a principal
executive officer of such Assignor stating that the release of the respective Collateral is
permitted pursuant to such Section 10.8(a), (b) or (c). At any time that the Borrower or the
respective Assignor desires that a Subsidiary of the Borrower which has been released from the
Subsidiaries Guaranty be released hereunder as provided in the last sentence of Section 10.8(b), it
shall deliver to the Collateral Agent a certificate signed by a principal executive officer of the
Borrower and the respective Assignor stating that the release of the respective Assignor (and its
Collateral) is permitted pursuant to such Section 10.8(b). If reasonably requested by the
Collateral Agent (although the Collateral Agent shall have not obligation to make such request),
the relevant Assignor shall furnish appropriate legal opinions (from counsel, reasonably acceptable
to the Collateral Agent) to the effect set forth in this Section 10.8(d).



          (e) The Collateral Agent shall have no liability whatsoever to any other Secured Creditor as
the result of any release of Collateral by it in accordance with (or which the Collateral Agent in
the absence of gross negligence and willful misconduct believes to be in accordance with) this
Section 10.8.



          10.9 Counterparts. This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Collateral Agent.



          10.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.



          10.11 The Collateral Agent and the other Secured Creditors. The Collateral Agent
will hold in accordance with this Agreement all items of the Collateral at any time received under
this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent
as holder of the Collateral and interests therein and with respect to the disposition thereof, and
otherwise under this Agreement, are only those expressly set forth in this Agreement and in Section
12 of the Credit Agreement. The Collateral Agent shall act hereunder on the terms and conditions
set forth herein and in Section 12 of the Credit Agreement.



          10.12 Additional Assignors. It is understood and agreed that any Subsidiary
Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of
this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any
other Credit Document, shall become an Assignor hereunder by executing a counterpart hereof and
delivering same to the Collateral Agent, or by executing an assumption agreement in form and
substance satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through F,
inclusive, and H through K, inclusive, hereto as are necessary to cause such Annexes to be complete
and accurate with respect to such additional Assignor on such date and (z) taking









 



Page 36



all actions as
specified in this Agreement as would have been taken by such Assignor had it been an original party
to this Agreement, in each case with all documents required above to be delivered to the Collateral
Agent and with all documents and actions required above to be taken to the reasonable satisfaction
of the Collateral Agent.



          10.13 Compliance with Laws. Each Assignor agrees, following the occurrence and
during the continuance of an Event of Default, to use commercially reasonable efforts, including
taking any action which the Collateral Agent and the Secured Creditors may reasonably request, to
assist in obtaining any required consent or approval of the Federal Communications Commission (the
“FCC”) or any other governmental or other authority for any sale or transfer of control of
the Collateral contemplated by the Security Documents pursuant to the exercise of the rights and
remedies of the Collateral Agent and the Secured Creditors thereunder, including, upon request, to
prepare, sign and file with the FCC the assignor’s or transferor’s and licensee’s portions of any
applications required under the rules of the FCC for consent to the assignment or transfer of
control of any FCC construction permit, license or other authorization.



          Each Assignor further consents, subject to obtaining any necessary approvals, following the
occurrence and during the continuance of an Event of Default, to the assignment or transfer of
control of any FCC or other governmental construction permit,
license, or other authorization to operate, to a receiver, trustee, or similar official or to any purchaser of
the Collateral pursuant to any public or private sale, judicial sale, foreclosure, or exercise of
other remedies available to Collateral Agent and the Secured Creditors as permitted by applicable
law. Notwithstanding anything herein which may be construed to the contrary, no action shall be
taken by any of the Collateral Agent and the Secured Creditors with respect to any license of the
FCC unless and until any applicable rules and regulations thereunder, requiring the consent to or
approval of such action by the FCC or any governmental or other authority, have been satisfied.



[Remainder of this page intentionally left blank; signature page follows]












 



 


          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
by their duly authorized officers as of the date first above written.











 



 




RCN CORPORATION

21ST CENTURY TELECOM SERVICES, INC.

BRAINSTORM NETWORKS, INC.

HOT SPOTS PRODUCTIONS, INC.

ON TV, INC.

RCN-BECOCOM, INC.

RCN CABLE TV OF CHICAGO, INC.

RCN DIGITAL SERVICES LLC

     By: [       ], its managing member

RCN ENTERTAINMENT, INC.

RCN FINANCE, LLC

     By: RCN Corporation, its managing member

RCN FINANCIAL MANAGEMENT, INC.

RCN INTERNATIONAL HOLDINGS, INC.

RCN INTERNET SERVICES, INC.

