Document:

SECURITY
      AGREEMENT

     

    SECURITY
      AGREEMENT (this "Agreement"),
      dated
      as of November 21, 2008, made by each of the signatories party hereto
      (including any permitted successors and assigns, collectively, the "Grantors"
      and
      each a "Grantor"),
      in
      favor of Bank of America, N.A., as Administrative Agent ("Administrative
      Agent"),
      for
      the ratable benefit of each Secured Party (as hereinafter defined).

     

    BACKGROUND.

     

    A. Bank
      of
      America, N.A., as the Administrative Agent, Swing Line Lender and L/C
      Issuer, the Lenders party thereto, and Texas Industries, Inc., a Delaware
      corporation
      (the
      "Borrower"),
      entered into the First Amended and Restated Credit Agreement dated as of
      August 15, 2007, (said First Amended and Restated Credit Agreement, as
      heretofore and hereafter amended, restated, extended, supplemented or otherwise
      modified in writing from time to time, the "Credit
      Agreement").

     

    B. It
      is the
      intention of the parties hereto that this Agreement create a first priority
      security interest in property of the Grantors in favor of the Administrative
      Agent for the ratable benefit of the Secured Parties securing the payment and
      performance of the Secured Obligations.

     

    C. It
      is a
      condition precedent to effectiveness of the Third Amendment to the First Amended
      and Restated Credit Agreement that the Grantors shall have executed and
      delivered this Agreement.

     

    AGREEMENT.

     

    NOW,
      THEREFORE, in consideration of the premises set forth herein and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and in order to induce certain of the Secured Parties to continue
      to make the Loans and the L/C Issuer to continue to issue Letters of Credit
      under the Credit Agreement and to extend other credit accommodations under
      the
      Loan Documents, each Grantor hereby agrees with the Administrative Agent, for
      the ratable benefit of the Secured Parties, as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1. Definitions.
      For
      purposes of this Agreement:

     

    "Accession"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to an accession (as
      defined in the UCC), and (whether or not included in that definition), a good
      that is physically united with another good in such a manner that the identity
      of the original good is not lost.

     

    
      
         

      

      
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    "Account"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to an account (as
      defined in the UCC), and (whether or not included in such definition), a right
      to payment of a monetary obligation, whether or not earned by performance,
      for
      property that has been or is to be sold, leased, licensed, assigned, or
      otherwise disposed of, and for service rendered or to be rendered, and all
      right, title, and interest in any such returned property, together with all
      rights, titles, securities, and guarantees with respect thereto, including
      any
      rights to stoppage in transit, replevin, reclamation, and resales, and all
      related Liens whether voluntary or involuntary.

     

    "Account
      Debtor"
      means
      any Person who is or who may become obligated to each Grantor under, with
      respect to or on account of an Account.

     

    "Chattel
      Paper"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to chattel paper (as
      defined in the UCC), and (whether or not included in such definition) a Record
      or Records that evidence both a monetary obligation and a security interest
      in
      specific Goods, a security interest in specific Goods and Software used in
      the
      Goods, or a lease of specific Goods.

     

    "Collateral"
      means
      all (a) Accounts, (b) Accessions, (c) Chattel Paper,
      (d) Commercial Tort Claims, including but not limited to the specific
      Commercial Tort Claims described on Schedule 7,
      (e) Commodity Accounts, (f) Commodity Contracts, (g) Deposit
      Accounts, (h) Documents, (i) Equipment, (j) Financial Assets,
      (k) General Intangibles, (l) Goods, (m) Intellectual Property,
      (n) Instruments, (o) Inventory, (p) Investment Property,
      (q) Letters of Credit, (r) Letter-of-Credit Rights, (s) Payment
      Intangibles, (t) Permits, (u) Securities, (v) Securities
      Accounts, (w) Security Entitlements, (x) Software, (y) supporting
      obligations, (z) cash and cash accounts, (aa) Proceeds,
      (ab) products of Collateral, (ac) Collateral Records,
      (ad) Insurance, (ae) Money, and (af) Pledged Equity Interests,
      provided that "Collateral" does not include any fixtures or real property or
      any
      property or assets subject to a Lien permitted by clause (f) of the
      definition of "Permitted Liens" in the Credit Agreement.

     

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

     

    "Commercial
      Tort Claim"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a commercial tort
      claim (as defined in the UCC), and (whether or not included in such definition),
      all claims arising in tort with respect to which the claimant (a) is an
      organization, or (b) an individual and the claim (i) arose in the
      course of the claimant's business or profession, and (ii) does not include
      damages arising out of personal injury to or the death of an
      individual.

     

    "Commodity
      Account"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a commodity account
      (as defined in the UCC), and (whether or not included in such definition),
      an
      account maintained by a Commodity Intermediary in which a Commodity Contract
      is
      carried for a Commodity Customer.

     

    
      
         

      

      
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    "Commodity
      Contract"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a commodity futures
      contract, an option on a commodity futures contract, a commodity option, or
      any
      other contract if the contract or option is (a) traded on or subject to the
      rules of a board of trade that has been designated as a contract market for
      such
      a contract pursuant to the federal commodities Laws, or (b) traded on a
      foreign commodity board of trade, exchange, or market, and is carried on the
      books of a Commodity Intermediary for a Commodity Customer.

     

    "Commodity
      Customer"
      means a
      Person for whom a Commodity Intermediary carries a Commodity Contract on its
      books.

     

    "Commodity
      Intermediary"
      means
      (a) a Person that is registered as a futures commission merchant under the
      federal commodities Laws or (b) a Person that in the ordinary course of its
      business provides clearance or settlement services for a board of trade that
      has
      been designated as a contract market pursuant to federal commodities
      Laws.

     

    "Copyright
      License"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to any written
      agreement, now or hereafter in effect, granting any right to any third party
      under any Copyright now or hereafter owned by each such Grantor or which each
      such Grantor otherwise has the right to license, or granting any right to each
      such Grantor under any Copyright now or hereafter owned by any third party,
      and
      all rights of each such Grantor under any such agreement.

     

    "Copyrights"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to (a) all
      copyright rights in any work subject to the copyright Laws of any Governmental
      Authority, whether as author, assignee, transferee, or otherwise set forth
      on
Schedule 5(d),
      (b) all registrations and applications for registration of any such
      copyright in any Governmental Authority, including registrations, recordings,
      supplemental registrations, and pending applications for registration in any
      jurisdiction, and (c) all rights to use and/or sell any of the
      foregoing.

     

    "Deposit
      Account"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a deposit account
      (as
      defined in the UCC), and (whether or not included in such definition), a demand,
      time, savings, passbook, or similar account maintained at a bank (as defined
      in
      the UCC).

     

    "Document"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a document (as
      defined in the UCC), and (whether or not included in such definition), a
      document of title, bill of lading, dock warrant, dock receipt, warehouse
      receipt, or order for the delivery of Goods.

     

    "Electronic
      Chattel Paper"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to electronic chattel
      paper (as defined in the UCC), and (whether or not included in such definition),
      chattel paper evidenced by a Record or Records consisting of information stored
      in electronic medium.

     

    "Entitlement
      Holder"
      means a
      Person identified in the records of a Securities Intermediary as the Person
      having a Security Entitlement against the Securities Intermediary. If a Person
      acquires a Security Entitlement by virtue of Section 8.501(b)(2) or (3) of
      the UCC, such Person is the Entitlement Holder.

     

    
      
         

      

      
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    "Equipment"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to equipment (as defined
      in the UCC), and (whether or not included in such definition), all Goods other
      than Inventory, farm products or consumer goods, and all improvements,
      accessions, or appurtenances thereto. 

     

    "Financial
      Asset"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a financial asset
      (as
      defined in the UCC), and (whether or not included in such definition),
      (a) a Security, (b) an obligation of a Person or a share,
      participation or other interest in a Person or in property or an enterprise
      of a
      Person, that is, or is of a type, dealt in or traded on financial markets or
      that is recognized in any area in which it is issued or dealt in as a medium
      for
      investment, or (c) any property that is held by a Securities Intermediary
      for another Person in a Securities Account if the Securities Intermediary has
      expressly agreed with the other Person that the property is to be treated as
      a
      financial asset under Chapter 8 of the UCC. As the context requires, "Financial
      Asset" means either the interest itself or the means by which a Person's claim
      to it is evidenced, including a certificated or uncertificated Security, a
      certificate representing a Security, or a Security Entitlement.

     

    "General
      Intangible"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a general intangible
      (as defined in the UCC), and (whether or not included in such definition) all
      other personal property, including things in action, other than Accounts,
      Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Goods,
      Instruments, Investment Property, Letter-of-Credit Rights, Letters of Credit,
      Money, and oil, gas or other minerals before extraction.

     

    "Goods"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to goods (as defined
      in
      the UCC).

     

    "Governmental
      Authority"
      means
      any nation or government, any state or other political subdivision thereof,
      any
      agency, authority, instrumentality, regulatory body, court, administrative
      tribunal, central bank or other entity exercising executive, legislative,
      judicial, taxing, regulatory or administrative powers or functions of or
      pertaining to government, and any corporation or other entity owned or
      controlled, through stock or capital ownership or otherwise, by any of the
      foregoing.

     

    "Instrument"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to an instrument (as
      defined in the UCC), and (whether or not included in such definition), a
      negotiable instrument or any other writing that evidences a right to the payment
      of a monetary obligation, is not itself a security agreement or lease, and
      is of
      a type that in ordinary course of business is transferred by delivery with
      any
      necessary indorsement or assignment.

     

    "Insurance"
      shall
      mean all right, title and interest to insurance policies covering any or all
      of
      the Collateral (regardless of whether the Administrative Agent is the loss
      payee
      thereof).

     

    
      
         

      

      
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    "Intellectual
      Property"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to all Patents,
      Copyrights, Licenses, Trademarks, Trade Secrets, confidential or proprietary
      technical and business information, know-how, show-how or other data or
      information, Software and databases and all embodiments or fixations thereof
      and
      related documentation, registrations and franchises, and all additions,
      improvements and accessions to, and books and records describing or used in
      connection with, any of the foregoing.

     

    "Inventory"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to inventory (as defined
      in the UCC), and (whether or not included in such definition), Goods (other
      than
      farm products) that (a) are leased by such Grantor as lessor, (b) are
      held by such Grantor for sale or lease or to be furnished under a contract
      of
      service, (c) are furnished by such Grantor under a contract of service, or
      (d) consist of raw materials, work in process, or materials used or
      consumed in a business, including packaging materials, scrap material,
      manufacturing supplies and spare parts, and all such Goods that have been
      returned to or repossessed by or on behalf of such Grantor.

     

    "Investment
      Property"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to investment property
      (as defined in the UCC), and (whether or not included in such definition),
      a
      Security (whether certificated or uncertificated), a Security Entitlement,
      a
      Securities Account, and Pledged Debt.

     

    "Letter
      of Credit"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a letter of credit
      (as defined in the UCC). 

     

    "Letter-of-Credit
      Right"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a letter-of-credit
      right (as defined in the UCC), and (whether or not included in such definition),
      a right to payment or performance under a letter of credit, whether or not
      the
      beneficiary has demanded or is at the time entitled to demand payment or
      performance.

     

    "License"
      means
      any Patent License, Trademark License, Copyright License, or other similar
      license or sublicense.

     

    "Money"
      shall
      mean "money" as defined in the UCC.

     

    "Patent
      License"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to any written
      agreement, now or hereafter in effect, granting to any third party any right
      to
      make, use or sell any invention on which a Patent, now or hereafter owned by
      each such Grantor or which each such Grantor otherwise has the right to license,
      is in existence, or granting to each such Grantor any right to make, use or
      sell
      any invention on which a Patent, now or hereafter owned by any third party,
      is
      in existence, and all rights of each such Grantor under any such
      agreement.

     

    
      
         

      

      
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    "Patents"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to (a) all letters
      patent of any Governmental Authority set forth on Schedule 5(b),
      all
      registrations and recordings thereof, and all applications for letters patent
      of
      any Governmental Authority set forth on Schedule 5(c),
      and
      (b) all reissues, continuations, divisions, continuations-in-part,
      renewals, or extensions thereof, and the inventions disclosed or claimed
      therein, including the right to make, use and/or sell the inventions disclosed
      or claimed therein.

     

    "Payment
      Intangible"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to a payment intangible
      (as defined in the UCC), and (whether or not included in such definition),
      a
      General Intangible under which the Account Debtor's principal obligation is
      a
      monetary obligation.

     

    "Permit" means
      all
      right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to any authorization,
      consent, approval, permit, license or exemption of or from a Governmental
      Authority, together with any registration or filing with, or report or notice
      to, any such Governmental Authority as part of such authorization, consent,
      approval, permit, license or exemption.

     

    "Pledged
      Debt"
      shall
      mean all indebtedness owed to such Grantor, the instruments evidencing such
      indebtedness, and all interest, cash, instruments and other property or proceeds
      from time to time received, receivable or otherwise distributed in respect
      of or
      in exchange for any or all of such indebtedness.

     

    "Pledged
      Equity Interests"
      shall
      mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests
      and
      Pledged Trust Interests, provided,
      however,
      notwithstanding anything herein to the contrary, the amount of pledged equity
      interests of any Foreign Subsidiary pledged by any Grantor shall be limited
      to
      66% of the issued and outstanding equity interests of such Foreign Subsidiary
      owned directly by such Grantor.

     

    "Pledged
      LLC Interests"
      shall
      mean, with respect to each Grantor, all interests of such Grantor in any limited
      liability company and the certificates, if any, representing such limited
      liability company interests and any interest of such Grantor on the books and
      records of such limited liability company or on the books and records of any
      Securities Intermediary pertaining to such interest and all dividends,
      distributions, cash, warrants, rights, options, instruments, securities and
      other property or proceeds from time to time received, receivable or otherwise
      distributed in respect of or in exchange for any or all of such limited
      liability company interests, provided,
      however,
      notwithstanding anything herein to the contrary, the amount of pledged limited
      liability company interests of any Foreign Subsidiary pledged by any Grantor
      shall be limited to 66% of the issued and outstanding limited liability company
      interests of such Foreign Subsidiary owned directly by such
      Grantor.

     

    "Pledged
      Partnership Interests"
      shall
      mean, with respect to each Grantor, all interests of such Grantor in any general
      partnership, limited partnership, limited liability partnership or other
      partnership and the certificates, if any, representing such partnership
      interests and any interest of such Grantor on the books and records of such
      partnership or on the books and records of any Securities Intermediary
      pertaining to such interest and all dividends, distributions, cash, warrants,
      rights, options, instruments, securities and other property or proceeds from
      time to time received, receivable or otherwise distributed in respect of or
      in
      exchange for any or all of such partnership interests, provided,
      however,
      notwithstanding anything herein to the contrary, the amount of pledged general
      partnership, limited partnership, limited liability partnership or other
      partnership interests of any Foreign Subsidiary pledged by any Grantor shall
      be
      limited to 66% of the issued and outstanding general partnership, limited
      partnership, limited liability partnership or other partnership interests of
      such Foreign Subsidiary owned directly by such Grantor.