RCN NEW YORK COMMUNICATIONS, LLC

     By: [       ], its managing member

RCN TELECOM SERVICES, INC.

RCN TELECOM SERVICES OF ILLINOIS, LLC

     By: RCN Corporation, its managing member

RCN TELECOM SERVICES OF MASSACHUSETTS, INC.

RCN TELECOM SERVICES OF PHILADELPHIA, INC.

RCN TELECOM SERVICES OF VIRGINIA, INC.

RCN TELECOM SERVICES OF WASHINGTON D.C., INC.

RFM 2, LLC

     By: RCN Corporation, its managing member

RLH PROPERTY CORPORATION

STARPOWER COMMUNICATIONS, LLC

     By: RCN Telecom Services of Washington D.C., Inc., its managing member

TEC AIR, INC.

UNET HOLDING, INC.,

as Assignors




	 	 	 	 	 
	By:

	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 












 



 


Accepted and Agreed to:




DEUTSCHE BANK TRUST COMPANY

     AMERICAS,

as Collateral Agent




	 	 	 	 	 
	By:

	 	 	 	 
	Name:

	 	 


	 	 
	Title:

	 	 


	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	Name:

	 	 



	Title:

	 	 


	 	 
	 	 













 



 




ANNEX A




SCHEDULE OF CHIEF EXECUTIVE OFFICES




	 	 	 	 	 
	Name of Assignor	 	Addresses of Chief Executive Office	 
	 
	 	 	 	 











 



 


ANNEX B




 SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS




	 	 	 	 	 	 	 
	Assignor	 	State	 	County	 	City
	 
	 	 	 	 	 	 











 



 


ANNEX C




SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION



(AND WHETHER A REGISTERED ORGANIZATION), JURISDICTION OF ORGANIZATION,



LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Assignor’s
	 	 	Type of	 	 	 	 	 	Assignor’s	 	Organization
	 	 	Organization (or,	 	 	 	 	 	Location (for	 	Identification
	 	 	if the Assignor is	 	Registered	 	 	 	purposes of NY	 	Number (or, if it
	 	 	an Individual, so	 	Organization?	 	Jurisdiction of	 	UCC	 	has none, so
	Exact Legal Name of Each Assignor	 	indicate)	 	(Yes/No)	 	Organization	 	§ 9-307)	 	indicate)
	 
	 	 	 	 	 	 	 	 	 	 











 



 


ANNEX D




SCHEDULE OF TRADE AND FICTITIOUS NAMES




	 	 	 
	Name of Assignor	 	Trade and/or Fictitious Names
	 
	 	 











 



 


ANNEX E




DESCRIPTION OF CERTAIN SIGNIFICANT TRANSACTIONS OCCURRING WITHIN

ONE YEAR PRIOR TO THE DATE OF THE SECURITY AGREEMENT




	 	 	 
	 	 	Description of any Transactions as required
	Name of Assignor	 	by Section 2.8 of the Security Agreement
	 
	 	 











 



 


ANNEX F




SCHEDULE OF DEPOSIT ACCOUNTS




Part A 




	 	 	 	 	 	 	 	 	 
	 	 	Legal Entity on	 	 	 	 	 	 
	Account Name	 	Account	 	Account Number	 	Bank	 	Description
	 
	 	 	 	 	 	 	 	 





Part B – Designated Accounts











 



 




ANNEX G




Form of Control Agreement Regarding Deposit Accounts




          AGREEMENT (as amended, modified, restated and/or supplemented from time to time, this
“Agreement”), dated as of [___ ______, ___], among the undersigned assignor (the
“Assignor”), Deutsche Bank Trust Company Americas, not in its individual capacity but
solely as Collateral Agent under the Security Agreement referred to below (in such capacity, the
“Collateral Agent”) and [___] (the “Deposit Account Bank”), as the bank (as
defined in Section 9-102 of the UCC as in effect on the date hereof in the State of New York (the
“UCC”)) with which one or more deposit accounts (as defined in Section 9-102 of the UCC)
are maintained by the Assignor (with all such deposit accounts now or at any time in the future
maintained by the Assignor with the Deposit Account Bank being herein called the “Deposit
Accounts”).