     

    
      
         

      

      
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    "Pledged
      Stock"
      shall
      mean, with respect to each Grantor, all shares of capital stock owned by such
      Grantor and the certificates, if any, representing such shares and any interest
      of such Grantor on the books of the issuer of such shares or on the books of
      any
      Securities Intermediary pertaining to such shares, and all dividends,
      distributions, cash, warrants, rights, options, instruments, securities and
      other property or proceeds from time to time received, receivable or otherwise
      distributed in respect of or in exchange for any or all of such shares,
provided,
      however,
      notwithstanding anything herein to the contrary, the amount of pledged capital
      stock of any Foreign Subsidiary pledged by any Grantor shall be limited to
      66%
      of the issued and outstanding capital stock of such Foreign Subsidiary owned
      directly by such Grantor.

     

    "Pledged
      Trust Interests"
      shall
      mean, with respect to each Grantor, all interests of such Grantor in a business
      trust or other trust and the certificates, if any, representing such trust
      interests and any interest of such Grantor on the books and records of such
      trust or on the books and records of any Securities Intermediary pertaining
      to
      such interest and all dividends, distributions, cash, warrants, rights, options,
      instruments, securities and other property or proceeds from time to time
      received, receivable or otherwise distributed in respect of or in exchange
      for
      any or all of such trust interests.

     

    "Proceeds"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to proceeds (as defined
      in the UCC) of Collateral, and (whether or not included in such definition),
      (a) whatever is acquired upon the sale, lease, license, exchange, or other
      disposition of the Collateral, (b) whatever is collected on, or distributed
      on account of, the Collateral, (c) rights arising out of the Collateral,
      (d) claims arising out of the loss, nonconformity, or interference with the
      use of, defects or infringement of rights in, or damage to the Collateral,
      (e) insurance payable by reason of the loss or nonconformity of, defects or
      infringement of rights in, or damage to the Collateral, and (f) any and all
      other amounts from time to time paid or payable under or in connection with
      any
      of the Collateral.

     

    "Record"
      means
      information that is inscribed on a tangible medium or that is stored in an
      electronic or other medium and is retrievable in perceivable form.

     

    "Release
      Date"
      means
      the date on which all of the conditions set forth in Section 9.10(a)(i)
      of the
      Credit Agreement have been satisfied.

     

    "Secured
      Party"
      has the
      meaning given to such term in the Credit Agreement.

     

    "Secured
      Obligations"
      has the
      meaning given to such term in the Credit Agreement.

     

    "Securities
      Account"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to an account to which
      a
      Financial Asset is or may be credited in accordance with an agreement under
      which the Person maintaining the account undertakes to treat the Person for
      whom
      the account is maintained as entitled to exercise rights that comprise the
      Financial Asset.

     

    
      
         

      

      
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    “Securities
      Collateral”
has
      the
      meaning specified in Section
      4.5.

     

    "Securities
      Intermediary"
      means
      (a) a clearing corporation, or (b) a Person, including a bank or
      broker, that in the ordinary course of its business maintains securities
      accounts for others and is acting in that capacity.

     

    "Security"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to any obligation of
      an
      issuer or any share, participation or other interest in an issuer or in property
      or an enterprise of an issuer which (a) is represented by a certificate
      representing a security in bearer or registered form, or the transfer of which
      may be registered upon books maintained for that purpose by or on behalf of
      the
      issuer, (b) is one of a class or series or by its terms is divisible into a
      class or series of shares, participations, interests or obligations, and
      (c)(i) is, or is of a type, dealt with or traded on securities exchanges or
      securities markets or (ii) is a medium for investment and by its terms
      expressly provides that it is a security governed by Chapter 8 of the
      UCC.

     

    "Security
      Entitlements"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to the rights and
      property interests as and of an Entitlement Holder with respect to a Financial
      Asset.

     

    "Software"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to software (as defined
      in the UCC), and (whether or not included in such definition), a computer
      program (including both source and object code) and any supporting information
      provided in connection with a transaction relating to the program.

     

    "Tangible
      Chattel Paper"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to tangible chattel
      paper (as defined in the UCC), and (whether or not included in such definition),
      chattel paper evidenced by a Record or Records consisting of information that
      is
      inscribed on a tangible medium.

     

    "Trade
      Secrets"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to all trade secrets,
      know-how, inventions, processes, methods, information, data, plans, blueprints,
      specifications, designs, drawings, engineering reports, test reports, materials
      standards, processing standards and performance standards, and all Software
      directly related thereto, and all Licenses or other agreements to which such
      Grantor is a party with respect to any of the foregoing.

     

    "Trademark
      License"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to any written
      agreement, now or hereafter in effect, granting to any third party any right
      to
      use any Trademark now or hereafter owned by such Grantor or which such Grantor
      otherwise has the right to license, or granting to such Grantor any right to
      use
      any Trademark now or hereafter owned by any third party, and all rights of
      such
      Grantor under any such agreement.

     

    
      
         

      

      
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    "Trademarks"
      means
      all right, title, and interest of each Grantor (in each case whether now or
      hereafter existing, owned, arising, or acquired) in and to (a) all
      trademarks, service marks, trade names, corporate names, company names, business
      names, fictitious business names, trade styles, trade dress, logos, other source
      or business identifiers, designs and general intangibles of like nature, all
      registrations and recordings thereof set forth on Schedule 5(a),
      and all
      registration and recording applications filed with any Governmental Authority
      in
      connection therewith, and all extensions or renewals thereof, (b) all
      goodwill associated therewith or symbolized thereby, (c) all other assets,
      rights and interests that uniquely reflect or embody such goodwill, (d) all
      rights to use and/or sell any of the foregoing, and (e) the portion of the
      business to which each trademark pertains.

     

    "UCC"
      means
      Chapters 8 and 9 of the Uniform Commercial Code as in effect from time to
      time in the State of Texas.

     

    1.2. Other
      Definitional Provisions.
      Capitalized terms not otherwise defined herein have the meaning specified in
      the
      Credit Agreement, and, to the extent of any conflict, terms as defined in the
      Credit Agreement shall control (provided,
      that a
      more expansive or explanatory definition shall not be deemed a
      conflict).

     

    1.3. Construction.
      Unless
      otherwise expressly provided in this Agreement or the context requires
      otherwise, (a) the singular shall include the plural, and vice
      versa,
      (b) words of a gender include the other genders, (c) monetary
      references are to Dollars, (d) time references are to Dallas time,
      (e) references to "Articles," "Sections," "Exhibits," and "Schedules" are
      to the Articles, Sections, Exhibits, and Schedules of and to this Agreement,
      (f) headings used in this Agreement are for convenience only and shall not
      be used in connection with the interpretation of any provision hereof,
      (g) references to any Person include that Person's heirs, personal
      representatives, successors, trustees, receivers, and permitted assigns, that
      Person as a debtor-in possession, and any receiver, trustee, liquidator,
      conservator, custodian, or similar party appointed for such Person or all or
      substantially all of its assets, (h) references to any Law include every
      amendment or restatement to it, rule and regulation adopted under it, and
      successor or replacement for it, (i) references to a particular Loan
      Document include each amendment or restatement to it made in accordance with
      the
      Credit Agreement and such Loan Document, and (j) the inclusion of Proceeds
      in the definition of "Collateral" shall not be deemed a consent by the Secured
      Parties to any sale or other disposition of any Collateral not otherwise
      specifically permitted by the terms of the Credit Agreement or this Agreement.
      This Agreement is a Loan Document.

     

    ARTICLE
      II

     

    GRANT
      OF SECURITY INTEREST

     

    2.1. Assignment
      and Grant of Security Interest.
      As
      security for the payment and performance, as the case may be, in full of the
      Secured Obligations, each Grantor hereby assigns to, and pledges and grants
      to
      Administrative Agent, for its benefit and the ratable benefit of the other
      Secured Parties:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (a) a
      security interest in the entire right, title, and interest of Grantor in and
      to
      all Collateral of each such Grantor, whether now or hereafter existing, owned,
      arising or acquired (provided,
      the
      amount of Equity Interests of any Foreign Subsidiary pledged by such Grantor
      hereunder shall be limited to 66% of the issued and outstanding Equity Interests
      of such Foreign Subsidiary directly owned by such Grantor); and

     

    (b) an
      irrevocable royalty-free right and license to use, upon the occurrence and
      during continuance of an Event of Default, the Intellectual Property of such
      Grantor worldwide in order to enable Administrative Agent to exercise its rights
      and remedies with respect to the Collateral as Administrative Agent reasonably
      deems necessary or appropriate. 

     

    The
      Collateral shall not include any agreement, license or permit which by Law
      or
      its terms validly prohibits the granting of a security interest therein unless
      a
      consent to the security interest and pledge hereunder has been obtained;
provided
      that the
      foregoing limitation shall not affect, limit, restrict, or impair the grant
      by
      each Grantor of a security interest pursuant to this Agreement in any such
      Collateral to the extent that an otherwise applicable prohibition on such grant
      is rendered ineffective by the UCC or other applicable Law. Collateral shall
      not
      include any general intangibles to the extent the grant by such Grantor of
      a
      security interest pursuant to this Agreement in such general intangibles is
      expressly prohibited or restricted, unless such prohibition or restriction
      is
      rendered ineffective pursuant to Section 9.408 of the UCC, provided that the
      foregoing limitation shall not affect, limit, restrict or impair the grant
      by
      such Grantor of a security interest pursuant to this Agreement in any money
      or
      other amounts due or sums due in respect of such general intangible under
      Section 9.408 of the UCC.

     

    2.2. Grantor
      Remains Liable.
      Anything herein to the contrary notwithstanding, (a) each Grantor shall
      remain liable under the contracts and agreements included in such Grantor’s
      Collateral to the extent set forth therein to perform all of its duties and
      obligations thereunder to the same extent as if this Agreement had not been
      executed, (b) the exercise by any Secured Party of any of the rights
      hereunder shall not release any Grantor from any of its duties or obligations
      under the contracts and agreements included in such Grantor’s Collateral, and
      (c) no Secured Party shall have any obligation or liability under the
      contracts and agreements included in such Grantor’s Collateral by reason of this
      Agreement, nor shall any Secured Party be obligated to perform any of the
      obligations or duties of any Grantor thereunder or to take any action to collect
      or enforce any claim for payment assigned hereunder.

     

    2.3. Delivery
      of Pledged Equity Interests.
      All
      certificates or Instruments constituting or evidencing the Pledged Equity
      Interests shall be delivered to and held by or on behalf of Administrative
      Agent
      pursuant hereto and shall be in suitable form for transfer by delivery, or
      shall
      be accompanied by undated and duly executed instruments of transfer or
      assignment in blank, all in form and substance reasonably satisfactory to
      Administrative Agent. If an Event of Default exists, Administrative Agent has
      the right, without notice to any Grantor, to register in the name of
      Administrative Agent or any of its nominees any or all of such Collateral.
      In
      addition, Administrative Agent has the right at any time, with the consent
      of
      the Borrower prior to an Event of Default, to exchange certificates or
      instruments representing or evidencing Pledged Equity Interests for certificates
      or instruments of smaller or larger denominations.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    ARTICLE
      III

     

    REPRESENTATIONS
      AND WARRANTIES

     

    3.1. Representations
      and Warranties.
      Each
      Grantor represents and warrants to each Secured Party with respect to itself
      and
      the Collateral owned by it that:

     

    (a) This
      Agreement and the grant of the security interest pursuant to this Agreement
      in
      the Collateral create a valid first priority security interest (other than
      such
      Collateral that would require the execution of a control agreement or would
      require that the Administrative Agent takes possession of for such first
      priority security interest) in favor of the Administrative Agent for the ratable
      benefit of the Secured Parties in the Collateral (subject to Permitted Liens),
      securing the payment and performance of the Secured Obligations, and all filings
      and other actions necessary to perfect and protect such security interest and
      such priority have been duly taken (or will be taken upon each Grantor obtaining
      rights in Collateral after the date hereof) and, upon the filing of a UCC-1
      financing statements for such Grantor, in the form agreed to by such Grantor
      with the Administrative Agent on or prior to the Closing Date, and in the filing
      offices listed on Schedule 1,
      Section (g),
      and
      delivery to and continuing possession by the Administrative Agent of all
      certificates evidencing the Pledged Equity Interests (together with executed
      stock powers), all filings and other actions necessary to perfect and protect
      such security interest and such priority (subject to execution of a control
      agreement or possession by the Administrative Agent) have been duly taken (or
      will be taken upon any Grantor obtaining rights in Collateral after the date
      hereof),
      subject, however, with respect to Proceeds, to the provisions of
      Section 9.315 of the UCC.

     

    (b) Each
      Grantor has good and indefeasible title to, or a valid leasehold interest in,
      all of the Collateral free and clear of any Lien, except for Permitted Liens.
      No
      Grantor has granted a currently effective security interest or other Lien in
      or
      made a currently effective assignment of any of the Collateral (except for
      Permitted Liens). No Grantor has entered into nor is it or any of its property
      subject to any agreement limiting the ability of such Grantor to grant a Lien
      in
      any Collateral of such Grantor, or the ability of such Grantor to agree to
      grant
      or not grant a Lien in any property of such Grantor (in each case, except as
      permitted by the Credit Agreement). None of the Collateral is consigned Goods
      or
      subject to any agreement of repurchase, except in the ordinary course of
      business, nor is any Collateral subject to any dispute, defense, or
      counterclaim. No effective financing statement or other similar document used
      to
      perfect and preserve a security interest or other Lien under the Laws of any
      jurisdiction covering all or any part of the Collateral is on file in any
      recording office, except such as may have been filed (i) pursuant to this
      Agreement or other Loan Document, or (ii) relating to Permitted Liens.
      Except as permitted under the Credit Agreement, no Grantor has made any
      presently effective sale of any interest in any of its Accounts (other than
      past
      due or doubtful Accounts assigned to third parties for collection), Chattel
      Paper, promissory notes, or Payment Intangibles, or consigned any of its
      Inventory.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (c) All
      of
      the Pledged Equity Interests have been duly and validly issued, and the Pledged
      Stock is fully paid and nonassessable. All of the Pledged Equity Interests
      consisting of certificated securities have been delivered to the Administrative
      Agent. Other than Pledged Partnership Interests, Pledged LLC Interests and
      Pledged Trust Interests constituting General Intangibles, there are no Pledged
      Equity Interests other than those represented by certificated securities in
      the
      possession of the Administrative Agent. There are no restrictions in any
      Organization Document governing any Pledged Equity Interest or any other
      document related thereto which would limit or restrict (i) the grant of a
      Lien in the Pledged Equity Interests, (ii) the perfection of such Lien or
      (iii) the exercise of remedies in respect of such perfected Lien in the
      Pledged Equity Interests as contemplated by this Agreement that have not been
      waived. Upon the exercise of remedies in respect of Pledged Partnership
      Interests, Pledged LLC Interests and Pledged Trust Interests, a transferee
      or
      assignee of a partnership interest, a membership interest, or a trust interest,
      as the case may be, of such partnership, limited liability company or trust,
      as
      the case may be, shall become a partner, member, trustee, beneficiary or
      settlor, as the case may be, of such partnership, limited liability company
      or
      trust, as the case may be, entitled to participate in the management thereof
      to
      the extent such partnership, membership or trust interest would otherwise permit
      such transferee or assignee to participate in management, and, upon the transfer
      of the entire interest of such Grantor, such Grantor ceases to be a partner,
      member, trustee, beneficiary or settlor, as the case may be.

     

    (d) Schedule 1
      states
      the exact name of each Grantor, as such name appears in its currently effective
      organizational documents as filed with the appropriate authority of the
      jurisdiction of each Grantor's organization. Schedule 1,
      Section (a)
      states
      the jurisdiction of organization of each Guarantor. Schedule 1,
      Section (b)
      sets
      forth the type of entity and each other name each Grantor has had in the past
      two years, together with the date of the relevant change. Except as set forth
      in
Schedule 1,
      Section (c),
      each
      Grantor has not changed its identity or type of entity in any way within the
      past two years. Changes in identity or type of entity include mergers,
      consolidations, conversions, and any change in the form, nature, or jurisdiction
      of organization. Schedules 1
      and
2
      contain
      the information required by this Section as to each acquiree or constituent
      party to a merger, consolidation, or conversion within the preceding two years.
      Schedule 1,
      Section (d)
      states
      all other names (including trade, assumed, and similar names) used by each
      Grantor or any of its divisions or other business units at any time during
      the
      past two years. Schedule 1,
      Section (e)
      states
      the Federal Taxpayer Identification Number of each Grantor. Schedule 1,
      Section (f)
      states
      the corporate or other organizational number of each Grantor.

     

    (e) As
      of the
      Closing Date, the chief executive office of each Grantor is located at the
      address stated on Schedule 2,
      Section (a)
      and
Schedule 2,
      Section (b)
      states
      all locations where each Grantor maintains any books or records relating to
      all
      Accounts (with each location at which Chattel Paper, if any, is kept being
      indicated by an "*"). As of the Closing Date, Schedule 2,
      Section (c)
      states
      all locations where each Grantor maintains any Equipment or Inventory. As of
      the
      Closing Date, Schedule 2,
      Section (d)
      states
      all the places of business of each Grantor or other locations of material
      Collateral not identified in Schedule 2,
      Sections 2(a),
      (b),
      or
(c).
      As of
      the Closing Date, Schedule 2,
      Section (e)
      states
      the names and addresses of all Persons other than each Grantor who have
      possession of any of the Collateral of each such Grantor, other than Equipment
      temporarily out of service or out of repair and Inventory in the hands of third
      party processors, transporters or storage providers.

     

    
      
         

      

      
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    (f) As
      of the
      Closing Date, all Accounts have been originated by each Grantor and all
      Inventory has been acquired by each Grantor in the ordinary course of business.
      

     

    (g) As
      of the
      Closing Date, each Grantor has exclusive possession and control of the Equipment
      and Inventory pledged by it hereunder, other than Equipment temporarily out
      of
      service or out for repair and Inventory in the hands of third party processors,
      transporters or storage providers.

     

    (h) As
      of the
      Closing Date, Schedule 3
      is a
      complete and correct list of all the issued and outstanding stock, partnership
      interests, limited liability company membership interests, or other equity
      interest owned by each Grantor and the record and beneficial owners of such
      stock, partnership interests, membership interests or other equity interests.
      Also set forth on Schedule 3
      is each
      equity investment of each Grantor that represents 50% or less of the equity
      of
      the entity in which such investment was made as of the Closing
      Date.

     

    (i) As
      of the
      Closing Date, Schedule 4
      is a
      complete and correct list of each promissory note and other instrument
      evidencing indebtedness owed to and held by each Grantor (excluding all
      intercompany notes and other instruments between each Grantor and each
      Subsidiary, and each Subsidiary and each other Subsidiary).

     

    (j) As
      of the
      Closing Date, Schedule 5(a)
      is a
      complete and correct list of each material Trademark registration and material
      Trademark application in which each Grantor has any interest (whether as owner,
      licensee, or otherwise), including the name of the registered owner and the
      nature of each Grantor’s interest if not owned by the Grantor, the registered or
      applied for Trademark, the Trademark application serial and/or registration
      number, the date of the Trademark application and/or registration, and the
      country or state registering the Trademark or with which the Trademark
      application was filed.

     

    (k) As
      of the
      Closing Date, Schedule 5(b)
      is a
      complete and correct list of each material Patent in which each Grantor has
      any
      interest (either as owner or licensee), including the name of the registered
      owner and the nature of Grantor's interest if not owned by Grantor, the Patent
      number, the date of Patent issuance, and the country issuing the
      Patent.

     

    (l) As
      of the
      Closing Date, Schedule 5(c)
      is a
      complete and correct list of each material Patent application in which each
      Grantor has any interest (either as owner or licensee), including the name
      of
      the Person applying to be the registered owner and the nature of each Grantor's
      interest if not owned by the Grantor, the Patent application number, the date
      of
      Patent application filing, and the country with which the Patent application
      was
      filed.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (m) As
      of the
      Closing Date, Schedule 5(d)
      is a
      complete and correct list of each material Copyright (including the related
      registration and Copyright application, if any) in which each Grantor has any
      interest (either as owner or licensee), including the name of the registered
      owner and the nature of Grantor’s interest if the Grantor is not the owner, the
      title of the work which is the subject of the registered or applied for
      Copyright, the date of Copyright issuance, the registration number (if
      applicable) and the country issuing the Copyright or with which the Copyright
      application was filed.

     

    (n) As
      of the
      Closing Date, Schedule 5(e)
      is a
      complete and correct list of all allegations of use under Section 1(c) or
      1(d) of the Trademark Act (15 U.S.C. §1051, et
      seq.)
      filed
      by each Grantor.

     

    (o) As
      of the
      Closing Date, Schedule 6
      is a
      complete and correct list of all material Software (other than non-custom
      generally available Software) in which each Grantor has any interest (either
      as
      owner or licensee), including the name of the licensor and the escrow agent
      under the applicable Software escrow agreement (if any).

     

    (p) As
      of the
      Closing Date, Schedule 7
      is a
      complete and correct list of all pending Commercial Tort Claims in which each
      Grantor has any interest, including the complete case name or style, the case
      number, and the court or other tribunal in which the case is
      pending.

     

    (q) As
      of the
      Closing Date, except as set forth on Schedule 8,
      no
      consent of any other Person and no authorization, approval or other action
      by,
      and no notice to or filing with, any Governmental Authority is required
      (i) for the pledge by each Grantor of the Collateral pledged by it
      hereunder, for the grant by each Grantor of the security interest granted
      hereby, or for the execution, delivery, or performance of this Agreement by
      each
      Grantor, (ii) for the perfection or maintenance of the pledge, assignment,
      and security interest created hereby (including the first priority nature of
      such pledge, assignment, and security interest) as contemplated herein or
      (iii) for the enforcement of remedies by the Administrative Agent or any
      other Secured Parties.

     

    (r) As
      of the
      Closing Date, Schedule 9
      is a
      complete and correct list of all insurance policies covering losses with respect
      to Collateral for which each Grantor is a named insured.

     

    ARTICLE
      IV

     

    COVENANTS

     

    4.1. Further
      Assurances.

     

    (a) Each
      Grantor will, from time to time and at each Grantor's expense, promptly execute
      and deliver such financing or continuation statements, or amendments thereto
      and
      such patent or trademark filings and promptly deliver such certificated
      securities, as may be necessary, or as Administrative Agent may request, in
      order to perfect and preserve the pledge, assignment, and security interest
      granted or purported to be granted hereby, and take all further action in
      connection with the filing of such financing or continuation statements or
      amendments thereto and such patent or trademark office filings that
      Administrative Agent may reasonably request, in order to perfect and protect
      any
      pledge, assignment, or security interest granted or purported to be granted
      hereby, and the priority thereof, or to enable Administrative Agent to exercise
      and enforce Administrative Agent's and other Secured Parties' rights and
      remedies hereunder with respect to any Collateral.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (b) In
      addition to such other information as shall be specifically provided for herein,
      each Grantor shall furnish to Administrative Agent such other information with
      respect to the Collateral as Administrative Agent may reasonably request.

     

    (c) Each
      Grantor authorizes Administrative Agent to file one or more financing or
      continuation statements and amendments thereto and any patent and trademark
      filings, relating to all or any part of the Collateral without the
      authentication of any Grantor where permitted by Law. A photocopy or other
      reproduction of this Agreement or any financing statement covering the
      Collateral or any part thereof shall be sufficient as a financing statement
      where permitted by Law. Each Grantor ratifies its execution and delivery of,
      and
      the filing of, any financing statement describing any of the Collateral which
      was filed prior to the date of this Agreement. 

     

    (d) Each
      Grantor will not, and will not permit any Person to, revise, modify, amend,
      or
      restate the Organization Documents of any Person the Equity Interests in which
      is Pledged Equity Interests in a manner that adversely affects the security
      interest of the Administrative Agent therein except as permitted by the Credit
      Agreement, or terminate, cancel, or dissolve any such Person except as permitted
      by the Credit Agreement.

     

    (e) Each
      Grantor shall cooperate to determine what may or shall be required to satisfy
      the Laws throughout the world with respect to the recordation and validation
      of
      the license of Intellectual Property, or otherwise to render this Agreement
      and
      the Intellectual Property effective, and shall execute all documents which
      Administrative Agent reasonably determines to be necessary or desirable to
      implement this subsection, including registered user statements or other
      documents suitable for filing with the appropriate Governmental
      Authorities.

     

    4.2. Place
      of Perfection; Records; Collection of Accounts, Chattel Paper and
      Instruments.
      

     

    (a) No
      Grantor shall change the jurisdiction of its organization from the jurisdiction
      specified in Schedule 1,
      Section (a),
      its
      type of entity from the type of entity specified in Schedule 1,
      Section (b),
      or its
      name from the name specified in Schedule 1,
      unless
      the appropriate Grantor has delivered to Administrative Agent 30 days prior
      written notice and taken such actions as Administrative Agent may reasonably
      require with respect to such change. Each Grantor shall keep its chief executive
      office at the address specified in Schedule 2,
      Section (a),
      and the
      office where it keeps its records concerning the Accounts, and the originals
      of
      all Chattel Paper and Instruments, at the address specified in Schedule 2,
      Section (b),
      unless
      the appropriate Grantor has delivered to Administrative Agent 30 days prior
      written notice and taken such actions as Administrative Agent may reasonably
      require with respect to such change. Each Grantor will hold and preserve such
      records and Chattel Paper and Instruments and will permit representatives of
      Administrative Agent at any time during normal business hours to inspect and
      make abstracts from and copies of such records and Chattel Paper and
      Instruments.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    (b) Except
      as
      otherwise provided in this Section 4.2(b),
      each
      Grantor shall continue to collect, at its own expense, all amounts due or to
      become due each Grantor under the Accounts, Chattel Paper, and Instruments.
      In
      connection with such collections, each Grantor may take (and, at Administrative
      Agent's direction, shall take) such action as each such Grantor or
      Administrative Agent may deem necessary or advisable to enforce collection
      of
      the Accounts, Chattel Paper, and Instruments; provided,
      however,
      that
      Administrative Agent shall have the right, if an Event of Default exists and
      is
      continuing, without notice to any Grantor, to notify the Account Debtors or
      obligors under any Accounts, Chattel Paper, and Instruments of the assignment
      of
      such Accounts, Chattel Paper, and Instruments to Administrative Agent and to
      direct such Account Debtors or obligors to make payment of all amounts due
      or to
      become due to each Grantor thereunder directly to Administrative Agent and,
      at
      the expense of each Grantor, to enforce collection of any such Accounts, Chattel
      Paper, and Instruments, and to adjust, settle or compromise the amount or
      payment thereof, in the same manner and to the same extent as each Grantor
      might
      have done or as Administrative Agent deems appropriate. If any Event of Default
      has occurred and is continuing and upon notice to the Borrower and the
      applicable Grantor, all amounts and proceeds (including Instruments) received
      by
      each Grantor in respect of the Accounts, Chattel Paper, and Instruments shall
      be
      received in trust for the benefit of Administrative Agent hereunder, shall
      be
      segregated from other funds and property of each Grantor and shall be forthwith
      paid or delivered over to Administrative Agent in the same form as so received
      (with any necessary indorsement) to be held as cash collateral, thereafter
      to be
      applied as provided in the Credit Agreement. Each Grantor shall not adjust,
      settle, or compromise the amount or payment of any Account, Chattel Paper,
      or
      Instrument, release wholly or partly any Account Debtor or obligor thereof,
      or
      allow any credit or discount thereon, except in the ordinary course of business.
      If any Collateral shall be or be evidenced by a promissory note or other
      Instrument or be Tangible Chattel Paper, and is, in each case, in the original
      amount of $1,500,000 or greater, the applicable Grantor shall deliver to
      Administrative Agent such note, Instrument or Tangible Chattel Paper duly
      endorsed (whether by allonge or otherwise) and accompanied by duly executed
      instruments of transfer or assignment, all in form and substance satisfactory
      to
      Administrative Agent; provided,
      however,
      during
      the existence of an Event of Default, Grantors shall deliver, promptly upon
      request therefor, to Administrative Agent all Collateral evidenced by a
      promissory note, Instrument or Chattel Paper, duly endorsed and accompanied
      by
      duly executed instruments of transfer or assignment, all in form and substance
      satisfactory to Administrative Agent.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    4.3. Patents,
      Trademarks, and Copyrights. 

     

    (a) Each
      Grantor shall ensure that an acknowledgment (approved in form and substance
      by
      Administrative Agent) containing a description of all Collateral consisting
      of
      material Patents, Trademarks or Copyrights shall have been received and recorded
      by the United States Patent and Trademark Office within one month after the
      execution of this Agreement with respect to United States Patents and Trademarks
      and by the United States Copyright Office within one month after the execution
      of this Agreement with respect to United States registered Copyrights pursuant
      to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C.
§ 205, and otherwise as may be required by Administrative Agent pursuant to
      the Laws of any other necessary jurisdiction to the extent that the revenue
      generated and/or received by the Grantors in any foreign jurisdiction during
      any
      year exceeds $100,000, to protect the validity of and to establish a legal,
      valid, and perfected security interest in favor of Administrative Agent in
      respect of all Collateral consisting of material Patents, Trademarks, and
      Copyrights in which a security interest may be perfected by filing, recording,
      or registration in the United States and its territories and possessions, or
      in
      such other jurisdictions as may be required by Administrative Agent, and no
      further or subsequent filing, refiling, recording, rerecording, registration,
      or
      reregistration is necessary (other than such actions as are necessary to perfect
      the security interest with respect to any Collateral consisting of material
      Patents, Trademarks, and Copyrights (or registration or application for
      registration thereof) acquired or developed after the date hereof).

     

    (b) No
      Grantor (either itself or through licensees or sublicensees) will do any act,
      or
      omit to do any act, whereby any material Patent may become invalidated or
      dedicated to the public, and shall continue to mark any products covered by
      a
      material Patent with the relevant patent number as necessary and sufficient
      to
      establish and preserve its maximum rights under Applicable Laws.

     

    (c) Each
      Grantor (either itself or through licensees or sublicensees) will, for each
      material registered Trademark, (i) maintain such Trademark in full force
      free from any claim of abandonment or invalidity for non-use; (ii) maintain
      the quality of products and services offered under such Trademark,
      (iii) display such Trademark with notice of United States federal or
      foreign registration to the extent necessary and sufficient to establish and
      preserve its maximum rights under Applicable Law, and (iv) not use or
      permit the use of such Trademark in violation of any third party
      rights.

     

    (d) Each
      Grantor (either itself or through licensees or sublicensees) will, for each
      work
      covered by a material Copyright, continue to publish, reproduce, display, adopt,
      and distribute the work with appropriate copyright notice as necessary and
      sufficient to establish and preserve its maximum rights under Applicable
      Laws.