W I T N E S S E T H:




          WHEREAS, the Assignor, various other Assignors and the Collateral Agent have entered into a
Security Agreement, dated as of May 25, 2007 (as amended, restated, modified and/or supplemented
from time to time, the “Security Agreement”), under which, among other things, in order to
secure the payment of the Obligations (as defined in the Security Agreement), the Assignor has
granted a security interest to the Collateral Agent for the benefit of the Secured Creditors (as
defined in the Security Agreement) in all of the right, title and interest of the Assignor in and
into any and all deposit accounts (as defined in Section 9-102 of the UCC) and in all monies,
securities, instruments and other investments deposited therein from time to time (collectively,
herein called the “Collateral”);



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



          1. Assignor’s Dealings with Deposit Accounts; Notice of Exclusive Control. Until the
Deposit Account Bank shall have received from the Collateral Agent a Notice of Exclusive Control
(as defined below), the Assignor shall be entitled to present items drawn on and otherwise to
withdraw or direct the disposition of funds from the Deposit Accounts and give instructions in
respect of the Deposit Accounts; provided, however, that the Assignor may not, and
the Deposit Account Bank agrees that it shall not permit the Assignor to, close any Deposit
Account, in any case without the prior written consent of the Collateral Agent. If the Collateral
Agent shall give to the Deposit Account Bank a notice of the Collateral Agent’s exclusive control
of the Deposit Accounts, which notice states that it is a “Notice of Exclusive Control” (a
“Notice of Exclusive Control”), only the Collateral Agent shall be entitled to withdraw
funds from the Deposit Accounts, to give any instructions in respect of the Deposit Accounts and
any funds held therein or credited thereto or otherwise to deal with the Deposit Accounts.









 



ANNEX G
Page 2






          2. Collateral Agent’s Rights to Give Instructions as to Deposit Accounts. (a)
Notwithstanding the foregoing or any separate agreement that the Assignor may have with the Deposit
Account Bank, the Collateral Agent shall be entitled, for purposes of this Agreement, at any time
to give the Deposit Account Bank instructions as to the withdrawal or disposition of any funds from
time to time credited to any Deposit Account, or as to any other matters relating to any Deposit
Account or any other Collateral, without further consent from the Assignor or any other Person.
The Assignor hereby irrevocably authorizes and instructs the Deposit Account Bank, and the Deposit
Account Bank hereby agrees, to comply with any such instructions from the Collateral Agent without
any further consent from the Assignor or any other Person. Such instructions may include the
giving of stop payment orders for any items being presented to any Deposit Account for payment.
The Deposit Account Bank shall be fully entitled to rely on, and shall comply with, such
instructions from the Collateral Agent even if such instructions are contrary to any instructions
or demands that the Assignor may give to the Deposit Account Bank. In case of any conflict between
instructions received by the Deposit Account Bank from the Collateral Agent, on the one hand, and
the Assignor, on the other hand, the instructions from the Collateral Agent shall prevail.



          (b) It is understood and agreed that the Deposit Account Bank’s duty to comply with
instructions from the Collateral Agent regarding the Deposit Accounts is absolute, and the Deposit
Account Bank shall be under no duty or obligation, nor shall it have the authority, to inquire or
determine whether or not such instructions are in accordance with the Security Agreements or any
other Credit Document (as defined in each of the Security Agreements), nor seek confirmation
thereof from the Assignor or any other Person.



          3. Assignor’s Exculpation and Indemnification of Depository Bank. The Assignor hereby
irrevocably authorizes and instructs the Deposit Account Bank to follow instructions from the
Collateral Agent regarding the Deposit Accounts even if the result of following such instructions
from the Collateral Agent is that the Deposit Account Bank dishonors items presented for payment
from any Deposit Account. The Assignor further confirms that the Deposit Account Bank shall have
no liability to the Assignor for wrongful dishonor of such items in following such instructions
from the Collateral Agent. The Deposit Account Bank shall have no duty to inquire or determine
whether the Assignor’s obligations to the Collateral Agent are in default or whether the Collateral
Agent is entitled, under any separate agreement between the Assignor and the Collateral Agent to
give any such instructions. The Assignor further agrees to be responsible for the Deposit Account
Bank’s customary charges and to indemnify the Deposit Account Bank from and to hold the Deposit
Account Bank harmless against any loss, cost or expense that the Deposit Account Bank may sustain
or incur in acting upon instructions which the Deposit Account Bank believes in good faith to be
instructions from the Collateral Agent.