     

    (e) Each
      Grantor shall notify Administrative Agent immediately if it knows that any
      material Patent, Trademark, or Copyright may become abandoned, lost, or
      dedicated to the public, or of any adverse determination or development
      (including the institution of, or any such determination or development in,
      any
      proceeding in the United States Patent and Trademark Office, United States
      Copyright Office, or any Governmental Authority in any jurisdiction) regarding
      Grantor's ownership of any material Patent, Trademark, or Copyright, its right
      to register the same, or to keep and maintain the same.

     

    
      
         

      

      
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    (f) In
      no
      event shall any Grantor, either itself or through any agent, employee, licensee,
      or designee, file an application for any material Patent, Trademark, or
      Copyright (or for the registration of any Trademark or Copyright) with the
      United States Patent and Trademark Office, United States Copyright Office,
      or
      any Governmental Authority in any jurisdiction, unless it informs Administrative
      Agent within 15 Business Days of such filing, and, upon request of
      Administrative Agent, executes and delivers any and all agreements, instruments,
      documents, and papers as Administrative Agent may request to evidence
      Administrative Agent's and Secured Parties' security interest in such Patent,
      Trademark, or Copyright, and each Grantor hereby appoints Administrative Agent
      as its attorney-in-fact to execute and file such writings for the foregoing
      purposes.

     

    (g) Each
      Grantor will take all necessary steps that are consistent with the practice
      in
      any proceeding before the United States Patent and Trademark Office, United
      States Copyright Office, or any Governmental Authority in any other jurisdiction
      as may be required by Administrative Agent, to maintain and pursue each
      application relating to the material Patents, Trademarks, and/or Copyrights
      (and
      to obtain the relevant grant or registration), and to maintain each such issued
      Patent and each registration of such Trademarks and Copyrights, including timely
      filings of applications for renewal, affidavits of use, affidavits of
      incontestability and payment of maintenance fees, and, if consistent with good
      business judgment, to initiate opposition, interference, and cancellation
      proceedings against third parties.

     

    (h) If
      any
      Grantor has reason to believe that any Collateral consisting of a material
      Patent, Trademark, or Copyright has been or is about to be infringed,
      misappropriated, or diluted by a third party, each such Grantor promptly shall
      notify Administrative Agent and shall, if consistent with good business
      judgment, unless such Grantor shall reasonably determine that such Patent,
      Trademark or Copyright is in no way material to the conduct of its business
      or
      operations, promptly sue for infringement, misappropriation, or dilution and
      to
      recover any and all damages for such infringement, misappropriation, or
      dilution, and take such other actions as are appropriate under the circumstances
      to protect such Collateral.

     

    (i) If
      an
      Event of Default exists, each Grantor shall use its best efforts to obtain
      all
      requisite consents or approvals by the licensor of each Copyright License,
      Patent License, or Trademark License to effect the collateral assignment of
      all
      of each Grantor's right, title, and interest thereunder to Administrative Agent
      or its designee.

     

    (j) In
      no
      event shall any Grantor acquire or purchase any patent, registered trademark,
      or
      registered copyright which any Grantor, in its reasonable discretion, determines
      is material to the business operations of such Grantor unless it informs
      Administrative Agent within 15 Business Days of such purchase or acquisition,
      and, upon request of Administrative Agent, executes and delivers any and all
      agreements, instruments, documents, and papers as Administrative Agent may
      reasonably request to evidence Administrative Agent's and Secured Parties’
security interest in such purchased or acquired patent, registered trademark,
      or
      registered copyright. Each Grantor hereby appoints Administrative Agent as
      its
      attorney-in-fact to execute and file any evidence of Administrative Agent’s
      security interest and Lien in any such patent, registered trademark, or
      registered copyright (or for the application for any patent or registration
      of
      any copyright) with the United States Patent and Trademark Office, United States
      Copyright Office, or any Governmental Authority in any other jurisdiction as
      may
      be reasonably required by Administrative Agent, in connection with such purchase
      or acquisition of any such patent, registered trademark, or registered
      copyright.

     

    
      
         

      

      
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    (k) The
      parties acknowledge and agree that the Intellectual Property is the sole and
      exclusive property of each applicable Grantor, subject to the terms and
      conditions stated in this Agreement. Other than in connection with any security
      interest in the Intellectual Property that any Grantor has granted to
      Administrative Agent, or any rights and remedies of Secured Parties under
      Applicable Law, neither Administrative Agent nor any other Secured Party shall
      challenge any Grantor’s ownership of the Intellectual Property. Each Grantor
      expressly retains all rights, prior to the occurrence of an Event of Default,
      to
      license third parties to use the Intellectual Property for any purpose
      whatsoever not in violation of the Loan Documents and which are not exclusive
      as
      to prevent Administrative Agent from using any of the Intellectual
      Property.

     

    (l) The
      license granted to Administrative Agent hereunder shall include the right of
      Administrative Agent to grant sublicenses to others to use the Intellectual
      Property if an Event of Default exists, and to enable such sublicensees to
      exercise any rights and remedies of Secured Parties with respect to the
      Collateral, as Administrative Agent reasonably deems necessary or appropriate
      in
      the exercise of the rights and remedies of Secured Parties. In any country
      where
      sublicenses are incapable of registration or where registration of a sublicense
      will not satisfactorily protect the rights of Grantor and Administrative Agent,
      Administrative Agent shall also have the right to designate other parties as
      direct licensees of Grantor to use the Intellectual Property if an Event of
      Default exists and to enable such direct licensees to exercise any rights and
      remedies of Secured Parties as such licensees reasonably deem necessary or
      appropriate and Grantor agrees to enter into direct written licenses with the
      parties as designated on the same terms as would be applicable to a sublicense,
      and any such direct license may, depending on the relevant local requirements,
      be either (a) in lieu
      of a
      sublicense or (b) supplemental to a sublicense. In either case, the parties
      hereto shall cooperate to determine what shall be necessary or appropriate
      in
      the circumstances. For each sublicense to a sublicensee and direct license
      to a
      licensee, Grantor appoints Administrative Agent its agent for the purpose of
      exercising quality control over the sublicensee. Grantor shall execute this
      Agreement in any form, content and language suitable for recordation, notice
      and/or registration in all available and appropriate agencies of foreign
      countries as Administrative Agent may require.

     

    (m) In
      connection with the assignment or other transfer (in whole or in part) of its
      obligations to any other Person, Administrative Agent may assign the license
      granted herein without Grantor’s consent and upon such assignment or transfer
      such other Person shall thereupon become vested with all rights and benefits
      in
      respect thereof granted to Administrative Agent under this Agreement (to the
      extent of such assignment or transfer).

     

    
      
         

      

      
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    (n) The
      parties hereto shall take reasonable action to preserve the confidentiality
      of
      the Intellectual Property; provided,
      that
      Administrative Agent shall not have any liability to any Person for any
      disclosure of the Intellectual Property upon and after any realization upon
      Collateral.

     

    (o) Notwithstanding
      any other provisions of this Agreement, nothing herein obligates any Grantor
      to
      pursue registration or other protection of, and any Grantor may abandon,
      relinquish, withdraw or release, any Intellectual Property determined by such
      Grantor as not in any way material to the conduct of its business or
      operations.

     

    4.4. Rights
      to Dividends and Distributions.
      With
      respect to any certificates, bonds, or other Instruments or Securities
      constituting a part of the Collateral, Administrative Agent shall have authority
      if an Event of Default exists and is continuing, either to have the same
      registered in Administrative Agent's name or in the name of a nominee, and,
      with
      or without such registration, to demand of the issuer thereof, and to receive
      and receipt for, any and all dividends (including any stock or similar dividend
      or distribution) payable in respect thereof, whether they be ordinary or
      extraordinary. Administrative Agent shall send to the respective Grantor notice
      of Administrative Agent’s election to take any action described in the preceding
      sentence; provided any failure of any Grantor to receive any such notice shall
      not invalidate any action taken by Administrative Agent or impair any of its
      rights. If any Grantor shall become entitled to receive or shall receive any
      interest in or certificate (including, without limitation, any interest in
      or
      certificate representing a dividend or a distribution in connection with any
      reclassification, increase, or reduction of capital, or issued in connection
      with any reorganization), or any option or rights arising from or relating
      to
      any of the Collateral, whether as an addition to, in substitution of, as a
      conversion of, or in exchange for any of the Collateral, or otherwise, each
      Grantor agrees to accept the same as Administrative Agent's agent and to hold
      the same in trust on behalf of and for the benefit of Administrative Agent,
      and
      to deliver the same immediately to Administrative Agent in the exact form
      received, with appropriate undated stock or similar powers, duly executed in
      blank, to be held by Administrative Agent, subject to the terms hereof, as
      Collateral. Unless an Event of Default exists, each Grantor shall be entitled
      to
      receive all cash dividends and distributions paid in respect of any of the
      Collateral (subject to the restrictions of any other Loan Document).
      Administrative Agent shall be entitled to all dividends and distributions,
      and
      to any sums paid upon or in respect of any Collateral, upon the liquidation,
      dissolution, or reorganization of the issuer thereof (except those constituting
      Dispositions permitted under the Credit Agreement) which shall be paid to
      Administrative Agent to be held by it as additional collateral security for
      and
      application to the Secured Obligations at the discretion of Administrative
      Agent. All dividends paid or distributed in respect of the Collateral which
      are
      received by any Grantor in violation of this Agreement shall, until paid or
      delivered to Administrative Agent, be held by each Grantor in trust as
      additional Collateral for the Secured Obligations.

     

    4.5. Right
      of Administrative Agent to Notify Issuers.
      If
      an
      Event of Default exists and is continuing and at such other times as
      Administrative Agent is entitled to receive dividends and other property in
      respect of or consisting of any Collateral which is or represents an equity
      or
      ownership interest in any Person ("Securities
      Collateral"),
      Administrative Agent may notify issuers of the Securities Collateral to make
      payments of all dividends and distributions directly to Administrative Agent
      and
      Administrative Agent may take control of all Proceeds of any Securities
      Collateral. Until Administrative Agent elects to exercise such rights, if an
      Event of Default exists, each Grantor, as agent of Administrative Agent, shall
      collect and segregate all dividends and other amounts paid or distributed with
      respect to the Securities Collateral.

     

    
      
         

      

      
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    4.6. Insurance.
      All
      policies of insurance required to be maintained pursuant to Section 6.07
      of the
      Credit Agreement insuring the Equipment and Inventory shall be written for
      the
      benefit of Administrative Agent for itself and the other Secured Parties and
      each Grantor, as their interests may appear, and shall provide for at least
      thirty days' prior written notice of cancellation to Administrative Agent.
      Upon
      reasonable request by Administrative Agent, each Grantor shall promptly furnish
      to Administrative Agent evidence of such insurance in form and content
      satisfactory to Administrative Agent. If any Grantor fails to perform or observe
      any applicable covenants as to insurance, Administrative Agent may at its option
      obtain insurance on only Secured Parties' interest in the Equipment and
      Inventory, any premium thereby paid by Administrative Agent to become part
      of
      the Secured Obligations, bear interest prior to the existence of an Event of
      Default, at the then applicable Base Rate, and during the existence of an Event
      of Default, at the lesser of (i) the Highest Lawful Rate and (ii) the Default
      Rate. If Administrative Agent maintains such substitute insurance, the premium
      for such insurance shall be due on demand and payable by the applicable Grantor
      to Administrative Agent. Each Grantor grants and appoints Administrative Agent
      its attorney-in-fact to, if an Event of Default exists, endorse any check or
      draft that may be payable to each such Grantor in order to collect any payments
      in respect of insurance, including any refunds of unearned premiums in
      connection with any cancellation, adjustment, or termination of any policy
      of
      insurance. Any such sums collected by Administrative Agent shall be credited,
      except to the extent applied to the purchase by Administrative Agent of similar
      insurance, to any amounts then owing on the Secured Obligations in accordance
      with the Credit Agreement.

     

    4.7. Transfers
      and Other Liens.
      No
      Grantor shall (a) Dispose of any of the Collateral, except as permitted under
      the Credit Agreement and the other Loan Documents, or (b) create or permit
      to exist any Lien upon or with respect to any of the Collateral, except for
      Permitted Liens.

     

    4.8. Administrative
      Agent Appointed Attorney-in-Fact.
      Each
      Grantor hereby irrevocably appoints Administrative Agent Grantor's
      attorney-in-fact, with full authority in the place and stead of each Grantor
      and
      in the name of each Grantor or otherwise to take any action and to execute
      any
      instrument which Administrative Agent may deem reasonably necessary or advisable
      to accomplish the purposes of this Agreement, including, without limitation
      (provided that the actions listed in each clause below other than the obtainment
      of insurance may only be taken or exercised if an Event of Default
      exists):

     

    (a) to
      obtain
      and adjust insurance required to be paid to Administrative Agent pursuant to
      Section 4.6;

     

    (b) to
      ask,
      demand, collect, sue for, recover, compromise, receive, and give acquittance
      and
      receipts for moneys due and to become due under or in connection with the
      Collateral;

     

    (c) to
      receive, indorse, and collect any drafts or other Instruments, Documents, and
      Chattel Paper, in connection therewith; and

     

    
      
         

      

      
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    (d) to
      file
      any claims or take any action or institute any proceedings which Administrative
      Agent may deem necessary or desirable for the collection of any of the
      Collateral or otherwise to enforce compliance with the terms and conditions
      of
      any Collateral or the rights of Administrative Agent with respect to any of
      the
      Collateral. EACH
      GRANTOR HEREBY IRREVOCABLY GRANTS TO ADMINISTRATIVE AGENT EACH SUCH GRANTOR'S
      PROXY (EXERCISABLE ONLY IF AN EVENT OF DEFAULT EXISTS) TO VOTE ANY SECURITIES
      COLLATERAL AND APPOINTS ADMINISTRATIVE AGENT EACH SUCH GRANTOR'S
      ATTORNEY-IN-FACT TO PERFORM ALL OBLIGATIONS OF GRANTOR UNDER THIS AGREEMENT
      AND
      TO EXERCISE ALL OF ADMINISTRATIVE AGENT'S AND EACH OTHER SECURED PARTY'S RIGHTS
      HEREUNDER. THE PROXY AND EACH POWER OF ATTORNEY HEREIN GRANTED, AND EACH STOCK
      POWER AND SIMILAR POWER NOW OR HEREAFTER GRANTED (INCLUDING ANY EVIDENCED BY
      A
      SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR TO
      FINAL PAYMENT IN FULL OF THE SECURED OBLIGATIONS.

     

    4.9. Dilution
      of Ownership.
      As to
      any Pledged Equity Interests, unless otherwise permitted by the Credit
      Agreement, no Grantor will consent to or approve of the issuance of (a) any
      additional shares of any class of Equity Interests of such issuer (unless
      immediately upon issuance additional Equity Interests are pledged and delivered
      to the Administrative Agent pursuant to the terms hereof to the extent necessary
      to give Administrative Agent a security interest after such issuance in at
      least
      the same percentage of such issuer's outstanding securities or other equity
      interest as Administrative Agent had before such issuance), (b) any
      instrument convertible voluntarily by the holder thereof or automatically upon
      the occurrence or non-occurrence of any event or condition into, or exchangeable
      for, any such securities or other equity interests (unless immediately upon
      issuance such instrument is pledged and delivered to the Administrative Agent
      pursuant to the terms hereof), or (c) any warrants, options, contracts or
      other commitments entitling any third party to purchase or otherwise acquire
      any
      such securities or other equity interests.
      The
      foregoing shall not apply to any equity interests in Borrower.