          4. Subordination of Security Interests; Deposit Account Bank’s Recourse to Deposit
Accounts. The Deposit Account Bank hereby subordinates any claims and security interests it
may have against, or with respect to, any Deposit Account at any time established or maintained
with it by the Assignor (including any amounts, investments, instruments or other Collateral from
time to time on deposit therein) to the security interests of the Collateral Agent (for the benefit
of the Secured Creditors under, and as defined in, the Security Agreement) and agrees that no
amounts shall be charged by it to, or withheld or set-off or otherwise recouped by









 




ANNEX G
Page 3






it from, any Deposit Account of the Assignor or any amounts, investments, instruments or other
Collateral from time to time on deposit therein; provided that the Deposit Account Bank
may, however, from time to time debit the Deposit Accounts for any of its customary charges in
maintaining the Deposit Accounts or for reimbursement for the reversal of any provisional credits
granted by the Deposit Account Bank to any Deposit Account, to the extent, in each case, that the
Assignor has not separately paid or reimbursed the Deposit Account Bank therefor.



          5. Representations, Warranties and Covenants of Deposit Account Bank. The Deposit
Account Bank represents and warrants to the Collateral Agent (for the benefit of the Secured
Creditors under, and as defined in, the Security Agreement) and hereby agrees that:



          (a) The Deposit Account Bank constitutes a “bank” (as defined in Section 9-102 of the UCC) and
that the jurisdiction (determined in accordance with Section 9-304 of the UCC) of the Deposit
Account Bank for purposes of each Deposit Account maintained by the Assignor with the Deposit
Account Bank is                     .



          (b) The Deposit Account Bank shall not permit any Assignor to establish any demand, time,
savings, passbook or other account with it which does not constitute a “deposit account” (as
defined in Section 9-102 of the UCC).



          (c) The Deposit Account Bank will not, without the prior written consent of the Collateral
Agent, amend any account agreement between it and the Assignor governing any Deposit Account so
that the Deposit Account Bank’s jurisdiction for purposes of Section 9-304 of the UCC is other than
the jurisdiction specified in the preceding clause (a). All account agreements in respect of each
Deposit Account in existence on the date hereof are listed on Annex F hereto and copies of all such
account agreements have been furnished to the Collateral Agent. The Deposit Account Bank will
promptly furnish to the Collateral Agent a copy of the account agreement for each Deposit Account
hereafter established by the Deposit Account Bank for the Assignor.



          (d) The Deposit Account Bank has not entered and will not enter, into any agreement with any
other Person by which the Deposit Account Bank is obligated to comply with instructions from such
other Person as to the disposition of funds from any Deposit Account or other dealings with any
Deposit Account or other of the Collateral.



          (e) On the date hereof, the Deposit Account Bank maintains no Deposit Accounts for the
Assignor other than the Deposit Accounts specifically identified in Annex F hereto.



          (f) Any items or funds received by the Deposit Account Bank for the Assignor’s account will be
credited to said Deposit Accounts specified in paragraph (e) above or to any other Deposit Accounts
hereafter established by the Deposit Account Bank for the Assignor in accordance with this
Agreement.



          (g) The Deposit Account Bank will promptly notify the Collateral Agent of each Deposit Account
hereafter established by the Deposit Account Bank for the Assignor (which notice shall specify the
account number of such Deposit Account and the location at









 






ANNEX G
Page 4






which the Deposit Account is maintained), and each such new Deposit Account shall be subject
to the terms of this Agreement in all respects.



          6. Deposit Account Statements and Information. The Deposit Account Bank agrees, and
is hereby authorized and instructed by the Assignor, to furnish to the Collateral Agent at its
address indicated below, copies of all account statements and other information relating to each
Deposit Account that the Deposit Account Bank sends to the Assignor and to disclose to the
Collateral Agent all information requested by the Collateral Agent regarding any Deposit Account.



          7. Conflicting Agreements. This Agreement shall have control over any conflicting
agreement between the Deposit Account Bank and the Assignor.



          8. Merger or Consolidation of Deposit Account Bank. Without the execution or filing
of any paper or any further act on the part of any of the parties hereto, any bank into which the
Deposit Account Bank may be merged or with which it may be consolidated, or any bank resulting from
any merger to which the Deposit Account Bank shall be a party, shall be the successor of the
Deposit Account Bank hereunder and shall be bound by all provisions hereof which are binding upon
the Deposit Account Bank and shall be deemed to affirm as to itself all representations and
warranties of the Deposit Account Bank contained herein.



          9. Notices. (a) All notices and other communications provided for in this Agreement
shall be in writing (including facsimile) and sent to the intended recipient at its address or
telex or facsimile number set forth below:


If to the [First-Lien] Collateral Agent, at:



60 Wall Street

New York, New York 10005

Attention: Alexander Richarz

Telephone: (212) 250-6142

Facsimile: (212) 797-5692



If to the Assignor, at:

C/o RCN Corporation

196 Van Buren Street

Herndon, VA 08540

Attention: Edward O’ Hara

Telephone: (703) 434-8249

Facsimile: (703) 434-8437



With a copy to:



RCN Corporation

196 Van Buren Street

Herndon, VA 20170

Telephone: (703) 434-8440










 




ANNEX G
Page 5





Facsimile: (703) 434-8461



If to the Deposit Account Bank, at:



                    



                    



                    



or, as to any party, to such other address or telex or facsimile number as such party may designate
from time to time by notice to the other parties.