     

    4.10. Restrictions
      on Securities.
      No
      Grantor will enter into any agreement creating, or otherwise permit to exist,
      any restriction or condition upon the transfer, voting or control of any Pledged
      Equity Interests, except as (a) consented to in writing by the Administrative
      Agent, (b) required by provisions of applicable Securities Laws or state
      securities Laws (which provisions are subject to Laws that expressly prohibit
      waiver of such provision), or (c) otherwise permitted by the Credit Agreement.
      No issuer of any Pledged Equity Interests, which is either a partnership or
      limited liability company, shall amend or restate its partnership agreement
      or
      certificate of organization or operating agreement, respectively, or other
      governance document, to provide that any Equity Interest of such Issuer is
      a
      security governed by Chapter 8 of the Code or permit any Equity Interest of
      such
      issuer to be evidenced by a certificate or other instrument (unless immediately
      upon issuance such certificate or instrument is pledged and delivered to the
      Administrative Agent pursuant to the terms hereof). 

     

    
      
         

      

      
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    ARTICLE
      V

     

    RIGHTS
      AND POWERS OF SECURED PARTIES.

     

    5.1. Administrative
      Agent May Perform.
      If any
      Grantor fails to perform any agreement contained herein, Administrative Agent
      may itself perform, or cause performance of, such agreement, and the expenses
      of
      Administrative Agent incurred in connection therewith shall be payable by each
      such Grantor under Section 5.6.

     

    5.2. Administrative
      Agent's Duties.
      The
      powers conferred on Administrative Agent hereunder are solely to protect Secured
      Parties' interest in the Collateral and shall not impose any duty upon it to
      exercise any such powers. Except for the safe custody of any Collateral in
      its
      possession and the accounting for moneys actually received by Secured Parties
      hereunder, neither Administrative Agent nor any other Secured Party shall have
      any duty as to any Collateral, as to ascertaining or taking action with respect
      to calls, conversions, exchanges, maturities, tenders, or other matters relative
      to any Collateral, whether or not Administrative Agent or any other Secured
      Party has or is deemed to have knowledge of such matters, or as to the taking
      of
      any necessary steps to preserve rights against prior parties or any other rights
      pertaining to any reasonable care in the custody and preservation of any
      Collateral in its possession if such Collateral is accorded treatment
      substantially equal to that which Administrative Agent accords its own property.
      Except as provided in this Section 5.2,
      neither
      Administrative Agent nor any other Secured Party shall have any duty or
      liability to protect or preserve any Collateral or to preserve rights pertaining
      thereto. Nothing contained in this Agreement shall be construed as requiring
      or
      obligating Administrative Agent or any other Secured Party, and neither
      Administrative Agent nor any other Secured Party shall be required or obligated,
      to (a) present or file any claim or notice or take any action, with respect
      to any Collateral or in connection therewith or (b) notify any Grantor of
      any decline in the value of any Collateral.

     

    5.3. Remedies.
      If an
      Event of Default exists:

     

    (a) Administrative
      Agent may exercise in respect of the Collateral, in addition to other rights
      and
      remedies provided for herein or otherwise available to it or any other Secured
      Party pursuant to any Applicable Law, all the rights and remedies of a secured
      party on default under the UCC (whether or not the UCC applies to the affected
      Collateral), and also may require each Grantor to, and each Grantor will at
      its
      expense and upon request of Administrative Agent forthwith, assemble all or
      part
      of the Collateral as directed by Administrative Agent and make it available
      to
      Administrative Agent at a place to be designated by Administrative Agent which
      is reasonably convenient to both parties at public or private sale, at any
      of
      Administrative Agent's offices or elsewhere, for cash, on credit or for future
      delivery, and upon such other terms as Administrative Agent may deem
      commercially reasonable. Each Grantor agrees that, to the extent notice of
      sale
      shall be required by Law, ten days' notice to each Grantor of the time and
      place
      of any public sale or the time after which any private sale is to be made shall
      constitute reasonable notification. Administrative Agent shall not be obligated
      to make any sale of Collateral regardless of notice of sale having been given.
      Administrative Agent may adjourn any public or private sale from time to time
      by
      announcement at the time and place fixed therefor, and such sale may, without
      further notice, be made at the time and place to which it was so
      adjourned.

     

    
      
         

      

      
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    (b) All
      cash
      proceeds received by Administrative Agent upon any sale of, collection of,
      or
      other realization upon, all or any part of the Collateral shall be applied
      as
      set forth in Section 8.03
      of the
      Credit Agreement.

     

    (c) All
      payments received by each Grantor under or in connection with any Collateral
      shall be received in trust for the benefit of Administrative Agent, shall be
      segregated from other funds of each such Grantor, and shall be forthwith paid
      over to Administrative Agent in the same form as so received (with any necessary
      indorsement).

     

    (d) Because
      of the Securities Act of 1933, as amended ("Securities
      Act"),
      and
      other Laws, including without limitation state "blue sky" Laws, or contractual
      restrictions or agreements, there may be legal restrictions or limitations
      affecting Administrative Agent in any attempts to dispose of the Collateral
      and
      the enforcement of rights under this Agreement. For these reasons,
      Administrative Agent is authorized by each Grantor, but not obligated, if any
      Event of Default exists, to sell or otherwise dispose of any of the Collateral
      at private sale, subject to an investment letter, or in any other manner which
      will not require the Collateral, or any part thereof, to be registered in
      accordance with the Securities Act, or any other Law. Administrative Agent
      is
      also hereby authorized by each Grantor, but not obligated, to take such actions,
      give such notices, obtain such consents, and do such other things as
      Administrative Agent may deem required or appropriate under the Securities
      Act
      or other securities Laws or other Laws or contractual restrictions or agreements
      in the event of a sale or disposition of any Collateral. Each Grantor
      understands that Administrative Agent may in its discretion approach a
      restricted number of potential purchasers and that a sale under such
      circumstances may yield a lower price for the Collateral than would otherwise
      be
      obtainable if same were registered and/or sold in the open market. No sale
      so
      made in good faith by Administrative Agent shall be deemed to be not
      "commercially reasonable" because so made. Each Grantor agrees that if an Event
      of Default exists, and Administrative Agent sells the Collateral or any portion
      thereof at any private sale or sales, Administrative Agent shall have the right
      to rely upon the advice and opinion of appraisers and other Persons, which
      appraisers and other Persons are acceptable to Administrative Agent, as to
      the
      best price reasonably obtainable upon such a private sale thereof. In the
      absence of bad faith or gross negligence, such reliance shall be prima
      facie
      evidence
      that Administrative Agent and the other Secured Parties handled such matter
      in a
      commercially reasonable manner under Applicable Law.

     

    (e) After
      notice to Grantor, Administrative Agent and such Persons as Administrative
      Agent
      may reasonably designate shall have the right, at Grantor's own cost and
      expense, to verify under reasonable procedures, the validity, amount, quality,
      quantity, value, condition, and status of, or any other matter relating to,
      the
      Collateral, including, in the case of Accounts or Collateral in the possession
      of any third person, by contacting Account Debtors or the third person
      possessing such Collateral for the purpose of making such a verification.
      Administrative Agent shall have the absolute right to share any information
      it
      gains from such inspection or verification with any Secured Party.

     

    
      
         

      

      
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    (f) For
      purposes of enabling Administrative Agent to exercise rights and remedies under
      this Agreement, each Grantor grants (to the extent not otherwise prohibited
      by a
      license with respect thereto) to Administrative Agent an irrevocable,
      nonexclusive license (exercisable without payment of royalty or other
      compensation to any Grantor or any other Person, provided,
      that if
      the license granted to Administrative Agent is a sublicense, each Grantor shall
      be solely responsible for, and indemnify Administrative Agent against, any
      royalty or other compensation payable to Grantor's licensor or other Person)
      to
      use, if an Event of Default exists, all of Grantor's Software, and including
      in
      such license reasonable access to all media in which any of the licensed items
      may be recorded and all related manuals.

     

    (g) For
      the
      purpose of enabling Administrative Agent to exercise rights and remedies under
      this Agreement, each Grantor grants (to the extent not otherwise prohibited
      by a
      license with respect thereto) to Administrative Agent an irrevocable,
      nonexclusive license (exercisable without payment of royalty or other
      compensation to any Grantor or any other Person) to use, license, or
      sub-license, if an Event of Default exists, any of the Collateral consisting
      of
      Intellectual Property and wherever the same may be located, and including in
      such license reasonable access to all media in which any of the licensed items
      may be recorded or stored and to all Software used for the use, compilation,
      or
      printout thereof. In connection therewith, each Grantor shall execute and
      deliver a license agreement to Administrative Agent to evidence the grant of
      such license. The use of such license by Administrative Agent shall be
      exercised, at the option of Administrative Agent, if an Event of Default exists;
      provided
      that any
      license, sub-license, or other transaction entered into by Administrative Agent
      in accordance herewith shall be binding upon each Grantor notwithstanding any
      subsequent cure of an Event of Default; provided
      further,
      Administrative Agent shall use reasonable efforts to limit the duration of
      each
      such license or sub-license to the time period ending upon the cure of such
      Event of Default in accordance with the Loan Documents.

     

    5.4. Appointment
      of Receiver or Trustee.
      In
      connection with the exercise of Secured Parties' rights under this Agreement
      or
      any other Loan Document, Administrative Agent may, if an Event of Default exists
      resulting in the acceleration of any of the Secured Obligations or following
      any
      Loan Party's failure to pay any of the Secured Obligations at maturity, obtain
      the appointment of a receiver or trustee to assume, upon receipt of all
      necessary judicial or other Governmental Authority consents or approvals,
      control of or ownership of any Permits. Such receiver or trustee shall have
      all
      rights and powers provided to it by Law or by court order or provided to
      Administrative Agent under this Agreement or any other Loan Document. Upon
      the
      appointment of such trustee or receiver, each Grantor shall cooperate, to the
      extent necessary or appropriate, in the expeditious preparation, execution,
      and
      filing of an application to any Governmental Authority or for consent to the
      transfer of control or assignment of each Grantor's Permits to the receiver
      or
      trustee. 

     

    
      
         

      

      
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    5.5. INDEMNITY
      AND EXPENSES 

     

    (a) EACH
      GRANTOR SHALL INDEMNIFY (WHICH SHALL BE PAYABLE FROM TIME TO TIME ON DEMAND)
      SECURED PARTIES FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, AND LIABILITIES
      (INCLUDING REASONABLE ATTORNEYS' FEES) GROWING OUT OF OR RESULTING FROM THIS
      AGREEMENT (INCLUDING ENFORCEMENT OF THIS AGREEMENT), EXPRESSLY INCLUDING
      SUCH CLAIMS, LOSSES, OR LIABILITIES ARISING OUT OF MERE NEGLIGENCE OF ANY
      SECURED PARTY, EXCEPT CLAIMS, LOSSES, OR LIABILITIES RESULTING FROM ANY SECURED
      PARTY'S (i) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR (ii) BREACH IN
      BAD FAITH OF ITS OBLIGATIONS UNDER ANY LOAN DOCUMENT.

     

    (b) EACH
      GRANTOR WILL UPON DEMAND PAY TO ADMINISTRATIVE AGENT (AND EACH SUB-AGENT
      THEREOF) AND THEIR RESPECTIVE RELATED PARTIES THE AMOUNT OF ANY AND ALL
      REASONABLE EXPENSES, INCLUDING THE REASONABLE FEES AND EXPENSES OF ITS COUNSEL
      AND OF ANY EXPERTS AND AGENTS, WHICH ADMINISTRATIVE AGENT (AND EACH SUB-AGENT
      THEREOF) AND THEIR RESPECTIVE RELATED PARTIES MAY INCUR IN CONNECTION WITH
      THE
      ADMINISTRATION OF THIS AGREEMENT.

     

    (c) EACH
      GRANTOR WILL UPON DEMAND PAY TO ADMINISTRATIVE AGENT (AND EACH SUB-AGENT
      THEREOF), EACH OTHER SECURED PARTY AND THEIR RESPECTIVE RELATED PARTIES THE
      AMOUNT OF ANY AND ALL EXPENSES, INCLUDING THE FEES AND EXPENSES OF ITS COUNSEL
      AND OF ANY EXPERTS AND AGENTS, WHICH ADMINISTRATIVE AGENT (AND EACH SUB-AGENT
      THEREOF), SUCH OTHER SECURED PARTY AND THEIR RESPECTIVE RELATED PARTIES MAY
      INCUR IN CONNECTION WITH (I) THE CUSTODY, PRESERVATION, USE OR OPERATION
      OF, OR THE SALE OF, COLLECTION FROM, OR OTHER REALIZATION UPON, ANY OF THE
      COLLATERAL, (II) THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OF ANY
      SECURED PARTY HEREUNDER, OR (III) THE FAILURE BY GRANTOR TO PERFORM OR
      OBSERVE ANY OF THE PROVISIONS HEREOF.

     

    ARTICLE
      VI

     

    MISCELLANEOUS

     

    6.1. Maximum
      Liability.
      Anything
      in this Agreement to the contrary notwithstanding, the obligations of each
      Grantor (other than Borrower) hereunder shall be limited to a maximum aggregate
      amount equal to the largest amount that would not render its obligations
      hereunder subject to avoidance as a fraudulent transfer or conveyance under
      Section 548 of Title 11 of the United States Code or any applicable
      provisions of comparable Law (collectively, the "Fraudulent
      Transfer Laws"),
      in
      each case after giving effect to all other liabilities of each Grantor,
      contingent or otherwise, that are relevant under the Fraudulent Transfer Laws
      (specifically excluding, however, any liabilities of each Grantor in respect
      of
      intercompany indebtedness to other Loan Parties or Affiliates of other Loan
      Parties to the extent that such indebtedness would be discharged in an amount
      equal to the amount paid or property conveyed by each Grantor under the Loan
      Documents) and after giving effect as assets, subject to Section 6.2,
      to the
      value (as determined under the applicable provisions of the Fraudulent Transfer
      Laws) of any rights to subrogation or contribution of each Grantor pursuant
      to
      (a) Applicable Law or (b) any agreement providing for an equitable
      allocation among each Grantor and other Loan Parties of obligations arising
      under the Loan Documents. 

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    6.2. Waiver
      of Subrogation.
      No
      Grantor shall assert, enforce, or otherwise exercise (a) any right of
      subrogation to any of the rights or Liens of any Secured Party or any other
      beneficiary against any other Loan Party or any Collateral or other security,
      or
      (b) any right of recourse, reimbursement, contribution, indemnification, or
      similar right against any other Loan Party on all or any part of the Obligations
      or any other Loan Party, and each Grantor hereby waives any and all of the
      foregoing rights and the benefit of, and any right to participate in, and
      Collateral or other security given to or for the benefit of any Secured Party
      or
      any other beneficiary to secure payment of the Obligations. This Section 6.2
      shall
      survive the termination of this Agreement, and any satisfaction and discharge
      of
      each Grantor by virtue of any payment, court order, or Law.

     

    6.3. Cumulative
      Rights.
      All
      rights of Administrative Agent and each other Secured Party under the Loan
      Documents are cumulative of each other and of every other right which
      Administrative Agent and each other Secured Party may otherwise have at Law
      or
      in equity or under any other agreement. The exercise of one or more rights
      shall
      not prejudice or impair the concurrent or subsequent exercise of other
      rights.