          (b) Except as otherwise provided herein, all notices and other communications hereunder shall
be delivered by hand or by commercial overnight courier (delivery charges prepaid), or mailed,
postage prepaid, or telexed or faxed, addressed as aforesaid, and shall be effective (i) three
business days after being deposited in the mail (if mailed), (ii) when delivered (if delivered by
hand or courier) and (iii) or when transmitted with receipt confirmed (if telexed or faxed);
provided that notices to the Collateral Agent shall not be effective until actually received by
such Collateral Agent.



          10. Amendment. This Agreement may not be amended, modified or supplemented except in
writing executed and delivered by all the parties hereto.



          11. Binding Agreement. This Agreement shall bind the parties hereto and their
successors and assigns and shall inure to the benefit of the parties hereto and their successors
and assigns. Without limiting the provisions of the immediately preceding sentence, the Collateral
Agent may at any time or from time to time designate in writing to the Deposit Account Bank a
successor Collateral Agent or (at such time, if any, as such entity becomes the “Collateral Agent”
under the Security Agreement, or at any time thereafter), and such successor shall thereafter
succeed to the rights of the existing Collateral Agent hereunder and shall be entitled to all of
the rights and benefits provided hereunder.



          12. Continuing Obligations. The rights and powers granted herein to the Collateral
Agent have been granted in order to protect and further perfect its security interests in the
Deposit Accounts and other relevant Collateral and are powers coupled with an interest and will not
be affected by any purported revocation by the Assignor of this Agreement or the rights granted to
the Collateral Agent hereunder or by the bankruptcy, insolvency, conservatorship or receivership of
the Assignor, the Deposit Account Bank, the Collateral Agent or by the lapse of time. The rights
of the Collateral Agent hereunder and in respect of the Deposit Accounts and the other Collateral,
and the obligations of the Assignor and Deposit Account Bank hereunder, shall continue in effect
until the security interests of the Collateral Agent in the Deposit Accounts and such other
Collateral have been terminated and the Collateral Agent has notified the Deposit Account Bank of
such termination in writing.



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









 




ANNEX G
Page 6





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



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Annex
G


Page 7





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




	 	 	 	 	 
	 	Assignor:



[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	Collateral Agent:



DEUTSCHE BANK TRUST COMPANY AMERICAS

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	Deposit Account Bank:



[NAME OF DEPOSIT ACCOUNT BANK]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 










 



 




ANNEX H




DESCRIPTION OF COMMERCIAL TORT CLAIMS




	 	 	 
	Name of Assignor	 	Description of Commercial Tort Claims





None.










 



 


ANNEX I




SCHEDULE OF MARKS AND APPLICATIONS; 



INTERNET DOMAIN NAME REGISTRATIONS




1. Marks and Applications:











 



 




ANNEX J




SCHEDULE OF PATENTS











 



 




ANNEX K




SCHEDULE OF COPYRIGHTS











 



 




ANNEX L




GRANT OF SECURITY INTEREST



IN UNITED STATES TRADEMARKS




          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged,
[Name of Grantor], a                                           (the “Grantor”) with principal offices at
                                        , hereby grants to Deutsche Bank Trust Company Americas, as Collateral
Agent, with principal offices at 60 Wall Street, New York, New York 10005, (the “Grantee”),
a security interest in (i) all of the Grantor’s right, title and interest in and to the United
States trademarks, trademark registrations and trademark applications (the “Marks”) set
forth on Schedule A attached hereto, (ii) all Proceeds (as such term is defined in the Security
Agreement referred to below) and products of the Marks, (iii) the goodwill of the businesses with
which the Marks are associated and (iv) all causes of action arising prior to or after the date
hereof for infringement of any of the Marks or unfair competition regarding the same.




          THIS GRANT is made to secure the satisfactory performance and payment of all the Obligations
of the Grantor, as such term is defined in the Security Agreement among the Grantor, the other
assignors from time to time party thereto and the Grantee, dated as of May 25, 2007 (as amended,
modified, restated and/or supplemented from time to time, the “Security Agreement”). Upon
the occurrence of the Termination Date (as defined in the Security Agreement), the Grantee shall
execute, acknowledge, and deliver to the Grantor an instrument in writing releasing the security
interest in the Marks acquired under this Grant.




          This Grant has been granted in conjunction with the security interest granted to the Grantee
under the Security Agreement. The rights and remedies of the Grantee with respect to the security
interest granted herein are as set forth in the Security Agreement, all terms and provisions of
which are incorporated herein by reference. In the event that any provisions of this









 





Annex
L


Page 2



Grant are deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.



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Annex
L


Page 3




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




	 	 	 	 	 
	 	[NAME OF GRANTOR], Grantor

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as	 
	 	 	as Collateral Agent and Grantee	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 










 



 


STATE OF
                        )


)
ss:

COUNTY OF                      )



          On
this ___ day of ___, ___, before me personally came                                           who,
being by me duly sworn, did state as follows: that [s]he is
____ of [Name of Grantor],
that [s]he is authorized to execute the foregoing Grant on behalf of said                      and that
[s]he did so by authority of the [Board of Directors] of said                     .




	 	 	 	 	 	 	 
	 
	 	 	 	 

Notary Public
	 	 












 



 


STATE OF NEW YORK         )

                                                 ) ss:

COUNTY OF NEW YORK     )




     On
this ___ day of                     , ___, before me personally came                                     
     
who, being by me duly sworn, did state as follows: that [s]he is                      of Deutsche
Bank Trust Company Americas, that [s]he is authorized to execute the foregoing Grant on behalf of
said banking corporation and that [s]he did so by authority of the Board of Directors of said
banking corporation.



	 	 	 	 	 	 	 
	 
	 	 	 	 

Notary Public
	 	 













 



 




SCHEDULE A




	 	 	 	 	 
	MARK	 	REG. NO.	 	REG. DATE
	 	 	 	 	 











 



 


ANNEX M




GRANT OF SECURITY INTEREST



IN UNITED STATES PATENTS




          FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged,
[Name of Grantor], a                                           (the “Grantor”) with principal offices at
                    , hereby grants to Deutsche Bank Trust Company Americas, as Collateral
Agent, with principal offices at 60 Wall Street, New York, New York 10005 (the “Grantee”),
a security interest in (i) all of the Grantor’s rights, title and interest in and to the United
States patents (the “Patents”) set forth on Schedule A attached hereto, in each case
together with (ii) all Proceeds (as such term is defined in the Security Agreement referred to
below) and products of the Patents, and (iii) all causes of action arising prior to or after the
date hereof for infringement of any of the Patents or unfair competition regarding the same.




          THIS GRANT is made to secure the satisfactory performance and payment of all the Obligations
of the Grantor, as such term is defined in the Security Agreement among the Grantor, the other
assignors from time to time party thereto and the Grantee, dated as of May 25, 2007 (as amended,
modified, restated and/or supplemented from time to time, the “Security Agreement”). Upon
the occurrence of the Termination Date (as defined in the Security Agreement), the Grantee shall
execute, acknowledge, and deliver to the Grantor an instrument in writing releasing the security
interest in the Patents acquired under this Grant.










 




Annex
M



Page 2




          This Grant has been granted in conjunction with the security interest granted to the Grantee
under the Security Agreement. The rights and remedies of the Grantee with respect to the security
interest granted herein are as set forth in the Security Agreement, all terms and provisions of
which are incorporated herein by reference. In the event that any provisions of this Grant are
deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall
govern.




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Annex
M


Page 3


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




	 	 	 	 	 
	 	[NAME OF GRANTOR], Grantor

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as 	 
	 	 	Collateral Agent and Grantee

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 










 










STATE OF                        )

                                           ) ss.:

COUNTY OF                    )




     On this ___ day of ___, ___, before me personally came                                           who,
being by me duly sworn, did state as follows: that [s]he is                      of [Name of Grantor],
that [s]he is authorized to execute the foregoing Grant on behalf of said                      and that
[s]he did so by authority of the Board of Directors of said                     .



	 	 	 	 	 	 	 
	 
	 	 	 	 

Notary Public
	 	 












 







STATE OF NEW YORK         )

                                                  ) ss:

COUNTY OF NEW YORK     )




          On this ___ day of
                    , ___, before me personally came                                
          
who, being by me duly sworn, did state as follows: that [s]he is                      of Deutsche
Bank Trust Company Americas, that [s]he is authorized to execute the foregoing Grant on behalf of
said banking corporation and that [s]he did so by authority of the Board of Directors of said
banking corporation.