     

    6.4. Amendments;
      Waivers.
      Any
      term, covenant, agreement, or condition of this Agreement may be amended, and
      any right under this Agreement may be waived, if, but only if, such amendment
      or
      waiver is in writing and is signed by Administrative Agent and, in the case
      of
      an amendment, by each Grantor. Unless otherwise specified in such waiver, a
      waiver of any right under this Agreement shall be effective only in the specific
      instance and for the specific purpose for which given. No election not to
      exercise, failure to exercise or delay in exercising any right, nor any course
      of dealing or performance, shall operate as a waiver of any right of any Secured
      Party under this Agreement or Applicable Law, nor shall any single or partial
      exercise of any such right preclude any other or further exercise thereof or
      the
      exercise of any other right of any Secured Party under this Agreement or
      Applicable Law.

     

    6.5. Continuing
      Security Interest.
      

     

    (a) This
      Agreement creates a continuing security interest in the Collateral and shall
      (x) remain in full force and effect until the Release Date, (y) be
      binding upon each Grantor, its successors and assigns, and (z) inure to the
      benefit of, and be enforceable by, Administrative Agent and its successors,
      transferees and assigns. Upon the Release Date, this Agreement and all
      obligations (other than those expressly stated to survive such termination)
      of
      Administrative Agent and each Grantor hereunder shall terminate, all without
      delivery of any instrument or performance of any act by any party, and all
      rights to the Collateral shall revert to the granting parties and Administrative
      Agent will, at Grantor's expense, execute and deliver to each Grantor or
      authorize such Grantor to file such documents (including without limitation
      UCC
      termination statements) as each such Grantor shall reasonably request to
      evidence such termination and shall deliver to such Grantor any Collateral
      held
      by or on behalf of Administrative Agent hereunder. Each Grantor agrees that
      to
      the extent that Administrative Agent or any other Secured Party receives any
      payment or benefit and such payment or benefit, or any part thereof, is
      subsequently invalidated, declared to be fraudulent or preferential, set aside
      or is required to be repaid to a trustee, receiver, or any other Person under
      any Debtor Relief Law, common law or equitable cause, then to the extent of
      such
      payment or benefit, the Obligations or part thereof intended to be satisfied
      shall be revived and continued in full force and effect as if such payment
      or
      benefit had not been made and, further, any such repayment by Administrative
      Agent or any other Secured Party, to the extent that Administrative Agent or
      any
      other Secured Party did not directly receive a corresponding cash payment,
      shall
      be added to and be additional Secured Obligations payable upon demand by
      Administrative Agent or any other Secured Party and secured hereby, and, if
      the
      Lien and security interest hereof shall have been released, such Lien and
      security interest shall be reinstated with the same effect and priority as
      on
      the date of execution hereof all as if no release of such Lien or security
      interest had ever occurred.

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    (b) In
      connection with any sale or other disposition of Collateral permitted by the
      Credit Agreement, the Lien pursuant to this Agreement on such sold or disposed
      of Collateral shall be automatically released. In connection with the sale
      or
      other disposition of Collateral permitted under the Credit Agreement,
      Administrative Agent shall, upon receipt from the Borrower of a written request
      for the release of such Collateral subject to such sale or other disposition,
      identifying such Collateral, deliver to such Grantor, as the case may be, such
      Collateral held by Administrative Agent hereunder and execute and deliver to
      the
      relevant Grantor (at the sole cost and expense of such Grantor) or authorize
      such Grantor to file all releases or other documents (including without
      limitation UCC termination statements) necessary or reasonably desirable for
      the
      release of Liens created hereby on such Collateral as such Grantor may
      reasonably request.

     

    6.6. GOVERNING
      LAW; WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND SERVICE OF
      PROCESS.
      

     

    (a) THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
      THE
      STATE OF TEXAS
      APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
      STATE AND
      APPLICABLE FEDERAL LAW.

     

    (b) EACH
      GRANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, BY ACCEPTANCE
      HEREOF, IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
      TO
      THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS SITTING IN
      DALLAS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT
      OF TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
      ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
      FOR
      RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH GRANTOR, THE ADMINISTRATIVE
      AGENT AND EACH OTHER SECURED PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
      ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
      DETERMINED IN SUCH TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
      APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH GRANTOR, THE ADMINISTRATIVE AGENT
      AND EACH OTHER SECURED LENDER BY ACCEPTANCE HEREOF, AGREES THAT A FINAL JUDGMENT
      IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
      OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
      BY
      LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
      RIGHT THAT THE ADMINISTRATIVE AGENT, ANY OTHER SECURED PARTY OR THE L/C ISSUER
      MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
      OR ANY OTHER LOAN DOCUMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS
      OF ANY JURISDICTION.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    (c) EACH
      GRANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, BY ACCEPTANCE
      HEREOF, IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
      OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
      AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN
      PARAGRAPH (B) OF THIS SECTION. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND
      EACH OTHER SECURED PARTY, BY ACCEPTANCE HEREOF, HEREBY IRREVOCABLY WAIVES,
      TO
      THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
      FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
      COURT.

     

    (d) EACH
      GRANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, BY ACCEPTANCE
      HEREOF, IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
      NOTICES IN SECTION 10.02
      OF THE
      CREDIT AGREEMENT. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF EACH
      GRANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, TO SERVE PROCESS
      IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

     

    (e) EACH
      GRANTOR, THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, BY ACCEPTANCE
      HEREOF, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
      ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN
      DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
      OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR
      THE
      TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
      ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH GRANTOR,
      THE ADMINISTRATIVE AGENT AND EACH OTHER SECURED PARTY, BY ACCEPTANCE HEREOF,
      HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
      ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
      THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
      ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
      WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    6.7. Administrative
      Agent's Right to Use Agents.
      Administrative
      Agent may exercise its rights under this Agreement through an agent or other
      designee.

     

    6.8. No
      Interference, Compensation or Expense.
      Administrative Agent may exercise its rights under this Agreement
      (a) without resistance or interference by any Grantor and (b) without
      payment of any rent, license fee, or compensation of any kind to any
      Grantor.

     

    6.9. Waivers
      of Rights Inhibiting Enforcement.
      Each
      Grantor waives (a) any claim that, as to any part of the Collateral, a
      private sale, should Administrative Agent elect so to proceed, is, in and of
      itself, not a commercially reasonable method of sale for such Collateral,
      (b) except as otherwise provided in this Agreement, TO
      THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, NOTICE OR JUDICIAL HEARING
      IN CONNECTION WITH ADMINISTRATIVE AGENT'S DISPOSITION OF ANY OF THE COLLATERAL
      INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
      REMEDIES AND ANY SUCH RIGHT THAT EACH GRANTOR WOULD OTHERWISE HAVE UNDER THE
      CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
      REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS
      WITH
      RESPECT TO THE ENFORCEMENT OF SECURED LENDERS' RIGHTS
      HEREUNDER
      and (c)
      all rights of redemption, appraisement or valuation.

     

    6.10. Obligations
      Not Affected.
      To the
      fullest extent not prohibited by Applicable Law, the obligations of each Grantor
      under this Agreement shall remain in full force and effect without regard to,
      and shall not be impaired or affected by:

     

    (a) any
      amendment, addition, or supplement to, or restatement of any Loan Document
      or
      any instrument delivered in connection therewith or any assignment or transfer
      thereof;

     

    (b) any
      exercise, non-exercise, or waiver by Administrative Agent or any other Secured
      Party of any right, remedy, power, or privilege under or in respect of, or
      any
      release of any guaranty, any collateral, or the Collateral or any part thereof
      provided pursuant to, this Agreement or any Loan Document;

     

    (c) any
      waiver, consent, extension, indulgence, or other action or inaction in respect
      of this Agreement or any Loan Document or any assignment or transfer of any
      thereof; 

     

    (d) any
      bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
      liquidation, or the like of any Loan Party or any other Person, whether or
      not
      each Grantor shall have notice or knowledge of any of the foregoing;
      or

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    (e) any
      other
      event which may give a Grantor or any other Loan Party a defense to, or a
      discharge of, any of its obligations under any Loan Document.

     

    6.11. Notices
      and Deliveries.
      All
      notices and other communications provided for hereunder shall be effectuated
      in
      the manner provided for in Section 10.02
      of the
      Credit Agreement, provided that if a notice or communication hereunder is to
      a
      Grantor other than the Borrower, said notice shall be addressed to such Grantor,
      in care of the Borrower at the Borrower's then current address (or facsimile
      number) for notice under the Credit Agreement.

     

    6.12. Severability.
      If any
      provision of this Agreement is held to be illegal, invalid, or unenforceable
      under present or future Laws during the term thereof, (a) such provision
      shall be fully severable, this Agreement shall be construed and enforced as
      if
      such illegal, invalid, or unenforceable provision had never comprised a part
      hereof, and the remaining provisions hereof shall remain in full force and
      effect and shall not be affected by the illegal, invalid, or unenforceable
      provision or by its severance herefrom and (b) the parties shall endeavor
      in good faith negotiations to replace the illegal, invalid, or unenforceable
      provisions with valid provisions the economic effect of which comes as close
      as
      possible to that of the illegal, invalid, or unenforceable
      provisions.

     

    6.13. Successors
      and Assigns.
      All of
      the provisions of this Agreement shall be binding and inure to the benefit
      of
      the parties hereto and their respective successors and assigns (including,
      as to
      each Grantor, all Persons who may become bound as a debtor or a new debtor
      to
      this Agreement); provided,
      each
      Grantor may not assign any of its rights or obligations under this Agreement,
      except as a result of the consummation of a transaction permitted under
Section 7.04
      of the
      Credit Agreement.

     

    6.14. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, with the same effect as if the signatures thereto were upon the
      same instrument.

     

    6.15. Waiver.
      To the
      extent not prohibited by Applicable Law, each Grantor, which is a partner in
      any
      partnership in which any Pledged Partnership Interests are being pledged
      hereunder, a member in any limited liability company in which any Pledged
      Membership Interests are being pledged hereunder, or a trustee, settlor or
      beneficiary of any trust in which Pledged Trust Interests are being pledged
      hereunder, hereby agrees that any provision of any Organization Document, the
      Delaware Limited Liability Company Act (as it may be amended or restated) or
      any
      other governance document that in any manner restricts, prohibits or provides
      conditions to (a) the grant of a Lien on any interest in such partnership,
      limited liability company or trust, (b) any transfer of any interest in
      such partnership, limited liability company or trust, (c) any change in
      management or control of such partnership, limited liability company or trust,
      or (d) any other exercise by the Administrative Agent of any rights
      pursuant to this Agreement, any other Loan Document or Law shall not apply
      to
      (i) the grant of any Lien hereunder, (ii) the execution, delivery and
      performance of this Agreement by any such Grantor, or (iii) the foreclosure
      or other realization upon any interest in any Pledged Equity Interest.
      Furthermore, each such Grantor agrees that it will not permit any amendment
      to
      or restatement of any Organization Document or any other governance document
      in
      any manner to adversely affect the Administrative Agent's ability to foreclose
      on any Pledged Equity Interest or which conflicts with the provisions of this
      Section 6.15
      without
      the prior written consent of the Administrative Agent.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    6.16. ENTIRE
      AGREEMENT.
      THIS
      WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL
      AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
      UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

     

    
      	
              THE
                REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
                BLANK.

            

    

    

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

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

    

      
        	 	
                TEXAS
                  INDUSTRIES, INC.

              
	 	 
	 	 
	 	
                By:

              	
                /s/
                  Sharon Ellis

              	 
	 	 	
                Name:

              	
                Sharon
                  Ellis

              
	 	 	
                Title:

              	
                Treasurer

              

      

    

    

      Security
        Agreement Signature Page

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      
        	 	
                BROOKHOLLOW
                  CORPORATION

              
	 	
                BROOK
                  HOLLOW PROPERTIES, INC.

              
	 	
                BROOKHOLLOW
                  OF ALEXANDRIA, INC.

              
	 	
                BROOKHOLLOW
                  OF VIRGINIA, INC.

              
	 	
                SOUTHWESTERN
                  FINANCIAL CORPORATION

              
	 	
                CREOLE
                  CORPORATION

              
	 	
                PARTIN
                  LIMESTONE PRODUCTS, INC.

              
	 	
                RIVERSIDE
                  CEMENT HOLDINGS COMPANY

              
	 	
                TXI
                  AVIATION, INC.

              
	 	
                TXI
                  CEMENT COMPANY

              
	 	
                TXI
                  RIVERSIDE INC.

              
	 	
                TXI
                  TRANSPORTATION COMPANY

              
	 	
                TXI
                  CALIFORNIA INC.

              
	 	
                PACIFIC
                  CUSTOM MATERIALS, INC.

              
	 	
                TXI
                  POWER COMPANY

              
	 	
                TEXAS
                  INDUSTRIES HOLDINGS, LLC

              
	 	
                TEXAS
                  INDUSTRIES TRUST

              
	 	
                TXI
                  LLC

              
	 	
                TXI
                  OPERATING TRUST

              
	 	 
	 	 
	 	
                By:

              	
                /s/
                  Sharon Ellis

              	 
	 	 	
                Name:
                  Sharon Ellis

              
	 	 	
                Title:
                  Treasurer

              

      

    

    

      Security
        Agreement Signature Page

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

      
        	 	
                RIVERSIDE
                  CEMENT COMPANY

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  Sharon Ellis

              	 
	 	 	
                Name:
                  Sharon Ellis

              
	 	 	
                Title:
                  Treasurer

              
	 	 	 
	 	 	 
	 	TXI
                OPERATIONS, LP
	 	 	 
	 	
                By:

              	
                TXI
                  Operating Trust, its General Partner

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  Sharon Ellis

              	 
	 	 	
                Name:
                  Sharon Ellis

              
	 	 	
                Title:
                  Treasurer

              

      

    

    

      Security
        Agreement Signature PageUnassociated Document

    Exhibit
4.1

     

     

    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.

    

    

    WARRANT

    to
purchase

    299,829

    Shares
of Common Stock

    

    of
PORTER BANCORP, INC.

    

    Issue
Date: November 21, 2008

    

    1.           Definitions. Unless
the context otherwise requires, when used herein the following terms shall have
the meanings indicated.

    

    “Affiliate” has the meaning
ascribed to it in the Purchase Agreement.

    

    “Appraisal Procedure” means a
procedure whereby two independent appraisers, one chosen by the Company and one
by the Original Warrantholder, shall mutually agree upon the determinations then
the subject of appraisal. Each party shall deliver a notice to the other
appointing its appraiser within 15 days after the Appraisal Procedure is
invoked. If within 30 days after appointment of the two appraisers they are
unable to agree upon the amount in question, a third independent appraiser shall
be chosen within 10 days thereafter by the mutual consent of such first two
appraisers. The decision of the third appraiser so appointed and chosen shall be
given within 30 days after the selection of such third appraiser. If three
appraisers shall be appointed and the determination of one appraiser is
disparate from the middle determination by more than twice the amount by which
the other determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be binding and
conclusive upon the Company and the Original Warrantholder; otherwise, the
average of all three determinations shall be binding upon the Company and the
Original Warrantholder. The costs of conducting any Appraisal Procedure shall be
borne by the Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Board of Directors” means the
board of directors of the Company, including any duly authorized committee
thereof.

    

    “Business Combination” means a
merger, consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s stockholders.

    

    “Business Day” means any day
except Saturday, Sunday and any day on which banking institutions in the State
of New York generally are authorized or required by law or other governmental
actions to close.

    

    “Capital Stock” means (A) with
respect to any Person that is a corporation or company, any and all shares,
interests, participations or other equivalents (however designated) of capital
or capital stock of such Person and (B) with respect to any Person that is not a
corporation or company, any and all partnership or other equity interests of
such Person.

    

    “Charter” means, with respect
to any Person, its certificate or articles of incorporation, articles of
association, or similar organizational document.

    

    “Common Stock” has the meaning
ascribed to it in the Purchase Agreement.

    

    “Company” means the Person
whose name, corporate or other organizational form and jurisdiction of
organization is set forth in Item 1 of Schedule A hereto.

    

    “Conversion” has the meaning
set forth in Section 13(B).

    

    “Convertible securities” has
the meaning set forth in Section 13(B).

    

    “CPP” has the meaning ascribed
to it in the Purchase Agreement.

    

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.

    

    “Exercise Price” means the
amount set forth in Item 2 of Schedule A hereto.

    

    “Expiration Time” has the
meaning set forth in Section 3.

    

    “Fair Market Value” means,
with respect to any security or other property, the fair market value of such
security or other property as determined by the Board of Directors, acting in
good faith or, with respect to Section 14, as determined by the Original
Warrantholder acting in good faith. For so long as the Original Warrantholder
holds this Warrant or any portion thereof, it may object in writing to the Board
of Director’s calculation of fair market value within 10 days of receipt of
written notice thereof. If the Original Warrantholder and the Company are unable
to agree on fair market value during the 10-day period following the delivery of
the Original Warrantholder’s objection, the Appraisal Procedure may be invoked
by either party to determine Fair Market Value by delivering written
notification thereof not later than the 30th day after delivery of the Original
Warrantholder’s objection.

     

     

    
      
        
        

      

      
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    “Governmental Entities” has
the meaning ascribed to it in the Purchase Agreement.

    

    “Initial Number” has the
meaning set forth in Section 13(B).

    

    “Issue Date” means the date
set forth in Item 3 of Schedule A hereto.

    

    “Market Price” means, with
respect to a particular security, on any given day, the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on
the principal national securities exchange on which the applicable securities
are listed or admitted to trading, or if not listed or admitted to trading on
any national securities exchange, the average of the closing bid and ask prices
as furnished by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose. “Market Price” shall
be determined without reference to after hours or extended hours trading. If
such security is not listed and traded in a manner that the quotations referred
to above are available for the period required hereunder, the Market Price per
share of Common Stock shall be deemed to be (i) in the event that any portion of
the Warrant is held by the Original Warrantholder, the fair market value per
share of such security as determined in good faith by the Original Warrantholder
or (ii) in all other circumstances, the fair market value per share of such
security as determined in good faith by the Board of Directors in reliance on an
opinion of a nationally recognized independent investment banking corporation
retained by the Company for this purpose and certified in a resolution to the
Warrantholder. For the purposes of determining the Market Price of the Common
Stock on the “trading day” preceding, on or following the occurrence of an
event, (i) that trading day shall be deemed to commence immediately after the
regular scheduled closing time of trading on the New York Stock Exchange or, if
trading is closed at an earlier time, such earlier time and (ii) that trading
day shall end at the next regular scheduled closing time, or if trading is
closed at an earlier time, such earlier time (for the avoidance of doubt, and as
an example, if the Market Price is to be determined as of the last trading day
preceding a specified event and the closing time of trading on a particular day
is 4:00 p.m. and the specified event occurs at 5:00 p.m. on that day, the Market
Price would be determined by reference to such 4:00 p.m. closing
price).

    

    “Ordinary Cash Dividends”
means a regular quarterly cash dividend on shares of Common Stock out of surplus
or net profits legally available therefor (determined in accordance with
generally accepted accounting principles in effect from time to time), provided that Ordinary Cash
Dividends shall not include any cash dividends paid subsequent to the Issue Date
to the extent the aggregate per share dividends paid on the outstanding Common
Stock in any quarter exceed the amount set forth in Item 4 of Schedule A hereto,
as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction.

    

    “Original Warrantholder” means
the United States Department of the Treasury. Any actions specified to be taken
by the Original Warrantholder hereunder may only be taken by such Person and not
by any other Warrantholder.

    

    “Permitted Transactions” has
the meaning set forth in Section 13(B).

     

     

    
      
        
        

      

      
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    “Person” has the meaning given
to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act.

    

    “Per Share Fair Market Value”
has the meaning set forth in Section 13(C).

    

    “Preferred Shares” means the
perpetual preferred stock issued to the Original Warrantholder on the Issue Date
pursuant to the Purchase Agreement.

    

    “Pro Rata Repurchases” means
any purchase of shares of Common Stock by the Company or any Affiliate thereof
pursuant to (A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B) any
other offer available to substantially all holders of Common Stock, in the case
of both (A) or (B), whether for cash, shares of Capital Stock of the Company,
other securities of the Company, evidences of indebtedness of the Company or any
other Person or any other property (including, without limitation, shares of
Capital Stock, other securities or evidences of indebtedness of a subsidiary),
or any combination thereof, effected while this Warrant is outstanding. The
“Effective Date” of a
Pro Rata Repurchase shall mean the date of acceptance of shares for purchase or
exchange by the Company under any tender or exchange offer which is a Pro Rata
Repurchase or the date of purchase with respect to any Pro Rata Repurchase that
is not a tender or exchange offer.

    

    “Purchase Agreement” means the
Securities Purchase Agreement – Standard Terms incorporated into the Letter
Agreement, dated as of the date set forth in Item 5 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department
of the Treasury (the “Letter
Agreement”), including all annexes and schedules thereto.

    

    “Qualified Equity Offering”
has the meaning ascribed to it in the Purchase Agreement.

    

    “Regulatory Approvals” with
respect to the Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of Common Stock and
to own such Common Stock without the Warrantholder being in violation of
applicable law, rule or regulation, the receipt of any necessary approvals and
authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.

    

    “SEC” means the U.S.
Securities and Exchange Commission.

    

    “Securities Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.

    

    “Shares” has the meaning set
forth in Section 2.

    

    “Trading Day” means (A) if the
shares of Common Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a business day or (B) if the
shares of Common Stock are traded on any national or regional securities
exchange or association or over-the-counter market, a business day on which such
relevant exchange or quotation system is scheduled to be open for business and
on which the shares of Common Stock (i) are not suspended from trading on any
national or regional securities exchange or association or over-the-counter
market for any period or periods aggregating one half hour or longer; and (ii)
have traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the shares of Common Stock.

     

     

    
      
        
        

      

      
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    “U.S. GAAP” means United
States generally accepted accounting principles.

    

    “Warrantholder” has the
meaning set forth in Section 2.

    

    “Warrant” means this Warrant,
issued pursuant to the Purchase Agreement.

    

    2.           Number of Shares; Exercise
Price. This certifies that, for value received, the United States
Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled,
upon the terms and subject to the conditions hereinafter set forth, to acquire
from the Company, in whole or in part, after the receipt of all applicable
Regulatory Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise Price. The
number of shares of Common Stock (the “Shares”) and the Exercise
Price are subject to adjustment as provided herein, and all references to
“Common Stock,” “Shares” and “Exercise Price” herein shall be deemed to include
any such adjustment or series of adjustments.

    

    3.           Exercise of Warrant;
Term. Subject to Section 2, to the extent permitted by applicable laws
and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time
to time after the execution and delivery of this Warrant by the Company on the
date hereof, but in no event later than 5:00 p.m., New York City time on the
tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 7 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:

    

    (i)           by
having the Company withhold, from the shares of Common Stock that would
otherwise be delivered to the Warrantholder upon such exercise, shares of Common
stock issuable upon exercise of the Warrant equal in value to the aggregate
Exercise Price as to which this Warrant is so exercised based on the Market
Price of the Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to this Section
3, or

     

     

    
      
        
        

      

      
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    (ii)           with
the consent of both the Company and the Warrantholder, by tendering in cash, by
certified or cashier’s check payable to the order of the Company, or by wire
transfer of immediately available funds to an account designated by the
Company.

    

    If the Warrantholder does not exercise
this Warrant in its entirety, the Warrantholder will be entitled to receive from
the Company within a reasonable time, and in any event not exceeding three
business days, a new warrant in substantially identical form for the purchase of
that number of Shares equal to the difference between the number of Shares
subject to this Warrant and the number of Shares as to which this Warrant is so
exercised. Notwithstanding anything in this Warrant to the contrary, the
Warrantholder hereby acknowledges and agrees that its exercise of this Warrant
for Shares is subject to the condition that the Warrantholder will have first
received any applicable Regulatory Approvals.

    

    4.           Issuance of Shares;
Authorization; Listing. Certificates for Shares issued upon exercise of
this Warrant will be issued in such name or names as the Warrantholder may
designate and will be delivered to such named Person or Persons within a
reasonable time, not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of this Warrant.
The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3 will be
duly and validly authorized and issued, fully paid and nonassessable and free
from all taxes, liens and charges (other than liens or charges created by the
Warrantholder, income and franchise taxes incurred in connection with the
exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will
be deemed to have been issued to the Warrantholder as of the close of business
on the date on which this Warrant and payment of the Exercise Price are
delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed
or certificates representing such Shares may not be actually delivered on such
date. The Company will at all times reserve and keep available, out of its
authorized but unissued Common Stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Common Stock
then issuable upon exercise of this Warrant at any time. The Company will (A)
procure, at its sole expense, the listing of the Shares issuable upon exercise
of this Warrant at any time, subject to issuance or notice of issuance, on all
principal stock exchanges on which the Common Stock is then listed or traded and
(B) maintain such listings of such Shares at all times after issuance. The
Company will use reasonable best efforts to ensure that the Shares may be issued
without violation of any applicable law or regulation or of any requirement of
any securities exchange on which the Shares are listed or traded.

    

    5.           No Fractional Shares or
Scrip. No fractional Shares or scrip representing fractional Shares shall
be issued upon any exercise of this Warrant. In lieu of any fractional Share to
which the Warrantholder would otherwise be entitled, the Warrantholder shall be
entitled to receive a cash payment equal to the Market Price of the Common Stock
on the last trading day preceding the date of exercise less the pro-rated
Exercise Price for such fractional share.

     

     

    
      
        
        

      

      
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    6.           No Rights as Stockholders;
Transfer Books. This Warrant does not entitle the Warrantholder to any
voting rights or other rights as a stockholder of the Company prior to the date
of exercise hereof. The Company will at no time close its transfer books against
transfer of this Warrant in any manner which interferes with the timely exercise
of this Warrant.

    

    7.           Charges, Taxes and
Expenses. Issuance of certificates for Shares to the Warrantholder upon
the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by
the Company.

    

    8.           Transfer/Assignment.

    

    (A)           Subject
to compliance with clause (B) of this Section 8, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company
by the registered holder hereof in person or by duly authorized attorney, and a
new warrant shall be made and delivered by the Company, of the same tenor and
date as this Warrant but registered in the name of one or more transferees, upon
surrender of this Warrant, duly endorsed, to the office or agency of the Company
described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of
the new warrants pursuant to this Section 8 shall be paid by the
Company.

    

    (B)           The
transfer of the Warrant and the Shares issued upon exercise of the Warrant are
subject to the restrictions set forth in Section 4.4 of the Purchase Agreement.
If and for so long as required by the Purchase Agreement, this Warrant shall
contain the legends as set forth in Sections 4.2(a) and 4.2(b) of the Purchase
Agreement.

    

    9.           Exchange and Registry of
Warrant. This Warrant is exchangeable, upon the surrender hereof by the
Warrantholder to the Company, for a new warrant or warrants of like tenor and
representing the right to purchase the same aggregate number of Shares. The
Company shall maintain a registry showing the name and address of the
Warrantholder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise in accordance with its terms, at the office
of the Company, and the Company shall be entitled to rely in all respects, prior
to written notice to the contrary, upon such registry.

    

    10.           Loss, Theft, Destruction or
Mutilation of Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of
a bond, indemnity or security reasonably satisfactory to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of this Warrant,
the Company shall make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of Shares as provided for in such lost,
stolen, destroyed or mutilated Warrant.

    

    11.           Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a
business day, then such action may be taken or such right may be exercised on
the next succeeding day that is a business day.

     

     

    
      
        
        

      

      
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    12.           Rule 144 Information.
The Company covenants that it will use its reasonable best efforts to timely
file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by
the SEC thereunder (or, if the Company is not required to file such reports, it
will, upon the request of any Warrantholder, make publicly available such
information as necessary to permit sales pursuant to Rule 144 under the
Securities Act), and it will use reasonable best efforts to take such further
action as any Warrantholder may reasonably request, in each case to the extent
required from time to time to enable such holder to, if permitted by the terms
of this Warrant and the Purchase Agreement, sell this Warrant without
registration under the Securities Act within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or (B) any successor rule or regulation hereafter adopted by
the SEC. Upon the written request of any Warrantholder, the Company will deliver
to such Warrantholder a written statement that it has complied with such
requirements.

    

    13.           Adjustments and Other
Rights. The Exercise Price and the number of Shares issuable upon
exercise of this Warrant shall be subject to adjustment from time to time as
follows; provided, that
if more than one subsection of this Section 13 is applicable to a single event,
the subsection shall be applied that produces the largest adjustment and no
single event shall cause an adjustment under more than one subsection of this
Section 13 so as to result in duplication:

    

    (A)           Stock Splits, Subdivisions,
Reclassifications or Combinations. If the Company shall (i) declare and
pay a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify the outstanding
shares of Common Stock into a smaller number of shares, the number of Shares
issuable upon exercise of this Warrant at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that the Warrantholder
after such date shall be entitled to purchase the number of shares of Common
Stock which such holder would have owned or been entitled to receive in respect
of the shares of Common Stock subject to this Warrant after such date had this
Warrant been exercised immediately prior to such date. In such event, the
Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be adjusted to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this Warrant
before such adjustment and (2) the Exercise Price in effect immediately prior to
the record or effective date, as the case may be, for the dividend,
distribution, subdivision, combination or reclassification giving rise to this
adjustment by (y) the new number of Shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.

    

    (B)           Certain Issuances of Common
Shares or Convertible Securities. Until the earlier of (i) the date on
which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company shall
issue shares of Common Stock (or rights or warrants or other securities
exercisable or convertible into or exchangeable (collectively, a “conversion”) for shares of
Common Stock) (collectively, “convertible securities”)
(other than in Permitted Transactions (as defined below) or a transaction to
which subsection (A) of this Section 13 is applicable) without consideration or
at a consideration per share (or having a conversion price per share) that is
less than 90% of the Market Price on the last trading day preceding the date of
the agreement on pricing such shares (or such convertible securities) then, in
such event:

     

     

    
      
        
        

      

      
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    (A)           the
number of Shares issuable upon the exercise of this Warrant immediately prior to
the date of the agreement on pricing of such shares (or of such convertible
securities) (the “Initial
Number”) shall be increased to the number obtained by multiplying the
Initial Number by a fraction (A) the numerator of which shall be the sum of (x)
the number of shares of Common Stock of the Company outstanding on such date and
(y) the number of additional shares of Common Stock issued (or into which
convertible securities may be exercised or convert) and (B) the denominator of
which shall be the sum of (I) the number of shares of Common Stock outstanding
on such date and (II) the number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of shares of Common
Stock so issued (or into which convertible securities may be exercised or
convert) would purchase at the Market Price on the last trading day preceding
the date of the agreement on pricing such shares (or such convertible
securities); and

    

    (B)           the
Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon exercise of this Warrant prior to such date and the denominator of
which shall be the number of shares of Common Stock issuable upon exercise of
this Warrant immediately after the adjustment described in clause (A)
above.