	 	 	 	 	 	 	 
	 
	 	 	 	 

Notary Public
	 	 













 








SCHEDULE A




	 	 	 	 	 
	PATENT	 	PATENT NO.	 	ISSUE DATE
	 	 	 	 	 












 








ANNEX  N 




GRANT OF SECURITY INTEREST



IN UNITED STATES COPYRIGHTS




          WHEREAS, [Name of Grantor], a                                           (the “Grantor”), having
its chief executive office at                                         ,                     , is the owner of all right, title and interest in and to the United States
copyrights and associated United States copyright registrations and applications for registration
set forth in Schedule A attached hereto;




          WHEREAS, Deutsche Bank Trust Company Americas, as Collateral Agent, having its principal
offices at 60 Wall Street, New York, New York 10005 (the “Grantee”), desires to acquire a
security interest in said copyrights and copyright registrations and applications therefor; and




          WHEREAS, the Grantor is willing to grant to the Grantee a security interest in and lien upon
the copyrights and copyright registrations and applications therefor described above.




          NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, and subject to the terms and conditions of the Security Agreement, dated as of May
25, 2007, made by the Grantor, the other assignors from time to time party thereto and the Grantee
(as amended, modified, restated and/or supplemented from time to time, the “Security
Agreement”), the Grantor hereby assigns to the Grantee as collateral security, and grants to
the Grantee a security interest in, the copyrights and copyright registrations and applications
therefor set forth in Schedule A attached hereto.




          This Grant has been granted in conjunction with the security interest granted to the Grantee
under the Security Agreement. The rights and remedies of the Grantee with respect to the security
interest granted herein are as set forth in the Security Agreement, all terms and provisions of
which are incorporated herein by reference. In the event that any provisions of this Grant are
deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall
govern.




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Annex N


Page 2




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




	 	 	 	 	 
	 	[NAME OF GRANTOR], Grantor

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	DEUTSCHE BANK TRUST COMPANY
AMERICAS, as	 
	 	 	 Collateral Agent and Grantee 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 










 






STATE OF                        )

                                           ) ss:

COUNTY OF                    )




     On this ___ day
of                     , ___, before me personally came                                     
     , who
being duly sworn, did depose and say that [s]he is                      of [Name of Grantor], that
[s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did
so by authority of the Board of Directors of said corporation.



	 	 	 	 	 	 	 
	 
	 	 	 	 

Notary Public
	 	 












 







STATE OF NEW YORK         )

                                                  ) ss:

COUNTY OF NEW YORK     )





     On
this ___ day of                     , ___, before me personally came                                     
     
who, being by me duly sworn, did state as follows: that [s]he is                                          of Deutsche
Bank Trust Company Americas, that [s]he is authorized to execute the foregoing Grant on behalf of
said banking corporation and that [s]he did so by authority of the Board of Directors of said
banking corporation.



	 	 	 	 	 	 	 
	 
	 	 	 	 

Notary Public
	 	 













 






TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I SECURITY INTERESTS
	 	 	2	 
	 
	1.1 Grant of Security Interests
	 	 	2	 
	1.2 Power of Attorney
	 	 	4	 
	 
	 	 	 	 
	ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	4	 
	 
	2.1 Necessary Filings
	 	 	4	 
	2.2 No Liens
	 	 	5	 
	2.3 Other Financing Statements
	 	 	5	 
	2.4 Chief Executive Office, Record Locations
	 	 	5	 
	2.5 Location of Inventory and Equipment
	 	 	5	 
	2.6 Legal Names; Type of Organization (and Whether a Registered
Organization); Jurisdiction of Organization; Location; Organizational
Identification Numbers; Changes Thereto; etc.
	 	 	5	 
	2.7 Trade Names; Etc.
	 	 	6	 
	2.8 Certain Significant Transactions.
	 	 	6	 
	2.9 Non-UCC Property
	 	 	6	 
	2.10 As-Extracted Collateral; Timber-to-be-Cut
	 	 	7	 
	2.11 Collateral in the Possession of a Bailee
	 	 	7	 
	2.12 Recourse
	 	 	7	 
	 
	 	 	 	 
	ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
AND CERTAIN OTHER COLLATERAL
	 	 	7	 
	 
	3.1 Additional Representations and Warranties
	 	 	7	 
	3.2 Maintenance of Records
	 	 	8	 
	3.3 Direction to Account Debtors; Contracting Parties; etc.
	 	 	8	 
	3.4 Modification of Terms; etc.
	 	 	8	 
	3.5 Collection
	 	 	9	 
	3.6 Instruments
	 	 	9	 
	3.7 Assignors Remain Liable Under Accounts
	 	 	9	 
	3.8 Assignors Remain Liable Under Contracts
	 	 	9	 
	3.9 Deposit Accounts; Etc.
	 	 	10	 
	3.10 Letter-of-Credit Rights
	 	 	11	 
	3.11 Commercial Tort Claims
	 	 	11	 
	3.12 Chattel Paper
	 	 	11	 
	3.13 Further Actions
	 	 	11	 
	 
	 	 	 	 
	ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
	 	 	11	 
	 
	4.1 Additional Representations and Warranties
	 	 	11	 







(i)







 




	 	 	 	 	 
	 	 	Page
	4.2 Licenses and Assignments
	 	 	12	 
	4.3 Infringements
	 	 	12	 
	4.4 Preservation of Marks and Domain Names
	 	 	12	 
	4.5 Maintenance of Registration
	 	 	12	 
	4.6 Future Registered Marks and Domain Names
	 	 	13	 
	4.7 Remedies
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE
SECRETS
	 	 	13	 
	 
	5.1 Additional Representations and Warranties
	 	 	13	 
	5.2 Licenses and Assignments
	 	 	14	 
	5.3 Infringements
	 	 	14	 
	5.4 Maintenance of Patents or Copyrights
	 	 	14	 
	5.5 Prosecution of Patent Applications
	 	 	14	 
	5.6 Other Patents and Copyrights
	 	 	15	 
	5.7 Remedies
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL
	 	 	15	 
	 
	6.1 Protection of Collateral Agent’s Security
	 	 	15	 
	6.2 Warehouse Receipts Non-Negotiable
	 	 	15	 
	6.3 Additional Information
	 	 	16	 
	6.4 Further Actions
	 	 	16	 
	6.5 Financing Statements
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
	 	 	16	 
	 
	7.1 Remedies; Obtaining the Collateral Upon Default
	 	 	16	 
	7.2 Remedies; Disposition of the Collateral
	 	 	18	 
	7.3 Waiver of Claims
	 	 	19	 
	7.4 Application of Proceeds
	 	 	19	 
	7.5 Remedies Cumulative
	 	 	22	 
	7.6 Discontinuance of Proceedings
	 	 	22	 
	 
	 	 	 	 
	ARTICLE VIII INDEMNITY
	 	 	22	 
	 
	8.1 Indemnity
	 	 	22	 
	8.2 Indemnity Obligations Secured by Collateral; Survival
	 	 	24	 
	 
	 	 	 	 
	ARTICLE IX DEFINITIONS
	 	 	24	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	30	 
	 
	10.1 Notices
	 	 	31	 
	10.2 Waiver; Amendment
	 	 	31	 
	10.3 Obligations Absolute
	 	 	32	 
	10.4 Successors and Assigns
	 	 	32	 
	10.5 Headings Descriptive
	 	 	32	 







(ii)







 




	 	 	 	 	 
	 	 	Page
	10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL
	 	 	32	 
	10.7 Assignor’s Duties
	 	 	33	 
	10.8 Termination; Release
	 	 	34	 
	10.9 Counterparts
	 	 	35	 
	10.10 Severability
	 	 	35	 
	10.11 The Collateral Agent and the other Secured Creditors
	 	 	35	 
	10.12 Additional Assignors
	 	 	35	 
	10.13 Compliance with Laws
	 	 	36	 






	 	 	 
	ANNEX A

	 	Schedule of Chief Executive Offices Address(es)
	ANNEX B

	 	Schedule of Inventory and Equipment Locations
	ANNEX C

	 	Schedule of Legal Names, Type of Organization (and Whether a Registered Organization),
Jurisdiction of Organization, Location and Organizational Identification Numbers
	ANNEX D

	 	Schedule of Trade and Fictitious Names
	ANNEX E

	 	Description of Certain Significant Transactions Occurring Within One Year Prior to the Date of
the Security Agreement
	ANNEX F

	 	Schedule of Deposit Accounts
	ANNEX G

	 	Form of Control Agreement Regarding Deposit Accounts
	ANNEX H

	 	Schedule of Commercial Tort Claims
	ANNEX I

	 	Schedule of Marks and Applications; Internet Domain Name Registrations
	ANNEX J

	 	Schedule of Patents
	ANNEX K

	 	Schedule of Copyrights
	ANNEX L

	 	Grant of Security Interest in United States Trademarks
	ANNEX M

	 	Grant of Security Interest in United States Patents
	ANNEX N

	 	Grant of Security Interest in United States Copyrights






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(iii)