    

    For purposes of the foregoing, the
aggregate consideration receivable by the Company in connection with the
issuance of such shares of Common Stock or convertible securities shall be
deemed to be equal to the sum of the net offering price (including the Fair
Market Value of any non-cash consideration and after deduction of any related
expenses payable to third parties) of all such securities plus the minimum
aggregate amount, if any, payable upon exercise or conversion of any such
convertible securities into shares of Common Stock; and “Permitted Transactions” shall
mean issuances (i) as consideration for or to fund the acquisition of businesses
and/or related assets, (ii) in connection with employee benefit plans and
compensation related arrangements in the ordinary course and consistent with
past practice approved by the Board of Directors, (iii) in connection with a
public or broadly marketed offering and sale of Common Stock or convertible
securities for cash conducted by the Company or its affiliates pursuant to
registration under the Securities Act or Rule 144A thereunder on a basis
consistent with capital raising transactions by comparable financial
institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this
Section 13(B) shall become effective immediately upon the date of such
issuance.

     

     

    
      
        
        

      

      
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    (C)           Other Distributions.
In case the Company shall fix a record date for the making of a distribution to
all holders of shares of its Common Stock of securities, evidences of
indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash
Dividends, dividends of its Common Stock and other dividends or distributions
referred to in Section 13(A)), in each such case, the Exercise Price in effect
prior to such record date shall be reduced immediately thereafter to the price
determined by multiplying the Exercise Price in effect immediately prior to the
reduction by the quotient of (x) the Market Price of the Common Stock on the
last trading day preceding the first date on which the Common Stock trades
regular way on the principal national securities exchange on which the Common
Stock is listed or admitted to trading without the right to receive such
distribution, minus the amount of cash and/or the Fair Market Value of the
securities, evidences of indebtedness, assets, rights or warrants to be so
distributed in respect of one share of Common Stock (such amount and/or Fair
Market Value, the “Per Share
Fair Market Value”) divided by (y) such Market Price on such date
specified in clause (x); such adjustment shall be made successively whenever
such a record date is fixed. In such event, the number of Shares issuable upon
the exercise of this Warrant shall be increased to the number obtained by
dividing (x) the product of (1) the number of Shares issuable upon the exercise
of this Warrant before such adjustment, and (2) the Exercise Price in effect
immediately prior to the distribution giving rise to this adjustment by (y) the
new Exercise Price determined in accordance with the immediately preceding
sentence. In the case of adjustment for a cash dividend that is, or is
coincident with, a regular quarterly cash dividend, the Per Share Fair Market
Value would be reduced by the per share amount of the portion of the cash
dividend that would constitute an Ordinary Cash Dividend. In the event that such
distribution is not so made, the Exercise Price and the number of Shares
issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to
distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in effect
and the number of Shares that would then be issuable upon exercise of this
Warrant if such record date had not been fixed.

    

    (D)           Certain Repurchases of
Common Stock. In case the Company effects a Pro Rata Repurchase of Common
Stock, then the Exercise Price shall be reduced to the price determined by
multiplying the Exercise Price in effect immediately prior to the Effective Date
of such Pro Rata Repurchase by a fraction of which the numerator shall be (i)
the product of (x) the number of shares of Common Stock outstanding immediately
before such Pro Rata Repurchase and (y) the Market Price of a share of Common
Stock on the trading day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase,
and of which the denominator shall be the product of (i) the number of shares of
Common Stock outstanding immediately prior to such Pro Rata Repurchase minus the
number of shares of Common Stock so repurchased and (ii) the Market Price per
share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect
such Pro Rata Repurchase. In such event, the number of shares of Common Stock
issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon
the exercise of this Warrant before such adjustment, and (2) the Exercise Price
in effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the
immediately preceding sentence. For the avoidance of doubt, no increase to the
Exercise Price or decrease in the number of Shares issuable upon exercise of
this Warrant shall be made pursuant to this Section 13(D).

     

     

    
      
        
        

      

      
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    (E)           Business
Combinations. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in
Section 13(A)), the Warrantholder’s right to receive Shares upon exercise of
this Warrant shall be converted into the right to exercise this Warrant to
acquire the number of shares of stock or other securities or property (including
cash) which the Common Stock issuable (at the time of such Business Combination
or reclassification) upon exercise of this Warrant immediately prior to such
Business Combination or reclassification would have been entitled to receive
upon consummation of such Business Combination or reclassification; and in any
such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the Warrantholder shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of
stock or other securities or property pursuant to this paragraph. In determining
the kind and amount of stock, securities or the property receivable upon
exercise of this Warrant following the consummation of such Business
Combination, if the holders of Common Stock have the right to elect the kind or
amount of consideration receivable upon consummation of such Business
Combination, then the consideration that the Warrantholder shall be entitled to
receive upon exercise shall be deemed to be the types and amounts of
consideration received by the majority of all holders of the shares of common
stock that affirmatively make an election (or of all such holders if none make
an election).

    

    (F)           Rounding of Calculations;
Minimum Adjustments. All calculations under this Section 13 shall be made
to the nearest one-tenth (1/10th) of a cent or to the nearest one-hundredth
(1/100th) of a share, as the case may be. Any provision of this Section 13 to
the contrary notwithstanding, no adjustment in the Exercise Price or the number
of Shares into which this Warrant is exercisable shall be made if the amount of
such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of
Common Stock, but any such amount shall be carried forward and an adjustment
with respect thereto shall be made at the time of and together with any
subsequent adjustment which, together with such amount and any other amount or
amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of Common
Stock, or more.

    

    (G)           Timing of Issuance of
Additional Common Stock Upon Certain Adjustments. In any case in which
the provisions of this Section 13 shall require that an adjustment shall become
effective immediately after a record date for an event, the Company may defer
until the occurrence of such event (i) issuing to the Warrantholder of this
Warrant exercised after such record date and before the occurrence of such event
the additional shares of Common Stock issuable upon such exercise by reason of
the adjustment required by such event over and above the shares of Common Stock
issuable upon such exercise before giving effect to such adjustment and (ii)
paying to such Warrantholder any amount of cash in lieu of a fractional share of
Common Stock; provided,
however, that the Company upon request shall deliver to such
Warrantholder a due bill or other appropriate instrument evidencing such
Warrantholder’s right to receive such additional shares, and such cash, upon the
occurrence of the event requiring such adjustment.

     

     

    
      
        
        

      

      
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    (H)           Completion of Qualified
Equity Offering. In the event the Company (or any successor by Business
Combination) completes one or more Qualified Equity Offerings on or prior to
December 31, 2009 that result in the Company (or any such successor ) receiving
aggregate gross proceeds of not less than 100% of the aggregate liquidation
preference of the Preferred Shares (and any preferred stock issued by any such
successor to the Original Warrantholder under the CPP), the number of shares of
Common Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock
equal to the product of (i) 0.5 and (ii) the number of shares underlying the
Warrant on the Issue Date (adjusted to take into account all other theretofore
made adjustments pursuant to this Section 13).

    

    (I)           Other Events. For so
long as the Original Warrantholder holds this Warrant or any portion thereof, if
any event occurs as to which the provisions of this Section 13 are not strictly
applicable or, if strictly applicable, would not, in the good faith judgment of
the Board of Directors of the Company, fairly and adequately protect the
purchase rights of the Warrants in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board of Directors, to protect such purchase rights as
aforesaid. The Exercise Price or the number of Shares into which this Warrant is
exercisable shall not be adjusted in the event of a change in the par value of
the Common Stock or a change in the jurisdiction of incorporation of the
Company.

    

    (J)           Statement Regarding
Adjustments. Whenever the Exercise Price or the number of Shares into
which this Warrant is exercisable shall be adjusted as provided in Section 13,
the Company shall forthwith file at the principal office of the Company a
statement showing in reasonable detail the facts requiring such adjustment and
the Exercise Price that shall be in effect and the number of Shares into which
this Warrant shall be exercisable after such adjustment, and the Company shall
also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Company’s
records.

    

    (K)           Notice of Adjustment
Event. In the event that the Company shall propose to take any action of
the type described in this Section 13 (but only if the action of the type
described in this Section 13 would result in an adjustment in the Exercise Price
or the number of Shares into which this Warrant is exercisable or a change in
the type of securities or property to be delivered upon exercise of this
Warrant), the Company shall give notice to the Warrantholder, in the manner set
forth in Section 13(J), which notice shall specify the record date, if any, with
respect to any such action and the approximate date on which such action is to
take place. Such notice shall also set forth the facts with respect thereto as
shall be reasonably necessary to indicate the effect on the Exercise Price and
the number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such notice
shall be given at least 15 days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any such action.

     

     

    
      
        
        

      

      
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    (L)           Proceedings Prior to Any
Action Requiring Adjustment. As a condition precedent to the taking of
any action which would require an adjustment pursuant to this Section 13, the
Company shall take any action which may be necessary, including obtaining
regulatory, New York Stock Exchange, NASDAQ Stock Market or other applicable
national securities exchange or stockholder approvals or exemptions, in order
that the Company may thereafter validly and legally issue as fully paid and
nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.

    

    (M)           Adjustment Rules. Any
adjustments pursuant to this Section 13 shall be made successively whenever an
event referred to herein shall occur. If an adjustment in Exercise Price made
hereunder would reduce the Exercise Price to an amount below par value of the
Common Stock, then such adjustment in Exercise Price made hereunder shall reduce
the Exercise Price to the par value of the Common Stock.

    

    14.           Exchange. At any time
following the date on which the shares of Common Stock of the Company are no
longer listed or admitted to trading on a national securities exchange (other
than in connection with any Business Combination), the Original Warrantholder
may cause the Company to exchange all or a portion of this Warrant for an
economic interest (to be determined by the Original Warrantholder after
consultation with the Company) of the Company classified as permanent equity
under U.S. GAAP having a value equal to the Fair Market Value of the portion of
the Warrant so exchanged. The Original Warrantholder shall calculate any Fair
Market Value required to be calculated pursuant to this Section 14, which shall
not be subject to the Appraisal Procedure.

    

    15.           No Impairment. The
Company will not, by amendment of its Charter or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in taking of all such action as may be
necessary or appropriate in order to protect the rights of the
Warrantholder.

    

    16.           Governing
Law.   This Warrant will be governed by and
construed in accordance with the federal law of the United States if and to the
extent such law is applicable, and otherwise in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. Each of the Company and the Warrantholder agrees (a) to
submit to the exclusive jurisdiction and venue of the United States District
Court for the District of Columbia for any civil action, suit or proceeding
arising out of or relating to this Warrant or the transactions contemplated
hereby, and (b) that notice may be served upon the Company at the address in
Section 20 below and upon the Warrantholder at the address for the Warrantholder
set forth in the registry maintained by the Company pursuant to Section 9
hereof. To the extent permitted by applicable law, each of the Company and the
Warrantholder hereby unconditionally waives trial by jury in any civil legal
action or proceeding relating to the Warrant or the transactions contemplated
hereby or thereby.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    17.           Binding Effect. This
Warrant shall be binding upon any successors or assigns of the
Company.

    

    18.           Amendments. This
Warrant may be amended and the observance of any term of this Warrant may be
waived only with the written consent of the Company and the
Warrantholder.

    

    19.           Prohibited Actions.
The Company agrees that it will not take any action which would entitle the
Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant,
together with all shares of Common Stock then outstanding and all shares of
Common Stock then issuable upon the exercise of all outstanding options,
warrants, conversion and other rights, would exceed the total number of shares
of Common Stock then authorized by its Charter.

    

    20.           Notices. Any notice,
request, instruction or other document to be given hereunder by any party to the
other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of
receipt, or (b) on the second business day following the date of dispatch if
delivered by a recognized next day courier service. All notices hereunder shall
be delivered as set forth in Item 8 of Schedule A hereto, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice.

    

    21.           Entire Agreement.
This Warrant, the forms attached hereto and Schedule A hereto (the terms of
which are incorporated by reference herein), and the Letter Agreement (including
all documents incorporated therein), contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or undertakings with respect thereto.

    

    [Remainder
of page intentionally left blank]

     

     

    
      
        
        

      

      
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    [Form
of Notice of Exercise]

    Date:
__________

    

    TO:           Porter
Bancorp, Inc.

    

    RE:           Election
to Purchase Common Stock

    

    The undersigned, pursuant to the
provisions set forth in the attached Warrant, hereby agrees to subscribe for and
purchase the number of shares of the Common Stock set forth below covered by
such Warrant. The undersigned, in accordance with Section 3 of the Warrant,
hereby agrees to pay the aggregate Exercise Price for such shares of Common
Stock in the manner set forth below. A new warrant evidencing the remaining
shares of Common Stock covered by such Warrant, but not yet subscribed for and
purchased, if any, should be issued in the name set forth below.

    

    Number of
Shares of Common Stock _______________________

    

    Method of
Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of
the Warrant or cash exercise pursuant to Section 3(ii) of the Warrant, with
consent of the Company and the
Warrantholder)  ________________________

    

    Aggregate
Exercise
Price:               ________________________

     

     

    
      
        	 
      	
                Holder:
      ______________________________________________

              
	 
      	
                By:
        _________________________________________

              
	 
      	
                Name:
       _______________________________________

              
	 
      	
                Title:
      ________________________________________

              

      

    

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed by a duly authorized
officer.

    

    Dated:
November 21, 2008

    

    COMPANY:  PORTER BANCORP,
INC.

    

    

    By:           /s/ Maria L.
Bouvette

    Name: Maria L. Bouvette

    Title: President and CEO

    

    Attest:

    

    By:           /s/ J. Chester
Porter

    Name: J. Chester Porter

    Title: Chairman

    

    [Signature
Page to Warrant]

     

    

    
      
        
        

      

      
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    SCHEDULE A

     

     

    Item 1

    Name:                                                                                     
 Porter Bancorp, Inc.

    Corporate
or other organizational
form:                                   corporation

    Jurisdiction
of
organization:                                                      Kentucky

    

    Item 2

    Exercise
Price:1                        
$17.51 per share

    

    Item 3

    Issue
Date:                                November
21, 2008

    

    Item 4

    Amount of
last dividend declared prior to the Issue
Date:          $.21 per
share

    

    Item 5

    Date of
Letter Agreement between the Company and the United States Department of the
Treasury:November 21, 2008

    

    Item 6

    Number of
shares of Common
Stock:                                        299,829
shares

    

    Item 7

    Company’s
address:                  2500
Eastpoint Parkway

    Louisville, Kentucky
40223

    

    Item 8

    Notice
information:                 Porter
Bancorp, Inc.

    2500 Eastpoint Parkway

    Louisville, Kentucky
40223

    Attn:  Maria L.
Bouvette

    

    

    

    

      

    

      
      
        	
                 
      

              	
                1
      Initial exercise price to be calculated based on the average of closing
      prices of the Common Stock on the 20 trading days ending on the last
      trading day prior to the date the Company’s application for participation
      in the Capital Purchase Program was approved by the United States
      Department of the
Treasury.

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